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Re: Wait to Age 70 to Collect SS?
Old 11-03-2005, 06:30 PM   #41
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Re: Wait to Age 70 to Collect SS?

So what I have learned from all these posts is not whether to collect at 62 or 70 but to make sure I can survive without it. I run my retirement calc's with zero and with 50% of expected benefit as the best (gravy) case. I've got 15 years until 62.
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Re: Wait to Age 70 to Collect SS?
Old 11-05-2005, 07:58 AM   #42
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Re: Wait to Age 70 to Collect SS?

My current thinking is that I'll start collecting SS at 62 and DH will hold off as long as possible (he's a few months older than me). At 62, my SS income will be ~60% of his. By waiting long enough to collect his, I presume that the ratio changes and taking 50% of his may be better than taking my own. We'll have to see what the actual numbers are when we get there--6 years from now.

At the moment we're looking at SS providing 35-40% of our retirement income. Since we've saved over $1m (and will receive a teeny tiny pension and probably no employer-paid retirement health benefits), I think that shows just how important SS is even to middle class folks who've been decent savers.
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Re: Wait to Age 70 to Collect SS?
Old 11-05-2005, 10:59 AM   #43
 
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Re: Wait to Age 70 to Collect SS?

Remember also that it's not an all or none thing. That is, you don't have to choose between 62 and 70. You can start at any age after 61.
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Re: Wait to Age 70 to Collect SS?
Old 11-05-2005, 12:10 PM   #44
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Re: Wait to Age 70 to Collect SS?

Quote:
Originally Posted by astromeria
My current thinking is that I'll start collecting SS at 62 and DH will hold off as long as possible (he's a few months older than me). At 62, my SS income will be ~60% of his. By waiting long enough to collect his, I presume that the ratio changes and taking 50% of his may be better than taking my own. We'll have to see what the actual numbers are when we get there--6 years from now.
That's an interesting question. We'll have to start crunching the numbers when we hit our 60s and see which offers the best deal...
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Re: Wait to Age 70 to Collect SS?
Old 11-07-2005, 09:26 AM   #45
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Re: Wait to Age 70 to Collect SS?

Astromeria:

I am not an expert on SS distributions, However what you have proposed is not quite correct.

If you retire at 62, you take a reduced benefit over what you'd get at full retirement age. I think they call this the early retirement reduction

If you then switch over and take 50 percent of your DH's benefit when he retires, your benefit then will also be reduced by the same percentage cut as above (the early retirement reduction).

You'll just have to work the numbers to see what works out best for you.
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Re: Wait to Age 70 to Collect SS?
Old 11-07-2005, 10:37 PM   #46
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Re: Wait to Age 70 to Collect SS?

Thanks, MasterBlaster. Perhpas I misunderstood something I read. Still, it would be kind of annoying that I worked for 20 years and paid the max in SS taxes for several of them, but someone who never worked at all may collect more SS from her higher-paid spouse. Well, time, as they say, will tell--who knows what the rules will be 6 or 10 years from now. Perhaps we'll be means-tested out of SS as "millionaires" anyway! :P
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Re: Wait to Age 70 to Collect SS?
Old 11-08-2005, 07:50 AM   #47
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Re: Wait to Age 70 to Collect SS?

This is from www.socialsecurity.gov:

Can my spouse collect benefits at age 62 from her work and earnings and then receive a combined total up to 50 per cent from my account when I start receiving benefits at age 65?

The answer depends on the situation. The following information explains two provisions when an individual is entitled to his or her own retirement benefit and is entitled to additional benefits as a spouse.

1. An individual is filing for both his or her own retirement benefit and benefits on his or her spouse's record at the same time.

One of the provisions of the Social Security Act provides that whenever an individual files for reduced retirement or spouse's benefits, that individual is "deemed" to have filed for the other benefit as well. Essentially, this means that if an individual is eligible for both retirement and spouse's benefits in the initial month of entitlement, then he/she must be awarded both benefits. An individual cannot restrict the application to only one benefit when the deemed filing provision of the law applies.

2. An individual is filing for his or her own retirement benefit but is not eligible to file for spouse's benefits on his or her husband/wife's record until the husband/wife becomes entitled.

An individual can elect to receive his or her own retirement benefit as early as age 62, but his or her benefit will be permanently reduced for each month before full retirement age. If the individual is due additional benefits as a spouse, as soon as the husband/wife on whose record he or she is eligible starts receiving Social Security benefits, then the spouse's benefit is payable. If payment of spouse benefits occurs before full retirement age, the benefit is reduced each month between the entitlement date to spouse's benefits and full retirement age.
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Re: Wait to Age 70 to Collect SS?
Old 11-08-2005, 08:49 AM   #48
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Re: Wait to Age 70 to Collect SS?

So, if SO and I never get married we can both collect full benefits?* Hm..

On another note, I read on the SS website recently that your benefit is based on your highest 35 years of earnings.* This means that some of us who are retiring particularly early or started working for full earnings later in life (extended college years with only part time work in my case) are going to see much smaller benefits than the predicted value on the yearly statement, right?


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Re: Wait to Age 70 to Collect SS?
Old 11-08-2005, 09:10 AM   #49
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Re: Wait to Age 70 to Collect SS?

The topic of retiring early and SS payouts has been discussed quite a bit on the forum.

Under current rules (which may change due to SS funding issues) the payout penalty for early retirees is very small. I worked my numbers for retiring at 50 versus 62. The difference in the SS benefit was a reduction of around 12 percent or so at 50 versus 62.

Therefore Social Security will not be the driver in my FIRE decision.

I suspect though, that SS may tighten up the rules as the boomers start to retire and those big deficits start to pile up. So in the future, it may cost you more in your SS payout to retire early.

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Re: Wait to Age 70 to Collect SS?
Old 11-08-2005, 10:28 AM   #50
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Re: Wait to Age 70 to Collect SS?

Quote:
Originally Posted by MasterBlaster

Under current rules (which may change due to SS funding issues) the payout penalty for early retirees is very small. I worked my numbers for retiring at 50 versus 62. The difference in the SS benefit was a reduction of around 12 percent or so at 50 versus 62.
I got my SS earnings statement yesterday and for the first time plugged the numbers into the calculator on the www.socialsecurity.gov website, assuming no more earnings after the age of 50 and starting to collect SS at 62. I had similar results. I was surprised the reduction wasn't bigger. I also agree that odds are things will change over the years, but who knows how.
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Re: Wait to Age 70 to Collect SS?
Old 11-08-2005, 11:19 AM   #51
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Re: Wait to Age 70 to Collect SS?

Quote:
Originally Posted by Sheryl
So, if SO and I never get married we can both collect full benefits?* Hm..

On another note, I read on the SS website recently that your benefit is based on your highest 35 years of earnings.* This means that some of us who are retiring particularly early or started working for full earnings later in life (extended college years with only part time work in my case) are going to see much smaller benefits than the predicted value on the yearly statement, right?
Sheryl
You can both collect full benefits on your individual account whether married or not.
As to max 35 years, go to the ssa website and work through the caluclators (you'll need your social security statement for the actual figures) to see how your benefit works out vs. more years. Difference depends quite a bit on the actual years of earnings and earnings.
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Re: Wait to Age 70 to Collect SS?
Old 11-08-2005, 12:36 PM   #52
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Re: Wait to Age 70 to Collect SS?

Thanks Unc. I've always just plugged in the number from my statement in FIRECalc and other budgets. I was surprised how little difference it really made to the success/failure rate in the big picture. I.e. SS is not going to make or break a retirement. I think it's best to plan without it and if you get it - icing on the cake.
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Re: Wait to Age 70 to Collect SS?
Old 11-09-2005, 02:25 PM   #53
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Re: Wait to Age 70 to Collect SS?

Just to clarify, a spouse can start her (or his) benefits at age 62 and then additional spousal benefits may be added on top of her (his) worker benefits when the spouse becomes eligible for those. It's not "switching".

Also, keep in mind that when the first spouse dies, the higher benefits can be passed on to a spouse. Actuarally, this ususally means a female spouse as females live longer and tend to marry older men, on average.

Don't discount the value of compounding Cost-Of-Living-Adjustments on a higher, delayed benefit. When you folks talk about "running the numbers", make sure you include COLA projections.
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Re: Wait to Age 70 to Collect SS?
Old 11-16-2005, 04:11 PM   #54
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Re: Wait to Age 70 to Collect SS?

More on the timing of spousal benefits....

SAN FRANCISCO (MarketWatch) -- There's nothing simple about deciding when to take your Social Security benefit, and the figuring gets more complex if you're a married couple trying to sort out which spouse should take benefits when.

Some good examples, tables and references...

http://tinyurl.com/83wug

Good thing I have 4 years to make a decision. Looks like it may take that long to figure out the best option.
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Re: Wait to Age 70 to Collect SS?
Old 11-16-2005, 06:09 PM   #55
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Re: Wait to Age 70 to Collect SS?

If I am not working I will probably start ss at 62. I am just not sure how long I will live.
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Re: Wait to Age 70 to Collect SS?
Old 11-16-2005, 08:17 PM   #56
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Re: Wait to Age 70 to Collect SS?

Quote:
Originally Posted by New Thinking

Also, keep in mind that when the first spouse dies, the higher benefits can be passed on to a spouse. Actuarally, this ususally means a female spouse as females live longer and tend to marry older men, on average.
However, if the surviving spouse remarries prior to taking their deceased spouses SS they lose out and the money stays with SS. This is one reason many widowed people end up living together rather than getting marred; they lose their deceased spouses SS benefits.

My wife was not yet taking SS and I have a ways to go to get to age 60 so I made the choice to remarry rather than live together just so I could get my late spouses SS when I turn 60. I guess I could divorce her at age 59...collect my late wife's SS and then remarry my current wife. I wonder if I could get away with that?
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Re: Wait to Age 70 to Collect SS?
Old 11-16-2005, 10:58 PM   #57
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Re: Wait to Age 70 to Collect SS?

Quote:
Originally Posted by SteveR
However, if the surviving spouse remarries prior to taking their deceased spouses SS they lose out and the money stays with SS.* This is one reason many widowed people end up living together rather than getting marred; they lose their deceased spouses SS benefits.*

My wife was not yet taking SS and I have a ways to go to get to age 60 so I made the choice to remarry rather than live together just so I could get my late spouses SS when I turn 60.* I guess I could divorce her at age 59...collect my late wife's SS and then remarry my current wife.* I wonder if I could get away with that?*
I can't exactly envision what you are talking about, but it does bring up a broader but related topic.

Aside from whatever emotional advantages/ disadvantages there may be, what are the benefits of being married vs. cohabitation? What are the advantages of cohabitating? Again, aside from easier exits, etc.

I know there can be advantages to spouses when making bequests. There are also disadvantages in many areas. Higher taxes in many situations. Less judgment proof. If you aren't married, a nursing home can only empty the coffers of the one who is inside. Also many means tests are per couple, not household. The couples allowance is usually at most 1.5 x the individualís allowance. This can affect RE tax deferrals, various senior benefits, utility discounts, etc.

How many pluses and minuses can we list, leaving aside emotional ones?

Ha
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Re: Wait to Age 70 to Collect SS?
Old 11-16-2005, 11:07 PM   #58
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Re: Wait to Age 70 to Collect SS?

Quote:
Originally Posted by HaHa

How many pluses and minuses can we list, leaving aside emotional ones?

Ha
Professional liability lawsuit (fears of which cause me nightmares) would only wipe out one partner. Same for any sort of catastrophic lawsuit beyond insurance limits, I guess.

If both partners are owning and rehabbing homes the primary residence exception can be taken by each separately (assuming they can prove residence - so far no one is checking to see who's sleeping where )


Avoid the "marriage penalty" for income taxes.

I'm sure there are more that I'm not thinking of right now.


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Re: Wait to Age 70 to Collect SS?
Old 11-17-2005, 10:06 AM   #59
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Re: Wait to Age 70 to Collect SS?

Quote:
Originally Posted by HaHa

How many pluses and minuses can we list, leaving aside emotional ones?
On the plus side, don't forget estate taxes. When one spouse dies, his/her estate can pass to the other without any estate tax due, even for very large estates.

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Re: Wait to Age 70 to Collect SS?
Old 11-23-2005, 04:08 PM   #60
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Re: Wait to Age 70 to Collect SS?

I can't always agree with Scott Burns, but I still read him. He's one of the better-researched columnists out there.

I think last year he'd decided to take the SS as early as possible and run away fast, although since he's still fully employed that's probably irrelevant.

His latest thought is to delay taking SS because he's assuming that he's going to (1) live long enough to make the payback and (2) not be smart enough to invest the money at higher than an 8% return over the inflation COLA.

http://www.uclick.com/client/zzz/sb/

I still have a very difficult time telling the gummint: "Here, hold my money for me a couple more years."

(This is a free version of the article, but the HTML formatter screwed up the "underline" command about halfway through the text. It's quite annoying but it shows up on at least two of the sites I checked. If you can find a more readable non-registration link, kindly post it!)
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