Consideration for taking SS early

[1242Vintage]

I’m planning on taking SS at 62. In our case it’s a matter of figuring out how to maximize the combination of pensions and social security.

Wife was a school teacher for the second half of her career and will get hit by the windfall elimination provision if I pass first. Doing what I can to live a healthy lifestyle, but looking at family history I have no male relatives who lived past 80. Makes sense to us for me to take SS early.

If I pass first, the Social Security she will be left with is drastically reduced BUT my pension (which includes a COLA) and hers continues unchanged for her lifespan. She will be just fine financially!

There is a bit of a quirky situation though. If she passes first, her very modest pension goes away, but my pension goes up … by a lot!

 

[Major Tom]

Yup, plus in hindsight every decision can be different. One of the hardest things in life is to not regret past decisions.

I think this depends on the individual. Some of us second-guess our decisions and play endless games of "what if". Others concentrate on the present and the future. Wise decision-making is easy with the benefit of hindsight, which none of us have at the time we are making the decision. Best to do what we can, with the information we have at the time, and keep moving forward.

 

[skyking1]

^
that. If I don't like the amount of nest egg I am spending to delay SS, I will make that call at that time.
Everything is subject to change, especially our health.

 

[pb4uski]

Both my parents took SS at 62 without thinking about it and, now, at 83, both regret it. ...

I think this is pretty common. The ol' "it's my money and I want it back ASAP" silliness that we see posted here all the time with nary a thought to longevity risk.

Deferring works better today because longevity has improved significantly from when the discounts for taking early were a last reset in the 1980s.

 

[foxfirev5]

On the other hand - DM at 93 yo took her's at 62. She has no regrets. 50 years working for a stock broker she would rather have full control over her investments than rely on a govt program. These days it's pretty much VWIAX and treasuries but it works for her. Anyway the last few years will probably clear the slate either way. In other words - like most things discussed ad nauseam here, it really doesn't matter all that much.

 

[bobandsherry]

I think this is pretty common. The ol' "it's my money and I want it back ASAP" silliness that we see posted here all the time with nary a thought to longevity risk.

Deferring works better today because longevity has improved significantly from when the discounts for taking early were a last reset in the 1980s.

Not really "silliness". Some people depend on it for supporting them as they don't have enough savings. Had a friend doing this as he found himself suddenly unemployed after 20 years as job was moved to India. He tried for several years to find a comparable job, but found no takers to hire someone who was now 60+. He didn't have the savings to continue to support him to 70 so he took it now. He also figures that given his family health history he'll be ahead as his grandparents and parents all passed well before 80. His uncle also passed before 80.

What is "silliness" are people who think the decision is a one size fits all, especially by those who have deep coffers in their retired years. Not everyone has been fortunate to make big money in their career and/or save a huge nest egg.

For some survival trumps longevity.

 

[statsman]

What is "silliness" are people who think the decision is a one size fits all, especially by those who have deep coffers in their retired years. Not everyone has been fortunate to make big money in their career and/or save a huge nest egg.

For some survival trumps longevity.

I would say this applies to a sizable majority in the US.

 

[fishfactory]

Apologies to those who have seen me post this several times on these SS discussions. I just think he brings up some good points that are not in typical articles on the subject.
Making Optimal Social Security Claiming Decisions - A Four Stage Analysis by Daniel Amerman

 

[troutnut1]

“A bird in the hand is worth two in the bush” old proverb

We took it kind of early. Mid 60’s. If we hadn’t take it when we did (upon my retirement) we did we would have used investment funds for our day to day living expenses thereby spending from the “bird in the hand” funds. Then we would have had to hopefully live to 70, and then long enough afterwards to replace the diverted funds, and hopefully even longer in order to get back our money and make a profit. It takes a long time to get to the “two in the bush”.

IMHO this turns social security into a gambling game where no % outcome can be calculated since none of us can know how long we have.

i was a pro blackjack player in the 70’s and 80”s, so I am not adverse to some gambling. But I knew all the rules and the percentages that applied to the game I was playing, or I didn’t play at all.

We went for the bird in the hand. We have no quarrel with those willing to search and wait for two in the bush.

 

[NXR7]

I took SS early, a few months before age 64. I had not intended to however job problems meant I decided to retire earlier than planned. I also took a pension early to keep from tapping into savings and so far I've been mostly successful.

As a result I've been permanently unemployed for four years instead of for less than two years at FRA as planned. I've done far more in the last four years than I otherwise would have.

A very close friend had the Big One yesterday, got to the hospital in time, arrested twice on the table shortly after arriving and was successfully cardioverted (shocked) back twice. His left anterior descending cardiac artery, the so-called Widow Maker, was 100% blocked. He got a stent, got an echo today, and may be released tomorrow.

He just turned 63 and is in far better physical shape than me. Had he been by himself when the symptoms hit we'd be going to a funeral. Fortunately he was with another retired firefighter/paramedic he worked with and his wife who does cardiac pump work.

Remember, tomorrow is promised to no one.

 

[mickeyd]

I am now 78 YO. I waited to age 70 to claim. I am in excellent health. My wife is exactly 4 years younger. I hope to beat the SSA system.

Wish me luck!

 

[skyking1]

Rooting for you and your DW, Mickey! Cheers!

 

[NXR7]

About the only "take it now or later" consideration I've never read about is the SS COLA. A fixed percentage at 62 is a lot less than the same fixed percentage at 70. The COLA has not been a big factor until the last year, which may be why.

 

[CRLLS]

“A bird in the hand is worth two in the bush” old proverb

I find the proverb fairly accurate in many instances. In my case, I took the money on pensions plans, both mine and DW's. However, in the case of SS, we didn't think the SS was a bad bet and it was COLA'ed where the pensions were not. One thing that made it easier decision was that we fit into the group where I could claim spousal and then switch later to my benefits. 4 years of spousal without affecting mine was an easy decision. That choice is now gone for others. we would probably have made the same decision today.

 

[badatmath]

I took SS early, a few months before age 64. I had not intended to however job problems meant I decided to retire earlier than planned. I also took a pension early to keep from tapping into savings and so far I've been mostly successful.

As a result I've been permanently unemployed for four years instead of for less than two years at FRA as planned. I've done far more in the last four years than I otherwise would have.

A very close friend had the Big One yesterday, got to the hospital in time, arrested twice on the table shortly after arriving and was successfully cardioverted (shocked) back twice. His left anterior descending cardiac artery, the so-called Widow Maker, was 100% blocked. He got a stent, got an echo today, and may be released tomorrow.

He just turned 63 and is in far better physical shape than me. Had he been by himself when the symptoms hit we'd be going to a funeral. Fortunately he was with another retired firefighter/paramedic he worked with and his wife who does cardiac pump work.

Remember, tomorrow is promised to no one.

Sorry about your friend amazing he was saved.

 

[bobandsherry]

I would say this applies to a sizable majority in the US.

Exactly!

 

[Librarian]

We both have good pensions & have survivors benefits on each others.
Our thought is: we do not know how long we will live.
Yes we are both healthy, but one never knows.
We use our investments for travel & plan to take SS at 62–we will use it for travel & leave investments.
We realize that our expenses are higher now while we travel. We don’t need those investments to last the rest of our lives…just as long as we can travel.

 

[jim584672]

My thinking is if you don't need it don't take it. I have a pension at 65 that will cover my expenses so (health permitting) 70 would be the target. Also pre 65 will crush any ACA subsidies.

 

[airbornesapper]

We both have good pensions & have survivors benefits on each others.
Our thought is: we do not know how long we will live.
Yes we are both healthy, but one never knows.
We use our investments for travel & plan to take SS at 62–we will use it for travel & leave investments.
We realize that our expenses are higher now while we travel. We don’t need those investments to last the rest of our lives…just as long as we can travel.

I was about to type similar … and with so many of my former work mates going down before their time for one reason or another.

I’m in the early/have it now camp.. We keep an everyday balance around 30k…. And the rest in laddered GIC all over 5 percent - which I view as more like 7ish if I was paying management fees.

Having SS more after the break-even point is not a factor for us and never will be. I’m 61… better half is 65… We retired the same time in 2015…

 

[Osprey]

Apologies to those who have seen me post this several times on these SS discussions. I just think he brings up some good points that are not in typical articles on the subject.
Making Optimal Social Security Claiming Decisions - A Four Stage Analysis by Daniel Amerman

Interesting article, thanks for sharing!

 

[dknighd]

Apologies to those who have seen me post this several times on these SS discussions. I just think he brings up some good points that are not in typical articles on the subject.
Making Optimal Social Security Claiming Decisions - A Four Stage Analysis by Daniel Amerman

The problem with this article, and many like it, is they try to determine what is optimal. That of course depends on many many assumptions.
No article can predict what might be optimal for a given individual, or couple, or family.
I've given up trying to predict what is optimal. I'm not even sure how to define that word as it pertains to me/we/us.
I think maybe optimal is we can take care of ourselves, and be comfortable, without having to ask our kids for money. Maybe optimal is having extra left over. I'm pretty sure our kids will be OK if we leave them nothing. But I expect we will leave them something. Hopefully.


We are in the so called middle group. We do not need the money now, but do not have way too much.



We are taking this decision year by year. The one thing I keep in the back of my mind is that one, or both of us, could live longer than average. There is at least a 50% chance one of us will live longer than average.



There is no right answer to this puzzle.

 

[rmorris50]

Interesting article. As someone who would be happy to make it to 85 (no man in my family has made it to their 80s, and the women have passed by 85), the case to delay to 70 seems very weak.

Seems like collecting early and saving it is a strong contender. Of course no decision will be made until it’s made

 

[fishfactory]

dknighd, I did not view the article as trying to optimize, but pointing out that the typical break even calculation is too simplified. The article points out the effects of inflation, health of the system, and linkage between SS and Medicare. Every individual case is unique, but I believe the more info on the variables the better.

One variable you mentioned is longevity. If your family tree genetics indicate long lives, odds are waiting is a good decision. In my case, most family do not make it to 85. You are correct there is no one answer that fits all.

 

[dknighd]

dknighd, I did not view the article as trying to optimize, but pointing out that the typical break even calculation is too simplified. The article points out the effects of inflation, health of the system, and linkage between SS and Medicare. Every individual case is unique, but I believe the more info on the variables the better.

One variable you mentioned is longevity. If your family tree genetics indicate long lives, odds are waiting is a good decision. In my case, most family do not make it to 85. You are correct there is no one answer that fits all.

I think "break even" is an interesting, but flawed concept.

 

[street]

“A bird in the hand is worth two in the bush” old proverb

We took it kind of early. Mid 60’s. If we hadn’t take it when we did (upon my retirement) we did we would have used investment funds for our day to day living expenses thereby spending from the “bird in the hand” funds. Then we would have had to hopefully live to 70, and then long enough afterwards to replace the diverted funds, and hopefully even longer in order to get back our money and make a profit. It takes a long time to get to the “two in the bush”.

IMHO this turns social security into a gambling game where no % outcome can be calculated since none of us can know how long we have.

i was a pro blackjack player in the 70’s and 80”s, so I am not adverse to some gambling. But I knew all the rules and the percentages that applied to the game I was playing, or I didn’t play at all.

We went for the bird in the hand. We have no quarrel with those willing to search and wait for two in the bush.

I like your way of thinking!!!! Only one way thinking on SS is very uneducated way of viewing your choice.