Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 06-01-2010, 11:43 PM   #41
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,387
Quote:
Originally Posted by endthefed View Post
hate to beat the same drum...but gold and some other some hard assets are off of the radar.
Gold is only off someone's radar if he resides in a cemetery.

Might be a fine investment, but off the radar
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-02-2010, 09:00 AM   #42
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,820
Quote:
Originally Posted by rayvt View Post

Create this spreadsheet and the results are astounding.
For me, assuming 2% SS COLA and 0% (zero percent) earrnings on the saving account, the BEP was at age 81. 19 years.
At 4% earnings, the BEP was age 89. 27 years.

Plus, when you refile you are starting clean. If you die the next day all the money is gone and you wll have collected nothing. OTOH, if you start early with the side savings account, whenever you die the savings account is still there, for your spouse/heirs to keep.
My spreadsheet gave a slightly different answer. Did you remember to inflate the benefit at NRA? (For example, suppose that at 62 your "full" benefit is $10,000 per year and your early benefit is $7,500. If you take the $7,500 now, it will be $8,118 when you get to age 66. If you wait until 66 to start, your initial benefit is $10,824, not $10,000.)
__________________

__________________
Independent is offline   Reply With Quote
Old 06-02-2010, 09:13 AM   #43
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
All this ink over nada. The rules are almost certain to change in the next few years. How can you game the system when you don't know the rules ?
__________________
MasterBlaster is offline   Reply With Quote
Old 06-02-2010, 09:43 AM   #44
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Quote:
Originally Posted by MasterBlaster View Post
All this ink over nada. The rules are almost certain to change in the next few years. How can you game the system when you don't know the rules ?
How true. Then again, do you really trust a thread whose OP tells you what you should ALWAYS do ?
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Old 06-02-2010, 10:03 AM   #45
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Quote:
Originally Posted by Rich_in_Tampa View Post
...do you really trust a thread whose OP tells you what you should ALWAYS do ?
Sort of sounds like religion ...
__________________
rescueme is offline   Reply With Quote
Old 06-02-2010, 11:41 AM   #46
Full time employment: Posting here.
 
Join Date: Sep 2007
Posts: 719
Quote:
Originally Posted by Independent View Post
My spreadsheet gave a slightly different answer. Did you remember to inflate the benefit at NRA? (For example, suppose that at 62 your "full" benefit is $10,000 per year and your early benefit is $7,500. If you take the $7,500 now, it will be $8,118 when you get to age 66. If you wait until 66 to start, your initial benefit is $10,824, not $10,000.)
Ah, I see what you did. I did only part of it. And I made a simplifying assumption
You applied a 2% COLA to the early amount starting at age 62, in which case at age 66 it will be $677/mo. You did the same for the reported FRA benefit, so that when SSA says (today) it will be 833/mo, you assume that the FRA benefit will also grow by 2% COLA, so that when you actually get to 66 the FRA benefit will have ballooned to 902/mo. Clever--I didn't think about that. I applied the COLA only after the checks began--either age 62 or age 66.

Interestingly, the thing I checked by spreadsheet against (
http://web.bryant.edu/~rmuksian/text...62vsNormal.xls
) _also_ applies COLA only after the checks begin. So maybe both him and me made this mistake.

If it is a mistake.
When I compare what SSA sent to me on Feb 2008 vs. Feb 2009, my 2009 age early (62) payment was 3.1% higher that the 2008 number, but FRA (66) payment was only 1.2% higher. How can this be? Shouldn't these have gone up by the same percentage? Indeed, shouldn't the 66 amount have gone up even more due to compounding? To further confuse me, the 2008 COLA was 5.8% and the 2009 COLA was 0.0%. So where did the 3.1% come from? Certainly nothing else has changed---I'll still have turned 62 on the same date, and have turned 66 on the same date, and I've hit the caps.

Arrrggghhh! They also said that if I deferred to age 70, the difference between the 2008 amount and the 2009 amount was $3/mo or 0.1%.

BTW, my simplifying assumption was that the COLA gets applied monthly rather than annually. At low rates, this does not introduce much of an error.
__________________
rayvt is offline   Reply With Quote
Old 06-02-2010, 12:26 PM   #47
Recycles dryer sheets
 
Join Date: May 2010
Location: houston
Posts: 96
Quote:
Originally Posted by haha View Post
Gold is only off someone's radar if he resides in a cemetery.

Might be a fine investment, but off the radar
it is off the radar. nobody knows what's in that shoebox....or buried in your backyard

compare this to the "total information awareness" the feds have on paper and real estate.
__________________
endthefed is offline   Reply With Quote
Old 06-02-2010, 12:30 PM   #48
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,387
Quote:
Originally Posted by endthefed View Post
it is off the radar. nobody knows what's in that shoebox....or buried in your backyard

compare this to the "total information awareness" the feds have on paper and real estate.
Oh, I see what you mean. I misunderstood your meaning.
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 06-02-2010, 02:31 PM   #49
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,820
Quote:
Originally Posted by rayvt View Post
Ah, I see what you did. I did only part of it. And I made a simplifying assumption
You applied a 2% COLA to the early amount starting at age 62, in which case at age 66 it will be $677/mo. You did the same for the reported FRA benefit, so that when SSA says (today) it will be 833/mo, you assume that the FRA benefit will also grow by 2% COLA, so that when you actually get to 66 the FRA benefit will have ballooned to 902/mo. Clever--I didn't think about that. I applied the COLA only after the checks began--either age 62 or age 66.

Interestingly, the thing I checked by spreadsheet against (
http://web.bryant.edu/~rmuksian/text...62vsNormal.xls
) _also_ applies COLA only after the checks begin. So maybe both him and me made this mistake.

If it is a mistake.
When I compare what SSA sent to me on Feb 2008 vs. Feb 2009, my 2009 age early (62) payment was 3.1% higher that the 2008 number, but FRA (66) payment was only 1.2% higher. How can this be? Shouldn't these have gone up by the same percentage? Indeed, shouldn't the 66 amount have gone up even more due to compounding? To further confuse me, the 2008 COLA was 5.8% and the 2009 COLA was 0.0%. So where did the 3.1% come from? Certainly nothing else has changed---I'll still have turned 62 on the same date, and have turned 66 on the same date, and I've hit the caps.

Arrrggghhh! They also said that if I deferred to age 70, the difference between the 2008 amount and the 2009 amount was $3/mo or 0.1%.

BTW, my simplifying assumption was that the COLA gets applied monthly rather than annually. At low rates, this does not introduce much of an error.
I'm having trouble opening the spreadsheet (macros vs. my security settings I think) but I did look at Chapter 10 of Muksian's textbook here: http://web.bryant.edu/~rmuksian/text...l_Security.pdf
Notice the example on page 12 where the worker is starting benefits in 2010 at age 66. The calculation uses the bend points for 2006, calculates a PIA of $2,099 then inflates it for four years to get $2,347 as the initial benefit at age 66.

This agrees with the process that the SSA explains on their website here: Social Security Retirement Benefit Calculation In fact, the numbers are identical. See worker B on the second page.

I think the 3.1% and the 1.6% makes an interesting puzzle. You didn't mention if you've quit working, or what the SS benefit estimate might be assuming for future wages. Generally, even if you've quit working, if you are still under 62 the Wage Index will increase the dollar amount of your initial benefit. So some increase isn't surprising, but I would expect to see the same increase in the age 62 and age 66 benefits.

I'll agree that the monthly COLA application shouldn't make a material difference on this analysis.
__________________
Independent is offline   Reply With Quote
Old 06-04-2010, 08:24 AM   #50
Recycles dryer sheets
 
Join Date: May 2010
Location: houston
Posts: 96
thanks to ron boyd for posting this on another thread. it will answer a lot of questions here. seems to ease the fears about spousal implications of taking it early. it's a long detailed article - so i just pasted some short clips -

Social Security Reset: When Does It Make Sense?

For married beneficiaries, there are additional considerations. Married couples in which the younger and/or healthier spouse has the lower PIA may see an increase to lifetime household benefits if the older spouse resets his or her retirement benefit.

As stated above, this is because the reset benefit amount continues as a survivor benefit after the death of the older spouse. The greater the age difference between the older spouse with the higher PIA and the younger spouse with the lower PIA, the greater the potential increase to lifetime household benefits.

If a reset is considered appropriate, the transaction itself is fairly straightforward: the retiree files form SSA-521 Request for Withdrawal of Application and simultaneously files a new application.8

All past benefits paid on the withdrawn application, including spousal, children's, and Medicare deductions, must be repaid before the new application can be processed. Interest is not charged on the repaid amount and disenrollment from Medicare is not required.9

The SSA will issue an SSA-1099 showing a negative net benefit amount. The taxes paid on past benefits can be deducted (not subject to the 2 percent floor for miscellaneous deductions) if over $3,000, or taxes paid on past benefits can be recaptured as a credit.10

The retiree will have to recalculate but not amend past tax returns to determine the amount of tax attributed to past benefits. Notably, there is no limit to the number of times benefits can be reset.
__________________
endthefed is offline   Reply With Quote
Old 06-04-2010, 11:46 AM   #51
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,294
So... endthefed...

Do you take back your original statement

Do you now agree that you should not ALWAYS take SS at 62
__________________
Texas Proud is offline   Reply With Quote
Old 06-04-2010, 11:47 AM   #52
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Quote:
Originally Posted by Texas Proud View Post
So... endthefed...

Do you take back your original statement

Do you now agree that you should not ALWAYS take SS at 62
: laugh::l augh::la ugh:

As in all things in life (IMHO), "it all depends"....
__________________
rescueme is offline   Reply With Quote
Old 06-04-2010, 12:42 PM   #53
Recycles dryer sheets
 
Join Date: May 2010
Location: houston
Posts: 96
Quote:
Originally Posted by Texas Proud View Post
So... endthefed...

Do you take back your original statement

Do you now agree that you should not ALWAYS take SS at 62
not yet.

nobody laid out a factual case against it. just speculation and fears -

plus, the article from mr boyd seems more supportive than not -
__________________
endthefed is offline   Reply With Quote
Old 06-04-2010, 01:06 PM   #54
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
Quote:
Originally Posted by endthefed View Post
not yet.

nobody laid out a factual case against it. just speculation and fears -
Regardless if you feel it is "correct", I'll just go back to my "mantra":

"I would rather die with money, than live without it".

My "solution" (in my situation only; I can't speak for others) meets my goal/mantra....

And as far as to your opinion on the subject? That only impacts your life ...
__________________
rescueme is offline   Reply With Quote
Old 06-04-2010, 02:44 PM   #55
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,294
Quote:
Originally Posted by endthefed View Post
not yet.

nobody laid out a factual case against it. just speculation and fears -

plus, the article from mr boyd seems more supportive than not -

Well, since very few people know all the rules... it might be a bit harder...

But let's try this... my wife is 11 years younger than me... she does not have any SS of her own... if I started to take SS at age 62 and then die.. she does not get survivor benefits until she reaches age 62.. and then at a discount on my discounted amount... because I had started mine early.. and I can not 'fix' it by paying it all back

So, she will be impacted by me starting early for the rest of her life. If I had not started early, she could get a higher amount for the rest of her life based on my normal retirement amount....

Am I 100% sure of this.... no, but I am putting things together from what others have said... and my sister who's husband started early and it affect how much she gets..
__________________
Texas Proud is offline   Reply With Quote
Old 06-04-2010, 02:53 PM   #56
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
TromboneAl's Avatar
 
Join Date: Jun 2006
Posts: 11,202
If there's going to be means testing, perhaps it would make sense to spend down your other assets as much as possible before taking SS.

IOW instead of setting your rate at 62 when you have $2 million in the bank, wait until 70 when you only have 28 cents left.
__________________
Al
TromboneAl is offline   Reply With Quote
Old 06-04-2010, 03:21 PM   #57
Recycles dryer sheets
 
Join Date: May 2010
Location: houston
Posts: 96
Quote:
Originally Posted by TromboneAl View Post
If there's going to be means testing, perhaps it would make sense to spend down your other assets as much as possible before taking SS.

IOW instead of setting your rate at 62 when you have $2 million in the bank, wait until 70 when you only have 28 cents left.

i think it more prudent to convert the visible $2 mill into invisible $2 mill - precious metals, collectibles, etc. still take it at 62 -
__________________
endthefed is offline   Reply With Quote
Old 06-04-2010, 03:24 PM   #58
Recycles dryer sheets
 
Join Date: May 2010
Location: houston
Posts: 96
Quote:
Originally Posted by Texas Proud View Post
Well, since very few people know all the rules... it might be a bit harder...

But let's try this... my wife is 11 years younger than me... she does not have any SS of her own... if I started to take SS at age 62 and then die.. she does not get survivor benefits until she reaches age 62.. and then at a discount on my discounted amount... because I had started mine early.. and I can not 'fix' it by paying it all back

So, she will be impacted by me starting early for the rest of her life. If I had not started early, she could get a higher amount for the rest of her life based on my normal retirement amount....

Am I 100% sure of this.... no, but I am putting things together from what others have said... and my sister who's husband started early and it affect how much she gets..
that's another question, not a rebuttal.

to be clear - i'm am not opposed to being wrong - it happens all the time! my latest...started buying into bp in the low 50's....last buy was at 36.xx
__________________
endthefed is offline   Reply With Quote
Old 06-04-2010, 04:41 PM   #59
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,387
Quote:
Originally Posted by endthefed View Post
that's another question, not a rebuttal.

to be clear - i'm am not opposed to being wrong - it happens all the time! my latest...started buying into bp in the low 50's....last buy was at 36.xx
Maybe you should have stayed with conservative investments like gold?
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 06-04-2010, 05:14 PM   #60
Full time employment: Posting here.
 
Join Date: Apr 2009
Posts: 731
Eeek. Since I am not married, the spouse issues don't exist for me. However, I did convert some IRA money to a Roth IRA this year - so either I pay big taxes in 2010 or more modest taxes in 2011/2012. However, the second scenario makes SS taxable... so do I wait or not...

The everlasting question. I'm still trying to work the numbers - I decided NOT to take it at 62 (this month) because of all the issues around the IRA taxation. As soon as I can figure that out... when pigs fly?...

Does anyone know when it gets adjusted for age? Specifically, does my age 62 SS amount stay the same until I turn 63 (and then become a larger benefit, if I haven't claimed yet)? Or do they pro-rate it depending exactly how old you are?

Part of me just says take it and run and pay the taxes - it would make life much simpler in terms of cash flow. It would definitely increase my taxes.
__________________

__________________
Retired July 2, 2010 at 62. My only regret is that I couldn't do it sooner.
thinker25 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 12:38 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.