When to start taking SS?

[Retch The Grate]

I took SS at age 62 and sincerely hope to live long enough to make it a bad decision.

I keep wishing there was a like button on here.

My dad is waiting for 70 because he's looking at it as longevity protection for my mom.

 

[foxfirev5]

I'm inclined toward the take it 62 camp. I think the numbers crunch pretty evenly when investment returns, life expectancy, and age related lifestyle are all considered. A nice supplement to my ER income that would allow my other investments to grow along with added flexibility of having control over my distributions. That's the idea now, but I've got 7 years to see what happens.

 

[TN_INVEST]

You could make the same cooments about your nestegg.

What if you die before spending that extra $40k out of your nestegg.

Not only does it really suck to be dead, but what's worse you didn't spend enough !

Except if the money is in my nest egg, I get to pass it on. Yes, I know SS has spousal provisions, but something tells me the actuaries have already run the numbers and accounted for that.

I keep wishing there was a like button on here.

My dad is waiting for 70 because he's looking at it as longevity protection for my mom.

Does your mom work? What about dad?

Have they considered filing and suspending his benefits? Or filing a restricted benefit?

In their case, their tightening of their budget is going to be the real "magic" that helps them financially (i could be wrong, but something tells me they are being fairly careful with their expenses if dad is that worried about mom's future).

I know SSA limits the reset/do-over to 12 months, but that too is an option that often sides with taking benefits early.

Me...I simply prefer to get "my" money as soon as I can.

 

[Retch The Grate]

Does your mom work? What about dad?

Have they considered filing and suspending his benefits? Or filing a restricted benefit?

In their case, their tightening of their budget is going to be the real "magic" that helps them financially (i could be wrong, but something tells me they are being fairly careful with their expenses if dad is that worried about mom's future).

My mom doesn't/didn't work in an income producing job after I was born, I'm not sure she ever earned any income in the US actually, her work may all have been in Ireland.

The SS is cheap longevity insurance for them, no belt tightening going on. My dad is happily working as a professor and isn't considering retiring before 70, and even then he may just dial it back to only teaching a few classes so he still gets to have the fun with a somewhat lower workload.

 

[jdw_fire]

I'll read the JFP article later this evening, thanks.

In my case, I'm not too worried about running out of funds in later years. I think my goal is to have a comfortable excess of discretionary income to permit more elaborate SCUBA diving island travel than has been feasible to this point.

The major $$ uncertainty isn't so much on the SS side, but on the side of my personal nest egg investments. So, as someone else said, it's becoming clear that this will be a steer-it-as-you-go kind of plan, not something that can be cast in cement ahead of time...

if you want to spend more between the ages of 62 - 70 while spending the same after age 70 then take SS at age 70. for a few examples with numbers i include the following links.

here are 2 hypothetical examples that used another posters SS numbers http://www.early-retirement.org/forums/f28/social-security-at-62-66-or-70-a-26354-3.html#post494511

and here is a 3rd that was an analysis of another poster's numbers: http://www.early-retirement.org/forums/f28/when-to-take-social-security-27924-8.html#post516617 with this correction and further comment http://www.early-retirement.org/forums/f28/when-to-take-social-security-27924-9.html#post516724

BTW if using the 4% rule is too risky for you the argument i make for taking SS at age 70 improves with lower initial WRs.

 

[rescueme]

Me...I simply prefer to get "my" money as soon as I can.

You and over 70% of the rest of the folks that claim at age 62.

I've run the numbers for us (as a married couple, which changes the rules a bit). DW will claim at FRA age of 66, I'll claim 50% spousal against her at that time (for my age 66-69 - we're the same age), and then claim mine at age 70 - both for the total financial benefit, but more importantly to have my wife take my benefit amount (which is much higher than her FRA amount) for the rest of her life, assuming I die first.

FYI, I used FIDO's RIP (Retirement Income Planner) program to run the different scenerio's of taking SS at different points, to come up with a plan that made sense for us, and our situation.

We're not concerned about getting "our" money back; rather we're planning for a consistent source of income as we age. Cash flow in retirement is everything. Anyway (as I've said often), money is for the living - not the dead. If we ensure a maximum revenue stream while we're alive - especially as we age, it works for us.

Everybody is different, in SS discussions; married vs. single, healthy vs. not, able to fund ER through other means vs. just getting by, and feelings of "I want mine" vs. looking at the total picture - of "possibilities". Few people will make the same decision, but everyone making that decision "knows" what the correct answer is...

 

[TheWizard]

if you want to spend more between the ages of 62 - 70 while spending the same after age 70 then take SS at age 70. for a few examples with numbers i include the following links......

I'll check those links shortly, thanks.
I don't presume to know what my future holds that far down the road, of course. The usual train of thought is that discretionary "fun" expenditures tend to decline after age 70 or 75, only to be replaced with increasing medical expenses.

 

[LOL!]

A thread on bogleheads pertinent to this thread has links to a NYTimes article on "when to collect SS" which in turn has links to some newish on-line calculators to help one make the this decision: Bogleheads :: View topic - Web/Online calculators: When to Collect Social Security?

 

[jeffmete]

When I was younger, I didn't think it would be this confusing trying to decide when to retire, when to take SS, etc. The trouble with all the calculators and recomendations is they rely on statistics based on a large population. I (we) have to make a decision based on a population of 1 or 2 (or in my case 3). So the odds of you making the wrong choice go way up. My wife and I are both 58, but I do have a disabled daughter who is getting SS payments (though only $220/month) so I haven't figured out yet how it will effect her when I retire.

 

[TromboneAl]

My current thinking is to take it at 62 - for both "bird-in-the-hand" and to enable retirement earlier issues. Subject to change...

One reason not often mentioned when discussing waiting as long as possible is to draw down retirement accounts, thereby reducing RMDs.

I'm also flip flopping on this, but my current thinking is to wait till 70. Why? Because with the rate we get at 70, we could survive without any other income, even if we live to be 110.

It's likely that we'll get more if we start at 62, but the above means no worries.

Re RMDs, I don't think those matter unless you want to leave an inheritance. Right?

 

[TromboneAl]

Remember that, unless you are sick, it's a lot harder to spend money after age 85 or so. You may just want to hang out around home.

 

[HFWR]

I'm also flip flopping on this, but my current thinking is to wait till 70. Why? Because with the rate we get at 70, we could survive without any other income, even if we live to be 110.

It's likely that we'll get more if we start at 62, but the above means no worries.

Re RMDs, I don't think those matter unless you want to leave an inheritance. Right?

In my case, unless my 401k grows a lot more over the next few years than I expect, I'd likely be living mostly on SS if I waited until 70 to collect.

As for RMDs, if your nest egg happens to still be sizable when you hit 90, you may be required to take some fairly large withdrawals, throwing you into a higher-than-necessary tax bracket. Of course, you could determine this enough ahead to take larger, earlier withdrawals, then leave the unused portion in non-RMD susceptible accounts.

 

[Independent]

So if you're 62 and you don't know you have unusually bad health, your chance of dying in the next 2 years is less than that 3%, so you will probably live longer than the SS actuaries anticipate.

Yes. Life insurers think that at those ages they can avoid more than half the deaths in the first year after issue just by avoiding people with known health issues. However, the impact of selection wears off over time.

So if healthy people have only a 1.5% chance of dying in the first two years instead of 3.0%, that doesn't mean they have a 4.5% chance (instead of 3%) of making it to 99.

 

[TheWizard]

As for RMDs, if your nest egg happens to still be sizable when you hit 90, you may be required to take some fairly large withdrawals, throwing you into a higher-than-necessary tax bracket......

RMDs start at age 70-1/2, not 90...

 

[TN_INVEST]

RMDs start at age 70-1/2, not 90...

Yes, they do. However, they can be quite severe at age 90

 

[W2R]

Remember that, unless you are sick, it's a lot harder to spend money after age 85 or so. You may just want to hang out around home.

Hey! That's what I just want to do even at the young age of 63. I am such a homebody.

 

[HFWR]

RMDs start at age 70-1/2, not 90...

Yes, they do. However, they can be quite severe at age 90

What he said... Check out the formula.

 

[WestLake]

If you are a single male it seems to me 62 is best.

 

[MasterBlaster]

If you are a single male it seems to me 62 is best.

Based on what ?

 

[Mulligan]

Based on what ?

Can't speak for Westlake, but I have read how short lived us single males are based on the surveys or research, or false theories. We are depressed, drink too much, dont eat healthy, don't have a wife to take care of us, etc... Bleak future for us indeed. Cash the check while your still breathing! Maybe he has read the same stories.

 

[Zero]

The 62 versus 66 versus 70 debate will likely look much different in 8 years for folks currently 62 and hoping all the rules are the same in 2020.

I picture changes to:
1. COLA
2. Spousal rules that allow a do-over at 70.
3. Taxation on SS income.
4. Means testing.

A person 62 right now would feel mighty foolish if they passed up 8 years of income under current rule and then in 2020 find a whole different set of rules.

 

[TromboneAl]

I guess the RMD thing depends a lot on the formula for how much you have to take out. I figure that if I'm 90, and don't plan to leave any inheritance, I'd better start taking out the money anyway if I want to use it before I die.

Anyone have a feeling for how the RMDs related to life expectancy, etc?

A person 62 right now would feel mighty foolish if they passed up 8 years of income under current rule and then in 2020 find a whole different set of rules.

Yes, that certainly throws a monkey wrench into things. Hopefully those changes would include grandfathering.

 

[Zero]

A real eye opener for me was the rule change to do away with the "do-over" (allowing someone to start at 62, then payback at 70) showed me that they can change things without any justification.

There one day, gone the next. I expect to see SS pecked away at in small increments but with 8 years to do it, the rules could look a lot different in 2020.

EDIT: There have been some discussions on making SS solvent by lowering the rate of COLA by going to "chain-weighted" CPI versus the current CPI being used. And also using this lower CPI to calculate initial benefits instead of the Wage Index inflation which is supposedly 1% higher on average. If enacted, this would result in the initial check being smaller and also growing more slowly.

 

[MasterBlaster]

You could make the same cooments about your nestegg.

What if you die before spending that extra $40k out of your nestegg.

Not only does it really suck to be dead, but what's worse you didn't spend enough !

Except if the money is in my nest egg, I get to pass it on. Yes, I know SS has spousal provisions, but something tells me the actuaries have already run the numbers and accounted for that.

Again, you could pass on the (age 70) higher income stream to your spouse in many cases. They then won't need to spand down the estate so much. That estate could then be passed on to anyone.

 

[TN_INVEST]

Again, you could pass on the (age 70) higher income stream to your spouse in many cases. They then won't need to spand down the estate so much. That estate could then be passed on to anyone.

Yes, you could begin saving the higher SS income at age 70, and they could save that money to build their nest egg. However, most projections have some sort of break even point near age 80.

I think another variable most folks don't look at (think of it as one of those mathematical risk adjustment equations). I'm working on the details, but my initial thought is to call it: pension optimization distribution. Works something like this:

amount of my money sent to D.C. x years of ineptness + political risk = PO'd