Agreed. The absolute projected dollar value for the various options will vary from one person/couple to another for all the reasons mentioned in these threads. But it makes more sense (IMO) to instead consider the relative value to you/spouse of the larger (or smaller) COLA adjusted pension/annuity.
Clear article about when to take Social Security
- Thread starter Markola
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audreyh1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I think projections improved to 80%.
Thanks. It apparently depends on whether we assume the law will be changed to allow combining the OASI and DI trust funds (and inflows). If combined, then they would meet 80%. If kept separate, then there's enough incoming revenue to OASI to pay 77%.
From the report (pg 13):
Yeah, I thought that was a sneaky one they tried to pull over on the public to make it appear to look better. Disappointing!
It's not the case that social security will be unable to pay anything. Read more before you make your choice based on an incorrect assumption.
By "lion's share" you mean about 60%? A sad sort of lion, I guess.
What do you imagine their motivation would be for wanting to pull one over on the public?
Well, starting last year, they combined the DI and OSDI into a single opening statement number in the report. You make your lower number not look quite as bad by combining it with a higher number.
They did not do that in prior years. IMHO, there are politics in play.
Might be. Or it may be something else. But speculating on that won't help us in this discussion of SS claiming strategies.
Chuckanut
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
IMHO, many of us don't have enough respect for a nasty, on-going, relentless Bear market. The kind of Bear that rips as big piece of flesh out of the market, lets you think it's over, and then comes back for another bigger piece of flesh.
The Bear of 1973-1974 took a huge chunk out of the stock Market. IIRC, it wasn't until 1992 that USA investors broke even in REAL terms. These days we are used to a fairly rapid bounce-back, a bounce back that brings us to new highs in less than a decade. 1974 shows just how foolish that belief can be.
Getting a fat monthly check from the guys who own the money printing press is a big advantage when the Bear rips the market apart, and it needs a few decades to heal.
And if the Bear doesn't wander buy, or decides to stay for only a short time, well..... More money to spend on wine, women and song. Or whiskey, men and song. Or whatever you want.
My 2¢. Take what you wish and leave the rest.
The Bear of 1973-1974 took a huge chunk out of the stock Market. IIRC, it wasn't until 1992 that USA investors broke even in REAL terms. These days we are used to a fairly rapid bounce-back, a bounce back that brings us to new highs in less than a decade. 1974 shows just how foolish that belief can be.
Getting a fat monthly check from the guys who own the money printing press is a big advantage when the Bear rips the market apart, and it needs a few decades to heal.
And if the Bear doesn't wander buy, or decides to stay for only a short time, well..... More money to spend on wine, women and song. Or whiskey, men and song. Or whatever you want.
My 2¢. Take what you wish and leave the rest.
Major Tom
Thinks s/he gets paid by the post
Apologies if I'm saying something that has been said by someone else in this thread, but I only just discovered it and (baldfaced admission here) don't have the attention span to read the entire thread.
I had 2 thoughts on skim-reading the article. The first was that they are using maximum benefits claimed over your lifetime as the sole criteria for determining when to take SS. What happened to treating SS as longevity insurance?
My second thought was, "Oh, it's the Motley Fool. Well, that's disappointing...…….."
I had 2 thoughts on skim-reading the article. The first was that they are using maximum benefits claimed over your lifetime as the sole criteria for determining when to take SS. What happened to treating SS as longevity insurance?
My second thought was, "Oh, it's the Motley Fool. Well, that's disappointing...…….."
OP
OP
Markola
Thinks s/he gets paid by the post
Not sure how you define “longevity insurance” but, for me, waiting until 70 is not about accumulating the maximum lifetime benefit. Rather, waiting to 70 to collect is to get a bigger monthly paycheck to shore up other revenue sources that might be drying up. Is that longevity insurance? If so, count me in.
Major Tom
Thinks s/he gets paid by the post
There's nothing like being called on to explain what you just said, to make you realize you don't know as much as you thought you did. They say that if you really want to learn a subject, try teaching it to someone else!
Anyway, I don't really have a strict definition for longevity insurance, but it is largely in line with what you said - waiting before claiming, so as to offset the negative financial impact that might be incurred by living for "too long".
Anyway, I don't really have a strict definition for longevity insurance, but it is largely in line with what you said - waiting before claiming, so as to offset the negative financial impact that might be incurred by living for "too long".
My wife, and I (both 54 years old) are fully planning on taking early SS at 62, and a reduced pension also at 62, which should cover 70% of our expenses easily. My 401K can cover the nut without going over 4% WR.
The only unknown right now is the cost of health insurance between 62-65, which I can cover with doing paid projects out of my home shop, or a part time job.
My wife will probably live to 90+ years old, while I will be lucky to hit 80 with my history. We have no debt, paid off farm, and are in a LCOL area with modest needs.
The only unknown right now is the cost of health insurance between 62-65, which I can cover with doing paid projects out of my home shop, or a part time job.
My wife will probably live to 90+ years old, while I will be lucky to hit 80 with my history. We have no debt, paid off farm, and are in a LCOL area with modest needs.
Thus not surprising that so many have varying opinions. I thought my choice was best until I understood that others have different circumstances and preferences and this will result in different decisions.
Longevity insurance for me is that myself and DW are aged 63 (her) and 64 (me) so the chances that one of us will live to 90 is a lot higher than the individual probability. She also has a family history of longevity and also will get about half of my SS, so in the likely event I should die first but have delayed until age 70 then she will receive a big bump up in her SS to what I was receiving. We plan on her starting SS at her FRA.
daylatedollarshort
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We've optimized our budget so that SS at 62 and pensions at 55 cover all our fixed and the majority of our discretionary expenses. When to take SS has had very little impact on our long term financial projections compared to expense optimization.
jollystomper
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Right now the biggest factor I am analyzing to impact when I take SS is how much benefit I would get by converting some of my 401K to Roth before 70 1/2. This is "hampered" somewhat due to having a good pension that might cause little or no difference in our current and future tax brackets. We'll see...
The earliest I am currently planning to take SS is 64. Based on my analysis, the break-even years for me are 79 (compared to FRA) and 84 (compared to 70). The "worst" case of living to 100 is $300K... which more impacts what we would leave to our children vs. what we would need. But I evaluate this every year before then.
The earliest I am currently planning to take SS is 64. Based on my analysis, the break-even years for me are 79 (compared to FRA) and 84 (compared to 70). The "worst" case of living to 100 is $300K... which more impacts what we would leave to our children vs. what we would need. But I evaluate this every year before then.
gayl
Thinks s/he gets paid by the post
Your assumption is that the person takes 12k per yr from investments. What if you don't? What if you are taking divorce spousal benefits?
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Basic and...
I hate clickbait that requires an email (or more) before you can go any further.
This article may cause someone who is married to take SS too soon and then if they die before their spouse, will impact the amount of SS they are eligible to receive for the rest of their life.
In addition, it does not address someone eligible for SS based on a former spouse's record and when to claim. In addition, no mention of the
The good thing is that EVERYONE, regardless of age, should establish their online SS account so they can verify their earnings each year.
The podcast "Big Picture Retirement" has several episodes about Social Security and when to claim. But they caution that every case is different.
I hate clickbait that requires an email (or more) before you can go any further.
This article may cause someone who is married to take SS too soon and then if they die before their spouse, will impact the amount of SS they are eligible to receive for the rest of their life.
In addition, it does not address someone eligible for SS based on a former spouse's record and when to claim. In addition, no mention of the
The good thing is that EVERYONE, regardless of age, should establish their online SS account so they can verify their earnings each year.
The podcast "Big Picture Retirement" has several episodes about Social Security and when to claim. But they caution that every case is different.
My wife is a few years younger. My SS is considerably bigger than hers. Our strategy is for her to taken at 62 while mine grows and will be tapped at my age 70. When she takers at 62 I will claim spousal benefits half of hers. At age my 70 she will continue with her SS and I will claim my full age 70 retirement. I will likely die first and upon my death she can claim survivor benefits on mine which amounts to about my age 66 FRA benefit. Over the course till age 90 the maneuver I figure the maneuver gains me 170K including 20 years of reduced stress on my portfolio. This way we are splitting the risk. SS is paying something from age 62, at my 70 if I live a long time its pays a lot if I die it pays her at a much better rate for the course of her life.
NoMoreJob
Recycles dryer sheets
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An additional consideration for those with a spouse who will draw on a primary earner's account is that the survivor's benefit is calculated on the primary earner's actual benefit.
So in my case my wife who earned considerably less will draw on my account. Since I am older and male I will likely die first. The longer I wait to draw up to age 70 the greater her continuing benefit will be. If I die before age 70 her benefit will be calculated based on my benefit at the age that I die. In our case my wife won't reach her full retirement age until after I reach age 70.
So in my case my wife who earned considerably less will draw on my account. Since I am older and male I will likely die first. The longer I wait to draw up to age 70 the greater her continuing benefit will be. If I die before age 70 her benefit will be calculated based on my benefit at the age that I die. In our case my wife won't reach her full retirement age until after I reach age 70.
If both of you are over 55, the combined HSA contribution limit in 2019 is $9K. You need to put at least 1,000 of that in the spousal account.
Taxes - Taxes - Taxes
It's not always what you collect from Social Security but how much of it will be taxed. Always think about the net return on your Social Security. That's the only true way to calculate your break even point. If by collecting early forces higher taxes on your SS as compared to waiting and paying virtually no taxes you win. Spend down your IRA's to avoid high RMD's from forcing you to pay taxes on a higher percentage of my SS.
It's not always what you collect from Social Security but how much of it will be taxed. Always think about the net return on your Social Security. That's the only true way to calculate your break even point. If by collecting early forces higher taxes on your SS as compared to waiting and paying virtually no taxes you win. Spend down your IRA's to avoid high RMD's from forcing you to pay taxes on a higher percentage of my SS.
stephenson
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I always thought this would be simple ... but, after reading experiences and thoughts from this and other fora ...
I was going to initially simply wait till 70 ... because it was simple and offered the "it's more money."
Wife and I both 65 ... will be in the 24% bracket in 2019. Income from military pension and corporate pension, with some paid for rentals. Old IRAs and 401K transfers from megacorp with about 25% Roth.
Couple of things hanging on me re SS:
1. Things could change wrt solvency - low probability
2. Things could change wrt means testing - more probable
3. The SS "crisis" is getting closer - and, our start date could fall right when it hits - some probability
4. Psychology of "not saving" - yeah, weird thought, but we have done it for so long we still discuss ... perhaps wistfully?
We only have control of 3. and 4., above ... since 66 is next year, we can mitigate 3., by taking SS at FRA. This would also help with the psych of "saving" since we would likely dollar cost average into a mix of equities and bonds.
Hard .... grrrrrr...
I was going to initially simply wait till 70 ... because it was simple and offered the "it's more money."
Wife and I both 65 ... will be in the 24% bracket in 2019. Income from military pension and corporate pension, with some paid for rentals. Old IRAs and 401K transfers from megacorp with about 25% Roth.
Couple of things hanging on me re SS:
1. Things could change wrt solvency - low probability
2. Things could change wrt means testing - more probable
3. The SS "crisis" is getting closer - and, our start date could fall right when it hits - some probability
4. Psychology of "not saving" - yeah, weird thought, but we have done it for so long we still discuss ... perhaps wistfully?
We only have control of 3. and 4., above ... since 66 is next year, we can mitigate 3., by taking SS at FRA. This would also help with the psych of "saving" since we would likely dollar cost average into a mix of equities and bonds.
Hard .... grrrrrr...
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