Social Security at age 62

[rayinpenn]

I'm 61 and will be 62 July - I'll apply soon and get nothing because my income (still working) is too high. My 17 year old (birthday today) will get 10 months of checks... And they are going in the Bank!

When I do call it a day (months not years) I'll use the as to cover my company of AKA insurance ~$1800 a month -is that unbelievable or what?


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[Golden sunsets]

Waiting til 70 here(two years and 6 months from now). I do collect 1/2 of my DH's currently and have for the past 18 months. I like the longevity insurance aspect of waiting. DM is 91 and still going strong.

 

[Ronstar]

We attended a SS seminar, and had 5 scenarios run. The DW taking at 70, me at 66 scenario has $90k more in cumulative benefits than the DW taking at 66, me at 62 scenario. The other scenarios generally fit between these 2 in cumulative benefits, except the 62/62 scenario that came in at $300k less in cumulative benefits. Given all of this, I'm undecided as to when to start taking SS. But I still have 1.25 years until I turn 62, so I have time to figure it out. DW turns 62 in 2 months.

 

[Another Reader]

Took it at 62. Longevity is not on my side and the money will be used to pay off a mortgage that cannot be refinanced conventionally because I have too many mortgages in my name.

A cousin recently died at 72. She took it at 62, maximizing her benefit over time by relying on a combination of her record and her highly compensated ex-husband's record. Imagine if she had waited until 70 to collect...

 

[Sarah in SC]

I read this thread with interest, as DH is turning 55 this year and my thinking is that he should take it at 62 and I (8 years younger) should hold off until at least FRA to help boost my income (assuming I do in fact live as long as the actuaries say) later. We haven't run any scenarios yet, but glad to see the thought process of some of you other folks.

 

[ejman]

Both my wife and myself took it at 62 ( 3 1/2 years ago in my case). My calculations showed we'd be ahead if we could achieve a return of more than 5 % on the amount of money left untouched because of SS covering the equivalent expenses. A lot of the calculations I've seen basically ignore the fact that for those living from income derived from their investments, taking SS early allows their equivalent investments to continue to compound.

A secondary reason is that I prefer to have direct control of my resources as much as possible. SS laws, eligibility requirements, calculation methodologies can all be changed at the stroke of a pen and I'd rather steer my own ship to the extent I can.

I am certainly aware of the thinking that SS has been deemed the "third rail" and thus will be sacrosanct forever but the evidence in the way of changes that have actually occurred over the last few years plus future funding issues argues against that interpretation. The math of a shrinking number of workers supporting an ever growing retiree population is inexorable without overt or covert benefit reductions.

 

[ownyourfuture]

Starting to get off topic. Just a reminder to avoid politics and get back to the original question, posted here as a reminder

Is it possible to talk Social Security & avoid politics ?
I don't think so.

 

[W2R]

Is it possible to talk Social Security & avoid politics ?
I don't think so.

Well if you can't, then maybe go to a different thread and talk about something else? Our Community Rules have strict limitations on politics in the Early Retirement Forum.

P.S. - - When MichaelB posts warnings like this, he is posting them for the whole Moderation Team. One of us has to post what we agree needs to be posted, and often it is MichaelB because he is nice enough to do it (or got the short straw).

 

[ownyourfuture]

Well if you can't, then maybe go to a different thread and talk about something else? Our Community Rules have strict limitations on politics in the Early Retirement Forum.

P.S. - - When MichaelB posts warnings like this, he is posting them for the whole Moderation Team. One of us has to post what we agree needs to be posted, and often it is MichaelB because he is nice enough to do it (or got the short straw).

I didn't realize there was a 'FIRE Related Political Topics' forum until today.
Since the vast majority of my posts are related to that subject, I'll post there in the future.

 

[W2R]

I didn't realize there was a 'FIRE Related Political Topics' forum until today.
Since the vast majority of my posts are related to that subject, I'll post there in the future.

Wow, you need to familiarize yourself with our forum! Take some time and look around! I'd suggest starting with careful study of the Community Rules and with the verbiage tied to the "FIRE Related Political Topics" forum title, so that you understand the tight restrictions on political posting in our Early Retirement Forum. We do enforce this.

If you have any further questions, please feel free to PM me or any of the mods since this discussion/argument is hijacking the present thread.

 

[Khan]

I retired at 54 with a small pension. At 56 a small SS replacement supplement kicked in, at 62 the supplement ended and I started SS. I also started withdrawals from TSP.
I'm not expecting to live past 75.

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[ChainsBeGone]

DW has been a SAHM our entire marriage, so I plan to file at FRA, age 67, to ensure she receives maximum spousal benefits in case I kick the bucket first.

Surviving spousal benefits max out at FRA, so waiting past that point to file would not increase the surviving spouse benefit.

FRA seems a good cost/benefit compromise between taking at 62 and waiting to 70, and since DW has no earnings history, waiting until FRA is the smart choice for us - helps me sleep at night knowing that she would receive the maximum benefit available as she would receive only 55% of my current pension if I expired and the maximum SS benefit would help make up the difference.

 

[Walt34]

FRA seems a good cost/benefit compromise between taking at 62 and waiting to 70, and since DW has no earnings history, waiting until FRA is the smart choice for us - helps me sleep at night knowing that she would receive the maximum benefit available as she would receive only 55% of my current pension if I expired and the maximum SS benefit would help make up the difference.

That was my exact rationale too at taking SS at FRA, 66 for me. My pension benefit to DW also drops upon my exit but only by 30%. So given the pension, SS, and savings, she'll be comfortable. I have told her that I fully expect her to wear black for a year before she starts partying with the pool boy.

 

[Teacher Terry]

I will wait until 66 which is my full retirement age. I have a small pension that does not pay into SS so will get that reduction and I am still working p.t. so they would take a dollar for every 2 they give me. My Mom lived to be very old but my Dad didn't so I am not taking any chances.

 

[Cricky]

DW has been a SAHM our entire marriage, so
Surviving spousal benefits max out at FRA, so waiting past that point to file would not increase the surviving spouse benefit.

FRA seems a good cost/benefit compromise between taking at 62 and waiting to 70, and since DW has no earnings history, waiting until FRA is the smart choice for us - helps me sleep at night knowing that she would receive the maximum benefit available as she would receive only 55% of my current pension if I expired and the maximum SS benefit would help make up the difference.

Are you sure about this? I thought spousal benefits max at FRA, but survivor benefits keep increasing to age 70. In other words, if I delay to age 70 my DW's spousal benefit is still based on my benefit at FRA, but once I cross that last bridge her spousal benefit would be replaced by a survivor benefit equal to my actual benefit.

 

[robertf57]

DW has been a SAHM our entire marriage, so I plan to file at FRA, age 67, to ensure she receives maximum spousal benefits in case I kick the bucket first.

Surviving spousal benefits max out at FRA, so waiting past that point to file would not increase the surviving spouse benefit.

.

Ummm, no....... Surviving spouse gets higher of their benefit or what the deceased actual benefit was


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[Sunset]

The rule on survivorship SS, is not all that easily found, they give example of early taking of SS, but seem to neglect to tell folks delaying doesn't count.

So if I take SS at FRA or delay to age 70, my surviving spouse gets the same either way (assuming her's was less) survivor SS.

This makes it a little tricky because if I delay and say die at age 75, it would have been better to take it at FRA.

My original plan had been to delay to 70 as larger benefit, don't need it right away, and it would leave the max in survivorship, but that last one is false.

Thankfully I have a few years to decide and learn.

 

[robertf57]

The rule on survivorship SS, is not all that easily found, they give example of early taking of SS, but seem to neglect to tell folks delaying doesn't count.

So if I take SS at FRA or delay to age 70, my surviving spouse gets the same either way (assuming her's was less) survivor SS.

This makes it a little tricky because if I delay and say die at age 75, it would have been better to take it at FRA.

My original plan had been to delay to 70 as larger benefit, don't need it right away, and it would leave the max in survivorship, but that last one is false.

Thankfully I have a few years to decide and learn.

This is not my understanding at all. If I died at 72, having started my benefit at 70, my surviving wife would get the benefit I was receiving (reduced by a factor if she was below FRA for this benefit) This Forbes article explains it well:

http://www.forbes.com/sites/advisor...ecurity-survivor-benefit-part-1/#2044f33c377c


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[ChainsBeGone]

This is not my understanding at all. If I died at 72, having started my benefit at 70, my surviving wife would get the benefit I was receiving (reduced by a factor if she was below FRA for this benefit) This Forbes article explains it well:

Forbes Welcome


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I am happy to be wrong and in this case it appears that I am, to my benefit, so thank you for pointing the error of my analysis. I have confused the difference between a survivor benefit and a spousal benefit:

I found this on wealthmanagement.com:

Social Security Survivor Benefits Simplified

"Let’s note an important difference between survivor benefits and spousal benefits. Spousal retirement benefits provide a maximum 50 percent of the other spouse’s primary insurance amount (PIA), while a surviving spouse’s benefit provide a maximum benefit of 100 percent of the deceased worker’s retirement benefit.

Note the difference between the PIA and retirement benefit. This is critical when considering deferred retirement credits (DRCs). DRCs offer a benefit increase of 8 percent per year when the worker elects to start collecting after FRA, up to a maximum age of 70. They don’t increase the PIA so they aren’t applicable to spousal benefits, but they’re applicable to survivor benefits. So if one spouse has the higher personal benefit and waits until age 70 to begin collecting, the full benefit with DRCs would be payable to the surviving spouse."

It would make me feel better to actually see this written on the Social Security website, but I've only seen examples given by SSA that explain the scenario up to FRA.

 

[nubill]

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.

Michael Kitces website has a table. Looks like I am ineligible for File and Suspend but eligible for Restricted Application. Mike Piper gets lots of love over at the Bogleheads site. My plan is to buy his latest book before my FRA (66) because there may be more changes.

Kitties chart looks small. Here is the link where the table is.
https://www.kitces.com/blog/navigat...and-suspend-and-restricted-application-rules/
Another link on Restricted Application
http://www.annuities.pacificlife.com/public/salesmaterials/salesideas/23175.pdf

 

[pb4uski]

I have found this site very useful in looking at claiming decisions.

SSAnalyze - Bedrock Capital Management

DW was a stay at home mom so her benefit based on her work record is about 30% of mine and I am 9 months younger than her. Our optimal strategy is for her to file at FRA and me at 70 (or perhaps earlier than 70 at higher discount rates).

So unless investment results turn sour she will file at FRA and I'll file sometime between FRA and 70. YMMV.

 

[friar1610]

I waited until FRA at 66 to maximize what the spousal benefit will be assuming I exit first.

I took it at 62 because it seemed like a good idea at the time. If I could walk that dog back, I would delay for the reason you mention. But I can't so no sense in losing sleep over it. My wife will still be well taken care of - just might have to pass on a cruise sometime.



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[Danmar]

Ignoring all other financial issues, why wouldn't men take it at 62 and women defer till 70? At least in Canada the actuarially determined discounts do not differentiate between men and women. Seems like a good opportunity to "game" the system?

 

[pb4uski]

As I understand it benefits in the US are based on uni-sex mortality too so there is a nuance of a play there but I suspect that health at age 62 and family longevity are important factors too for a single person.

For couples with very different earnings records, it is a bit different thing as joint mortality comes into play.

 

[Brett_Cameron]

I plan to take it at 62 to preserve my meager IRA.