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Old 02-25-2015, 05:45 PM   #21
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How is timing SS any different than timing the market? Both are based on unknowns and vary with each persons needs/expectations.

When I got serious about ER, I read a lot of posts here and @ Bogleheads (for several years) as well as doing independent research. The end result is that I devised the perfect SS strategy for DW and I.

We have more monthly income than we need and stash any left over in Ally saving for the next vacation/cruise/trip/excursion/adventure.
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Old 02-25-2015, 06:17 PM   #22
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+1 anytime after 62, if my investment results are below expectations I can exercise my SS option... if my investment results are as expected or better then I'll delay and effectively buy longevity insurance from the good ol'USA.
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Old 02-26-2015, 04:33 AM   #23
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same here . i am retiring in july. i am 62 and plan on taking it at fra. but if markets perform poorly the first 2 years once my existing cash is gone i may opt to take ss earlier.

the two years cash for withdrawals we are holding stalls me making that choice at least the first 2 years.
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Old 02-26-2015, 07:22 AM   #24
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From modeling different SS claiming scenarios in my spreadsheet what I find to be more of a provocative question than 'how do I get more money out of SS' is would I rather drawdown savings before age 70, and thus be more dependent on SS later in life, or claim at age 62, leaving savings intact to continue growing and providing for more financial independence in old age. After all, that is what allowed ER in the first place.

My spreadsheet uses linear inflation and portfolio return rates, which of course does not provide the level of sophistication of Monte Carlo simulations, but in our specific case I found an inflation rate of greater than 2.6%, or a portfolio return rate of less than 5.9% favored claiming at age 62. As I use baseline values of 3.0% and 5.3% respectively, that would seem to indicate claiming at age 62 would be preferable. Although, I also take the view that wait and see is the best approach since so many variables can change. Not just market returns; but inflation, legislative changes to SS, e.g. bend point manipulation, tax dis/incentives, levels of means testing, etc., health issues - so I say keep an open mind and a wary eye.
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Old 02-26-2015, 08:09 AM   #25
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I am with Theseus. Every month I re-evaluate based on my model, the buzz from the political class and how things went that month market wise. And every month is a month closer to 70 when the decision is made for me. So far for me it is a no question wait till 70 but like Theseus I watch and wait.
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Old 02-26-2015, 08:28 AM   #26
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I don't think the question should be "how do we maximize our chances of getting the most money", but instead "how do I maximize my chances of achieving an acceptable level of money". They aren't the same question.

For example, if offered the chance to take my entire savings and gamble it on the flip of a coin, and I'd be paid 3:1 if I win, then I should >clearly< take the risk if I want to maximize my chances of getting the most money (question #1). But I should not take the risk if I want to maximize the chances of having enough money to be happy (question 2), because a loss brings me far more unhappiness than the quantity of happiness that a win would provide, and the chances of each outcome are equal. The first $10K of investment income per year has a lot more marginal utility than the 5th $10K.

DW will claim the spousal SS benefit under my record. For us, delaying SS is the cheapest way to provide a larger lifetime annuity, especially for her. If things go poorly on the investment front, that's a good backstop, and that's more important than trying to maximize the ultimate absolute amount of dollars by taking SS early and investing the difference, esp since 1) actuarilly speaking, the expected amounts from SS are about the same and 2) the assumptions about portfolio growth and other factors under each course of action are subject to quite a bit of uncertainty.

If the market is down and the economy is in a funk when I'm eligible for SS, I think it may be harder (not easier) to take SS early--to permanently reduce the size of the monthly SS checks just when it is clearest that the SS money might be really useful if markets don't recover well (i.e. if it really is "different this time").
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Old 02-26-2015, 12:35 PM   #27
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Quote:
Originally Posted by samclem View Post
........
If the market is down and the economy is in a funk when I'm eligible for SS, I think it may be harder (not easier) to take SS early--to permanently reduce the size of the monthly SS checks just when it is clearest that the SS money might be really useful if markets don't recover well (i.e. if it really is "different this time").
+1
I was looking at a chart of 1929 stock crash, which clearly shows the market in a decline over 4 years. Ending at about 5-10% of the top value.
Then it took 22 years to recover back to the top.

http://www.financialinvestmentplanne.../1929crash.jpg

I'm not suggesting we will exactly repeat 1929 as that would be silly, but there are other cases when hanging on while SS goes up would be good. Like if the stock market simply goes sideways for the next 20 years. The only increase I would get would be the SS value, as dividends and likely interest would remain where they are today.

For those without Google, I found the article at: How to Time Social Security Payouts - WSJ
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Old 02-26-2015, 12:47 PM   #28
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Originally Posted by NW-Bound View Post
...In my case, we are of the same age, hence I think my wife should claim her SS either early or at full-retirement age, while I delay my higher SS till 70. As I most likely will croak before she does and she will be entitled to just one SS when I pass anyway, I think that makes the most sense. Oui?
I would think you claiming at FRA with File and suspend. (your SS goes up 8% /yr )
Your wife claiming spousal to get 1/2 of yours at FRA. (her SS goes up 8% /yr)
Then at 70 you both start on your own record. (both get the age 70 rate, plus had the cash from her spousal claim.)

Would you get more this way assuming one of you lives to age 80+ , N'cest Pas ?
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Old 02-26-2015, 01:01 PM   #29
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Quote:
Originally Posted by samclem View Post
I don't think the question should be "how do we maximize our chances of getting the most money", but instead "how do I maximize my chances of achieving an acceptable level of money". They aren't the same question.

For example, if offered the chance to take my entire savings and gamble it on the flip of a coin, and I'd be paid 3:1 if I win, then I should >clearly< take the risk if I want to maximize my chances of getting the most money (question #1). But I should not take the risk if I want to maximize the chances of having enough money to be happy (question 2), because a loss brings me far more unhappiness than the quantity of happiness that a win would provide, and the chances of each outcome are equal. The first $10K of investment income per year has a lot more marginal utility than the 5th $10K.

DW will claim the spousal SS benefit under my record. For us, delaying SS is the cheapest way to provide a larger lifetime annuity, especially for her. If things go poorly on the investment front, that's a good backstop, and that's more important than trying to maximize the ultimate absolute amount of dollars by taking SS early and investing the difference, esp since 1) actuarilly speaking, the expected amounts from SS are about the same and 2) the assumptions about portfolio growth and other factors under each course of action are subject to quite a bit of uncertainty.

If the market is down and the economy is in a funk when I'm eligible for SS, I think it may be harder (not easier) to take SS early--to permanently reduce the size of the monthly SS checks just when it is clearest that the SS money might be really useful if markets don't recover well (i.e. if it really is "different this time").
+1
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Old 02-26-2015, 01:54 PM   #30
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I view SS strictly as longevity insurance. Security is the priority, not cash maximization.


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Old 02-26-2015, 03:03 PM   #31
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SS is best viewed as a safety net, not a piggy bank. I feel good that my FICA deductions are supporting my widowed mother and disabled sister. If I live long enough to collect at 70, I'll consider it well-deserved payback from my kids.
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