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Old 05-26-2015, 09:10 AM   #341
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Ray, what table are you looking at? This table indicates that of 100,000 men that 84,090 would be alive at age 62, 26,854 at age 87 and 2,819 at age 97.

So the probability of a 62 year old male living to age 87 is 32% (26,854/84,090, but not 50%) and the probability of a 62 year old male living to age 97 is 3% (2,819/84,090, but not 10%).
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Old 05-26-2015, 09:47 AM   #342
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Originally Posted by pb4uski View Post
Ray, what table are you looking at? This table indicates that of 100,000 men that 84,090 would be alive at age 62, 26,854 at age 87 and 2,819 at age 97.

So the probability of a 62 year old male living to age 87 is 32% (26,854/84,090, but not 50%) and the probability of a 62 year old male living to age 97 is 3% (2,819/84,090, but not 10%).
correct, according to that table
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Old 05-26-2015, 12:19 PM   #343
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I don't know how these particular life expectancy tables were created, and I have not been following this thread, but one thing to keep in mind is that average life expectancy for a 65 year old is statistically increasing at the rate of just over one year per decade. It has been like this for some time and shows absolutely no signs of slowing down.

So, for instance, if a 65 year was looking at the data for the last statistical cohort, he should probably add roughly 2 years to the statistical data (since he will on average live around 2 decades more, and someone who just died around the average age represents someone who was 65 years old 2 decades in the past).
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Old 05-26-2015, 01:49 PM   #344
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I have been reading this long thread with interest. DH will be turning 62 and we are leaning toward taking SS early. No spousal benefits to consider since I receive a pension from a non SS job.

Reasons we are leaning toward take at 62 include...DH has already lived longer than father and one grandfather. However, DH father was a smoker and that certainly makes a difference in longevity.


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Old 05-26-2015, 02:54 PM   #345
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I have been reading this long thread with interest. DH will be turning 62 and we are leaning toward taking SS early. No spousal benefits to consider since I receive a pension from a non SS job.

Reasons we are leaning toward take at 62 include...DH has already lived longer than father and one grandfather. However, DH father was a smoker and that certainly makes a difference in longevity.


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If your DH takes SS at 62, that provides some financial protection for you should he pre-decease you. That's the primary reason I started my SS at 62. And depending on his success (or not) at investing that money, he may or may not be financially better off even if he lives to a ripe old age.

A SS spouse wishing to financially protect a non-SS spouse should he/she pre-decease the non-SS spouse is the best reason I've heard to take SS early.

GPO is a strange rule......... Folks in non-SS jobs should be demanding they become part of the SS system as happened with Fed employees.
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Old 05-26-2015, 03:51 PM   #346
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Originally Posted by pb4uski View Post
Ray, what table are you looking at? This table indicates that of 100,000 men that 84,090 would be alive at age 62, 26,854 at age 87 and 2,819 at age 97.

So the probability of a 62 year old male living to age 87 is 32% (26,854/84,090, but not 50%) and the probability of a 62 year old male living to age 97 is 3% (2,819/84,090, but not 10%).
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I don't know how these particular life expectancy tables were created, and I have not been following this thread, but one thing to keep in mind is that average life expectancy for a 65 year old is statistically increasing at the rate of just over one year per decade. It has been like this for some time and shows absolutely no signs of slowing down.

So, for instance, if a 65 year was looking at the data for the last statistical cohort, he should probably add roughly 2 years to the statistical data (since he will on average live around 2 decades more, and someone who just died around the average age represents someone who was 65 years old 2 decades in the past).
I started an alternate thread on this topic
Longevity
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Old 05-26-2015, 05:10 PM   #347
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If your DH takes SS at 62, that provides some financial protection for you should he pre-decease you. That's the primary reason I started my SS at 62. And depending on his success (or not) at investing that money, he may or may not be financially better off even if he lives to a ripe old age.

A SS spouse wishing to financially protect a non-SS spouse should he/she pre-decease the non-SS spouse is the best reason I've heard to take SS early.

GPO is a strange rule......... Folks in non-SS jobs should be demanding they become part of the SS system as happened with Fed employees.
That GPO offset will not be changed... it took them many years to implement.... why would them want to backtrack and hurt the system more than it is now
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Old 05-26-2015, 10:12 PM   #348
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A SS spouse wishing to financially protect a non-SS spouse should he/she pre-decease the non-SS spouse is the best reason I've heard to take SS early.
Regarding the GPO, it seems to me that the lower the benefit of a SS spouse, the higher the risk of a 'total GPO offset' for the dependent benefit for the non-ss gpo spouse. If the SS spouse waits to take SS later, the higher benefit may prevent the 'total GPO offset' of the dependent benefit. Additionally, if the spouse pension is not indexed to inflation, then the difference between the spouse pension and the dependent benefit will increase over time, creating a gradually larger dependent benefit.

Also, if the SS spouse waits to apply, then the higher SS survivor benefit, leaves more for the survivor after the GPO is applied, especially considering the inflation effect on the non-indexed pension.

If this is not correct, I'd like to know
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Old 05-27-2015, 06:37 AM   #349
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Originally Posted by pb4uski View Post
Ray, what table are you looking at? This table indicates that of 100,000 men that 84,090 would be alive at age 62, 26,854 at age 87 and 2,819 at age 97.

So the probability of a 62 year old male living to age 87 is 32% (26,854/84,090, but not 50%) and the probability of a 62 year old male living to age 97 is 3% (2,819/84,090, but not 10%).
Oh, darn, you are right. I went back yesterday to look at something else and, wouldn't ya know, could not find it again. Turns out I had looked at the projected Life Table for Calendar Year 2100. Which is obviously a complete fantasy & projection.

===========
To correct my original post:
At age 62, 50% of them would still be alive at 82, 10% would still be alive at 93.
At age 70, 50% would live to be 84, 10% would live to be 93.
At 62, the earliest age at which you can make the take/delay decision, you only have a 1 in 3 chance (31.9%) to make it to 87.

Also:
At age 62, if you defer to 70 the break-even age is 81.
Only 56% of 62 year-olds will make it to 81, 44% won't. So, okay, you've got a better than even shot at hitting the break-even age. The early claimer was ahead for 19 years, but eventually the delayer pulled ahead.
What are the odds that the delayer will live to be ahead for 10 years -- half of the time that he was behind? 30%

A bit less that 1 in 3 chance that he'll be ahead for *half* the number of years that the 62-claimer was ahead. And you can probably bet that having extra money at 80+ doesn't buy as much happiness as having extra money at 62-80.

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Old 05-27-2015, 07:18 AM   #350
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Oh, darn, you are right. I went back yesterday to look at something else and, wouldn't ya know, could not find it again. Turns out I had looked at the projected Life Table for Calendar Year 2100. Which is obviously a complete fantasy & projection.

===========
To correct my original post:
At age 62, 50% of them would still be alive at 82, 10% would still be alive at 93.
At age 70, 50% would live to be 84, 10% would live to be 93.
At 62, the earliest age at which you can make the take/delay decision, you only have a 1 in 3 chance (31.9%) to make it to 87.

Also:
At age 62, if you defer to 70 the break-even age is 81.
Only 56% of 62 year-olds will make it to 81, 44% won't. So, okay, you've got a better than even shot at hitting the break-even age. The early claimer was ahead for 19 years, but eventually the delayer pulled ahead.
What are the odds that the delayer will live to be ahead for 10 years -- half of the time that he was behind? 30%

A bit less that 1 in 3 chance that he'll be ahead for *half* the number of years that the 62-claimer was ahead. And you can probably bet that having extra money at 80+ doesn't buy as much happiness as having extra money at 62-80.

Best retire to Lake Wobegone.
What is your goal?

1) Is it to give you the best chance to "beat the system" and give yourself the best odds of coming away with the most SS money at whatever age you die?

2) Or is it to try to ensure you have enough money to live on in all cases?

If it's 1), by all means use the averages. If you think you've got less than 50% chance of outliving the breakeven point, take SS early.

But if it's 2), and this is the only one that makes sense to me, at least in my case, I don't really care if I don't maximize my money if I die before the break even. I'll have had enough for those years. What I care about is making it last no matter what age I hit. Holding out for a bigger payment makes a lot more sense, though I have to weigh that against possible SS cutbacks, and whether I can take early SS payments and invest it better on my own, especially if the markets are down when I'm 62. Dying before the breakeven is not a factor in this decision as long as I have enough money to live on to that point, which I have no doubt I will. I will not regret that I came out behind in SS payments because unless I knew I was going to die then, I wasn't going to spend any more money anyway, in case I did live longer.

And it probably is true that the extra money can be enjoyed more in the earlier years, but as has been said time and time again, money is fungible. I can take extra from other sources in the early years. I don't have to take SS early just to have more to spend in the early years. I recognize that not everyone has enough to do this, but on this board I suspect many can.

And while money may not bring as much happiness after age 80, lack of money can sure bring a lot of misery.
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Old 05-27-2015, 07:28 AM   #351
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What is your goal?
1) Is it to give you the best chance to "beat the system" and give yourself the best odds of coming away with the most SS money at whatever age you die?

2) Or is it to try to ensure you have enough money to live on in all cases?
+1. I'm interested in maximizing the utility of SS payments to DW and I, not necessarily their expected dollar value. They ain't the same thing. That considerably higher check--for as long as we live--buys some useful protection against poor investment performance for as long as we might need it.
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Old 05-27-2015, 08:57 AM   #352
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+1. I'm interested in maximizing the utility of SS payments to DW and I,
good plan
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Old 05-27-2015, 09:44 AM   #353
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Thanks all for this as it has been explained in math that I can grasp.

I like the comparison of buying a SPIA vs delaying SS.

Question.

Since interest rates are so low now couldn't you estimate a higher return SPIA would likely be available 8 years from now?

Thanks

Bob

still waiting for 70 think I will chip one more day off that wait today
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Old 05-27-2015, 10:39 AM   #354
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...
Question.

Since interest rates are so low now couldn't you estimate a higher return SPIA would likely be available 8 years from now?
...
I'm wondering if the government can tolerate higher interest rates and still cover fixed costs. The Fed might be somewhat independent, but I doubt they will do anything to rock the boat too much and will attempt to maintain the low interest rates. There, of course, will come a time when the system will balance, possibly with ugly results.
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Old 05-29-2015, 08:53 AM   #355
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To correct my original post:
At age 62, 50% of them would still be alive at 82, 10% would still be alive at 93.
As you pointed out, these numbers depend on what mortality table you use. The 2100 SS table probably isn't a good fit to people who reach 62 in 2015.
OTOH, the 2010 SS table probably isn't a good fit for healthy people who reach 62 in 2015.

I provided some choices in this thread: Longevity

My "best guess" table for that healthy male would produce
.. 50% of them would still be alive at 89, 10% would still be alive at 98.
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Old 05-29-2015, 09:01 AM   #356
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The only mortality table that really matters is the one my cold corpse is stored on while they figure out how the hell I died with an umbrella in that way. :-)
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Old 05-29-2015, 09:40 AM   #357
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One thing I see from these posts is that for some taking SS at 70 is an offset of secured income in later years to the possibility of poor investment returns. For retiree households with more of a matching type strategy in place and not so much of a mutual fund kind of plan, secure income from other sources may not be as much of a concern. So the SS decision is being influenced by the volatility of other retirement income sources - the less predictable the other sources, the more importance is placed on SS at 70 for a stable source of income.
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Old 05-29-2015, 09:51 AM   #358
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I would like to take SS at 18...then enjoy next 30 years while I am young ...then go to work when I am 48
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Old 05-29-2015, 09:55 AM   #359
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I would like to take SS at 18...then enjoy next 30 years while I am young ...then go to work when I am 48

That would have been dangerous for me as I would have enjoyed the 12 yrs. between 18 and 30 way too much.
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Old 05-31-2015, 08:33 PM   #360
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O.K., just 'ran the numbers' for my situation. I'm 59. I am withdrawing $2000 a month from my personal savings to supplement my pension. At age 62, I'll be withdrawing $2500 a month (with a COLA) from my own savings that will supplement my pension. This is approx. 4% of the savings value.

Based on the SS on-line calculator, SS will pay me and DW a combined $2519 at age 62 or $3818 at FRA (66 and 4 months old). The raw SS amount break-even is at age 75 when my $2519 age 62 totals $393,000 and my $3818 age FRA totals $397,000.

However, since I wouldn't be drawing my own money from age 62 to FRA, a total of $131,000, I would have to put away the difference between the 62 draw and the FRA draw for 8 years and 4 months to replenish my savings I used. That makes a TRUE break-even of age 83 to really break even, where my savings and my SS draw are now at the same value. Actually, that doesn't even consider the lost growth of my own savings I'd be gaining for those years between 62 and FRA when I'd be on SS.

Am I missing anything or misunderstand this? Seems to me, that I live my expected life span and break even at age 83 and I get to protect my savings for my heirs if I draw SS at 62. Plus I get to keep my net worth at it's highest during the entire period.

I plan to use this personal savings for any long term health needs if necessary. I also own my own home, currently valued at about $650,000. I will most likely downsize by age 75 or sooner if I get tired of maintaining this place and want a simpler and time-freeing lifestyle.
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