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Old 07-25-2017, 10:42 AM   #161
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Well, not exactly. It depends on your taxed income level fo each year, and the amount you pay back. If you repay less than $3000, then it is subject to the 2% AGI rule, so likely you do lose any tax paid on that. Once above the $3k amount (like a full years worth) then SS includes a 1099 that shows negative income. So if you are in the same tax bracket in the previous year and the year paid back, AND you can take advantage of the full deduction of the repaid amount, then you will get your SS taxed amount back.

It is a once a lifetime option, and makes the most sense from FRA to FRA plus one year, where the gain is the full 8%. I've been studing this a bit and still can't come up with a reason not to do it, (assuming one wanted to delay to FRA+1 anyway), meaning claim at FRA, then based on market, health, financial situation. etc, pay it back and at least refile for the new higher amount. It could even work to your advantage if you had a much higher income in the year paid back.
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Old 07-25-2017, 09:31 PM   #162
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BTW, these are just the people who are the greatest at risk for being hit with means-testing, if that gets put on SS. How'd you like to give up $3,800/mo for 8 years planning to get $6,700 and then get told "Nope, sorry, you have too much, you could get by without it for 8 years so you can get by without it forever."?

Bingo. This is my biggest fear and is in my opinion the best reason to take SS early. Alternatively, take SS the minute SS reform gets any traction at all in Congress, and hope to be grandfathered if additional means-testing is part of the "fix."

(I say "additional" means testing because the government is doing it already.)
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Old 07-27-2017, 03:28 AM   #163
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Interesting thread. DH will be 62 next year and we are considering what to do. Don't need SS yet, and currently RMD will exceed need at 70. But, we do not have long term nursing home insurance. Currently, our thinking is how do we maximize income for the survivor if one of us needs long term care. I mean LONG term of 5 years or more. Longevity is good on both sides and our plan carries us to age 97, if one of us does not end up in a nursing home and by that age it is likely. So our consideration is not how do we get the most, but how do we preserve the most for a survivor. Current plan is to have DH take at 62 and take less each year from portfolio, and I will take SS at age 70 as mine is slightly higher. One SS check plus non-cola pension is then what the survivor has if assets are depleted....
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Old 07-27-2017, 04:38 PM   #164
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All this talk about SS made me rerun anypia.exe to see what my SS will be at 62, FRA of 66-1/2, and 70. I initially did this in 2014, but downloaded the latest program version from SSA.gov to see the effect of inflation adjustments.

The new program gives me numbers that are 8.5% higher than the 2014 numbers. Even at the recent low inflation level, the cumulative inflation factor can really add up.

I then repeated what I did with FIRECalc back in 2014, that is to enter these SS benefits along with my now larger stash to see what I can spend if I draw SS at the 3 ages. The result was the same as before, that is the spending levels for 100% success stay about the same whether I draw SS at 62, 66-1/2, or 70. Success in this case means being broke in 30 years.

Now, I did something new, that was to select the requirement that my stash will never be less than 50% of its value now, with inflation accounted for. Drawing SS at 62 wins big time! I guess that's the effect of bad sequence of returns at the early phase of retirement that early SS can really help.

And the price of keeping at least 1/2 of my stash at all times means that I can spend only 67% of the level where I allowed myself to possibly being broke in 30 years.
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Old 07-27-2017, 04:47 PM   #165
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Now, I did something new, that was to select the requirement that my stash will never be less than 50% of its value now, with inflation accounted for. Drawing SS at 62 wins big time! I guess that's the effect of bad sequence of returns at the early phase of retirement that early SS can really help.
One thing you can do to offset this is to start taking SS when a downturn hits. Just because you don't take it at 62 doesn't mean you have to wait until 70, or decide years in advance when to take it. You can start at 63 or 64 or even 62 and a month if things start going south.
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Old 07-27-2017, 05:16 PM   #166
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One thing you can do to offset this is to start taking SS when a downturn hits. Just because you don't take it at 62 doesn't mean you have to wait until 70, or decide years in advance when to take it. You can start at 63 or 64 or even 62 and a month if things start going south.
Exactly!

FIRECalc presents a whole range of outcomes for the future, which is unknown. But as that future unfolds, one re-evaluates as more is known and the uncertainty is reduced.
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Old 07-27-2017, 08:31 PM   #167
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That may be one of the best things about SS...after age 62 it is an option that can be exercised if desired if investment results go sideways.
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Old 07-28-2017, 05:52 AM   #168
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Interesting thread. DH will be 62 next year and we are considering what to do. Don't need SS yet, and currently RMD will exceed need at 70. But, we do not have long term nursing home insurance. Currently, our thinking is how do we maximize income for the survivor if one of us needs long term care. I mean LONG term of 5 years or more. Longevity is good on both sides and our plan carries us to age 97, if one of us does not end up in a nursing home and by that age it is likely. So our consideration is not how do we get the most, but how do we preserve the most for a survivor. Current plan is to have DH take at 62 and take less each year from portfolio, and I will take SS at age 70 as mine is slightly higher. One SS check plus non-cola pension is then what the survivor has if assets are depleted....
This was pretty much our plan - with the genders reversed. Hope it works for both our family units!
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Old 08-06-2017, 04:20 PM   #169
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I hope it isn't bad form to return to this thread so late in the game. Life got crazy busy so I haven't been back in a while.

I just wanted to thank everyone for the conversation. The thread is definitely longer than what I expected it would be. I've lots to consider!
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