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when should you take social security article
Old 02-13-2011, 07:00 AM   #1
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when should you take social security article

here's a good article about the decisions involved re when to take ss. there's a good link in it showing what % you lose or gain by taking ss before or after your retirement date. it covers years from 1924 to 1960 and later. makes me wonder if i should delay by 1 year.

When Should You Take Social Security?
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Old 02-13-2011, 07:27 AM   #2
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Originally Posted by veremchuka View Post
... makes me wonder if i should delay by 1 year.
Well, I don't know, but what seems to me to be missing from the referenced discussion is the interest value of the early payments, in case you start SS earlier rather than later. I had to make a version of this decision when I applied for SS last May, when I could either retire retroactively starting November 2009 (but still full retirement age at 67), or prospectively starting August 2010 at 68, or still later. Visions of what the extra $15000 in retroactive SS payments invested might bring in my head, I choose to retire earlier. But I really don't know whether that was best.
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Old 02-13-2011, 07:39 AM   #3
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DW and I are planning the 62/70 approach. Of course, it all depends on what happens.. new information later could lead to different decisions.
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Old 02-13-2011, 07:41 AM   #4
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Indeed, it's a good article, thanks. There is no question I should wait until age 70 (unless I'm hit by a bus, there is little chance I won't live past the breakeven ages) - but the uncertain future of SS is what gnaws at me. I'll be "disappointed" if I wait and they suddenly make a change. Everyone says those our age have nothing to worry about, I'm not that confident, the recent radical change to the buyback for example (which I was planning to take advantage of).

But again, an article worth reading for many...thanks.
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Old 02-13-2011, 08:43 AM   #5
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It does seem to confirm that a single woman in my position should take benefits later, if possible.
Quote:
A quick note about life expectancy: At birth, our average life expectancy is about 78 years (about 75 for men and 81 for women), according to the National Center for Health Statistics.

However, if you are lucky enough to reach age 65, your average life expectancy rises to 82 for men and 85 for women.
Quote:
break-even ages are as follows:
62 (early) vs. 66 (NRA): Break-even age is between 76 and 77.
62 (early) vs. 70 (late): Break-even age is between 78 and 79.
My plan thus far has been to wait until 66, unless I chicken out. From the numbers above, it looks like I should wait until 70 instead of 66. I am undecided about that. It would sure be nice to see a deposit in the bank every month.

After age 65, it looks like I would have to actually pay Medicare every month instead of just getting a lower SS check to pay for it, for a net loss instead of a net gain from SS/Medicare combined. What a drag.
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Old 02-13-2011, 09:11 AM   #6
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I did an analysis of the various combinations of these choices: I take SS at 62 vs 66, my wife takes SS at 62 vs 66 and either taking a fixed immediate annuity or an inflation adjusted one. I wanted to see what the value of my retirement portfolio was over time with these various combinations. The best result was for us both to take SS at 62 and choose the fixed immediate annuity assuming both of us had average life spans. However, if we reach several years beyond normal life expectancy the best choice would for me take SS at 66, she at 62 and stick with the fixed annuity. Now, if she makes it to around 100 then we should choose me taking SS at 66, her at 62 and take an inflation adjusted annuity.
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Old 02-13-2011, 01:49 PM   #7
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2nd Thoughts

I plan to wait until full retirement age (66 and 10 mths for me) but I've decided not to wait until 70, despite the larger payout. What's missing from this discussion is the fact that most people will want to be able to enjoy that extra money when they receive it, and if i have to wait til age 70, who knows what my health will be like or if i'll have the energy to do all that travel i want to do.

I think full retirement age is a happy medium to increase your SS benefits at a time when you'll more likely be able to enjoy the $$.
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Old 02-13-2011, 02:42 PM   #8
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I'm in the "waiting until 70" group.
Longevity genes in the family, good health now, and no need to draw it earlier.

I may change my mind between now and then, but I have an unreasonable fear of running out of money in my extreme old age.
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Old 02-13-2011, 03:16 PM   #9
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I'm in the "waiting until 70" group.
Longevity genes in the family, good health now, and no need to draw it earlier.

I may change my mind between now and then, but I have an unreasonable fear of running out of money in my extreme old age.
I think that is a reasonable fear and a reasonable plan.
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Old 02-13-2011, 03:21 PM   #10
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Like GL says, the chart seems to be missing the impact of investment returns, I'd expect a financial planner to think about that.

Another miss is the possibility that deferring SS amounts to buying longevity insurance (similar to any life annuity). Most people who post here really don't care because they can self insure the possibility of a long life, but I expect this is important for many Americans.
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Old 02-13-2011, 03:38 PM   #11
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i calculated the break even point a few years ago of 62 vs 66 and it was over 17 years. it seemed reasonable to take it at 62 rather than gamble on making it to 79+ and then gaining from thereon. the extra 5% at 63 vs 62 is what piqued my curiosity. I have to see where the break even point is for that 1 year of waiting vs the extra 5%, i'm thinking it'll still be out in that later 70 area.
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Old 02-13-2011, 03:50 PM   #12
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I'll be turning 62 in April and my original plan was to take SS when DW turns 62 in Dec of 2012. During the last market down turn the plan changed to take it at 62. Now that the market is back I'm thinking of going back to my original plan. But if the market dumps out again I'll be looking to get my check. Since no male in my family has ever lived to the age of 70 waiting doesn't seem like a great plan. Maybe for DW but not for me. (heh)
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Old 02-13-2011, 03:57 PM   #13
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I'll be turning 62 in April and my original plan was to take SS when DW turns 62 in Dec of 2012. During the last market down turn the plan changed to take it at 62. Now that the market is back I'm thinking of going back to my original plan. But if the market dumps out again I'll be looking to get my check. Since no male in my family has ever lived to the age of 70 waiting doesn't seem like a great plan. Maybe for DW but not for me. (heh)
Given that family history, I say go for it! I think you should take it at 62 and enjoy the extra income.
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Old 02-13-2011, 06:30 PM   #14
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Originally Posted by 73ss454 View Post
I'll be turning 62 in April and my original plan was to take SS when DW turns 62 in Dec of 2012. During the last market down turn the plan changed to take it at 62. Now that the market is back I'm thinking of going back to my original plan. But if the market dumps out again I'll be looking to get my check. Since no male in my family has ever lived to the age of 70 waiting doesn't seem like a great plan. Maybe for DW but not for me. (heh)
Have you considered how life-long survivor benefits for DW will be impacted by your decision?
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Old 02-13-2011, 06:37 PM   #15
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Yup, read the last sentence of my post.
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Old 02-13-2011, 07:45 PM   #16
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I seem to be confusing myself on the survivorship issue.

If the wife takes SS at age 62 and the husband takes SS at 66 and husband passes away, does the wife get his full SS as a survivor or is the amount reduced because she took early distribution on her SS?

To confuse it even more. Wife passes before husband begins collecting his SS. Can he do survivorship on her monies and then shift to his record when he turns 66?
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Old 02-13-2011, 07:52 PM   #17
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Yup, read the last sentence of my post.
Yes, saw that and I assumed you meant maybe it would be okay for DW to wait until 70 to file. I think there is potential for higher survivor benefits for a lower earning spouse if the higher earner delays even if they expect a short life. If this is what you meant, sorry.
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Old 02-13-2011, 07:53 PM   #18
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I seem to be confusing myself
This is all very easy to be confused about.
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Old 02-13-2011, 08:00 PM   #19
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This is all very easy to be confused about.
I shall patiently wait for one of the Social Security Gurus to assuage my confusion.
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Old 02-14-2011, 09:36 AM   #20
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SS (especially if you wait until 70) makes good longevity insurance.
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