Social Security at 62 - Yes or No

[Sue J]

Remember that Social Security, both the taxable portion and non-taxable portion, are included in your Modified Adjusted Gross Income for Affordable Care Act subsidy eligibility. You'll need to consider this if you are too young for Medicare and are getting your insurance through the Marketplace and getting a subsidy.

This may not apply to the OP, just something to keep in mind.

 

[braumeister]

That calculator gave me 94, too.

The coolest one I ever saw was my mother.
I took her to a doctor's appointment one day when she was about 88. The doc was having a slow day and just making conversation when he asked her how long she expected to live.

Mom didn't blink an eye. She said "Well, I'm a lot like my father and he lived to 96. So I guess I'll make it to 96 as well.

Sure enough, she died at 96 ½ just as she predicted.

 

[W2R]

That calculator gave me 94, too.

The coolest one I ever saw was my mother.
I took her to a doctor's appointment one day when she was about 88. The doc was having a slow day and just making conversation when he asked her how long she expected to live.

Mom didn't blink an eye. She said "Well, I'm a lot like my father and he lived to 96. So I guess I'll make it to 96 as well.

Sure enough, she died at 96 ½ just as she predicted.

That is so cool!

Since we got the same score, I just tried it with all of the worst possible answers. It does work - - it said I would die next year.

P.S. - - didn't mean to threadjack. On the topic of the thread, I don't know what would be the best decision for the OP. There really is no one right decision on when to take SS, in my opinion. I am delaying until age 70 but was able to take divorced spousal SS this year while my own SS continues to grow. So, I kind of had my cake and am eating it too.

 

[Walt34]

Have you ever run one of the lifestyle dependent longevity calculators?

For example: Lifespan Calculator – Test Your Life Expectancy || NM

That one says I'm gonna make to to 92. Dang, I wanted to make it to 95, the age at which I plan to be shot and killed by a 20-year-old jealous husband.

 

[dallas27]

I'm 36, no dog in this fight, but for me, i would delay as long as the market is generally heading up. If it drops into correction territory, then i would file to limit that downside withdrawal early on, with hopefully a bit more than the minimum payout.


Sent from my iPhone using Early Retirement Forum

 

[mathjak107]

It isn't really a question of that, because you can just spend more of your portfolio in your sixties to make up for delaying your SS since you know the money will be higher in your later years.

In your sixties you could cash in some crap bonds and spend them since you are essentially buying better bonds by delaying SS.

by delaying you are also going to need less dependency on markets and rates. your withdrawal rate may come way down. by delaying we can become more aggressive investors since down turns are less a concern.

throw in the natural tapering off of spending as you age and you can take some pretty hefty withdrawals early on from your portfolio while you are young and healthy and refill later in life.

 

[Independent]

Holy cow! That one says I'm going to live to age 94, even though some of my answers were less than ideal. I hope it's right!

Yes, I also got 94 and was surprised.

The post was a response to someone who seemed to be thinking about a much lower life expectancy. I thought it would be good to consider some higher numbers.

 

[explanade]

Refill if the goal is to leave money to heirs?

 

[volfan]

We are in the same position as the other poster who said they would need to draw from their 403b to fill in the gap until SS kicks in. So we were thinking of having one, the lowest, take it early at 62 (FRA is 67 for both) to cover most of the gap and the other take it at 70, unless at the time 67 made more sense. BUT this is assuming that the spouse who takes it early would get the higher full survivor's benefit if they live the longest.
Is this how it works or would the survivor's amount be reduced because they took their own benefit early?

 

[Birchwood]

Very instructive, but I think the difference may be very little, if all of us live very long and have reasonable savings. The flaws of any argument is the fact that it fail to state that the average life expectancy is about 79 years now.
Another is, somebody who is 64 years old(my age), has 50% chance to live another 21 years. That means half will not make it to 85. I like to be as optimistic as possible and is relatively healthy. I run 3 miles a day, but, the life data may fail a large number of us.
I'll get mine 64- 65 or 66 and will also spend my savings and retirement fund, slowly. At 84, if lucky, I'll be less active live most of them anyway.

 

[rayvt]

There is no reason to assume that you'll live longer than your life expectancy as given in the mortality tables. This is not Lake Wobegon.

The SSA says that the payout is actuarially equivalent, for any ages 62 to 70. If you look at any accurate spreadsheet comparing taking at different ages, the break-even age is right around your life expectancy.

But, of course, we'll all be living long after the mortality tables show, because Lake Wobegon.

Do you have a good gut feel for how old 92 is? The last survivor of the Hindenburg just died -- at age 92. The Hindenburg crash is ancient history.

 

[mathjak107]

Very instructive, but I think the difference may be very little, if all of us live very long and have reasonable savings. The flaws of any argument is the fact that it fail to state that the average life expectancy is about 79 years now.
Another is, somebody who is 64 years old(my age), has 50% chance to live another 21 years. That means half will not make it to 85. I like to be as optimistic as possible and is relatively healthy. I run 3 miles a day, but, the life data may fail a large number of us.
I'll get mine 64- 65 or 66 and will also spend my savings and retirement fund, slowly. At 84, if lucky, I'll be less active live most of them anyway.

while average life expectancy means something to an insurer to us the mere mortals of the world it means nothing.

for us ,life can only have two outcomes . things either work out or they don't . statistics don't exist.

we are either dead or alive. we either have enough money if we take ss early or we don't.

life is pretty simple once you realize statistics have no bearing on our planning.

since we do not know who lives and who dies the only thing we can do is assume we will beat methuslas record and plan for a nice old age despite those charts.

 

[RunningBum]

There is no reason to assume that you'll live longer than your life expectancy as given in the mortality tables. This is not Lake Wobegon.

The SSA says that the payout is actuarially equivalent, for any ages 62 to 70. If you look at any accurate spreadsheet comparing taking at different ages, the break-even age is right around your life expectancy.

But, of course, we'll all be living long after the mortality tables show, because Lake Wobegon.

Do you have a good gut feel for how old 92 is? The last survivor of the Hindenburg just died -- at age 92. The Hindenburg crash is ancient history.

I don't care whether anyone else on this forum lives longer than the mortality tables show. I care that I might live longer. I'm not assuming I will, but I am planning in case I do.

As I've said time and again, if I die early, I won't be broke. Maybe some of you relying more on a pension have cash flow issues and need early SS money, but I don't. If I live a lot longer, the extra benefits might make my old age much more comfortable, and I'm much less likely to be a financial burden to my heirs.

I've dined with 2 people in their 90s this year. Heck, I skied with one of them one day last winter. Neither of them were on the Hindenburg, for what little that is worth to deciding on when to take SS. Yes, I do know how old 92 is.

 

[ejman]

There is no reason to assume that you'll live longer than your life expectancy as given in the mortality tables. This is not Lake Wobegon.

The SSA says that the payout is actuarially equivalent, for any ages 62 to 70. If you look at any accurate spreadsheet comparing taking at different ages, the break-even age is right around your life expectancy.

But, of course, we'll all be living long after the mortality tables show, because Lake Wobegon.

Do you have a good gut feel for how old 92 is? The last survivor of the Hindenburg just died -- at age 92. The Hindenburg crash is ancient history.

This table from SS is the "official" actuarial life table Actuarial Life Table

For us optimists that want to make sure we cover our bases to age 100 I see the table tells me that out of 100,000 that started the life journey there will 873 of us left. Piece of cake. All we have to do is make sure we are not part of the 99,127 dummies that didn't know how to do things right and apparently didn't eat their cheerios.

 

[photoguy]

The SSA says that the payout is actuarially equivalent, for any ages 62 to 70. If you look at any accurate spreadsheet comparing taking at different ages, the break-even age is right around your life expectancy.

I've always disliked when the SSA describes payouts as actuarially equivalent or neutral. Because this can only be true for an individual if you are 1/2 male and 1/2 female, as well as a good mix of all the races and ethnicities.

The difference in life expectancy at age 60 by using only race and gender is probably 7-10 years from worst (black males) to best (asian & hispanic females).

 

[MRG]

Do you have a good gut feel for how old 92 is? The last survivor of the Hindenburg just died -- at age 92. The Hindenburg crash is ancient history.

I do, DM passed at 92, DF this year at 96. Their expenses went up their last year of life.

Neither were on the Hindenburg or heard of Lake Wobegon.

 

[Archman]

...................................................................
But this doesn't take into account the growth of my investments I could leave in my accounts if I used the SS payments to fund expenses instead of withdrawing from investments. My SS payment at 62 is $21,252. If I leave that in my investments it will continue to grow.............................................

I'd love to hear more about how people made the decision one way or the other.

In my situation, if I take Social Security at age 63, and therefore drawing less from my retirement savings, my break even point is at age 97+,assuming the markets cooperate.

 

[pompanobeach]

If you wait to age 70 to claim SS then your SS benefit should be about 3400 a month or 41K per year.

The reduction in survivors SS for your wife will be 2/3 of her teachers benefit, in today's dollars assuming the teachers benefit is fully COLA which probably is not the case actually, many teachers pensions have a maximum yearly increase, would be 20K reduction meaning upon your death deferring to age 70 she would receive a SS benefit of 21K per year (41K - 20K) or almost as much as you would be claiming at age 62. Otherwise her SS survivor benefit is going to be 24K -20K or 4K per year. In other words, every year you wait to defer SS will increase SS by about 2000 per year on average which fully adds to your SS and to your wife's survivor SS.

My father in law had bypass surgery at age 50 and is still going strong at age 89 with his wife at age 87. Again since this money is not even needed I think financially and strategically it makes an incredible amount of sense to wait to claim to age 70.

I beg to differ. If the Social Security money is not needed. Simply take it and invest it and let it grow until you do need it. If you should die, at least your ears will have that nest tag nest egg that you saved up with Social Security.

On the other hand, if you did not take the Social Security at 62 and you died before age 70, Uncle Sam gets to keep it all and no family member will ever get anything. Thats the way I see it.

Why would you want more money later in life and not less earlier in retirement where you can at least spend it on vacations and something you like rather than hospitals and pharmacy bills.....

PB, Fla

 

[Dtail]

I beg to differ. If the Social Security money is not needed. Simply take it and invest it and let it grow until you do need it. If you should die, at least your ears will have that nest tag nest egg that you saved up with Social Security.

On the other hand, if you did not take the Social Security at 62 and you died before age 70, Uncle Sam gets to keep it all and no family member will ever get anything. Thats the way I see it.

Why would you want more money later in life and not less earlier in retirement where you can at least spend it on vacations and something you like rather than hospitals and pharmacy bills.....

PB, Fla

It can get to be a complex decision. We have most of our investments in TIRA, so spend down of TIRA vs. Roth conversion vs. when to take SS.....

 

[travelover]

I beg to differ. ........

You waited 4 years to beg to differ? That's patience!

 

[RunningBum]

You waited 4 years to beg to differ? That's patience!

Maybe in a few years I'll point out the flaws in his argument.

 

[Archman]

I did take Social Security at 63.5 years old. I recalculated that my breakeven age is 86 years old, if the markets cooperate.

 

[Running_Man]

I beg to differ. If the Social Security money is not needed. Simply take it and invest it and let it grow until you do need it. If you should die, at least your ears will have that nest tag nest egg that you saved up with Social Security.

On the other hand, if you did not take the Social Security at 62 and you died before age 70, Uncle Sam gets to keep it all and no family member will ever get anything. Thats the way I see it.

Why would you want more money later in life and not less earlier in retirement where you can at least spend it on vacations and something you like rather than hospitals and pharmacy bills.....

PB, Fla

Because both are still alive- 4 years later — and able to pay for the very fine facility where they live, the monthly fee is 5k per month, but that includes one extraordinary good meal per day, transportation for taking them to the doctor — a bank office open one day per week to discuss needed banking - and a independent beautiful apartment which is cleaned and maintained for them which they never could physically hold if they could not afford the payments for someone to do all this for them. And on site full time care available at no additional cost if one or both of them become unavailable to be capable of providing basic care to themselves in the apartment. Yes one of them did have heart surgery four years ago, right after the Cubs won the World Series for the first time in his life. He joyfully is still living to remember that day.

 

[Perryinva]

And as pointed out ad nauseum in many threads, no one (who can actually afford to delay and still
Retire at the same time) delays SS to “get more later”. They do it to get more NOW, because they DON’T have to be concerned with generation of that same extra amount later in life, since SS is providing the COLA income. Yes, IF you die before you collect, then your estate is left with less than if you had collected it early. But if married , the spouse ends up with that higher income. And if getting as much from SS as soon as possible is the most important thing to your future planning then do it. At most, delaying only really adds about $6k/yr to your income at age 62, compared to collecting at 62. But many figure that they worked and saved for THEIR OWN retirement so getting the most as soon as possible while maintaining that increased income is paramount, not making sure their heirs are better off when they are dead. THAT I will never understand! I mean, who in their right mind bases a decision on assuming they will die rather than if they live?

And that doesn’t even touch the likelihood that at some point in the aging process, the automatic income to take care of you/spouse will be just that...automatic, vs having to make sure your invested funds don’t inconveniently tank at the wrong time at end of life, or are stolen/swindled etc.

 

[Red Badger]

Way too much emotion / opinion on the topic for me. I'll take at 62 and DW at FRA (both of which will occur in 2019). On three separate occasions, I had an option to take a payout early or later. I chose early each time because I was there to choose - - and it's worked out fine. Will do same for SS. Yeah, if I assume room temperature first, DW will end up with a little less, but it'll still suffice. Her and the new guy will be comfy enough.

Leaving a stash for our heirs is secondary to DW and I enjoying our retirement. Gonna blow some of that dough!