Why I am taking SS before 66

[Bikerdude]

Everything about SS is situational.

Amen!

 

[jclarksnakes]

Many people make important financial decisions based upon incorrect information. So go right ahead and do what you are sure is right.

 

[growing_older]

Waiting till 70 is always a loser. For 30 yrs and for 40 yrs.

When I calculate mine, I do not get these results. If your situation means you should take it early, feel free to do so. But I hope you are basing your decision on correct facts. Too many people make a decision, then look for facts to support their choice, instead of looking at the facts then making the decision based on what they find.

 

[pb4uski]

That's pretty funny!

I assumed that the OP created the post because he wanted some feedback, in spite of the writing style he used where he made declarative statements about how things really are.

+1 Ha's post was funny.

I interpreted the OP as a lecture more than a request for feedback. Ha nailed it.

OP's rationale = Ready. Fire. Aim.

 

[eytonxav]

Ha was just trying to "advise" him the conventional "advice" given on this forum

 

[Andre1969]

My current plan is to take SS at 62. But, I'm only 44 now, so that's still a ways off. I figure I'll re-adjust my plan as necessary, as the time gets closer.

I used to think that your SS benefit went up about 4% per year, until you hit 62, and then, for every year you delayed, it went up about 8%. But in plugging in some formulas, that's not quite the case.

Right now, it looks like every year I keep working adds about 3.6% to my SS payout at 62. But, there's a diminishing rate of return. While delaying from age 44 to 45 boosts it by about 3.6%, delaying from age 50 to 51 ony boosts it by 3.1%. Pushing it from 55 to 56 only boosts it by 1.18%. And oddly, delaying from age 61 to 62 does not change it at all. But then, working until age 63 boosts it by 7.57% versus 62. And each year onward adds between 7.1 and 8.78% per year. Odd, I didn't think there would be that much variance from year to year, but that 8.78% boost is delaying from 64 to 65.

Now, to get these numbers, I just used the quick calculator, so your mileage may vary. And it assumes that I actually keep working each additional year, not simply delaying taking SS.

Once you get so many years in though, I don't think an additional year of earnings changes things all that much.

 

[RetireAge50]

Need to do the math still so have not decided.

But in my head I'm thinking get the money while I can (at 62).

Might be the wrong decision if I live to 100 but then again I'm not thrilled about counting on the government/uncertainty for that many years.

 

[Andre1969]

Need to do the math still so have not decided.

But in my head I'm thinking get the money while I can (at 62).

Might be the wrong decision if I live to 100 but then again I'm not thrilled about counting on the government/uncertainty for that many years.

That's pretty much my sentiment. I figure the sooner I get in, the better off I'll be. Wait too long and they just might change the rules! Of course, they can still change the rules in the 18 years I have left until I turn 62.

As I get closer to 62, I might think about delaying it. After all, that 7-8% boost does sound pretty tempting. I'll just weigh the pros and cons as I get closer to that point.

 

[braumeister]

Once you get so many years in though, I don't think an additional year of earnings changes things all that much.

An important point is that SS bases your benefit on your highest 35 years of earnings. This probably explains most of your calculations.

The Social Security Detailed Calculator lets you make a very good estimate by plugging in your expected earnings (even if they are zero).

 

[Redbugdave]

But in my head I'm thinking get the money while I can (at 62).

Might be the wrong decision if I live to 100 but then again I'm not thrilled about counting on the government/uncertainty for that many years.

I feel that way, too. You might as well enjoy what you can while you can. Life is too fleeting.

 

[pb4uski]

That's pretty much my sentiment. I figure the sooner I get in, the better off I'll be. Wait too long and they just might change the rules! ....

When was the last time there was a substantive change to the rules for people 62 or even 55?

Never to my knowledge. There are too many people and they vote regularly so a significant change to beneficiaries 55 or older is very unlikely IMO. I concede they might nibble at the edges, like replacing CPI with chained CPI.

 

[tmm99]

If you had a spouse who didn't work much, delaying getting SS makes more sense, no? Is there a SS calculator that calculates that also?

 

[Rustward]

I think for some people it is optimal to take SS at 62; for others it is optimal to take it at 70. For everybody else it will be optimal to take it somewhere between 62 and 70.

My point is that the membership here covers a wide variety of situations; from multi-millionaires to several thousand-aires; some with juicy pensions, and some with no pension; some with significant after-tax savings and others with nothing but retirement savings.

You can't just make a blanket statement like "It is always better to take SS at nn". It just depends on the individual's situation, and those vary widely.

 

[Animorph]

If you had a spouse who didn't work much, delaying getting SS makes more sense, no? Is there a SS calculator that calculates that also?

This one should work pretty well for many cases:

Social Security Benefits Evaluator - T. Rowe Price

 

[Chuckanut]

Waiting till 70 is always a loser. For 30 yrs and for 40 yrs. days.

I won't argue with this, but I will say that FireCalc is just one tool, and it does not take into account certain factors that are important to people. For example, I like to balance my sources of retirement income close to 1/3, 1/3, 1/3, with the idea that 2 of the three sources will provide for basic expenses. That allows me to sleep well at night. This may be a suboptimal according to FireCalc, but it works for me.

 

[razztazz]

Originally Posted by razztazz View Post
Waiting till 70 is always a loser. For 30 yrs and for 40 yrs. days.

I won't argue with this, but I will say that FireCalc is just one tool, and it does not take into account certain factors that are important to people.

Btw, I am not "arguing" any of this. I just posted the results *I* always get from FireCalc vis a vis social security. And, yes, I am single and I know how the thing is actuaried and how it changes depending on age and how many spouses you have.

Waiting for a bigger check cuts into my own personal money bag. I can't find a good excuse to wait.

 

[haha]

I won't argue with this, but I will say that FireCalc is just one tool, and it does not take into account certain factors that are important to people. For example, I like to balance my sources of retirement income close to 1/3, 1/3, 1/3, with the idea that 2 of the three sources will provide for basic expenses. That allows me to sleep well at night. This may be a suboptimal according to FireCalc, but it works for me.

I pay zero attention to Firecalc. I see no advantage in putting a black box between me and the investment decision. I used it once when I first came, to see if my way of spending that had already been working for 15 years or so was fully approved. I still think that is a reasonable use. But to get a yes or no on an investment decision?

Re SS, while there are many special circumstances, most, while not all favor taking it at 70, even for a single male. Most of the special factors that favor earlier relate to either FIT, or other than SS public or private benefit streams, foreign pensions, etc.

Well educated, law abiding, cautious millionaires like those here are very likely to live beyond the background longevity expectation of the entire population. Add several extra years for being female. Then the big enchilada is that the much talked about actuarially neutral feature of SS can only be that at a given interest rate (discount rate). It has been a long time since we have seen interest rates that might favor taking SS early, and it may be a long time before we see them again.

Ha

 

[Bigfish]

Replies

Many good replies to my original posts, thank you. I spoke with the local SS office today and Ready and Running Man are correct, even if I stop working at 63 and do not claim SS until 66 or even 70 my benefits will increase signifigantly. I will step back and run the numbers again but probably wait until 66. I'mstill concerned about drawing down my 401K and IRA during the possibility of a bear market. But as many have said all situations are different and we all have to do what we feel is best for ourselves. Thanks for your comments.
BF

 

[F4mandolin]

You can always just draw off the savings when things are going good. Then if there is a bear market at a bad time for you, start your SS.

 

[REWahoo]

You can always just draw off the savings when things are going good. Then if there is a bear market at a bad time for you, start your SS.

+1

That's exactly the road I traveled in 2008/9. Had planned to wait until FRA or later to start SS but Mr. Market had other plans for me...

 

[Looking4Ward]

According to the SSA website, I could collect:

$1500/mo at age 62
$2700/mo at age 70

If I started SS at 62 and I'm doing this math correctly, I would collect $144K by the age of 70.

If I wait until 70, it would take 10 years before I'd realize the advantage of the increased monthly amount ($144K/$14.4K a year additional SS).

So I'd have to live past 80 before I'm actually collecting $1200 a month more.

And that doesn't factor in any possible investment gains on the original $1500 a month if I start pulling it early and investing it. At 6.5%, that $1500 a month would grow to $188K over the eight year period.

I think I'll probably start at 62.

 

[F4mandolin]

+1

That's exactly the road I traveled in 2008/9. Had planned to wait until FRA or later to start SS but Mr. Market had other plans for me...

Uh oh.....if someone is agreeing with me....that's a bad sign. SELL EVERYTHING!!

 

[growing_older]

When was the last time there was a substantive change to the rules for people 62 or even 55?

There have been a number of changes, such as taxability of SS and proposals to change the cost of living calculations. These are generally applicable to everyone, not segregated by age. The increases in FRA were phased in, but there's no guarantee that benefits won't change again, even for people at or near retirement age.

 

[RunningBum]

According to the SSA website, I could collect:

$1500/mo at age 62
$2700/mo at age 70

If I started SS at 62 and I'm doing this math correctly, I would collect $144K by the age of 70.

If I wait until 70, it would take 10 years before I'd realize the advantage of the increased monthly amount ($144K/$14.4K a year additional SS).

So I'd have to live past 80 before I'm actually collecting $1200 a month more.

That's why many of us call it longevity insurance. I'm not too concerned about making my money last to age 70 or 80, or being able to spend a bit more to that point. I'm much more concerned with living long beyond 80 and being able to keep myself comfortable.

And that doesn't factor in any possible investment gains on the original $1500 a month if I start pulling it early and investing it. At 6.5%, that $1500 a month would grow to $188K over the eight year period.

This is the point I'm going to try to model more closely when I get closer to 62. 6.5% won't come risk free but might not be an unreasonable return to use. I think I modeled 5% a year or so ago and was surprised at how late the crossover came, around 90 if I did my numbers right.

 

[heeyy_joe]

Predicting things is hard, especially when it comes to the future. ;>)