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Old 04-29-2014, 04:46 PM   #41
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Waiting till 70 is always a loser. For 30 yrs and for 40 yrs. days.
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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.
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Old 04-29-2014, 04:56 PM   #42
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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.

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Old 04-29-2014, 07:34 PM   #43
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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
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Old 04-29-2014, 07:43 PM   #44
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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.
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Old 04-29-2014, 07:47 PM   #45
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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...
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Old 04-29-2014, 08:01 PM   #46
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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.
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Old 04-29-2014, 08:17 PM   #47
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+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!!
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Old 04-29-2014, 08:39 PM   #48
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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.
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Old 04-29-2014, 09:03 PM   #49
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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.
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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.
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Old 04-29-2014, 09:23 PM   #50
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Predicting things is hard, especially when it comes to the future. ;>)
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Old 04-29-2014, 09:30 PM   #51
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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.

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.
I believe one should use inflation-adjusted or real investment returns when determining the crossover age. With my asset allocation, I typically use a real return of 3.5% as a likely scenario. However, I consider the impact of lower and higher returns too (as well as taxes). A 3.5% real return puts my crossover age in the lower 80's.

I agree about the longevity insurance. For the most part, that's how I look at social security. It's extremely unlikely that I'll need the money in my 60's (I'm currently 54), but who knows what will happen over the next 30+ years. I'll re-evaluate as I approach 62, but currently I'm planning to wait until 70 before taking social security.
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Old 04-29-2014, 10:47 PM   #52
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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
You can always wait for claim SS and if your withdrawals for living expenses and investment results start to drive your 401k/IRA balance to a point were you are not comfortable then claim SS to stop the bleeding from your retirement accounts.
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Old 04-29-2014, 11:13 PM   #53
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Originally Posted by Looking4Ward View Post
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.

Your math may be correct, but your formula does not reflect likely conditions - you're not factoring in COLA increases. Assume 3% per year growth on both your income from 62 to 70 and at 70 going forward and you'll find that you're break even point is somewhat less than 10 years. That's because 3% of the higher number returns more than 3% of the smaller number.
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Old 04-29-2014, 11:27 PM   #54
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<SNIP>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
I'm in the sweet spot between 66 and 70 (benefits increasing 8%/yr). MY THING is to spend as MUCH of my 401(k) and tIRAs BEFORE I take SS at 70. After that, my RMDs will add to my "inflated" SS and cause me to pay more taxes. There are lots of angles to cover here. It's not always easy to figure. If you want to talk about "changes": Think about the changes (and change proposals we've all heard about) to the tax code. One thing for certain, if the gators don't getcha, the skeeters will.

By the way decision to take SS at 70 is longevity insurance (primarily) for DW as I have shorted her on pension survivor benefits (she had to sign of on it, just in case anyone is unfamiliar with the pension law).

YMMV
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Old 04-30-2014, 09:11 AM   #55
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I thought for a long time that being single I would take SS at 62. However, this year I am enjoying the benefit of a tax credit due to the ACA. Social Security income is counted 100% for the MAGI used in determining the amount of tax credit one recieves if buying health insurance through the Marketplace. I have not studied it in detail as I am only 57, but I have a sense that from age 59 1/2 to 64 it may be tax beneficial for me to take a good chunk of my income during those years from tax deferred accounts rather than SS and delaying SS to age 65, taking a larger SS payment when I am eligible for Medicare at 65. Anyone else who is or will be subsidy eligble give any thought to using tax deferred monies before age 65 for tax reasons and the changes brought about by the ACA?
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Old 04-30-2014, 10:45 AM   #56
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to the tax code. One thing for certain, if the gators don't getcha, the skeeters will.
I like this, too funny but sadly so true.
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Old 04-30-2014, 12:19 PM   #57
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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

Exactly. Once you pass 62 you always have the option to "break the glass" and begin taking SS if necessary based on circumstances at a given time.
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Old 04-30-2014, 12:37 PM   #58
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+1 Plan "B" for me if I experience a poor sequence of returns and my nestegg gets uncomfortably low.
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Old 05-02-2014, 04:51 PM   #59
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My "longevity insurance" plan is to have an investment portfolio (401K, IRAs, Roths, taxable) in the $2M range.

When you look at it carefully, people break into 3 cases:
1) Poor(ish). These people will take SS as soon as they can, because they need the money to eat.

2) Rich(ish). To these people it doesn't matter. What they receive from SS is just the sprinkles on top of the ice cream cone. The presense or absense of the SS check makes no difference in their life-style.

3) On the cusp. These people can squeak by without getting a SS check. By definition, they can eschew the SS check for 8 years. That being the case, they could probably get by without the SS check for 9 years. Or 10 years. Or perhaps forever. So they don't really need the SS money, so they don't really need to optimize what they collect from SS.

For case 1 & 2, there is no decision to be made--the category forces the decision.
And almost everybody fits into the first 2 categories.

For most of case 3, the decision is irrelevant. The only people to whom it makes a difference is those who just barely make it to year 8 on thier own money and basically run out just as they hit 70.
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Old 05-02-2014, 05:40 PM   #60
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[QUOTE=rayvt;1445381]My "longevity insurance" plan is to have an investment portfolio (401K, IRAs, Roths, taxable) in the $2M range.

When you look at it carefully, people break into 3 cases:
1) Poor(ish). These people will take SS as soon as they can, because they need the money to eat.

2) Rich(ish). To these people it doesn't matter. What they receive from SS is just the sprinkles on top of the ice cream cone. The presense or absense of the SS check makes no difference in their life-style.

3) On the cusp. These people can squeak by without getting a SS check. By definition, they can eschew the SS check for 8 years. That being the case, they could probably get by without the SS check for 9 years. Or 10 years. Or perhaps forever. So they don't really need the SS money, so they don't really need to optimize what they collect from SS.

Actually I think there are many on this forum that fit into cat 3. That's why there's so much discussion about this topic. Anyway I'm a #3 that will probably go with age 62 because that's the kind of guy I am.
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