Social Security at age 62

[cyber888]

I will probably take SS at 62, and DW will be FRA when I turn 62 because's she's older. It will allow us to take less from our 403B and IRA. The benefit of letting our retirement accounts grow from 62 to 70 with less withdrawals will probably extend break even point from 78 yrs old to 82 - 83 yrs old. If I live beyond 83, I'll probably downsize from a 3,500 sq.ft home to a 800 sq.ft. studio LOL.

[Dave J]

Quote:

Originally Posted by nubill Our plan is to first do a Roth conversions on all our remaining IRA’s. 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.

How many years to do all the conversions? What will your income be after you do them. I trust you will not pay 15% now and then be in a 10% bracket after you start SS. You don't have to do it all . I was in a hurry at first but slowed down and now I'm planning on finishing depleting my IRA's in my 80's to make the most of lower tax rates.

[Katsmeow]

DH took SS at about 62.75 (when he retired). In our case, it was a very easy decision because we had 2 minor children and those benefits made that the right call.

I recently turned 62 and haven't taken yet. I tentatively plan to take at the beginning of 2017, but that is subject to some change. My benefit is slightly more (if taken at the same age as DH) so there are no spousal reasons to defer. I prefer the flexibility of taking earlier and don't want to deplete the portfolio to wait until FRA or 70. I tend to think benefits will be cut at a later time. I don't think taking early will protect me from such changes. But, I will get the benefit of current benefits by taking sooner rather than later.

[ownyourfuture]

God willing, I'll turn 62 in the year 2024. If SS is still available at that age, I'll be on it like a hobo on a ham sandwich!!

ATTN littleb:
You mentioned that a couple of your relatives weren't that confident in Social Security being around for the next 10 years.

I'm including a scan of a pamphlet that was included in my 401(k) statement sometime in 2006. I think this lady does a pretty good job of showing the realities of Social Security even though the pamphlet is 10 years old.



FYI: In case you didn't know this, the government started cutting SS way back in 1983 when they voted to tax benefits for the 1st time. And they continue to cut benefits by occasionally lowering the amount of income you're allowed in addition to your SS before it becomes taxable. Criminal in my opinion but what are you going to do ?

What this shows is that the government knew Social Security was in trouble a long, long time ago. So don't believe the political party that tells you everything is & will be hunky-dory.

It's not

[cyber888]

The way around it is to stay in a State where SS is not taxed. And also ge the minimum amount from your nest egg, so it does not raise your tax bracket. Congress is corrupt and fattening their own pork barrel for sure.

Quote:

Originally Posted by ownyourfuture God willing, I'll turn 62 in the year 2024. If SS is still available at that age, I'll be on it like a hobo on a ham sandwich!! ATTN littleb: You mentioned that a couple of your relatives weren't that confident in Social Security being around for the next 10 years. I'm including a scan of a pamphlet that was included in my 401(k) statement sometime in 2006. I think this lady does a pretty good job of showing the realities of Social Security even though the pamphlet is 10 years old. FYI: In case you didn't know this, the government started cutting SS way back in 1983 when they voted to tax benefits for the 1st time. And they continue to cut benefits by occasionally lowering the amount of income you're allowed in addition to your SS before it becomes taxable. Criminal in my opinion but what are you going to do ? What this shows is that the government knew Social Security was in trouble a long, long time ago. So don't believe the political party that tells you everything is & will be hunky-dory. It's not

[nubill]

Quote:

Originally Posted by Dave J How many years to do all the conversions? What will your income be after you do them. I trust you will not pay 15% now and then be in a 10% bracket after you start SS. You don't have to do it all . I was in a hurry at first but slowed down and now I'm planning on finishing depleting my IRA's in my 80's to make the most of lower tax rates.

With zero growth in the IRA and based on our current spending, if I converted the rest of my IRA it would take about 5 years. Then my wife would take 5 years. If I take SS at full retirement age (66), 50% of it would be subject to tax, if I take SS at 70 it jumps to 85%. Pensions and SS will keep me and DW above the 10% bracket. The 7% state income tax on IRA/401K withdrawals here in SC starts at $14,400 for married filing jointly.

I can slow down some time in the future, but if I did nothing at age 60 RMD’s would push me in the 25% bracket. Your suggestion made me think that I should run these “Should I do a Roth Conversion Calculators” (Fidelity has one, takes about 15 minutes) every year before conversion. I have not done one in a couple of years, and the stock market is never static. Dave J, thanks for the advice.

[garyt]

Quote:

Originally Posted by tmm99 My crystal ball says SS will not go away and if the payout decreases, it will be only by a very slight amount. There are just too many people whose main source of income is SS. The government won't want to create a bunch of old homeless people who are starving to death. Sent from my iPhone using Early Retirement Forum

Very true, but they may institute means testing, which is my fear. I save all my life and then they tell me I'm "too rich" to need SS.

[ownyourfuture]

Quote:

Originally Posted by garyt Very true, but they may institute means testing, which is my fear. I save all my life and then they tell me I'm "too rich" to need SS.

I feel the same way Gary. You know, people have questioned me on this and even called me greedy for feeling the way I do about Social Security. Sometimes they bring up the old motto 'whoever said life was fair'

I understand that motto, but I always figured it should apply to something like losing a loved one early, etc
Not your very own government punishing you for doing what they told me to do. Save early save a lot, & therefore you won't be a burden on us.

Yeah right

[ownyourfuture]

Quote:

Originally Posted by cyber888 The way around it is to stay in a State where SS is not taxed. And also ge the minimum amount from your nest egg, so it does not raise your tax bracket. Congress is corrupt and fattening their own pork barrel for sure.

I'll almost certainly have to leave the state of Minnesota at that time.
They're one of only four states that taxes both SS & Pension income.
And it doesn't matter if it's a government civilian Pension, military pension, or a private sector Pension, which I have.

Government greed

[Hermit]

I'm waiting until 70. But then again I am getting a nice SS check based on the late DW's account until I start my own. I'm withdrawing the difference between my income now and what I will get at 70 just to smooth the income. High tax bracket won't ever be a problem I can do anything about. I'm in the 25% bracket now and most likely always will be. As discussed in other threads, plenty of income (and the associated higher tax burden) is a problem I can live with.

[Whisper66]

Quote:

Originally Posted by nubill Your suggestion made me think that I should run these “Should I do a Roth Conversion Calculators” (Fidelity has one, takes about 15 minutes) every year before conversion.

Optimal Retirement Calculator and Retirement Decision Support System does a nice job of testing if Roth Conversions would be beneficial or not. Output includes a table of how much you will pay in taxes each year and how much is paid into each tax bracket. Can run a case w/o I-ORP suggestions for Roth Conversions and one with those suggestions and compare your tax impact.

Sometimes Conversions make sense and save overall tax spend depending on the situation. Sometimes not so much so.

Roth conversions can also impact when you may want to take SS. If Roth conversions are beneficial in your case AND you need a few more years to convert the amount you want, delaying SS may allow more years of conversions without a high taxable income (SS + conversion).

[hurricane harry]

SS at 62

[kcowan]

DW and I both in at 62. Since deferral is just an actuarial game, I figured we could play it to our benefit. We also get deferred pensions at 72. So the cash flow would help for 10 years.

[MichaelB]

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

Quote:

Originally Posted by littleb So, I see different reasons why someone might take ss at age 62. Maybe if you are in bad health, longevity does not run in the family or you don't have the money to coast from age 62 to FR age. What age were you when you took social security? Are there other advantages at age 62 vs full retirement age?

[pb4uski]

We'll be waiting to FRA. Good health and family longevity, not to mention joint mortality.

[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?


Sent from my iPad using Early Retirement Forum

[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.