Early SS could be the smartest move

[braumeister]

Interesting study reported on Bloomberg. I was quite surprised by this statistic.

Others might be justifiably worried about their health, Slavov’s study shows. Early filers were 80 percent likelier to die between 66 and 71 than those who filed for Social Security after the full retirement age. Early filers are also likelier to feel unhealthy and doubt whether they’ll make it to 75, according to the authors' analysis of survey data.

Don't Fall Into the Social Security Trap - Bloomberg Business

 

[Big_Hitter]

same reason those still w*rking have lower mortality rates than retirees, ceteris paribus

 

[mickeyd]

Makes sense to me. Early filers for SS would include all of those who had an idea that they were in poor health and wanted to get into the SS funds ASAP before they were ineligible to receive further SS checks.

 

[Senator]

That settles it. I am not collecting early, it leads to an early death.

 

[rodi]

I'm considering early SS in part because of family history. My mom and dad both died relatively young (lower than the SS actuarial tables would predict for their gender). My brother died in his late 40's. All of cancer. 3 of my 4 grandparents died relatively young of cancer.

I hope to match the remaining grandparent who lived to her 90's... but based on family statistics - taking SS early might be the more prudent bet.

I think a lot of people consider family history when deciding early vs late. After all - it's neutral from a $ POV (excluding spousal benefits etc.) Taking early makes sense for those who suspect they might die younger... taking later makes sense for those with family members who live longer.

 

[harley]

IMO taking SS early or late to try to maximize them amount you get overall is just a bet, like a lottery ticket. You'll win or you'll lose, but you don't have much, if any, control over it. I'm waiting to collect until 70 merely to maximize DWs income if I die first. The total amount collected has no impact.


Having said that, I'm with Senator, post hoc ergo propter hoc. I'm not going to collect early so I'll live longer.

 

[jebmke]

That settles it. I am not collecting early, it leads to an early death.

That was my thought as well. Same reason I stay out of hospitals -- people are dying in there.

 

[Car-Guy]

I took it at 62 and both my longer term health and the health of SS concerned me. Probably both (myself and SS) need a major checkup and some preventative care. Since we (the DW and I) can easily get by without any SS, now or in the future, it was an easy decision.

 

[Car-Guy]

That was my thought as well. Same reason I stay out of hospitals -- people are dying in there.

I've noticed that too. Similar with going to the doctors office. Sure seems to be a lot of sick people in the waiting room.

 

[gerntz]

IMO taking SS early or late to try to maximize them amount you get overall is just a bet, like a lottery ticket. You'll win or you'll lose, but you don't have much, if any, control over it. I'm waiting to collect until 70 merely to maximize DWs income if I die first. The total amount collected has no impact.

No, the lottery is completely random. Death isn't. Your lifestyle choices can shift the odds significantly in many if not most cases.

 

[hurricane harry]

No, the lottery is completely random. Death isn't. Your lifestyle choices can shift the odds significantly in many if not most cases.

Really?

 

[Spokane2303]

I don't understand the comment about delaying SS till 70 to maximize spouse's benefit??

As I understand the spouse benefit rules, the lower earlier spouse benefit is at its maximum when you reach full retirement age (assuming they are filing against your income). They do not get any additional value based upon the primary spouse delaying retirement until 70. They only receive their 50% (or 100% if you pass) of your full age retirement benefit, not of the higher delayed benefit amount.

Am I mistaken on this?

 

[starry night]

Quam bene vivas refert, non quam diu!

 

[NW-Bound]

I don't understand the comment about delaying SS till 70 to maximize spouse's benefit??

As I understand the spouse benefit rules, the lower earlier spouse benefit is at its maximum when you reach full retirement age (assuming they are filing against your income). They do not get any additional value based upon the primary spouse delaying retirement until 70. They only receive their 50% (or 100% if you pass) of your full age retirement benefit, not of the higher delayed benefit amount.

Am I mistaken on this?

If you delay SS till 70 to maximize your benefit then die at 71, I believe your spouse will pick up your higher benefit. The survivor benefit is different than spousal benefit.

 

[nate2953]

Spouses benefit is capped at 50% of the primary persons PIA.
Widows benefits is capped at 100% of the monthly benefit amount the deceased was receiving.

In English: spouses do not benefit from DRCs. Widows do benefit from DRCs.


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[jollystomper]

If you delay SS till 70 to maximize your benefit then die at 71, I believe your spouse will pick up your higher benefit. The survivor benefit is different than spousal benefit.

This is what happened to my parents and the survivor benefit. Dad delayed SS until 70 to ensure Mom would get the maximum survivors benefit. He died at 72. Mom continued his benefit for almost 20 years until she died a year ago.

From a financial modeling standpoint I'm currently planning to take my benefit at age 63. In reality it will depend on our financial situation at that time. If I don't need it I will delay it.

 

[NYEXPAT]

I plan to take it at 62 and again at 70, to cover all bases.

 

[NW-Bound]

This is what happened to my parents and the survivor benefit. Dad delayed SS until 70 to ensure Mom would get the maximum survivors benefit. He died at 72. Mom continued his benefit for almost 20 years until she died a year ago.

From a financial modeling standpoint I'm currently planning to take my benefit at age 63. In reality it will depend on our financial situation at that time. If I don't need it I will delay it.

Between 65 and 70, your dad picked up a 40% increase. By forfeiting 5 years of claim, he has given your mom an extra 0.4 x 20 = 8 years. It's good but turns out not as good as I initially thought.

PS. Oops. Forgot that he himself picked up that 40% increase for 2 years. So add that 0.8 years and they together got an extra 8.8 years of benefits. Had he lived a few more years, it would work out even better. The longer you live, the more you win. Do I feel lucky?

 

[jkern]

I plan to take my SS at 62. Even with a modest ROI, the breakeven point is around the early to mid 80s. Also, a bird in the hand is worth two in the bush. I don't trust the government to not change the rules.

 

[Jerry1]

The modeling I've done says that to maximize SS, I should take at 62, my wife should file and suspend at FRA and then take her full benefit at 70. During the file and suspend time period, my wife will take half of my benefit. I'm thinking it will depend on how our finances look each year I'm 62 and over. Interesting is that since my wife is five years older, she hits FRA the same year I hit 62.

As for this thread, I agree that many people who know they have health issues likely are driving up the percentage of people taking SS at 62. I have a friend that was waiting to take SS but got a diagnosis of Parkinson's and went ahead and filed early.

Another thing is pensions. I'm not sure how they all work, but my friends that early retired from the autos are required to take SS at 62. Basically, their pension is X and once SS kicks in, they still get X but it is made up of SS+a smaller amount from the auto.

 

[Rustic23]

Took it at 67, rather than 66. I was going to wait until 70 for DW, but we looked at it and she does not need the increase. We looked at travel plans and decided that taking it now made since, in order to give us more cash when we were still able to enjoy it.

 

[LoneAspen]

I'm a Gen X'er who has never put any faith in SS, so I'm going to file as soon as I can. I don't care what the future projections look like, or whether the fun might, or might not, be around, etc.

As somebody else wrote, a bird in the hand...

 

[Birchwood]

Consequence bias? Those who file early had short longevity or in poor health or very poor family history, so obviously they die earlier than those who have very good prognosis or family history who decided to get their SS later. The dying has nothing to do with their choices of SS. These are just different group of folks. The life span depends mainly on the
health status(physical & mental), not what they decide to do on SS or to retire or not.

 

[imoldernu]

Lots to consider when taking SS early.
We took SS @ age 62, (1998) after retiring in 1989, at age 53 (cancer scare). The 9 years before taking SS, were tight, as almost all of our expenses were coming out of assets, and watching the savings account go down wasn't easy.
We learned a lot about living on a tight budget. Living in a campground in IL and a senior community in FL was a real help. With a concern about life expectancy, and... trying to keep our IRA's intact the SS option looked good. Frankly, we didn't overthink this at the time. The supplement to our living expenses was welcome.
So, now we've had SS for 17+ years. During the first years after retirement, interest rates were relatively high, and our CD's were earning nearly 10% and always over 7%... so a different time.

When I was born, the life expectancy for a male was 59 years. Now, SS estimates I'll live to age 90. I suppose that if I recalculated where we'd be today if we had waited we'd be better off, but we're both very happy with what we did, and where we are.

Nothing new here, but for anyone who may be on the fence, a recap of our 26 of happy retirement:
http://www.early-retirement.org/forums/f27/sharing-23-years-of-frugal-retirement-62251.html

 

[UpAnchor]

On one hand, the cynic in me would be inclined to take SS as early as possible. And family longevity history makes it toss whether or not I'll come out better by delaying to 70. Yet I'm in the process of doing just that, if only because...

1. Neither DW nor I have a pension of any sort.
2. Presently, SS is the best inflation-adjusted annuity available.
3. Maximizes survivor benefit for DW.
4. Stable, relatively-guaranteed income stream during later years when at risk of cognitive decline or being a potential fraud victim.

And, last but not least...

5. Delayed gratification got me this far and DRC's are perhaps my last big opportunity to practice my craft! ;-)




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