Best time for SS withdraw is age 67 not 70?

[SecondCor521]

I wasn't refering to an actual discout rate. For me it it utility. For DW and I, all SS money's will be discretionary. I have many more choices in what to do with those dicretionary dollars up to age 82 (break even point between taking at 62 or 70). If a person makes more lifetime SS dollars starting at age 82, I don't care. My experience and statistics tell me I will not be spending discretionary $'s after that age. Go-Go, then Go Slow then No-Go years. Feeling that I will not care about a larger SS check when I'm 82. My 82+ year old relatives spent less (discrectionary) by a large % after 82 than they did at 62-80. DW and I are fortunate that we have excess pension $ so will not depend on nor need our SS money. Full disclosure, I plan to take at 65 and I am pushing DW to take at 70. She is 6 years younger.

Right, I get all that.

I think you must not agree with my post #136 and pb4uski's comments mentioned there.

That's OK.

 

[Bigdawg]

Right, I get all that.

I think you must not agree with my post #136 and pb4uski's comments mentioned there.

That's OK.

Making me work hard here SecondCor521. Had to go look at 136 and then at 85. I don't disagree with Ski. I just see things differently. Lost a good friend on August 2nd. He was 65. He took SS at age 62. Instead of using 2k/month from some other source (his stash), he used his SS check. If he would have waited to take SS until 70, he wouldn't have had the 2K from SS and would have draw down his stash by 2K/month. If he was planning on waiting until 70 to draw SS, he would not have seen a dime. Lost one sister at 29 to the big C. Lost the other to the bottle at 59. Neither saw a dime of SS. Ski is right. Whether taking SS at 62 or 70 will not affect my spending. But, if I draw down my stash my $2200/M (projected 62 SS check) or $3400/M(projected age 70 SS check), my stash will be smaller at age 70. We can figure in all kinds of variables. Market returns, AA, inflation, SS cola raises, guesses about longevity, etc... To me I would rather have the bird in hand vice 2 in the bush. No one here argues that SS is not actuarial nuetral. With that being said, not needing the money-I'll take the money earlier than later. If I live to regret it after the break even of age 82 or so then so be it. The first thing I think of when someone I DON'T KNOW dies after age 62 but prior to taking SS is wow, they left $ on the table. If my twin (I don't have one) laughs at me when we are 82 because he is raking in $3400/m in SS to my measly $2200/m, then I will shake his hand.

 

[Out of Steam]

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.

This has been my view, that when I decided not to take Social Security at 62, I was committing only not to take it before 65. After that, it's a month-by-month decision.

 

[Montecfo]

I think many of us would have responded the same way in our 20s and 30s. That and I think SS is way down their priority list so I think your post has negligible validity.

Yes, me for instance. But I still believed it should not be bankrupted, particularly given the fix was so fair to all parties and lasted so long. And because people paid into it for years expecting it to be there. So simple fairness.

This thinking seems likely to prevail in the future, when there is no road left to kick the can down.

 

[Montecfo]

You get 8% a year till age 70 garenteed. Plus you get whatever raise the govn adds on. I may be wrong but I do not know if any other no risk investment that will do that. For me, I am glad I waited.

Yes. You are wrong about it. An "investment" that takes years to pay off and begins when you are at least 62 and requires you to live to mid-80s is not "guaranteed" and is far from "low risk".

It might make sense to do, but we need to describe it accurately.

 

[mikes425]

67 sounds like where i'm gonna sign up. Will be 65 in April. Seems a sensible 'compromise' between both of the usual arguments of 62 vs 70....

 

[Out of Steam]

I can be very comfortable spending more now from my retirement savings knowing that I have a reinforcement of a 24% larger COLAed SS check coming in every month if I happen to live long.

Have not been able to make ourselves do that since 2020, though we did increase our draw from 4% to 4.7% in 2022 for my wife to replace her car while giving the old one to our daughter instead of trading it in.

 

[Out of Steam]

Yes. You are wrong about it. An "investment" that takes years to pay off and begins when you are at least 62 and requires you to live to mid-80s is not "guaranteed" and is far from "low risk"

That 8% figure is widely misunderstood. One does have to subtract based on the fact that, by delaying one year, they will receive payments for one less year. Assuming 25 years of life after 62, that's 4% fewer years. As with all lifespan calculations, your results may vary.

I agree that the longevity insurance element of delaying payments is a sound concept, and am delaying myself--mainly to provide a bump-up in benefits for my wife if she survives me.

 

[Sunset]

...
Another way to look at SS payments is the Take SS at 70 and have more money to spend every year starting at age 62 plan. The math is compelling, but one needs the assets to pay for one's lifestyle from 62 to 70. .....

.......

We are by default doing this. The math example is very explicit but in real life I don't put my next car money in a separate account. It's all one pot.

Since we are not thinking: "when we get SS we can spend that SS on top of what we currently spend".
It really means we are already spending some extra to make up for delaying SS.

I imaging many folks here who are delaying taking SS instead of taking it at 62 are not going to the bread lines, while waiting for SS to start so they can spend more.

 

[SecondAttempt]

+1 Exactly!

Back in 2008-2009 I was inspired by REWahoo's decision to take SS when things got tough, instead of waiting as he had planned. That seemed so sensible to me and I decided to follow his lead and decide one year at a time once I got to SS age. "Shall I take it now, or next year?" I got some unexpected divorced spousal benefits which helped, although they were far less than my own full age 70 SS but I got by. Anyway, year by year, I made it to age 70 before claiming on my own work record.

I'm so glad I waited! But I would have taken it earlier if I had felt I needed to do so.

I'm not sure how to quote the post this was a response to but the gist was that the best time to take SS is when you need it.

I have done lots of calculations and concluded that FOR ME 62 is probably the best time. But the right answer depends on when you will die. I have not considered stock market performance, just how much in total I will receive.

My parents died at 70 and 72 and neither was in generally poor health during their lifetimes. While I am in pretty good health, I don't have any rational reason to think I will live long enough to make waiting better. Of course I hope I do but hope is not something to base a decision on. And I have saved enough money for it to not matter.

My plan is to take SS as soon as 62. I say "as soon as" because I don't expect to need it then but will have to reevaluate the worth of the annual increase every year to ultimately make my decision.

As an aside, I have been planning for early retirement since I was in my 20s. I am soon 58 and could retire now. I have set a date in early 2024 just to tie up some loose ends. I am now in a tactical planning mode, looking closely at Roth conversions, when to take SS, and so forth. So this is top of mind.

But there are two correct answers: take it when you need it or if you don't know when you need it, take it when the value is maximized based on your date of death.

 

[old medic]

Another thing, as someone stated earlier, taking early means you're more likely to run out of money and have to sponge off your offspring if you live a very long time.

Pay-backs a B#@#$.... They sponged off us for years... And they always said treat us nice, we will be picking your nursing home...

 

[pb4uski]

Have not been able to make ourselves do that since 2020, though we did increase our draw from 4% to 4.7% in 2022 for my wife to replace her car while giving the old one to our daughter instead of trading it in.

Yeah, it's a leap of faith. FIRECalc says we could spend even more, but we don't.

 

[CRLLS]

Yeah, it's a leap of faith. FIRECalc says we could spend even more, but we don't.

FIRECalc and others say that we can spend more than we are spending too. I have no desire to live a higher lifestyle than the one I have lived all my life. I would feel like a fake if I did. We're happy doing just fine as it is. At least we didn't have to cut my lifestyle in retirement and have some buffer for an occasional BTD here of there. That was my goal.

 

[old medic]

Yeah, it's a leap of faith. FIRECalc says we could spend even more, but we don't.

Thats one of the things I like with FC... Playing with different numbers, different times, just one SS should one of us pass, even huge pulls from our nest egg.

 

[Gumby]

FIRECalc and others say that we can spend more than we are spending too. I have no desire to live a higher lifestyle than the one I have lived all my life. I would feel like a fake if I did. We're happy doing just fine as it is. At least we didn't have to cut my lifestyle in retirement and have some buffer for an occasional BTD here of there. That was my goal.

I hear you. My goal for retirement was that, financially speaking, my lifestyle would be the same as when we were working. I was happy before and I'm still happy living exactly the same way. We could spend more, but I don't have any really good ideas about what we would spend it on.

 

[finnski1]

I hear you. My goal for retirement was that, financially speaking, my lifestyle would be the same as when we were working. I was happy before and I'm still happy living exactly the same way. We could spend more, but I don't have any really good ideas about what we would spend it on.

Another one in the same boat, although I'm eyeing some future purchases, but nothing that will ever improve on my contentment level that I'm already at.

 

[audreyh1]

Ha ha, I worked too much to spend much when I was working, so my goal for retirement was to be able to spend way more.

 

[DallasGuy]

I hit my SS full retirement age in November of 2022. I decided to wait a few extra months and just recently applied to start in receiving it May 2023. That extra few months will give me approximately an extra $100/mo. Why? No particular reason. I just wanted a bit extra per month over my full retirement amount.

I was diagnosed with multiple myeloma in 2013 and most financial planners would have advised me to start collecting SS at age 62 due to possible decreased life expectancy. At that age and even now, I didn't need SS to live off of. So I decided to roll the dice and wait a few more years to start collecting it. So far that gamble has paid off since I've been in remission for the last 9 years. Now, I only have to live to about 78-80 to break even. At this point, the extra amount I will get per month by waiting will be a very nice bonus. Having said that, I didn't want to push my "gamble" and wait until age 70 to start collecting it.

 

[Chuckanut]

I hear you. My goal for retirement was that, financially speaking, my lifestyle would be the same as when we were working. I was happy before and I'm still happy living exactly the same way. We could spend more, but I don't have any really good ideas about what we would spend it on.

+1

I am happy and content. Being content is a very real financial blessing as well as being good for the mental and physical health.

 

[Montecfo]

I hit my SS full retirement age in November of 2022. I decided to wait a few extra months and just recently applied to start in receiving it May 2023. That extra few months will give me approximately an extra $100/mo. Why? No particular reason. I just wanted a bit extra per month over my full retirement amount.

I was diagnosed with multiple myeloma in 2013 and most financial planners would have advised me to start collecting SS at age 62 due to possible decreased life expectancy. At that age and even now, I didn't need SS to live off of. So I decided to roll the dice and wait a few more years to start collecting it. So far that gamble has paid off since I've been in remission for the last 9 years. Now, I only have to live to about 78-80 to break even. At this point, the extra amount I will get per month by waiting will be a very nice bonus. Having said that, I didn't want to push my "gamble" and wait until age 70 to start collecting it.

Glad that worked out and especially for your good health.

 

[Out of Steam]

I imaging many folks here who are delaying taking SS instead of taking it at 62 are not going to the bread lines, while waiting for SS to start so they can spend more.

Given that we should get to my wife's first Social Security payment next month with $50K more than we retired with in 2018-19, we could have reasonably chosen to have taken at least $1K a month more (pretax) from retirement savings. But we didn't miss out on anything important or especially enjoyable because we didn't do it.

Of course, we didn't know what the market would do when we began retirement account draws in the fall of 2020.

 

[Out of Steam]

Yeah, it's a leap of faith. FIRECalc says we could spend even more, but we don't.

Since I'm very focused on risk to savings in the early years of retirement, the leap required to go to a 6% draw rate for several years was more than I was comfortable with. Hindsight says it would have been fine.

 

[pb4uski]

Another one in the same boat, although I'm eyeing some future purchases, but nothing that will ever improve on my contentment level that I'm already at.

With 8mo DGS#1 here, our WR might increase if we end up moving nearby. I don't want to be those parents that follow their kids around the world but DS, DD, DSIL DGS#1 and DM and three of my 4 sisters all live within 45 min of each other, so it is a bit of a draw.

Or is it just increasing investment real estate and decreasing bonds so not a withdrawal at all?

 

[FI_RElater]

Since I'm very focused on risk to savings in the early years of retirement, the leap required to go to a 6% draw rate for several years was more than I was comfortable with. Hindsight says it would have been fine.

We were under a 2% wr before SS; now that I just started mine (with the other higher in a few years) we might not hit anywhere near that (6%) unless one of us needs nursing home care (which we considered in our financial plan).... could be that we just "add to the stash" especially when both of us are collecting SS (and my pension)

 

[Out of Steam]

We were under a 2% wr before SS; now that I just started mine (with the other higher in a few years) we might not hit anywhere near that (6%) unless one of us needs nursing home care (which we considered in our financial plan)....

Since we have not bought long-term care insurance, having available assets to fund nursing home care is definitely a factor.

Our anticipated draw with one of our two Social Security payments coming is 3%. Even with recent inflation, I anticipate being able to meet expenses with my pension and both of our SS payments (2025-26) without a monthly draw from retirement savings. We might still choose to draw as much as 2%, though.