When to start taking SS?

[mickeyd]

One of the nice things about SS is that it is so flexible.

So far this thread had 50 different ideas on the subject.

Until about a year ago I never knew about the "claim now, claim more later" aspect of SSA. After researching it and getting ideas and advice from a bunch of folks here and at Bogleheads, I realized that, with me being age 66 and DW being 62, it was a perfect strategy to delay my SS until age 70 and have me claim as a spouse on her age 62 claim.

Not many pension plans (if any) are so flexible.

 

[Alan]

One of the nice things about SS is that it is so flexible.

So far this thread had 50 different ideas on the subject.

I think I change my plans on when to take SS at least once a year. When the time comes to make the first decision in 6 years I'm almost tempted to write down all the options on different cards, put them a hat and have DW pick one out.

 

[JakeBrake]

Before I reached FRA, I enjoyed logging in to the SS website at the first of the month and seeing the amount that my estimated benefit increased each month. This reinforced my plan to defer claiming my SS. Now that I have reached FRA, I find that my estimated benefit is not updated each month. This is a real downer and tempting me to go ahead and claim my benefit.

I can calculate the estimated monthly increase manually, but it's not the same.

 

[rescueme]

Before I reached FRA, I enjoyed logging in to the SS website at the first of the month and seeing the amount that my estimated benefit increased each month. This reinforced my plan to defer claiming my SS. Now that I have reached FRA, I find that my estimated benefit is not updated each month. This is a real downer and tempting me to go ahead and claim my benefit.

But it does give you your benefit at age at 70 (regardless of the monthly increase, from age 62 to FRA - as I do every month).

It's still a goal, IMHO...

Since I'll be claiming against my wife (at 50%) in a couple of years, at least I don't feel I'm losing anything, as I wait till age 70 (primarily for DW's benefit) to claim my SS.

 

[dtbach]

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.

This is the heart of why I'm torn between taking ASAP or waiting until 70. Unless the rules are grandfathered for those age 60 or older, how can one make the calculations? If the rules change in the middle of the stream, nobody can make a meaningful decision.

 

[MasterBlaster]

This is the heart of why I'm torn between taking ASAP or waiting until 70. Unless the rules are grandfathered for those age 60 or older, how can one make the calculations? If the rules change in the middle of the stream, nobody can make a meaningful decision.

yeah !

How can we game the system if they keep changing the rules.

 

[PaddyMac]

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.

If she worked in Ireland for a few years, she is probably due an Irish pension. She should check with the authorities there.

I emailed them last week looking for my PPS number (the SSN number in Ireland) so I could have it on file. I emailed:
Registration Unit <SECT.REG4@welfare.ie>

They actually prefer you to call them - from the US you would call
011 353 1 704 3281
opening hours are GMT 9.15am to 1.00pm
and 2.00pm to 5.00pm Monday to Friday.

She may have to provide a marriage certificate to claim on a new name.

(I gave them my mailing address and got the number in writing as I want to merge my years with the UK pension office.)

 

[dtbach]

yeah !

How can we game the system if they keep changing the rules.

I'm not sure that trying to make the best decision for something that you will be locked into for the rest of your life should be considered "gaming the system"

 

[MasterBlaster]

I'm not sure that trying to make the best decision for something that you will be locked into for the rest of your life should be considered "gaming the system"

Call it what you want.... A rose by any other name...

 

[Koolau]

Call it what you want.... A rose by any other name...

Thinking of SS planning as "gaming" makes me recall something about "being a winner at a loser's game"... I hope not! On this one, I'm with Charlie. I would prefer just plain "Winning!".

 

[MasterBlaster]

Thinking of SS planning as "gaming" makes me recall something about "being a winner at a loser's game

Now Isn't that the truth. I suspect that SS is indeed a loser's game for many on this forum. The question then is how do I best pick the least-worst option.

But, if it makes you feel better, then call it "How to win at Social Security"

 

[jimnjana]

I suspect we will start DW SS when she is 62, just to have more money to travel then. With a 10 yr age difference, I'll put off my SS until at least age 67, then she could switch to a spousal benefit if it is worthwhile at that time. We have about 4.5 years to change our minds several more times...

 

[ejman]

If I recall correctly, the ability to start collecting at 62, repay the amount collected and then start collecting a much higher amount at age 70 was administratively removed in a very short period of time without much notice or fanfare. There are quite a number of proposals suggested for "gaming" the system that would maximize the assumed lifetime SS collected. I would think that with declining finances in the public sector, the tendency will be to take the punch bowl away not keep it as it is. And as with the repayment rule change, there may not be a lot of notice given.

For myself, the ability to not take withdrawals from my own funds once I turn 62 (I'm 60 now) start collecting SS as soon as I'm eligible and maintain control of that amount not withdrawn from my own funds is very tempting...

 

[haha]

If I recall correctly, the ability to start collecting at 62, repay the amount collected and then start collecting a much higher amount at age 70 was administratively removed in a very short period of time without much notice or fanfare. There are quite a number of proposals suggested for "gaming" the system that would maximize the assumed lifetime SS collected. I would think that with declining finances in the public sector, the tendency will be to take the punch bowl away not keep it as it is. And as with the repayment rule change, there may not be a lot of notice given.

For myself, the ability to not take withdrawals from my own funds once I turn 62 (I'm 60 now) start collecting SS as soon as I'm eligible and maintain control of that amount not withdrawn from my own funds is very tempting...

I did the payback, but with today's open discussion of whacking SS I would not have done this.

This SS crap is not necessary; it is just a return of the old conservative strategy of taking back both the New Deal and the Great Society. But this time it may just succeed.

Ha

 

[TromboneAl]

I did the payback, but with today's open discussion of whacking SS I would not have done this.

Ha

I'm not understanding, because if you truly are worried about SS, you can just go down to your SS office today and restart payments, right?

I'm feeling pretty certain that no whacking will be done to the benefits for those over age 55 or so, since those people can't go back and change their lives.

IOW, you can say, to a 25 year old "No more SS, but you'll be keeping more of your paycheck, and you'll just have to save more."

But you can't say, to a 62 year old "No more SS, and since you've already quit your job, we hope you like cat food."

Does that general reasoning make sense?

 

[W2R]

But you can't say, to a 62 year old "No more SS, and since you've already quit your job, we hope you like cat food."

One would wish/hope that the honor and integrity of our elected politicians would be sufficient to ensure that this could not happen.

But as the saying goes, "If wishes were horses, beggars would ride", and the days of trusting our elected government are pretty far behind us. So some of us are a little uneasy about the possible impact of future changes on baby boomers that are already retired.

 

[TromboneAl]

Also, if worried about the changes currently being considered for SS, look at examples of how minor and slow they are:

From: McClatchy Washington Bureau - Readability

1. Domenici and Rivlin want to slowly increase the amount of wages subject to Social Security payroll taxes. Currently, those taxes are collected on wages up to a maximum of $106,800, or 83 percent of total national wages. Over the next 38 years, the task force would gradually increase the amount to cover 90 percent of all wages, earning the program $542 billion from 2012 to 2030.
Obama's commission would do the same thing, reaching the 90 percent mark by 2050.

2. To better reflect inflation, the task force plan also would change the formula for annual cost-of-living adjustments for Social Security benefits. Their plan would slow the annual growth of benefits by an estimated three-tenths of a percentage point.

3. Under the task force plan, the highest-earning 25 percent of Social Security beneficiaries would also see smaller benefit growth beginning in 2023.
​

 

[Rustward]

Does that general reasoning make sense?

Yes.
It is much easier to get the buy-in from the twenty somethings who 1) believe they will never get old, and 2) believe that they will never see a penny in SS benefits anyway.

 

[haha]

I'm not understanding,

When you payback you hand over a large sum of money, that you figured you will get a future return on, based on the rules at the time.

There is no way you can get back that sum that you handed over, other than in the future payments that you hoped to get but now may not. If rules are changed, either the payback will be less, or the whole transaction may be at a loss.

People looking at what age to start today are looking at the same thing they always have, but with a considerably larger degree of insecurity that may favor taking it sooner rather than later, all other things being equal.

Ha

 

[TromboneAl]

There is no way you can get back that sum that you handed over, other than in the future payments

OK, I see now, thanks. But I think you're pretty safe, and made a good decision.

 

[W2R]

Also, if worried about the changes currently being considered for SS, look at examples of how minor and slow they are:

Uh huh. We shall see.

 

[ziggy29]

3. Under the task force plan, the highest-earning 25 percent of Social Security beneficiaries would also see smaller benefit growth beginning in 2023.

Even more reason to retire early -- plug a few years of "zero" in your SS earnings history and you may not be in the top 25%...

 

[TromboneAl]

What do you think they mean by "highest-earning?" People with the highest salary during their last year of work?

 

[W2R]

What do you think they mean by "highest-earning?" People with the highest salary during their last year of work?

People with the most income as retirees, I would imagine. (?) I am thinking that would include dividends, SS, pension, annuities, etc. If so, then I would imagine that most on the board would be in the top 25%.

 

[GregLee]

Does that general reasoning make sense?

No. If current or near term SS recipients are treated fairly, it won't happen through compassion or any sense of fairness. It could happen for other reasons, though.