Reduced SS take home amount question

[Drake3287]

Still a few years away but my wife plans to take SS at 62 and will be at the maximum benefit amount including the full 35 years of employment.

For those of you that did the same thing, what was/is your actual reduced take home amount? The current monthly maximum is $2,639.

I've read that the reduced amount is 25% at age 62, is that correct?

 

[Tadpole]

The table on this page might help. Find your birth year and read the row.
https://www.ssa.gov/oact/quickcalc/earlyretire.html

 

[Drake3287]

Thanks!! In her case then it would be a reduced amount of 29.17% or $769. in today's dollars. I'm guessing that after paying for Part B and taxes she's looking at $1,300. or so.

 

[Sunset]

Why would she take it early and reduce a max SS pension, since odds are at least 1 person in a couple will live to nearly 90 (and a I think 45% chance of living past 90).

If you both get max SS then I guess the other person could wait ?

My thinking is you have lots of savings and don't need SS at 62, since she it max earnings ?

 

[Drake3287]

Correct, I have a 90% CALPers Safety Retirement with full survivor benefits and COLA plus a large savings/investments and house free and clear.

I don't/won't qualify for SS because my employer was exempt from paying into it. Even if I had SS it would be greatly reduced because of my government pension. She also has a decent size 401K.

Just in the thinking stage of her retiring early and living off my retirement and our savings until her SS at 62.

 

[Sandy & Shirley]

It was expressed perfectly at a recent retirement seminar that we attended. If you have the cash to do it, and you hold off taking your SSB until age 70, and you die at age 68, you had enough money to last the rest of your life!

If you take the money out of your IRA to live off of, then that money will only be taxed at the standard federal brackets, and your brackets might start at 0%, 10%, or 15%. Taking the money out later when you are in the 15% bracket will probably result in an 85% taxability of your SSB so your marginal tax bracket will be 27.75% and if your standard bracket is 25% your marginal bracket will be 46.25%.

Better to have the maximum tax deferred SS income at age 70 with little to no Minimum Required IRA withdraws than to have the minimum tax deferred SS income with a maximum MRD.

 

[Drake3287]

Good point. For us, I guess if she retires early at age 59 let's say and we can live comfortably on my retirement and cash savings until her age of 62, we can reevaluate the entire situation.

Currently I'm still putting away in savings (extra money each month) the same amount of money my wife takes home after taxes. With our cash saving's and investments being at a higher level, it seems a waste to be saving anymore money that we may never need anyway.

I'd hate to make her work several more years just so we can go to our grave with a big savings. Sort of like the old saying, you can't take it with you!