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Old 05-12-2015, 09:59 AM   #41
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Quibbles, quibbles. I think you are as bad as I am.

My new mantra will be "whatever!"
I got a chuckle from the mantra! We've been dealing with a nightmare MIL who for last 5 months has been in hospitals (3), assisted living (2), rehabs (3) and a hospice where she was given 2-4 days max around March 10. Got kicked out 4 weeks later! DW and I have two mantras: Oh Well! and from a song title: "The Road goes on Forever and the Party Never Ends!" While it's costing us and BIL a bunch of money; we're a lot more about wanting to be done with all the drama (and she's a real PIA). Whatever!
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Old 05-12-2015, 10:07 AM   #42
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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 ?
I'm not sure what you mean by "get 8% from delaying SS".
Your SS monthly benefit will be higher in the future if you do not take any benefit today. This increase is not an interest rate, and shouldn't be confused with one.
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Old 05-12-2015, 10:09 AM   #43
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What would be the break even for taking it at 66 vs. 70?
About 81 1/2 according the the graph in Post#30, but that is assuming 0% interest. With some (real) interest it would be a bit later.
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Old 05-12-2015, 10:10 AM   #44
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I'm not sure what you mean by "get 8% from delaying SS".
15/14 or 14/13 or 13/12, etc - about an 8% increase each year for delaying


although you have to calculate the loss of the missed payments


rocket surgery...
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Old 05-12-2015, 10:12 AM   #45
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What would be the break even for taking it at 66 vs. 70?
It depends on your assumed interest rate.
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Old 05-12-2015, 10:13 AM   #46
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It is a straight 8% a year (or portion thereof, not compounded). So if your FRA is 66 then your age 70 benefit would be 132% of your FRA. If your FRA is 67 and you start at age 70 then 124%.
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Old 05-12-2015, 10:13 AM   #47
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15/14 or 14/13 or 13/12, etc - about an 8% increase each year for delaying


although you have to calculate the loss of the missed payments
.
Yes. My concern was that the poster wasn't including your second point.
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Old 05-12-2015, 10:15 AM   #48
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Here is another thought, especially for us single males. How many of us have a financial plan with 100% success to age 95 even though we only have a 20% chance of living that long from age 65?

I am 58 but with each passing year the more I worry about running out of time (especially healthy quality time) rather than running out of money.
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Old 05-12-2015, 10:19 AM   #49
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Here is another thought, especially for us single males. How many of us have a financial plan with 100% success to age 95 even though we only have a 20% chance of living that long from age 65?

I am 58 but with each passing year the more I worry about running out of time (especially healthy quality time) rather than running out of money.
For singles, in theory it doesn't matter. If it were me and I was single and had enough for 100% success, I would still wait as it is cheap longevity insurance to protect me if I did live long or if the financial markets were unkind.

However, if you add in unfavorable genetic history or existing health issues that impact long term mortality then taking early is a better option.
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Old 05-12-2015, 10:31 AM   #50
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So with MRD at 70, assuming most of it is from ROTH, better to wait or take SS early?
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Old 05-12-2015, 10:31 AM   #51
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Understanding life expectancy is important. How it's used, is even more important.
So... what does life expectance mean to you?
What:
Is the the life expectancy for a person born today?
Is it the life expectancy for people of your age?... and if so, does it account for the people your age who have already died?
Is the the average number of years you have left to live?

When I was born, my life expectancy was less than 60 years. As of today, my life expectancy is 86 years. Out of 100 persons who shared my birthday, 59 are still alive today. The leading cause of death was cancer.

If you are a 55 year old male, your current life expectancy is about 25 more years to age 80. Nine out of ten men who had the same birthday are still alive.
When you were born, you were expected to live to age 67.

Taking SS at 62 was a right decision for us. Because of our financial situation, Social Security meant we were able to avoid taxes. At the time, we hadn't considered the longer term implications which, fortunately, worked out perfectly, balancing our income and expenses and staying within the tax code which is designed for middle income couples in retirement. Has worked for the past 17 years. No Federal or state taxes.

Of course, every situation is different, and with no crystal ball for the future,
decisions have to be personal.
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Old 05-12-2015, 10:46 AM   #52
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Here is another thought, especially for us single males. How many of us have a financial plan with 100% success to age 95 even though we only have a 20% chance of living that long from age 65?

I am 58 but with each passing year the more I worry about running out of time (especially healthy quality time)
rather than running out of money.
which is what I find so "lacking" in most "retirement" talks. all chats tend to focus on simply making it to 90, 95, 100 without any thought to quality of life.

Even here rarely do you hear discussions (now I'm a newbie so I'm sure someone will point me to the appropriate post) of balanced living.

It seems like the end goal is just surviving to 100 and at 100 there will be a grand prize.

So I too, am becoming less and less concerned with living to 100 nor leaving my sons a gabillion dollars when I die.

I'm moving more to a "how can I lead an fulfilling, exciting, interesting life while I am healthy enough to do so" type of gal. although that maynot mean spending more money.
Now if someone can guarantee that my knees will hang in there until 70, I'll bite but when I'm 62 if my choices are take ss and be fully capable of using it to enhance my life vs waiting to 70 for a guarantee 8% increase. i'm taking door number one.

in the grand scheme of things though I guess i'm lucky that I have a choice.
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Old 05-12-2015, 10:48 AM   #53
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well in all fairness it used to be a big deal...100 years ago when infant mortality rates were high


I wasn't clear. I agree with you 100%. When my FIL was like 95 his life expectancy was counted by several years, It was very definitely not a minus figure.
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Old 05-12-2015, 10:50 AM   #54
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I wasn't clear. I agree with you 100%. When my FIL was like 95 his life expectancy was counted by several years, It was very definitely not a minus figure.
you were clear - I was just trying to make a funny
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Old 05-12-2015, 10:52 AM   #55
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..
I'm moving more to a "how can I lead an fulfilling, exciting, interesting life while I am healthy enough to do so" type of gal. although that may not mean spending more money.
Now if someone can guarantee that my knees will hang in there until 70, I'll bite but when I'm 62 if my choices are take ss and be fully capable of using it to enhance my life vs waiting to 70 for a guarantee 8% increase. i'm taking door number one.

in the grand scheme of things though I guess i'm lucky that I have a choice.
So is your assumption in all of this that you will spend more in your sixties if you take SS early and spend less if you delay?

In the general case the amount of spending in your sixties would be independent of when you draw SS.

-gauss
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Old 05-12-2015, 10:59 AM   #56
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Money is fungible. (I just really like that word.) So, spend more out of one's savings from 62-66 or 70. Or get SS earlier. Or.... Use higher SS at 70 as the most affordable LTC insurance available at the moment.

"You" statements are almost always problematic for a number of reasons. They are guaranteed to signal red alert and get the shields raised. Better to say "Here's one person's reason for taking SS at 62".

My 2 cents. Take what you wish and leave the rest.
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Old 05-12-2015, 11:04 AM   #57
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........
"You" statements are almost always problematic for a number of reasons. They are guaranteed to signal red alert and get the shields raised. Better to say "Here's one person's reason for taking SS at 62". ................
+1. The world does not consist of 7 billion people just like ourselves.
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Old 05-12-2015, 11:06 AM   #58
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Also, be careful SS @ 62 doesn't put one over one of the ACA cliffs.
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Old 05-12-2015, 11:07 AM   #59
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It is a straight 8% a year (or portion thereof, not compounded). So if your FRA is 66 then your age 70 benefit would be 132% of your FRA. If your FRA is 67 and you start at age 70 then 124%.
A question, how does COLA factor into this? Say you delay your benefits, will your retirement allowance still be COLA adjusted?

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So with MRD at 70, assuming most of it is from ROTH, better to wait or take SS early?
There's no MRD for Roth IRA. If your funds are in a Roth 401k or similar, you can rollover to a Roth IRA to avoid MRDs for greater tax free growth.
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Old 05-12-2015, 12:28 PM   #60
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A question, how does COLA factor into this? Say you delay your benefits, will your retirement allowance still be COLA adjusted?
Suppose your retirement benefit, if you start at 66, is $1,000 per month. Suppose that the CPI increases at exactly 3% for the next year.
Then, a year later you'll be getting $1,030.00 per month.

If you delay and start at age 67, your first benefit will be $1,112.40 (rounded down to $1,112.00, I believe). You get credit for both the 8% for deferring and the 3% for the CPI increase. *

In later years, the person who started at 67 will consistently get 8% more than the person who started at 66.


* There's a tricky deal in the very first year you claim, if it's after your normal retirement age, but I think that's too detailed for this question.
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