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When to take SS--again
Old 04-18-2009, 09:58 AM   #1
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When to take SS--again

This popped up in Yahoo finance this week. Another twist.

I am beginning to understand the ins and outs of SS better.

(Of course, I may be forced into just taking it early and get stuffed. )

The-Big-Decision-When-to-Claim-Social-Security: Personal Finance News from Yahoo! Finance



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Old 04-18-2009, 10:29 AM   #2
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The article got me thinking about it. I have 8 years until 62 and if that buy back option is still availalbe at 70 who knows what I'll do.

One aspect I didn't see discussed was opportunity costs - if you have investments earning a higher rate of return vs the ss increase for delaying taking it.
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Old 04-18-2009, 11:36 AM   #3
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This is one of the better articles I've seen on this topic. Maybe the "conventional wisdom" is getting clearer. I especially like this paragraph:

Quote:
That said, Steven A. Sass, associate director of the Center for Retirement Research at Boston College, urges retirees not to get hung up on the break-even age. Instead, he says, they should think of Social Security as insurance against the possibility that they will live to be very old and run through their assets. "People have to think about two numbers. How much they want in retirement and what is the minimum they need,'' says Sass. "Social Security is the best way to assure you have the minimum and to bump up that minimum you need to claim benefits later."
A co-worker pointed out to me once that a good way to plan retirement is to separate "must have" and "nice to have" spending, then have a funding plan for each. SS can be a big part of the "must have" plan.
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Old 04-18-2009, 12:32 PM   #4
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Good article - thanks for posting. I hadn't realized that if one started drawing at 62 that the spouse, at 65, could claim a benefit based on their partner. I think we'd pretty well decided that DW would draw at 62 based on her earnings and I would wait until 70, but things could change dramatically over the next 8 years.
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Old 04-18-2009, 01:00 PM   #5
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Good article. It will be interesting what loopholes will be left when DW and I get to SS age.
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Old 04-18-2009, 02:47 PM   #6
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Most of the people on this forum probably don't need to worry about eating dog food when they get older, the question is how much money they will have to enjoy retirement.

Since the "The Great Society" has been replaced by "The Great Stimulus", someone will have to pay for all that spending some day. I expect that SS will be taxed or means-tested to the extent that only the really poor will be getting anything from it. Hence, DW and I took it at 62. Ask me in 20 years if that was a good choice.
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Old 04-19-2009, 12:54 AM   #7
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Originally Posted by Gearhead Jim View Post
Most of the people on this forum probably don't need to worry about eating dog food when they get older, the question is how much money they will have to enjoy retirement.

Since the "The Great Society" has been replaced by "The Great Stimulus", someone will have to pay for all that spending some day. I expect that SS will be taxed or means-tested to the extent that only the really poor will be getting anything from it. Hence, DW and I took it at 62. Ask me in 20 years if that was a good choice.

I suppose it depends on the definition of "really poor". I see no problem with say, a $30K annual income cap to receive SS. But if you shut off benefits at the poverty level, it's going to create more socioeconomic problems than it solves.
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Old 04-19-2009, 02:04 AM   #8
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I suppose it depends on the definition of "really poor". I see no problem with say, a $30K annual income cap to receive SS. But if you shut off benefits at the poverty level, it's going to create more socioeconomic problems than it solves.
Let me guess- your income is $29,950?
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Old 04-19-2009, 06:01 AM   #9
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I know a person can get up to 8% per year for delaying SS past their full retirement age. Also, I have seen at least one example for delay between early retirement (relevant age 62) and the full retirement age. Presumably what is gained is equal to what is not lost to starting SS at age 62. So if the full retirement age is 66 and collection starts at 62, the reduction is 25%. But if benefits were recomputed at full retirement and wages increased substantially, then the benefit should be > 25% higher than the age 62 reduced benefit. On the other hand if wages did not increase at all and inflation was high, the benefit at 66 will have lost compounded COLA for those four years if you just get your 25% back.

The SS calculation is based on wage inflation, not CPI. What, if any, affect does CPI>>wage inflation have on the decision to take SS early? I guess I am thinking that if, over those four years, wages did not increase and CPI increased 3% or more, there would be decreased advantage in delaying the age of starting benefits.

Am I factoring in wage inflation and CPI incorrectly?
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Old 04-19-2009, 10:35 AM   #10
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Originally Posted by Tadpole View Post
The SS calculation is based on wage inflation, not CPI. What, if any, affect does CPI>>wage inflation have on the decision to take SS early? I guess I am thinking that if, over those four years, wages did not increase and CPI increased 3% or more, there would be decreased advantage in delaying the age of starting benefits.

Am I factoring in wage inflation and CPI incorrectly?
Once you reach age 62, increases are based on CPI, not wage inflation.

Ha
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Old 04-19-2009, 10:42 AM   #11
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Originally Posted by Gearhead Jim View Post
Most of the people on this forum probably don't need to worry about eating dog food when they get older, the question is how much money they will have to enjoy retirement.
Most but not all. Some of us are learning how close disaster can be.
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Old 04-19-2009, 12:41 PM   #12
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Let me guess- your income is $29,950?
I think 30k is just to low.
Under 250k in the new poor going by the big O
But I could see means testing over 100K for SS, or maybe asset based testing.
For the record I make way under 100k.
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Old 04-19-2009, 12:53 PM   #13
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Once you reach age 62, increases are based on CPI, not wage inflation.

Ha
Even if you stop working/contributing at age 62 but don't claim benefits until 66? I doubt it but you might be right.

I was assuming the delay would not receive the CPI COLA so I was talking about the fact that you have a choice of CPI or wage inflation from 62 to 66 as far as I can see. If you take SS at 62 you are on the CPI clock. If you delay until 66 but aren't working, your "promised" benefit is on the wage inflation clock. Then I asked if this should impact your choice if you expected CPI >> wage inflation. If CPI doesn't impact the starting value and wage inflation were 0, then if CPI/year > deduction in benefit/year then taking the deduction at age 62 would be the attractive option.
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Old 04-19-2009, 05:28 PM   #14
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Let me guess- your income is $29,950?

Nope
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Old 04-19-2009, 09:07 PM   #15
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Originally Posted by Tadpole View Post
Even if you stop working/contributing at age 62 but don't claim benefits until 66? I doubt it but you might be right.

I was assuming the delay would not receive the CPI COLA so I was talking about the fact that you have a choice of CPI or wage inflation from 62 to 66 as far as I can see. If you take SS at 62 you are on the CPI clock. If you delay until 66 but aren't working, your "promised" benefit is on the wage inflation clock.
Whatever.

Ha
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Old 04-20-2009, 01:34 PM   #16
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Originally Posted by Tadpole View Post
Even if you stop working/contributing at age 62 but don't claim benefits until 66? I doubt it but you might be right.

I was assuming the delay would not receive the CPI COLA so I was talking about the fact that you have a choice of CPI or wage inflation from 62 to 66 as far as I can see. If you take SS at 62 you are on the CPI clock. If you delay until 66 but aren't working, your "promised" benefit is on the wage inflation clock. Then I asked if this should impact your choice if you expected CPI >> wage inflation. If CPI doesn't impact the starting value and wage inflation were 0, then if CPI/year > deduction in benefit/year then taking the deduction at age 62 would be the attractive option.
Ha is right. Doesn't matter is you keep working and doesn't matter if you are collecting SS or not. Read page one of this pub: http://www.socialsecurity.gov/policy...ted_states.pdf
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Old 04-20-2009, 05:07 PM   #17
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Whatever.

Ha
Thanks, looks like you are right.
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Old 04-20-2009, 05:17 PM   #18
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Ha is right. Doesn't matter is you keep working and doesn't matter if you are collecting SS or not. Read page one of this pub: http://www.socialsecurity.gov/policy...ted_states.pdf
Thanks.
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Old 04-20-2009, 09:21 PM   #19
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Ha is right. Doesn't matter is you keep working and doesn't matter if you are collecting SS or not. Read page one of this pub: http://www.socialsecurity.gov/policy...ted_states.pdf
Another web site SOCIAL SECURITY DISABILITY SECRETS: SSD SSI TIPS ADVICE TO WIN BENEFITS WHEN YOU APPLY & APPEAL FOR SSDI (SSA LAWYERS, ADVOCATES) has some information I found not to long ago.
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