You should take SS at 62

[Big_Hitter]

Our FA convinced us to Waite until we I was 70 to take SS. I believe a big portion of that decision is your current status and how long you believe you will live?

I think FAs are hard-wired to automatically spit out the number 70 in any SS conversation

 

[ivinsfan]

It is so extreme that it really does not need to be addressed.... the amount saved would be very tiny compared to the amount being paid out.... do you know any couple with a 20+ age difference I have only met one in my life...

The big problem is just the sheer number of people getting benefits compared to the number paying in.... in addition, how much longer people are living...

That's a true statement, but I would be interested in knowing the amount overall that goes to the minor children of retired parents.Look at your average 60 year male movie star for more examples of 20 year age differences.

 

[Big_Hitter]

not to go too far off topic on the subject of long-tailed pension payments, but the last civil war pension beneficiary just passed away a few years ago - she married young to an old veteran around the turn of the century

 

[daylatedollarshort]

I think FAs are hard-wired to automatically spit out the number 70 in any SS conversation

+1. I sense a work until you drop theme in many financial articles as, present company excluded, most retirees simply do not have the resources to both retire at 62 and delay SS. Investment companies make money off of us - the more we save and the less we take out of savings the more they make. As Fred Brock put it in Retire on Less Than You Think, the investment brokerages and mutual fund companies want our money, so they scare us as much as possible.

While there are many good reasons to take SS at 70, articles that do not mention pros and cons, and certainly the very real potential cut in SS future benefits as a factor to consider, seem more like advertorials to me rather than the true pros and cons discussions like we have here.

 

[Big_Hitter]

if you can start before 2030, once you plug in that 25% (or whatever) haircut into the cash flows it becomes a no brainer

 

[dallas27]

I always find it odd people assume SS will be cut. I find it more likely the taxes will be increased. The reason t-bills are "risk-free" return is that the government can always create revenue via tax.


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[eta2020]

I always find it odd people assume SS will be cut. I find it more likely the taxes will be increased. The reason t-bills are "risk-free" return is that the government can always create revenue via tax.


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+1

It is possibility..... but I would say 10 times more likely are tax increases. And that may mean taxing 100% of SS benefits.

Contemplating cutting it is political suicide.

I think people who take SS at 62 want something to be happy about. So this is one of their spins. I will be rational about my decision at that means not at 62 and not at 70 either. 65-67 looks like right age for me

 

[Walt34]

not to go too far off topic on the subject of long-tailed pension payments, but the last civil war pension beneficiary just passed away a few years ago - she married young to an old veteran around the turn of the century

I remember reading about that. Also IIRC, the pension was $10/month.

 

[explanade]

I always find it odd people assume SS will be cut. I find it more likely the taxes will be increased. The reason t-bills are "risk-free" return is that the government can always create revenue via tax.


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Not so sure about that.

There's a strong anti-taxes, pro small govt. fervor that isn't going away any time soon.

Coupled that with disdain for "entitlements" as if people who get them have a sense of entitlement which is undeserved and it's a vocal and well-funded faction which will resist any kind of tax increases for the foreseeable future.

If they cut the benefits of seniors, what are they going to do, march on Washington in their walkers?

Meanwhile the younger cohorts don't believe SS will be there 20 or more years from now when they'd be eligible, so they'd rather have their taxes lowered (even if it's mostly the highest brackets which get most of the cuts) than cuts in SS benefits, which they don't think they're going to collect in the first place.

 

[Walt34]

If they cut the benefits of seniors, what are they going to do, march on Washington in their walkers?

No, but they will vote en masse, in part because they're not partying or working, raising kids (most anyway) or have many other distractions that keep folks away from the polls, including apathy. And the politicians know it.

I may be mistaken, and my crystal ball is as cloudy as the next guy's, but that'd be my bet.

 

[NYEXPAT]

That's a true statement, but I would be interested in knowing the amount overall that goes to the minor children of retired parents.Look at your average 60 year male movie star for more examples of 20 year age differences.

Well you found me out!

In 2011 (last #'s I've seen) there were 594,355 children collecting a combined total of about $7,132,260,000 per year and 2,291,792 collecting $27,501,504,000 on their spouses record.

+1 I know of one couple with a 20 year age difference... that's the most I can think of for people that I know.

It must be an "overseas thing" for the most part, as all of my married friends (age 60 and older) all have young wives and only five or so with young children. The oldest is 74 with a 36 y/o wife and a two year old daughter, He is a German national and we have never discussed his benefits. In the States my two closest friends have young Wives 62/26 and 62/40 but neither of them are retired or have children with their 2nd and 3rd Wives.

It is so extreme that it really does not need to be addressed.... the amount saved would be very tiny compared to the amount being paid out.... do you know any couple with a 20+ age difference I have only met one in my life...

If we move to Texas as we are planning, I'll be sure to drop by with the missus and say hello!

 

[Mulligan]

I remember reading about that. Also IIRC, the pension was $10/month.

Well now it all makes sense. She married for the money! I bet $10 bought more around 1900 than it did a few years ago though.


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[ivinsfan]

Well you found me out!

In 2011 (last #'s I've seen) there were 594,355 children collecting a combined total of about $7,132,260,000 per year and 2,291,792 collecting $27,501,504,000 on their spouses record.

It must be an "overseas thing" for the most part, as all of my married friends (age 60 and older) all have young wives and only five or so with young children. The oldest is 74 with a 36 y/o wife and a two year old daughter, He is a German national and we have never discussed his benefits. In the States my two closest friends have young Wives 62/26 and 62/40 but neither of them are retired or have children with their 2nd and 3rd Wives.


If we move to Texas as we are planning, I'll be sure to drop by with the missus and say hello!

See, Texas Proud even little amounts of money add up to a big total!

 

[samclem]

I don't understand all the financial "expert" articles where this issue is not even mentioned. A true business analysis would take a probability tree approach or something similar and factor reduced benefits in as a real possibility, since that is actually what is funded currently and as such a non-zero probability outcome.

As a project manager I would not have planned a very long term project on a 100% budget if only 77% of the project was actually funded.

I'm not sure that the exhaustion of the "trust fund" will be a giant issue. The resources in the "trust fund" are just a special type of US bonds, and they are redeemed in order to pay current benefits. When they are redeemed, the money comes from the general fund. There's no (greater) need for more tax revenue when the "trust fund" runs out.
Example:
Year 2032 (last full year before the trust fund runs out of bonds): 77% of money for SS benefits comes from taxes paid by present workers, 23% comes from the general fund (after redemptions of the SS special bonds).
Year 2033 (First year that the bonds have all been redeemed): 77% of money for SS benefits comes from taxes paid by present workers, 23% comes from the general fund.
Either way, the general fund (taxpayers) pay 23%.
The bonds and the trust fund are just an accounting mechanism (some would say "artifice" or "trick", but they are real and legitimate). If there were gold bars or even currency in that "lock box" it would be different, but they are just IOUs, and they need have no impact on the cash flows--the 23% comes from taxpayers now, and it can come from them after 2033 without need for higher taxes.

 

[daylatedollarshort]

I'm not sure that the exhaustion of the "trust fund" will be a giant issue.

I would prefer to see my benefits not reduced, but did you see the proposals by the Heritage Fund representative in the AARP link above? Benefit cuts being proposed on as low as $55K in other income, which is not exactly a one percenter lifestyle in higher COL areas.

 

[haha]

I would prefer to see my benefits not reduced, but did you see the proposals by the Heritage Fund representative in the AARP link above? Benefit cuts being proposed on as low as $55K in other income, which is not exactly a one percenter lifestyle in higher COL areas.

No matter how this is approached, it will take money out of some pockets. What we all hope is that it is someone else's pockets. Toward that end I recommend not being at all reasonable; just raise hell whenever they are getting anywhere close to your money. That is what everyone else is doing, and some of them have advantages beyond what most can marshal to see that someone else pays.

Ha

 

[Mulligan]

No matter how this is approached, it will take money out of some pockets. What we all hope is that it is someone else's pockets. Toward that end I recommend not being at all reasonable; just raise hell whenever they are getting anywhere close to your money. That is what everyone else is doing, and some of them have advantages beyond what most can marshal to see that someone else pays.

Ha

And seniors do that quite well and also do more than complain...They vote...Which seems to me the most likely outcome is lower amount for people who are still young "to make the numbers work long term" or raise retirement age again with the way lower 62 provision still in place. Drastic overhauls of important programs such as this would seem not likely.


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[haha]

And seniors do that quite well and also do more than complain...They vote...Which seems to me the most likely outcome is lower amount for people who are still young "to make the numbers work long term" or raise retirement age again with the way lower 62 provision still in place. Drastic overhauls of important programs such as this would seem not likely.


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LOL. true enough. Old people (como yo) are like divorce litigants. They know there is a pie in question. Some are going to pay for it, and some are going to eat it. We "senior citizens" are like any other interest group, we want to minimize our weaknesses and exploit our strengths. I've even worked out a theory as to why this is the only way that democracy is served. I'll spare you, but I feel that it is as good as anyone else's theory, and equally full of bull!

Ha

 

[samclem]

Drastic overhauls of important programs such as this would seem not likely.

Of course, they wouldn't have to be drastic if done soon enough. We could make the inflow match the outflow for a LONG time with a few minor modifications now, announced early enough so that people could make their own plans. But, that's not how our system works. So, if we won't do the responsible thing as a group, I guess we are left to do the best we can as individuals to avoid personal pain due to the general shortsightedness.

 

[Texas Proud]

See, Texas Proud even little amounts of money add up to a big total!

But we do not know how many of those are the big age difference.... that is total kids and some are due to a parent dying...

Also, in the scheme of things, $7 bill is not that much...


Very few people have talked about getting rid of spousal.... so until it gets any kind of traction it is not worth worrying about...

 

[Texas Proud]

Someone mentioned second and third marriages....


I wonder how much is going out the door due to multiple marriages... As an example... I have a sister who was married for 11 years before getting divorced... she was married 33 years to her second husband.... he got SS... she got spousal... he died... she is getting 100% of his benefit...

BUT, whenever first husband dies her SS goes up!!! She will qualify for survivor benefits on any husband she was married to for 10 years... her first husband has a much larger benefit... as she has said, I do not wish him any harm, but I will get something when he passes...

 

[Ian S]

Look, we don't even know for sure that the Trust Fund exhaustion will take place as projected. The SSA projections for the economy have typically been pessimistic. The main problem over the past seven years has been the severe recession and slow recovery. When folks don't work, they don't pay FICA. Wage stagnation hasn't helped either.

Regardless, it seems strange to me that we have no problem spending trillions on a couple of wars and bailing out crooked bankers but then talk about cutting Granny's meager retirement funds. Maybe when the kids find they have a choice between shelling out a bit more in taxes to keep Granny independent or having poor Granny move in with them, the answer will be a bit clearer.

 

[Sunset]

Look, we don't even know for sure that the Trust Fund exhaustion will take place as projected. The SSA projections for the economy have typically been pessimistic. The main problem over the past seven years has been the severe recession and slow recovery. When folks don't work, they don't pay FICA. Wage stagnation hasn't helped either.

Regardless, it seems strange to me that we have no problem spending trillions on a couple of wars and bailing out crooked bankers but then talk about cutting Granny's meager retirement funds. Maybe when the kids find they have a choice between shelling out a bit more in taxes to keep Granny independent or having poor Granny move in with them, the answer will be a bit clearer.

+1
There are enormous budget categories the gov't has that could have their funds reduced to pay for SS, where the US currently spends 10x more than any other country.

Its really a matter of shifting priorities.

 

[target2019]

I think FAs are hard-wired to automatically spit out the number 70 in any SS conversation

I found that for one FA group. When they ran their recommendation it was clear that waiting until 70 really helped their agenda. I see the wisdom in waiting to get more for a surviving spouse. But they never brought to our attention other SS strategies. That was the advertised come on, that they would put your numbers into their advanced software and it would show various options. But their spreadsheet really did not adequately analyze our situation.

 

[ivinsfan]

Someone mentioned second and third marriages....


I wonder how much is going out the door due to multiple marriages... As an example... I have a sister who was married for 11 years before getting divorced... she was married 33 years to her second husband.... he got SS... she got spousal... he died... she is getting 100% of his benefit...

BUT, whenever first husband dies her SS goes up!!! She will qualify for survivor benefits on any husband she was married to for 10 years... her first husband has a much larger benefit... as she has said, I do not wish him any harm, but I will get something when he passes...

Is this info direct from the SS admin, I have a friend whose sister was a multiple marriage type... I helped her do some reading up on this and my understanding is if you are no longer married to the person and wanting to collect the spousal benefit that one of the rules is you cannot actually be re-married to another person. Or in other words, once you remarry you have given up the right to collect survivor bennies from another spouse. You can either be divorced and not remarried, or a widower/widow of someone to qualify for a survivor benny.

Does anybody else have experience with this?