Jkstrudwick
Dryer sheet wannabe
Excellent point. Spend down your IRA/401K account balances NOW to reduce the RMD at age 70 1/2.
The Taxman Cometh!
The Taxman Cometh!
Unfortunately, we all must make a prediction regarding our end of life. I think it's perfectly reasonable to plan for a long life and end up leaving more if we die sooner. But when I do that, I use the same predicted age for all my pools of income. I don't understand why one would ever use more than one.
I understand that if I wait, once I hit 79, I will have get more. My question is, to do what with? What am I going to be spending money on in my 80s? New cars? Trips? More collectibles? How many people at that age are physically and mentally in great condition? So, that leaves what, medical bills and health care? If you have money, the government will take it all at that point anyway. I don't have any heirs or family to leave anything to. So, I'm not saying its not worthwhile to wait until 66.6 put I'm just curious as to what people think they need the extra money for?
I hope you understand that people who defer SS are not saying they are planning to buy less stuff during the time they are deferring.I understand that if I wait, once I hit 79, I will have get more. My question is, to do what with? What am I going to be spending money on in my 80s? New cars? Trips? More collectibles? How many people at that age are physically and mentally in great condition? So, that leaves what, medical bills and health care? If you have money, the government will take it all at that point anyway. I don't have any heirs or family to leave anything to. So, I'm not saying its not worthwhile to wait until 66.6 put I'm just curious as to what people think they need the extra money for?
Please see post above. People who defer think that it's okay to spend their invested assets on fun things early in retirement, knowing that they don't need to conserve those assets for their old age..
However, even though at 91 I will have collected $200,000 more (if I make it that long) I am being realistic about my ability to spend the extra $20K/year when I'm in my 80's. My view is that the 8 years from 62-70 are going to continue to be active and I will have the energy and desire to travel, remodel the house, etc. so I would rather put those funds to use while I can best enjoy them.
..... The SSA Actuaries have set the formula as equal as possible for filing early or filing late.
I understand that if I wait, once I hit 79, I will have get more. My question is, to do what with? What am I going to be spending money on in my 80s? New cars? Trips? More collectibles? How many people at that age are physically and mentally in great condition? /QUOTE]
As has been pointed out several times, by waiting until age 70, one can spend more every year starting at 62. This assumes one does not want to leave a pile of cash for others. So, in reality one can travel and enjoy life more starting at 62.
That said, it's an individual choice and I respect it. I would rather we spent our dollars (from SS or otherwise) having a nice chat over a good lunch, than quarreling over when to take SS.
So, you have to wait 8 long years of your best senior health just to make little additional $.
Like you, I have pretty good genes with my father just passing at 87 and my Mom still living at almost 86. Regardless, I will be applying for my SS next month and taking it at 62, against the advice of our financial advisor. My husband and I have done the math and if I wait, I will need to live until I'm 82 to reach the BREAKEVEN point. Now, because of my family genes, I could live to 82 and beyond, but I'm not risking it. Best of luck to you!
Excellent point. Spend down your IRA/401K account balances NOW to reduce the RMD at age 70 1/2.
The Taxman Cometh!
As a retired banker, I suggest three things:
1) Determine the age you want to be when you retire and estimate where your expenses will/should be at that age. For example, I determined I wanted to retire at 60 without taking any distributions from my 401-K. The only way I could do that was to have my mortgage paid off. THAT became my goal along with enough in savings to pay expenses until age 62.
2) Calculate your SS breakeven point and decide your personal risk. For example, my breakeven, if I wait to take my SS until age 66, is age 82. If I die before then, I leave money on Social Securities table instead of my own.
3) Last, 3-5 years before your projected by peoplw feretirement, determine the large expenses you may be able to eliminate prior to the big day. For example, I replaced my roof, A/C, appliances, did painting, etc., so I could avoid these huge expenditures during the gap period with little to no income. You can never avoid everything, but determining end-of-life on household maintenance and other necessities should be easy to accomplish.
Just my two-cents!
So, you have to wait 8 long years of your best senior health just to make little additional $. No thanks
Here's someone that has not read this thread at all !!
I don't plan on changing my spending by amping up once I start collecting SS at age 70. I have a desired income level that is steady and will be met by different income streams over the years - first my ......(IRAs), later adding SS which will decrease my withdrawals from (IRAs). But by drawing down my (IRAs) early on I'll be reducing my RMDs. I plan to spend more on travel early on and then later on healthcare.
It makes sense to follow odds in some situations- mostly when there will be many iterations and where your day to day life cannot be importantly negatively impacted.
In other situations, it is much better to use a fail safe approach.
Ha
Wise thoughts. Some people are in a position where they need the Fail-Safe. Others, not so much. Probably this contributes to the lack of consensus.I posted earlier in this thread that I think it's a bell shaped curve with those who have no choice taking it earlier on one end and those who don't need it on the other.
Folks in the middle want/need to maximize their benefit; they see it as a form of insurance.
Those with fewer assets need it asap just to make ends meet.
Those with a lot of assets see it as "fun money" to use while their healthy and don't care so much about maximizing their benefit.
It makes sense to follow odds in some situations- mostly when there will be many iterations and where your day to day life cannot be importantly negatively impacted.
In other situations, it is much better to use a fail safe approach.
Ha