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Old 05-12-2015, 08:59 AM   #21
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anyone else bothered by the lack of numbers in that short article?


also, remember that life expectancy depends on current age, so saying that "males live to x" doesn't really mean anything


"a male aged y is expected to live an additional x years" is the correct way to think about it
All my male ancestors that I know anything about (dad, paternal uncle, paternal GF) all drank them selves to the grave, so I don't know anything about that 1/2 of genetics, maternal side all lived to 90's and that was 20+ years ago, but then that was all female except one male. Not sure what that means or how the longevity of a female ancestor will affect my (male) longevity.

you have to have a plan that will reach some target age or plan to have excess in case you miss your appointment with DA Man and have to reschedule. However, any actuaries estimates only apply to the pool. I wonder how many actually die within say 5 years of that magic number for a man of X age. Clearly I'm not average. Am I going to my appointment at 70, 80, 90, 100 ? so since there is a 30 year window where do you plan for? me I'm planning for 107.
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Old 05-12-2015, 09:00 AM   #22
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Originally Posted by Big_Hitter View Post
anyone else bothered by the lack of numbers in that short article?


also, remember that life expectancy depends on current age, so saying that "males live to x" doesn't really mean anything


"a male aged y is expected to live an additional x years" is the correct way to think about it
but it's not only about when you die. I'm 55 and already I have arthritis in my feet, I have osteoarthritis and bad knees. A very high probability that I will have to have both of them replaced.

So it's also about as you get older you might not be able to do all those glorious things you think you'll do.

At 70 will I really be able to skip around Europe like I want too? probably not. I'll definitely have a better chance at 62.

So it's not only about when you die, it's also about how you want to live
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Old 05-12-2015, 09:07 AM   #23
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Here is my take on what he said.... and it is not what you probably think...

IOW, say you were going to live on $80K.... and could get $20K in SS.... his 'plan' is to spend $100K when you are young... not your original $80K... he said... take extra vacation, go first class, take a bigger suite on cruise (IIRC).... so, you are not taking it to take less money out of your portfolio, but to enhance your lifestyle in your early 60s....


To me, that is not what most people want to do... as it does not maximize family value....
Correct. If you want to pass money on to someone, don't do that. In my case, DW and I have no heirs, so what you described is exactly what we plan on doing, with one difference...we are putting my SS off until 70 just for the increased survivor benefit, as my pension gets cut by 50% when I die.

These types of articles do serve a purpose in inspiring people to ponder the issue, I guess. And everyone's situation is so different, these people that write this kind of stuff could write a different article every day and still not be through all of the possibilities. Easy money for them, if you like to do that sort of thing.
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Old 05-12-2015, 09:07 AM   #24
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So it's not only about when you die, it's also about how you want to live
agreed
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Old 05-12-2015, 09:12 AM   #25
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but it's not only about when you die. I'm 55 and already I have arthritis in my feet, I have osteoarthritis and bad knees. A very high probability that I will have to have both of them replaced.

So it's also about as you get older you might not be able to do all those glorious things you think you'll do.

At 70 will I really be able to skip around Europe like I want too? probably not. I'll definitely have a better chance at 62.

So it's not only about when you die, it's also about how you want to live
so if I take SS at 62 and spend it, is that different than taking a larger cut from retirement savings at 62 and then taking the SS at 66 or 70?

This was my initial thought but I'm not sure if I think this is a reasonable alternative or not.

If I could get 8% from both delaying SS and from my investments, then the next step would be to compare the risk of each. The SS 8% is "without risk" while the returns on my investments are "at risk", so take the 8% without risk. Right ?
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Old 05-12-2015, 09:16 AM   #26
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If I could get 8% from both delaying SS and from my investments, then the next step would be to compare the risk of each. The SS 8% is "without risk" while the returns on my investments are "at risk", so take the 8% without risk. Right ?
+1

plus it would be a shock to start getting 8% on my investments, so we are going to spend that first.
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Old 05-12-2015, 09:24 AM   #27
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but it's not only about when you die. I'm 55 and already I have arthritis in my feet, I have osteoarthritis and bad knees. A very high probability that I will have to have both of them replaced.

So it's also about as you get older you might not be able to do all those glorious things you think you'll do.

At 70 will I really be able to skip around Europe like I want too? probably not. I'll definitely have a better chance at 62.

So it's not only about when you die, it's also about how you want to live
All true, people tend to spend less very late in life (e.g. last 10 years) because of physical/mental limitations. Only caveat, and it can be a big $ one, assisted living/nursing and/or end of life medical costs can lead to staggering costs in the last few years. Only my data point, but DW's Mom and my parents spent less and less as they got older, but their living costs at least tripled for the last 2-3 years...
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Old 05-12-2015, 09:25 AM   #28
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Isn't the breakeven point for taking it at 70 instead of 62 something like the mid 80s?
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Old 05-12-2015, 09:29 AM   #29
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why is he a quack?.....

First of all I hate this American concept of Inheritance. let's see, I work hard all my life, give my kids every advantage and then I save and scrimp..what to leave it to my children when I'm dead?? Oh yeah that's a wonderful way to live life........
He is a quack because it is quite apparent to anyone knowledgeable on the subject of SS that the optimal choice is quite situational, so to make a blanket statement that you should take it early even if you don't need the money is foolish. There are numerous situations, like mine, where our family is better off waiting because of joint mortality and the fact that DW's benefits are less than half of mine since she was a SAHM.

Inheritance is not high on my list either, but leaving money to our kids is ahead of leaving money to the federal government by suboptimizing our social security. Besides, with the genetics in my family, there is a good chance that I may live long and SS is "cheap" longevity insurance given there are few good inflation-adjusted payout annuities out on the market.

I'm sorry for your loss but I never suggested dialing back on lifestyle for our heirs... you read that into it... we can pretty much spend what we want to but even though we don't need the money, it would still be foolish of us to take SS at 62 given joint mortailty and our genetic longevity.
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Old 05-12-2015, 09:33 AM   #30
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Isn't the breakeven point for taking it at 70 instead of 62 something like the mid 80s?
It varies some depending on individual circumstances, but most studies/articles seem to point to early 80's as an average breakeven. It can vary from late 70's to late 80's.

It's important to not confuse average longevity with SS breakeven. About half will live longer than average longevity, but everyone is money ahead on SS when/if they reach their individual SS breakeven age.

One of hundreds What Is Social Security's Full Retirement Age?
Attached Images
File Type: png 05142014-social-security-break-even-analysis_1_large.PNG (88.3 KB, 80 views)
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Old 05-12-2015, 09:33 AM   #31
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"quack" is probably fair due to the lack of financial rigor in that article
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Old 05-12-2015, 09:37 AM   #32
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First of all I hate this American concept of Inheritance. let's see, I work hard all my life, give my kids every advantage and then I save and scrimp..what to leave it to my children when I'm dead?? Oh yeah that's a wonderful way to live life...
.
Having seen inheritors of large sums and trust funders up close and personal, I can say that it is most often not a pretty picture over the long haul.

You'd assume that those of multigenerational wealth would be better prepared for such windfalls, but oftentimes even they fail at the game.
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Old 05-12-2015, 09:37 AM   #33
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It varies some depending on individual circumstances, but most studies/articles seem to point to early 80's as an average breakeven. It can vary from late 70's to late 80's. ....
But to be fair, this graphic assumes that the time value of money is zero. With the time value of money, the BEPs slide to the right and how far they slide depends on the assumed interest rate.
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Old 05-12-2015, 09:39 AM   #34
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why is he a quack?

I agree with him.

First of all I hate this American concept of Inheritance. let's see, I work hard all my life, give my kids every advantage and then I save and scrimp..what to leave it to my children when I'm dead?? Oh yeah that's a wonderful way to live life...

lol, my kids will graduate debt free from college, they are 21 and 23 and so far they have been to Paris, disneyworld (almost annually), lisbon, Jersey shore (annually), countless plays in NYC, Washington dc and numerous other local cities. My youngest will go to law school debt free (if he makes the grades) and most likely they will both inherit property. Sorry if they can't make it after those advantages, I am not going to feel guilty.

So no, I have absolutely no plans on leaving them a couple of million dollars. I plan on spending it and enjoying my senior years.

Now I am a widow, my husband died at 55 from cancer without ever enjoying a day of retirement. Yes, we took family vacations but basically the dreams we had of our senior lives died

And once again, this is a good way to live life?? IMO, that is not living basically what we do here in this country is we survive until we get old then we drop dead. so sad.
IMHO you have a very healthy attitude toward providing for your children. Set them on the right path (debt-free) and the rest is generally up to them.
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Old 05-12-2015, 09:45 AM   #35
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They latest life expectancy for males that I could find is 76.4 years in the US, for women it 81.2 years.
I don't know where you are looking. This table gives the remaining life expectancy of a 62 year old man as 19.8 years. For a 62 year old woman, 22.6 years. That's 82 and 84. Actuarial Life Table

But, that table includes people living in hospices on their 62nd birthdays. Most people who post here are in a lower mortality group and should plan on a longer life span. If we use the 2012 Individual Annuitant Mortality Table, we find that about half the 62 year old males will be alive at 87. Life Experience Committee | American Academy of Actuaries

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FWIW I am a single male. In the previous two generations of my family only 3 males out of 6 lived beyond this age. None in good health, two with severe dementia and one losing a leg to circulation problems. I believe in my case the author's point is valid, odds are I can do more with money and enjoy life more between the ages of 62 - 66 than I will in future past age 66.

Dementia and Parkinson's in the previous two generations of my family seems to be prevalent.
This is an excellent reason to start early. If the link had said "If you are in poor health, or believe you have genes that predict a short life, start at 62", virtually everyone here would agree.
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Old 05-12-2015, 09:46 AM   #36
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also, remember that life expectancy depends on current age, so saying that "males live to x" doesn't really mean anything


"a male aged y is expected to live an additional x years" is the correct way to think about it
Quibbles, quibbles. I think you are as bad as I am.

My new mantra will be "whatever!"
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Old 05-12-2015, 09:52 AM   #37
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We are planning on taking SS at 62.

a) large Trad IRAs that will require min distro at 70.5 with added in SS a lot will be taken in taxes

b) SS is not the amount of money that would change our lifestyle so we would just plan on giving it to our kids (siblings) as charitable gifts (14.5K limit) or to charities that have affected our lives.
a) When I tried to do the math, the taxes were pretty much a wash.

b) Congratulations on giving it away while you're alive. I think this is a fine reason to start early. Although theoretically you don't need to take SS to make the gifts, it's a nice way of explaining the gift to the kids.
Note that, unless you've go $10 million, the $14k is the limit on reporting. You can give your kids as much as you like without incurring gift taxes.
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Old 05-12-2015, 09:58 AM   #38
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To quote the venerated wit Mike Tyson "I won't know whether to be ecstatic or ludicrous" if I make it to 78 or 80. (probably ludicrous)

My view is that by the time I'd reach if I'm lucky enough to reach my break even, my expense profile will be considerably lower or at least shifted to things less valued.

I'd rather have the extra cash now.

1) less $$ I have to withdraw from my portfolio
2) my portfolio would/should grow at least as well as SS (if not better)
3) get in before DC changes the rules. (How sad would it be to hold off for a better result only to be subjected to means testing!)
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Old 05-12-2015, 09:58 AM   #39
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Quibbles, quibbles. I think you are as bad as I am.

My new mantra will be "whatever!"
well in all fairness it used to be a big deal...100 years ago when infant mortality rates were high


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Old 05-12-2015, 09:59 AM   #40
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What would be the break even for taking it at 66 vs. 70?
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