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Old 05-05-2016, 10:21 AM   #41
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I'd modify that prediction to say that there will be only slight decreases for those who have little or no other sources of income. For the rest of us it's a bit of a crapshoot.
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Old 05-05-2016, 10:23 AM   #42
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We are both 55. I've been retired 3 years. Tentative plan is to wait until 70, for both myself and DW. Reasons are similar to Senator's list above. We will reevaluate each year starting at 62, including such things as: our health, portfolio performance, inflation, spending patterns, legacy considerations, likelihood of changes to the program like means testing, etc.
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Old 05-05-2016, 11:12 AM   #43
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We printed out DH's SS statement a couple of days ago and saw that 2034 is the new date by which payroll taxes will pay only 79% of scheduled benefits. That's a slight improvement over what we've seen on earlier statements.




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Old 05-05-2016, 11:31 AM   #44
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I'd modify that prediction to say that there will be only slight decreases for those who have little or no other sources of income. For the rest of us it's a bit of a crapshoot.
For higher than average income or asset retired households, crapshoot is probably the correct term. Wealth inequality gets a lot of press these days.
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Old 05-05-2016, 11:53 AM   #45
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When I was planning my retirement, I assumed that I would get no SS money at all because of the dire predictions in the mass media at that time.

Every month when SS deposits money in my checking account, it's like Christmas! To me, that is an unexpected gift or bonus and it is wonderful to have.

If SS decreases to 79% in 2034, I will already be 86 (assuming I haven't croaked yet) so the decrease will not affect me for too many years.
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Old 05-05-2016, 12:20 PM   #46
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For higher than average income or asset retired households, crapshoot is probably the correct term. Wealth inequality gets a lot of press these days.
Time to spend it, or pretend you did (krugerrands buried in back yard).
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Old 05-05-2016, 12:37 PM   #47
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I took SS at 62.

My primary reason was concern over the rules being changed at some point particularly against HNW folk. Take the money, run and hope for grandfathering was my motto.

My secondary reason was the realization that the break even was about 78 coupled to minor Fed and full state tax advantages vs taking it from my portfolio; I pocket about $4K a year in saved taxes for eight years.
Agreed! Also, I go along the same lines as the Senator, I can start at age 62 in Jan 2017 and it will depend on the investment returns at that time.

I am past the so called double bent in benefit, at max. I did a model of both my wife and I with benefits at each age and have run a few online estimators including ORP, and Fido's planner. I like my SS spread sheet for simplicity, which is as simple reinvestment of benefits at a given return each year. At simple returns of 5% the break even is age 85ish, where age 66 or 62 are equal in accumulated NW. at 4% its 82 at 3% its 80ish. All simple scenarios starting benefits at age 62 makes only a small impact (5% total NW impact) even living to 95.

Since this all assumes that the rules do not change, the decision is personal comfort in a larger payment for fewer years etc. by waiting. However, I am a strong believer that taxes will be restructured, and benefits reduced for HNW.

The whole system is biased toward a higher benefit % for the lower wage earners. Changing the game will happen.
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Old 05-05-2016, 12:37 PM   #48
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We'll both take pensions before SS, but probably take SS at 62 each. We don't have much of a nest egg outside those sources, so to be safe we want to throw about half our income into the market. Having that SS money in the market early vs. waiting extends the break-even point possibly to infinity.
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Old 05-05-2016, 01:43 PM   #49
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Our plan is to first do a Roth conversions on all our remaining IRAís. My tax code knowledge may be incorrect and would invite anyone to comment and correct me. I started this when I turned 60 and have been trying to convert as much as I can without going over the 15% bracket which for married filing jointly is around $75K for TY 2016.

I will be 63 in July and DW will be 59.5 by years end. We will do my conversions first since my window before RMDís is shorter. We pay 15% to the feds and 7% to the state of SC. If I took SS now I would not be able to convert as much on the Fed Tax side and keep within the 15% bracket. SC does not tax SS income. If we live in a state such as FL, we would not pay state income taxes on the Roth conversions or SS income. If we live in a state such as Utah we would pay a 5% tax on Roth conversions and they also tax SS. We donít like RMDís. We would end up with us in a higher tax bracket at age 70.5. With demographics in the US showing an aging population, I would guess that higher tax rates are in the future.

Another reason for the Roth conversion is that our son is currently in the 25% tax bracket. If he inherits an IRA he will have to take RMDís and pay 25% tax on them. If he inherits a Roth he will still have to take RMDís but would not have to pay taxes. Before I turn 66 which is my FRA, I will have to buy a copy of Mike Pipers latest book since SS laws may change again. Born in 1953, there may still be a File and Suspend rule where I can claim my spouses SS and delay taking mine until 70.

As I mentioned in my first paragraph, this is my understanding of the tax code. Iím new to posting and my wish is to be helpful and accurate. If there are any experts on this forum please comment.
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Social Security at age 62
Old 05-05-2016, 02:07 PM   #50
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Social Security at age 62

Quote:
Originally Posted by Happyras View Post
However, I am a strong believer that taxes will be restructured, and benefits reduced for HNW.



The whole system is biased toward a higher benefit % for the lower wage earners. Changing the game will happen.

Perhaps nit picking, but I suspect any changes made for "wealthy" SS recipients will not be for HNW folks per se, but instead for High Income folks. To the extent there will be overt means testing it will most likely be income, and not asset, based. And, even in that regard, I would be very surprised if there isn't a grandfathering aspect to any changes. Regardless, with the current level of cooperation in Congress today I cannot imagine the issue of SS being tackled in earnest any time soon.


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Social Security at age 62
Old 05-05-2016, 02:15 PM   #51
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Social Security at age 62

I agree that if SS is to be reduced, it will probably by income, not by net worth. Maybe we should start withdrawing from our tax deferred accounts now (instead from the after tax accounts) to lower the RMD payout (in order to lower income in our 70's in case SS reduces payout based on income. )


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Waiting for SS until Medicare eligibility because of ACA
Old 05-05-2016, 02:28 PM   #52
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Waiting for SS until Medicare eligibility because of ACA

We had looked forward to beginning SS benefit at age 62 for many/all the reasons already mentioned. But because our Health Ins is provided under ACA with qualifying premium subsidy, we would lose that subsidy because SS Benefit is calculated in the Modified Adjusted Gross Income used in qualifying. So, we determined it is best to wait for SS until age 65 when we will get health coverage through Medicare.
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Old 05-05-2016, 02:59 PM   #53
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Between my employer and I over $200K was paid into social security. I figured the sooner I could get my grubby little hands back on my money and my employers match and invest it how best I think, the better. Yes, I took at 62 and have no regrets.
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Old 05-05-2016, 03:24 PM   #54
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OP here.

I

With Fidelity Income Planner if I take ss at full retirement age my success grade was 97. If I take ss at age 62 the grade went up to 102. The ran the numbers taking ss at age 62 and at full retirement age in firecalc and Fidelity Income Planner.

Both planners calculated 100% success with either option. However with Firecalc there was an average balance at the end of 16,000 more with full retirement age. (not much money in the big picture -- 35 years) higher the grade the more likely the money will last throughout retirement.

This was very interesting since I have always thought ss at full retirement age was the best situation. I might take it at age 62 instead.
Regulars here will note that I'm no mathematician but I suspect that it depends on how big your SS benefits are vs taking the same amount out of your portfolio.

I came out with a similar positive result on taking SS at 62 vs 70

A good sized SS benefit would allow a nice chunk of your portfolio to grow another 8 years (62 vs 70), in some cases tax deferred which could add up.
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Old 05-05-2016, 03:36 PM   #55
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I can't see SS paying any less. I can maybe see the CPI being adjusted, but not any 'cut'.

In any case, there are a lot more things that are entirely more possible. I would worry more about these...
  • Things like high inflation, when you have no COLA adjustments in your income stream.
  • The stock market stagnating for 20+ years, like Japan.
  • Living in a neighborhood that becomes dangerous.
  • The price of a lap dance becoming too prohibitive to invest in.
The first 3 are definite worries and are like a slow boil where you don't notice for a while.

The 4th is really just an opportunity to come out of retirement for a new career
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Old 05-05-2016, 03:44 PM   #56
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Our plan is to first do a Roth conversions on all our remaining IRAís. My tax code knowledge may be incorrect and would invite anyone to comment and correct me. I started this when I turned 60 and have been trying to convert as much as I can without going over the 15% bracket which for married filing jointly is around $75K for TY 2016.

I will be 63 in July and DW will be 59.5 by years end. We will do my conversions first since my window before RMDís is shorter. We pay 15% to the feds and 7% to the state of SC. If I took SS now I would not be able to convert as much on the Fed Tax side and keep within the 15% bracket. SC does not tax SS income. If we live in a state such as FL, we would not pay state income taxes on the Roth conversions or SS income. If we live in a state such as Utah we would pay a 5% tax on Roth conversions and they also tax SS. We donít like RMDís. We would end up with us in a higher tax bracket at age 70.5. With demographics in the US showing an aging population, I would guess that higher tax rates are in the future.

Another reason for the Roth conversion is that our son is currently in the 25% tax bracket. If he inherits an IRA he will have to take RMDís and pay 25% tax on them. If he inherits a Roth he will still have to take RMDís but would not have to pay taxes. Before I turn 66 which is my FRA, I will have to buy a copy of Mike Pipers latest book since SS laws may change again. Born in 1953, there may still be a File and Suspend rule where I can claim my spouses SS and delay taking mine until 70.

As I mentioned in my first paragraph, this is my understanding of the tax code. Iím new to posting and my wish is to be helpful and accurate. If there are any experts on this forum please comment.
I missed the age cut off of 62, for the last change in SS , the one a few months ago. So my understanding is very limited.

However, if I was 62 or older right now I'd certainly check on exactly what was eliminated from SS, as even if you are age 62, I thought there was a time limit that expires soon, to do a clever move or you lose it.

Besides if you are eligible for a clever move and there is no time limit, then you are losing out on free money, so still worth checking out.
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Old 05-05-2016, 03:48 PM   #57
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I'm counting on SS to pay my Medicare premiums. Most of rest will go to taxes incurred from the SS.
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Old 05-05-2016, 03:53 PM   #58
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DH took SS at age 62... It was a no brainer because we have minor age children who get a benefit because he's collecting.

For me - I'm planning on doing the analysis when I'm closer to the date... (I turn 55 this year - so I have time.) ACA premiums are a factor... as will be the size of my nest egg. I think it was REWahoo who decided to turn on the SS spigot earlier than originally planned during the market downturn in 2008/2009 - in order to prevent withdrawing too much from his nest egg.... I can't know what the market will be doing 7 years from now when I first qualify for SS.

So - like in all things retirement related - I plan to stay agile and remain willing to redesign my retirement plans as circumstances dictate.
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Old 05-05-2016, 05:21 PM   #59
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(I turn 55 this year - so I have time.)
Also a sigh of relief, and IMO a reason to let your guard down a bit. There's no way massive reform happens this year, and pretty much everyone in Washington agrees not to touch anyone over 55. But me, at 50... I'm on the cusp and may or may not be whacked. In some perverse sense it might be good for me to see more gridlock for four more years, but IMO the damage to the finances of the republic are too great to root for that!
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Old 05-05-2016, 05:47 PM   #60
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Ziggy - I hear you... I always thought the proposed age 55 "cliff" was pretty steep... I might feel different after my birthday.
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