Best time for SS withdraw is age 67 not 70?

[latexman]

DW and I will be 66 this year. As long as we are healthy and don’t need the money, the plan is file at FRA/66.5 for DW, and 70 for me, at which time DW will claim spousal. If our heath or finances take a turn, we’ll re-assess.

 

[ARW44]

Too long ago to remember the precise details, I calculated that I would have to last to about 85 to receive more total SS dollars if I waited until 70 vs starting SS as early as possible. I considered that my discretionary expenses would probably decline at advanced ages, but I did not consider the effects of inflation, return on invested funds, or impact on income taxes. As a result, I started SS early. Eighty-five seemed awfully far away.

 

[Bigdawg]

I turned 67 in January, 2022.
Any investment I would have made would be down, significantly.


BOY, am I glad I waited!!

S&P is up 18.55% since the day you turned 62.

 

[USGrant1962]

S&P is up 18.55% since the day you turned 62.

And his SS payment is up around 35% since the day he turned 62, not even counting the inflation adjustment that makes the ~35% "real" dollars. It looks like your S&P number is real total return as well. FWIW, BND total return for the last 5 years looks like ~1% (nominal), so a big loss there after inflation.

 

[Sunset]

I am going on 63, was going to take it now, but I have liver problems and probably won't live past 70 or so.

My financial advisor says I should do 67 anyway, if my wife lives into her 80's, it will wash out to be a better deal.

If I live a lot longer that would be even better. Only God knows for each of us.

In your shoes, I would check the open social security website to see what it says as to when to claim.
Reason being many folks, including FA's lack the knowledge of SS rules to be correct about timing of claiming, even when knowing probable lifespan.

Especially as that website will take into account, your wife's SS numbers if any.

 

[old medic]

I do like reading to peoples reasoning behind their strategies. The vast majority of them make sense for their specific situations.

I'll 2nd that... But unfortunately for me, It makes me relook at everything. Then again that part of life... reevaluating... Was planning on waiting till 65 and Medicare, But this thread has me seriously considering 62 instead.

 

[Bigdawg]

And his SS payment is up around 35% since the day he turned 62, not even counting the inflation adjustment that makes the ~35% "real" dollars. It looks like your S&P number is real total return as well. FWIW, BND total return for the last 5 years looks like ~1% (nominal), so a big loss there after inflation.

And 5 years of using his stash vice receiving SS payments so he lost all that money. We can play this all day. I respect everyones decision on when they should take SS. Anytime between 62 and 70 is fine. My hope is that everyone analyses their situation and makes an educated decision based on their (and their spouses) circumstances/needs.

 

[Chuckanut]

Keep in mind that if one chooses to delay taking SS, the option to start it earlier than 70 still remains. Every month between 62 and 70 is a new opportunity to start SS.

OTOH, once you take SS, after 12 months you are pretty much stuck with your decision. Sure, you could change your mind within the 12 months, but you would have to repay every dollar collected from SS.

Timing is key. Social Security will let you withdraw your original application for retirement benefits only once, and it must be within 12 months of the date you first claimed your benefits.

 

[Romer]

Per the article linked above I reran my numbers ASSUMING congress doesn't fix SS and in 2034 it can only pay 77% of scheduled benefits. It makes delaying less attractive.

I basically took all my options escalated each year for inflation (3%) and in 2034 cut them to 77%

It isn't an accurate model in any case as lots of things can and will change in 11 years
I believe there is a HUGE voting block who wants them to fix it, so think that won't become an issue

 

[Gumby]

Yep, the value of "early money" is hard to predict in advance for sure. I started my SS at 62 as protection for DW who gets no SS on her own and is ineligible to receive SS based on my earnings. Our timing was fortunate and the 8 years I collected SS (from age 62 to 70) were great years to be DCA'ing into the market. The accumulated stash now covers the difference between my SS at 62 and SS at 70 at a reasonable WR. Of course, it might not have worked out that way.

But, again, the primary motivation was protecting DW who otherwise would have never received SS from her own earnings or from mine had I died prior to 70.

There's a million scenarios out there. Most everyone feels what's right for them must be right for everybody. And that is just not true.

The young wife and I are in exactly the same position and made exactly the same choice. The traditional social security calculators/models typically do not address the GPO situation.

 

[TheWizard]

I found this article interesting, and plan to take at 62.
Making Optimal Social Security Claiming Decisions - A Four Stage Analysis by Daniel Amerman

I read that article.
It seems targeted toward low to middle income retirees.
It doesn't discuss the advantage of delaying SS to 70 to allow more headroom for Roth conversions before hitting the next higher IRMAA tier.
And it does discuss the hold harmless provision for SS/Medicare which doesn't apply to those of us paying IRMAA...

 

[fishfactory]

SS article

Wizard, your statements about the article are correct. There is no one size fits all formula. In my case, I believe benefits will be cut and/or means tested, so as the old saying goes - a bird in the hand.....

 

[djsander]

I found this article interesting, and plan to take at 62.
Making Optimal Social Security Claiming Decisions - A Four Stage Analysis by Daniel Amerman

Thanks for the article. To me it was very informative and gives us even more to think about. We are edging toward somewhere between 65 and 67. Like all have said it’s a personal decision based on what best fits your situation. Sometimes I just want to throw in the towel and apply and then I tell myself we can wait a couple more years. Thanks again!

 

[brucethebroker]

Never planned on taking it until much later, but when the last recession hit, plans changed.
Instead of sweating it out (commission sales), I took SS at 62 and continued to work PT, staying under the $ earning limit. It has made for a nice, pressure free semi-retirement. Would do it again without a second thought if the same circumstances happened again. If I would have continued my pre-housing crash income, and joy of w*rk, I would have waited.

It is good to remember not everyone enjoys their j*b, or has the good health to wait.

 

[brucethebroker]

Forgot to mention that early SS gave us the freedom to spend winters in a warm weather location. Would never trade those years for having to wait till age 70 to draw.

 

[Reese]

I would consider anytime after 65 to maximize ACA subsidies, personally. Probably a moving target depending on health and expected day of demise...

+1 Exactly what I'm doing which has enabled me to get a heavily subsidized Gold Plan.

 

[RetiredAt55.5]

In your shoes, I would check the open social security website to see what it says as to when to claim.
Reason being many folks, including FA's lack the knowledge of SS rules to be correct about timing of claiming, even when knowing probable lifespan.

Especially as that website will take into account, your wife's SS numbers if any.

+1

In my opinion, married couples really need to understand all the ramifications of early filing (particularly the primary wage earner) and survivor benefits. Taking SS (often simplistic) advice from SGOTI can be a very costly mistake.

In our case, once one of us passes, there's already a "haircut" going from two SS income streams to one. Plus, the married filing jointly standard deduction goes away. Throwing in the possible (probable) haircut coming to "fix" SS, I don't want to add an additional haircut to DW's future by claiming early.

 

[fishfactory]

RetiredAt55.5, I agree with your comments on survivor benefits. Each situation has differing variables. In my case, in addition to the reasons listed in the article link I posted, my wife will not be dependent on SS, so the haircuts you mention are not an issue. Other assets are available for income, and I would rather collect from age 62 vs waiting in case I passed early for some reason and get little to nothing from the decades of my contributions. And if they do cut benefits, my lower monthly $ figure may be cut at a lower % than the higher monthly from later filing (if they go progressive like tax brackets).

This thread is good in that many of the variables are being listed for evaluation on individual basis.

 

[Montecfo]

I do not think folks over 50 need to worry about benefit cuts.

Benefits more likely to be delayed for folks under 50.

We vote. Pols know it.

 

[fishfactory]

Montecfo, a 50 year old would be 61 in 2034 when it is projected cuts will have to be made. If no changes are made before then, by law the cuts must take place. I hope you are right about voting, but I believe this is something even people over 50 should be concerned about.

 

[Dtail]

+1 Exactly what I'm doing which has enabled me to get a heavily subsidized Gold Plan.

Same here but with a Silver plan.

 

[Chuckanut]

I do not think folks over 50 need to worry about benefit cuts.

Benefits more likely to be delayed for folks under 50.

We vote. Pols know it.

You're probably right overall. But, I do think they will find a way to tax that last 15% for people with higher incomes. That's a good way to cut SS benefits for "the rich" while perhaps not technically cutting the benefits.

 

[RunningBum]

Montecfo, a 50 year old would be 61 in 2034 when it is projected cuts will have to be made. If no changes are made before then, by law the cuts must take place. I hope you are right about voting, but I believe this is something even people over 50 should be concerned about.

+1. I'm 61 and I would really like to wait until 70 to collect (for longevity insurance and more years of Roth conversions) but if this is still getting kicked down the road when I'm off the ACA I may start it then. The people who would being paying increased SS taxes out of their paychecks also vote. I'm not feeling a lot of love for boomers from younger generations. Every year that goes by I'm a little less confident that even 62 year olds will be grandfathered in, especially if they haven't started yet.

You can listen to the people who assure you that your benefits won't get hit, and I agree the odds are favorable, but they won't be chipping in to help if does happen. Everyone has to think and decide for themselves.

 

[Montecfo]

Montecfo, a 50 year old would be 61 in 2034 when it is projected cuts will have to be made. If no changes are made before then, by law the cuts must take place. I hope you are right about voting, but I believe this is something even people over 50 should be concerned about.

Folks over 50 when the law changes likely would not be affected, no matter what year that happens.

I understand the law. We went through this in the 80s. It is not a new issue. It was fixed then when there was no other option.

 

[RunningBum]

I have some fear that rather than working together on a plan to fix it, pols will be posturing for finger pointing. Having angry voters is not so bad if you can get them to be angry at the opposition.