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Old 10-03-2015, 09:50 AM   #21
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the big issue is the 62 to fra when you can't do a file and suspend . that is where spending down assets and no spousal benefit adders can hurt and push out break even times ,.
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Old 10-03-2015, 11:45 AM   #22
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Question, since your wife has a history of earnings, why not have her retire and claim SS at 62 with you getting the spousal benefit while you delay claiming your own SS until 70 or FRA? At $20K per year, quick estimate, you'd be getting around $12K SS or more at 62 and you're still covered by the Medicare hold harmless provision.
For one, the spouse could not claim spousal benefits until the spouse reaches her FRA. IIRC they are the same age so this does not work for many reasons. Also, if you claim early your benefits are permanently reduced. Not a good strategy.
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Old 10-03-2015, 12:56 PM   #23
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The free T Rowe Price SS calculator might help a little to understand the nuances
Social Security Benefits Evaluator - T. Rowe Price
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Old 10-03-2015, 07:09 PM   #24
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The free T Rowe Price SS calculator might help a little to understand the nuances
Social Security Benefits Evaluator - T. Rowe Price
Thanks!!!!!

Another poster was correct....no matter what you chose....it's not much of a difference. I calculated my totals at taking SS at 62, 64, and 65. I estimated my kicking the bucket at 75 and my wife at 90. It took into consideration those calculations. Here are the totals:

If starting SS at:
62: 794k
64: 836k
65: 859k
66: 877k......FRA
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Old 10-03-2015, 07:46 PM   #25
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I looked at the calculator but there is no criteria for counting the fact if you delay and spend down invested assets that money is gone forever and can no longer compound.
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Old 10-03-2015, 08:39 PM   #26
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Thanks!!!!!

Another poster was correct....no matter what you chose....it's not much of a difference. I calculated my totals at taking SS at 62, 64, and 65. I estimated my kicking the bucket at 75 and my wife at 90. It took into consideration those calculations. Here are the totals:

If starting SS at:
62: 794k
64: 836k
65: 859k
66: 877k......FRA
But what if you or your DW live to be 100? or longer?
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Old 10-03-2015, 08:43 PM   #27
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But what if you or your DW live to be 100? or longer?
Well, you could go all day with a million different variables. I'm being realistic. The odds of me living to 100 are zero....as with the majority of the population. And honestly, I doubt the calculations would vary much either.
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Old 10-03-2015, 08:51 PM   #28
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I guess my point was that SS is a great longevity insurance that is COLAed.
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Old 10-03-2015, 09:38 PM   #29
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I guess my point was that SS is a great longevity insurance that is COLAed.
Exactly. People often start this "analysis" by trying to maximize payouts (dollars times years), which leads nowhere unless one knows when he'll die and it's not the right question anyway (IMO). The more useful question is: "Which will be of greater utility to my wife and I: Waiting to age 70 and getting the higher monthly inflation-adjusted check that we can't outlive, or the increased amount we'll keep in our portfolio if I take SS before age 70?"

Obviously, this is in addition to the other strategies (e.g having her take SS on her record early, then take the spousal benefit on your record later, etc).
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Old 10-04-2015, 12:42 AM   #30
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Well I've been reading the book, Get Whats Yours and boy is there a lot of information there. It is so confusing and there are so many scenarios. I thought I knew what we will probably do when the time comes, but now I don't know! And you can't trust the social security office to to tell you the right thing either. With a spouse that is six years younger, it is hard to know which scenario is the most advantageous. I guess I will have to find an expert when we get closer.

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Old 10-04-2015, 07:05 AM   #31
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if you will not be working from 62 to 70 and living off your own savings then the equation shifts a lot . if you will be spending down invested assets those assets are done compounding forever . also , like in our case my wife gets a spousal adder to hers since she is collecting early but until i file she gets no additional kicker of 2500.00 a year . . then of course we have the checks you didn't collect . ONE OTHER THING IS UNTIL YOU COLLECT THE HOLD HARMLESS MEDICARE LAW DOES NOT PROTECT YOU . for 2016 there is a huge jump in medicare of more than 50 bucks a month coming . if you are collecting you can not be raised more than the cola adjustment . since there is none there will be no increase if collecting . if not collecting you get the full increase . based on a balanced fund and all of the above , break even is not until 22-23 years out ,. that is a far cry from just figuring lost checks . that is a very long time just to reach ground zero . you need to live to 90 or a spouse does to make it worth delaying and getting a big enough difference so taking the risk of not reaching break even is worth it as you are betting against the house when you bet on longevity to that age ,. there still are reasons for waiting like survivor benefits and reduced dependency on markets down the road , but the point is it is more than looking at 8 years of checks difference . .
Mathjack; You seem to be in the know with respect to all things SS. With respect to the Medicare Premium hold harmless rules, if I am collecting a spousal benefit now my premium will therefore not be increased significantly for 2016 due to the hold harmless law. But what would happen in 2017 if I switched to collecting under my own record. Would I escape that big premium increase due to hold harmless, even though my SS increased?
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Old 10-04-2015, 07:45 AM   #32
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if you get a cola in either case they will take it .as long as you are collecting you can't be raised more than the cola .

if you file and suspend you can be raised regardless as well as if income for a couple is over a certain level , i think 170k.
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Old 10-04-2015, 01:20 PM   #33
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I just talked with my Fidelity guy. I sent him some of the scenarios from last nights calculations. He said, "remember a year ago when you were 59 and you said you were concerned about when to take SS? I told you not to worry about it. The people making money are the book writers trying to make it all complicated, buy my book for SECRET SOCIAL SECURITY info that they don't want you to have! It's all crap. I've done millions of different computations for people and watched people waste countless hours trying to do millions of different things to maximize SS. Guess what....no matter what you do it all comes out similar and not worth the stress." "So, I dont care when you take it. We will focus more on your personal accounts and maximize what we have to work with."
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Old 10-04-2015, 01:58 PM   #34
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I just talked with my Fidelity guy. I sent him some of the scenarios from last nights calculations. He said, "remember a year ago when you were 59 and you said you were concerned about when to take SS? I told you not to worry about it. The people making money are the book writers trying to make it all complicated, buy my book for SECRET SOCIAL SECURITY info that they don't want you to have! It's all crap. I've done millions of different computations for people and watched people waste countless hours trying to do millions of different things to maximize SS. Guess what....no matter what you do it all comes out similar and not worth the stress." "So, I dont care when you take it. We will focus more on your personal accounts and maximize what we have to work with."
Easy for him to say, it's not his SS money, guess what, SS is complicated and educating yourself and considering all the possibilities is not a waste of time. Does he blow off all your concerns this way? I find that attitude pretty paternalistic for an FA.
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Old 10-04-2015, 02:12 PM   #35
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no matter what you do it all comes out similar and not worth the stress
Obviously, he is focusing on the "actuarially neutral" aspect to the exclusion of all other considerations. Not someone I would care to take advice from.
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Old 10-04-2015, 02:20 PM   #36
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Obviously, he is focusing on the "actuarially neutral" aspect to the exclusion of all other considerations. Not someone I would care to take advice from.
+1. He's not looking at the right question. He should be looking at maximizing utility, and at using each available stool "leg" (SS, retirement savings, pension (if any)) for what it does best. He doesn't appear to be doing that.

While it might not apply here, advisors who get paid as a "% of assets under management" have a short-term incentive to advise people to take SS early rather than waiting, since it keeps more money in their portfolio (and generating fees for them).
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Old 10-04-2015, 07:06 PM   #37
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+1. He's not looking at the right question. He should be looking at maximizing utility, and at using each available stool "leg" (SS, retirement savings, pension (if any)) for what it does best. He doesn't appear to be doing that.

While it might not apply here, advisors who get paid as a "% of assets under management" have a short-term incentive to advise people to take SS early rather than waiting, since it keeps more money in their portfolio (and generating fees for them).
He covers all these areas very well. My wife and are the same age separated by only a week. Has done numerous calculations for SS..... The results vary slightly for our specific situation.
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Old 10-04-2015, 07:55 PM   #38
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Well I've been reading the book, Get Whats Yours and boy is there a lot of information there. It is so confusing and there are so many scenarios. I thought I knew what we will probably do when the time comes, but now I don't know! And you can't trust the social security office to to tell you the right thing either. With a spouse that is six years younger, it is hard to know which scenario is the most advantageous. I guess I will have to find an expert when we get closer.

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I was trying to help my BIL with some rudimentary SS concepts. His DW is 12 years younger, and the T Rowe Price calculator wouldn't work with that big of a spread. Although BIL did realize that with a child under 18, he could claim at 62 and there would be a dependent children benefit. I could see the $$ in his eyes
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Old 10-04-2015, 09:10 PM   #39
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I just talked with my Fidelity guy. I sent him some of the scenarios from last nights calculations. He said, "remember a year ago when you were 59 and you said you were concerned about when to take SS? I told you not to worry about it. The people making money are the book writers trying to make it all complicated, buy my book for SECRET SOCIAL SECURITY info that they don't want you to have! It's all crap. I've done millions of different computations for people and watched people waste countless hours trying to do millions of different things to maximize SS. Guess what....no matter what you do it all comes out similar and not worth the stress." "So, I dont care when you take it. We will focus more on your personal accounts and maximize what we have to work with."
Actuarially this might be right-ish. However, I notice that nowhere in the thread do you break out the numbers for your SS vs. your wife's. There's more to consider than break even points and outliving them. If your SS is significantly higher than your wife's, it could be important to wait as long as possible to guarantee her the highest possible survivor benefit. That's if SS is going to be a significant part of your AA. If it's not, take it now and spend it on beer or whatever. But if it's meaningful to your finances, and if your wife is going to outlive you (and actuarially she will), then it should be important to you to look out for her well being after you are gone.

It sounds like your FA is just looking at the income aspect of SS, without taking survivor benefits into consideration. He's probably right, from that POV. At least enough so that it won't effect his bottom line. But I think there are other, more important aspects to when to collect than just getting the extra dollar or two while you are alive. Again, if SS is just a pittance in your plan, then don't worry about it.
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