Theory Behind taking Social Security Early?

[DatumPoint5]

. 9 die at 100 yo and 1 dies at 10 yo. The average age of death = 910/10 or 91 years old. So, 9 died "above average" and 1 died "below average."

Just fyi, I believe in this particular situation where you have a set of data-points that has an extreme "outlier" you would have to use the median to describe the middle of the dataset and NOT the average (or mean).

Google - Average, Mean, Median
Edit:
Sorry, I did not see Independent's post until just now.

 

[Running_Man]

One can spend a lot of time to run SS calculators and optimizers, but the fact remains that it is mentally harder to spend down your own stash while delaying SS, compared to spending the money that is auto-deposited into your account every month.

And then, there's that nagging feeling that "one dollar in hand is worth two in the bush", particularly as one knows about the SS fund shortfall.

This is very true and a good point! and I think points to why in Imoldernu's post is correct in people happy at taking at age 62.

 

[capjak]

My situation is both spouses are same age and made the same income while working.

According to a SS calculator the optimum in this case is for one to take SS at age 62 and the other at 70. Not sure why but that may be the plan if nothing changes in 7 years when turn 62.

 

[Cut-Throat]

Nothing New

 

[Dtail]

Most everyone else wants/needs to maximize their income potential. Not desperate, not wealthy enough to never need it and feel that longevity is on their side.



But that should eliminate age 62 as a consideration, no?
Then it's just a matter of deciding to take it at FRA or 70 to maximize your income.

I was just pointing out that while age 62 appears to be the least advantageous, for some waiting is not an option and for others who take it, it doesn't matter. It's more of a matter of what's going on in your life than mere number calculations.

Maybe we're lumping in 62, FRA and 70 into one bucket when 62 might be set aside as a "no choice/don't care" group and focus just on a FRA to 70 debate?

Well currently we aren't married, so DGF would not be entitled to a portion of my SS if I go first. I am also managing ACA, so that's another consideration until 65. Most of our monies are in TIRA, so there is the RMD tax torpedo at 70.5 y.o. DGF already collecting SSDI.
So you can see it is somewhat complex.

 

[SecondCor521]

Nothing New

Yet people still want to discuss it, as is evident by this 480 post and counting thread.

 

[pb4uski]

This is very true and a good point! and I think points to why in Imoldernu's post is correct in people happy at taking at age 62.

I don't think that they are happy to.... in many cases they just have no choice.

From what I have read the reason why most people take at age 62 is because they have no other choice...... they have no or minimal retirement savings and still need to put food on the table. In many cases they have been laid off or fired and have trouble finding another job in their early 60s or they had physical jobs and just can't do those jobs anymore due to aging (bad knee, hip, shoulder, or whatever).

I have a BIL and friend who do physical work and in both cases they are almost mid 60s but struggling with their work due to age associated physical ailments.

 

[Perryinva]

Something I haven’t seen mentioned yet is that for most that wan to delay filing to 70, there is no real reason to wait past age 69 to file. If at 70, having already filed, you could always just pay back the last year, keep what ever that years SS earned, and continue at age 70 as if you had filed. Cake and eat it too, kind of thing. Of course, if you need that last year for Roth conversion, it may not make as much sense, but for most, heck even 68 1/2, allows a reset to 69 1/2. Plus , if it looks like delaying was a bad move, you can also file retroactive 6 months, & get a tidy lump sum!

 

[pb4uski]

^^^^ Unless you need the cash flow would it be worth the hassle and aggravation? As I understand it at the end of the day it would be the same if you filed at 70 because you would need to pay back what you receive in that first year.

If that is the case, I have better things to do than deal with bureaucrats twice when I can just deal with them once.

 

[Cut-Throat]

^^^^ Unless you need the cash flow would it be worth the hassle and aggravation? As I understand it at the end of the day it would be the same if you filed at 70 because you would need to pay back what you receive in that first year.

If that is the case, I have better things to do than deal with bureaucrats twice when I can just deal with them once.

+1 .... I have also learned not to get into 'exception processing' with bureaucracies. I had not heard of this 'Move' and so, I'm guessing a lot of Social Security people have not heard of it either.

 

[NW-Bound]

Nothing New

​

I never miss a chance to link a bit of music. It's time for an entr'acte anyway.

Temptation by Tom Waits

Temptation
Temptation
Temptation
I can't resist...
​

 

[Fedup]

+1 .... I have also learned not to get into 'exception processing' with bureaucracies. I had not heard of this 'Move' and so, I'm guessing a lot of Social Security people have not heard of it either.

Not only that, we may not remember to undo it either. This is why I filled my potential pension paper way ahead, when I retired, when all the information still fresh in my mind. 5 years from the date of retirement, I might even forget what date I started working there and what date I left.

 

[dixonge]

Just ran some spreadsheet calculations and determined that in our case there's not a big difference. In our scenario we will be investing all SS proceeds. I used 6% annual return (compounding monthly) for this estimate. So in our case no tremendous benefit for waiting.

 

[Cut-Throat]

Just ran some spreadsheet calculations and determined that in our case there's not a big difference. In our scenario we will be investing all SS proceeds. I used 6% annual return (compounding monthly) for this estimate. So in our case no tremendous benefit for waiting.

Unless the market drops and you lose 10% a year......



You know, I see so many positive market forecasts in this thread, that this is a very bearish indicator... If you read this thread, the market always goes up!

 

[Sunset]

My DW just told me, it's 70 unless you know you are going to die or are really desperate.

There you all go, the answer in 1 line.

 

[ragabnh]

I decided that I will die at 75, therefore will claim at 62 in Jan 2019. Problem solved.

 

[Cut-Throat]

I decided that I will die at 75, therefore will claim at 62 in Jan 2019.

So, what is your SWR for the next 13 years? --- (Just so that you don't leave any money 'on the table')

 

[ragabnh]

Hmmm , did not think about that, I will have to do around 9%, but realistically I need only 2% based on my current expenses, in this case my son will have lots of friends.

 

[Cut-Throat]

Hmmm , did not think about that, I will have to do around 9%, but realistically I need only 2% based on my current expenses, in this case my son will have lots of friends.

Yup, if you want to make your heirs very happy, Take your S.S. at age 62 and then Die as Soon as you can!

 

[joeea]

I decided that I will die at 75, therefore will claim at 62 in Jan 2019. Problem solved.

Perfectly reasonable!

So how are you going to start your eternal dirt nap? Now that you have the date, I assume you have already decided the means.

Are you planning a big party? Or will you just surprise everyone?

 

[ragabnh]

Perfectly reasonable!

So how are you going to start your eternal dirt nap? Now that you have the date, I assume you have already decided the means.

Are you planning a big party? Or will you just surprise everyone?

Jack Kevorkian is my savior,

 

[Perryinva]

Interesting responses. So bureaucracy, for taking advantage of an easy, clearly defined benefit is not worth an interest free loan of $3350/mo for a year while hedging your bet IN CASE a reason pops up to be better to have taken it earlier, is a reason to not get some free money? I mean, I realize it is only $438 if just put in a 2% savings, but if it is truly not needed, and you planned for 70 anyway, then why not? That’s rhetorical, btw, no answers wanted.

I just know that by the time I hit say 68 in 8 years, I will be certainly wondering the sense of delaying when I am passing by say $3100-3200/mo so that I can get what seems a small benefit as it will increase about $20/mo for every month delayed. It’s far easier to justify delaying based on pure math, but when it is that kind of in your face income, I know it will be much harder.

 

[dixonge]

Unless the market drops and you lose 10% a year......

You know, I see so many positive market forecasts in this thread, that this is a very bearish indicator... If you read this thread, the market always goes up!

But if that drop occurs after I hit 70, it would further push out the break-even point, beyond any likely life expectancy.

Also, SS benefits and retirement ages could be pushed out again. Many variables.

 

[marko]

In our scenario we will be investing all SS proceeds.

In a way, isn't that what most of us do? My SS benefit is 'invested' by virtue of allowing me to keep what I would've otherwise withdrawn (equal to my SS benefit) invested.

 

[marko]

From what I have read the reason why most people take at age 62 is because they have no other choice......

...or as I've pointed out, they don't need it at all, which was our case. We view our age 62 SS as free money ($40K between the two of us) to do extra stuff while we're young.