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Old 05-18-2015, 12:33 PM   #181
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What is the probability that all the factors that go into the decision will remain unchanged between now (age 48) and the time I must make the decision (Age 62)?

I am sure it is close to 0% so I will just have to wait to determine what I should do.

If I had to decide right now I would lean toward taking it early for the following (my circumstance) reasons:

1. If I waited it would only be a slight increase in expected lifetime income (assuming long life) so would not make much difference overall if everything goes as planned.

2. We expect an approximate equal weight from our portfolio, pensions, and SS. Delaying would put excess weight on social security later in life. My plan is to try to arrange it so any of these three sources would be enough to take care of the basics.

3. Lean toward depending on myself versus depending on SS (for longevity).
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Old 05-18-2015, 12:39 PM   #182
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What is the probability that all the factors that go into the decision will remain unchanged between now (age 48) and the time I must make the decision (Age 62)?

I am sure it is close to 0% so I will just have to wait to determine what I should do.
not close to zero, equal to zero
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Old 05-18-2015, 12:48 PM   #183
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not close to zero, equal to zero
I would disagree...

The only changed technical factor that may influence decision is your health at 62. All other considerations will remain nearly same.

But for people with lack of planning that will not be a case

And if you really will live long as you claimed you are looking at difference of few 100k. If I treated every few 100k earned in some investment like who cares if I make it or not I would not plan to fire at 55
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Old 05-18-2015, 12:56 PM   #184
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Yeah, equal to zero and then you have the unknowns beyond age 62:
Social Security: Would only get worse (means testing, etc) or remain unchanged
Pension: Only worse or unchanged
Portfolio Value: Can go up or down but with all the conservative estimates would likely be better.
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Old 05-18-2015, 01:00 PM   #185
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I would disagree...

The only changed technical factor that may influence decision is your health at 62. All other considerations will remain nearly same.

But for people with lack of planning that will not be a case

And if you really will live long as you claimed you are looking at difference of few 100k. If I treated every few 100k earned in some investment like who cares if I make it or not I would not plan to fire at 55
ORLY?

there are at least 10 things that can change (other than health) between now and then

Changes in SS law
Changes in tax rates
Changes in his portfolio or target asset allocation
Changes in his risk tolerance
Changes in ACA or in the definition of MAGI
Changes in his employment situation
Changes in employee benefits law
Changes in state law
Changes in interest rates
Changes in general mortality
etc.


If you want I can rattle off another 10


Bottom line - 14 years is an awfully long time.


Planning is great but it's based on several volatile assumptions, especially on an individual basis.
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Old 05-18-2015, 01:11 PM   #186
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Delaying till 65 will maximize Obamacare Subsidies ...

Just collect 60k in dividends get another 60k from cash and you have 10k a month plus Health Care subsidies (I am talking about couple)

Add to this 20k - 30k in SS and say goodbye to subsidies. You can go and spend half of SS on Health Care Insurance for a privilege of collecting it early.
The issue was taxes. Though I'm sure a full analysis for some people includes ACA subsidies.

I'm not sure if your smilies mean that you're joking. In my world, $60,000 in dividends means approx $3 million in taxable stocks. A $60,000 annual withdrawal from "cash" means a couple hundred thousand in cash. People with those numbers probably have at least equal amounts in other assets.

If I had that kind of money, I'd find these SS discussion boring.
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Old 05-18-2015, 01:13 PM   #187
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Originally Posted by Big_Hitter View Post
ORLY?

there are at least 10 things that can change (other than health) between now and then

Changes in SS law
Changes in tax rates
Changes in his portfolio or target asset allocation
Changes in his risk tolerance
Changes in ACA or in the definition of MAGI
Changes in his employment situation
Changes in employee benefits law
Changes in state law
Changes in interest rates
Changes in general mortality
etc.


If you want I can rattle off another 10


Bottom line - 14 years is an awfully long time.


Planning is great but it's based on several volatile assumptions, especially on an individual basis.
But the fact that for someone who will live above average length of life taking it early is financial mistake is a fact today as it was 30 years ago and as it will be 20 years from now.

And that is a case no matter what happened in last 30 years to all the things you are listing here actually it is unrelated to most of the things you are listing....
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Old 05-18-2015, 01:15 PM   #188
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But the fact that for someone who will live above average length of life taking it early is financial mistake is a fact today as it was 30 years ago and as it will be 20 years from now.
and who will be that someone?

none of us know

if you ask me to estimate how many people of a 100,000 cohort will be alive 10 years from now, I can do that pretty accurately

if you ask me if someone will be alive 10 years from now, I can't give you an answer
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Old 05-18-2015, 01:22 PM   #189
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and who will be that someone?

none of us know

if you ask me to estimate how many people of a 100,000 cohort will be alive 10 years from now, I can do that pretty accurately

if you ask me if someone will be alive 10 years from now, I can't give you an answer
Most of us here (those who FIRE) will live above average length of the life .
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Old 05-18-2015, 01:29 PM   #190
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The issue was taxes. Though I'm sure a full analysis for some people includes ACA subsidies.

I'm not sure if your smilies mean that you're joking. In my world, $60,000 in dividends means approx $3 million in taxable stocks. A $60,000 annual withdrawal from "cash" means a couple hundred thousand in cash. People with those numbers probably have at least equal amounts in other assets.

If I had that kind of money, I'd find these SS discussion boring.
For most part I have that kind of money and I don't find planing how to maximize SS boring in any way. That could mean few 100k for me and few 100k for DW.

That is LOT of money even for people with millions in equities.
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Old 05-18-2015, 01:40 PM   #191
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To get to the few 100k you must be assuming social security will not change and the market will have below average returns. Not sure either are probable over a long period of time.

Also trading some of my portfolio for more reliance on the government makes me less financially independent it seems to me.
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Old 05-18-2015, 01:46 PM   #192
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To get to the few 100k you must be assuming social security will not change and the market will have below average returns. Not sure either are probable over a long period of time.

Also trading some of my portfolio for more reliance on the government makes me less financially independent it seems to me.
Well if I start with maximum benefit which is about 2500 (really 2663) a month that is 60000 dollars a year per couple (both collecting maximum).

Now step 60k down by taking it at 62...step 60k up by taking it late at 70 and after age about 79 you are cashing that money in (difference between SS at 62 versus at 70 which is about 33k).

And that has nothing to do with how market performs. We are just talking about how much we collect from SS.

Please refer to graph in: http://www.schwab.com/public/schwab/...ocial-Security
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Old 05-18-2015, 02:07 PM   #193
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Most of us here (those who FIRE) will live above average length of the life .
since most early retirements are health related I doubt that will be the case...not that I don't hope that all forum posters live longer than expected
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Old 05-18-2015, 02:13 PM   #194
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since most early retirements are health related I doubt that will be the case...not that I don't hope that all forum posters live longer than expected
So many early retirees here do so because they have a means. Lets call them "Upper middle class".

Statistically this part of population lives longer. I am not trying to be rude or ahole.... It is just a simple fact. Same as statistically Asian Americans live longer then whites.

So I claim they will most likely live longer then 79-80 years a breakeven point of taking SS at 62 as compared to 70.
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Old 05-18-2015, 02:19 PM   #195
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the life expectancy for a male in the US currently aged 62 isn't 79 or 80, it's much longer than that


you don't want to argue life expectancies with me. let's just say I'm a pro and leave it at that
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You should take SS at 62
Old 05-18-2015, 02:24 PM   #196
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You should take SS at 62

I do not expect the minimum social security to go down but I would put a high probability on the maximum being capped either directly or by taxation.

You cannot make a decision without taking into account the time value of money (market return).

In any event, I probably agree financially it is better to delay but after taking into account the probabilities and other income sources it is not a black and white decision.
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Old 05-18-2015, 02:26 PM   #197
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I do not expect the minimum social security will go down but I would put a high probability on the maximum being capped either directly or by taxation.
due to the funded status of SS, many would say there is a huge political risk involved with the timing and amount of payment for those of us under 55
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Old 05-18-2015, 02:32 PM   #198
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Life expectancy for a male at 62 from the Social Security Actuarial Table (likely a little conservative) is 82 Census life table is about the same
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Old 05-18-2015, 02:42 PM   #199
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yeah those are old tables 84 is the new 82...


https://www.soa.org/Research/Experie...h-2014-rp.aspx
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Old 05-18-2015, 02:44 PM   #200
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Life expectancy for a male at 62 from the Social Security Actuarial Table (likely a little conservative) is 82 Census life table is about the same
Actually to correct myself break even point is between 80-81. I was just eyeballing graph when I stated 79-80.

So in the way SS is computed to be fair whether you take it at 62 or 70 for average person.

Really taking it at 70 means you are making bet on your longevity. So for 2 pack a day smoker this is a bad deal

From article break-even points:

$1,992 Age 62 vs. 66 Between 77 and 78
$2,676 Age 62 vs. 70 Between 80 and 81
$3,557 Age 66 vs. 70 Between 83 and 84
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