Taking SS at 69 instead of 70 - Yes, yet another SS question.

[ShokWaveRider]

Facts:

If I take my SS at 69 instead of 70 I would get $xxx a month more ($x,xxxpa). The actual numbers are not the really the point of this post. At my 69 rate it would take approximately 16 years to benefit from waiting till 70. Here is where I am coming from:

69 rate divided by the difference per annum is approximately 16. I will be 85 if I make it, and based on my health, I am not sure I will.

The dilemma is DW is still on the ACA till I am 70, we have a 5 year difference in our ages.

Here is what I am struggling with. At what point will the ACA increase (as our MAGI will increase substantially) make taking SS at 69 viable or non-viable. The increase will not be as much as my SS of course, but I am struggling with taking SS at 69 and paying a substantial part of it to an insurance company for DW's ACA premiums and the associated OOP costs. If 50% has to be paid to ACA if DW needs to make the max OOP, should we be happy with the other 50%?

We do not need the money to live comfortably, but I am struggling in leaving the money on the table. We have no Heirs.

Have any folks here faced the same issues, If so, what did you do? For the other SS experts here, what do you all think?

Thanks in advance for your opinions.

 

[skyking1]

by no means an expert, but if taking it earlier makes it easier to manage things then do it. The leaving money on the table? Let that go, like in the heirloom thread. You say you do not need the money to live comfortably.
We may choose to take SS earlier if it keeps the cash flow simple.

 

[W2R]

Here is what I am struggling with. [...] If 50% has to be paid to ACA if DW needs to make the max OOP, should we be happy with the other 50%?

We do not need the money to live comfortably, but I am struggling in leaving the money on the table. We have no Heirs.

Have any folks here faced the same issues, If so, what did you do? For the other SS experts here, what do you all think?

Thanks in advance for your opinions.

(Emphasis mine).

I didn't face the same issues, but here's my opinion. Please feel free to ignore it if you want. I think that in your situation, not needing the money to live comfortably, I think the decision depends more on what makes you happy than it depends on getting the very last (probably unspent) dollar.

Personally I decided every month between 66-70 whether to take my own SS at that moment, and every month I decided, "Nope! Don't really need it quite yet." Ended up waiting until age 70 and believe me, it's a lot of fun watching those bigger "age 70" SS deposits rolling into the bank each month. Such a thrill! At least, for me it is. Even if I end up getting a lesser total by the time I croak, who cares, I'll be gone then and I am getting my jollies from the bigger income right now, even if I can't spend it all.

I guess what I am saying is that it's not a spreadsheet issue by now because you have enough to be comfortable either way. Instead, it all depends on you and what will make you happiest and put a smile on your face.

 

[Spock]

I am in the same boat except minus the age difference.
I've spreadsheet modeled umpteen scenarios of taking it at age X vs. age Y and they all come up with a) they all break even fairly close to each other and b) the difference in total $ isn't that great.
I'm also stalling drawing SS while on ACA. It turns out the big kicker is the spousal benefit... the math of which contradicts everything presented by SSA calculators.

Some things to consider:
1. Its only 1 ACA premium (you'll be on medicare).
2. For now (you don't mention the time line), ACA is capping insurance costs at 8.5% (?) of MAGI, so even at higher incomes you'll still get some subsidy.
3. "Do you want to live forever?" I'm watching my parents mental capacity and physical capabilities circle the drain in their early/mid-80's... which argues for spend it now before I'm drooling into my oatmeal.

 

[Chuckanut]

IMO stop struggling with the idea of leaving money on the table. Do some planning based upon your best guesses. That certainly makes sense. Government may change things anyway. Then enjoy your life.

With no heirs to leave an estate, you can spend more money every year starting at 62 if you take Ss at 70.

Time>Money.

 

[ShokWaveRider]

With no heirs to leave an estate, you can spend more money every year starting at 62 if you take Ss at 70.
Time>Money.

I am 68 will be 69 in January which is the timeframe I am thinking about. I guess it will depend on what the 2023 ACA costs will be. I do have trouble giving my SS to Florida Blue for my Wife's final Year of ACA.

I am eager to find out the ACA costs, not long to wait I guess.

 

[badatmath]

IMO you have won the game. No need to keep playing with the spreadsheets. But then I am single and will need all my dollars so doing without is not much of an option for me so I can understand you feel differently.

 

[pb4uski]

I think your break even is 12.5 years, not 16 years. Say your age 69 benefit is 100 and your age 70 benefit is 108. You forgo 100 for 1 year to receive an additional 8 per year for life... your break even is 100/8 =12.5.

13.5 x 100 = 12.5 x 108

Have you run your situation through opensocialsecurity.com? Be sure to check the little checkbox at the top of the page.

If there is a 5 year age difference won't DW be 65, medicare age, when you are 70?

 

[Jerry1]

If 50% has to be paid to ACA if DW needs to make the max OOP, should we be happy with the other 50%?

Why wouldn’t you be happy with the other 50%? You seem somewhat motivated by not leaving any money on the table so why not go for it? If you truest don’t need it, use it to help someone else. Personally, I’m going to start earlier than I thought I would and the thought of drawing less from my retirement accounts is exciting too. Either way, at 69, you’ve got close to the max you’re going to get so at this point just do what feels right.

 

[ShokWaveRider]

If there is a 5 year age difference won't DW be 65, medicare age, when you are 70?

Yes, exactly she is eligible at exactly the same time as our birthdays are only a month apart.

My math was not as logical as yours, and I trust yours better. I was taking the actual cash I would get at 69. ($40k) and dividing it by the difference at 70 ($2,400) BTW these are the exact numbers I get from SSA.gov and moving the receiving date around. I know this is not 8% it is 6%, but those are the numbers from SSA.gov. Then $40k / $2,400 = 16.6. Again, your numbers are probably more accurate. But it is semantics really for us.

My issue is really giving 50% of my SS to Florida Blue for 2023 and the extra taxes. I will need to see what DWs ACA is for 2023 and either break down and accept it or bite the bullet and wait.

 

[pb4uski]

If you were the higher earner then it might be best to wait until 70... it is in our case as DW was a SAHM. What does opensocialsecurity.com recommend?

 

[ShokWaveRider]

Why wouldn’t you be happy with the other 50%? You seem somewhat motivated by not leaving any money on the table so why not go for it? If you truest don’t need it, use it to help someone else. Personally, I’m going to start earlier than I thought I would and the thought of drawing less from my retirement accounts is exciting too. Either way, at 69, you’ve got close to the max you’re going to get so at this point just do what feels right.

Thanks, that is my dilemma ... We have ~20 years living expenses (including inflation) in Non-Qualified funds invested that we simply withdraw from it as needed and have neen doing so since we retired. So, there is really no risk of withdrawing from IRAs till RMDs are due.

 

[ShokWaveRider]

If you were the higher earner then it might be best to wait until 70... it is in our case as DW was a SAHM. What does opensocialsecurity.com recommend?

January 2024. (70) But they do not take into account ACA subsidy eligibility. (Unless I am missing something)

 

[pb4uski]

Candidly, in your situation I would just wait until 70... but I don't think that one year makes much difference the whole scheme of things.

 

[ShokWaveRider]

Candidly, in your situation I would just wait until 70... but I don't think that one year makes much difference the whole scheme of things.

I will do the final math when 2023 ACA numbers are released. If the numbers work, I may just take it at 69, if not 70 it is.

I was curious if anyone else had a similar situation.

 

[dtbach]

I'm turning 70 in Feb 2023. Have toyed with getting it earlier but really didn't need the money and I'm the high earner, so want the DW to get the max if I go before.


I figured out I"d get an extra $17 for every month I wait. My Dad lived til 98 and my mom until 94. I'm in great health. Never know when I might need that extra $17 bucks!

 

[finnski1]

I think your break even is 12.5 years, not 16 years. Say your age 69 benefit is 100 and your age 70 benefit is 108. You forgo 100 for 1 year to receive an additional 8 per year for life... your break even is 100/8 =12.5.

13.5 x 100 = 12.5 x 108

Have you run your situation through opensocialsecurity.com? Be sure to check the little checkbox at the top of the page.

If there is a 5 year age difference won't DW be 65, medicare age, when you are 70?

I believe he is right. The 16 (actually 16.5 )years is correct. One would not go from 100 to 108 at age 70. If he got 100 at age 69 and FRA was 66 then he would get 106.44 at age 70. The 8% per year is based on the FRA which in this case would be $80.64. Then would receive 8% per year from the $80.64 amount. Therefore $80.64 at age 66, $87.09 at age 67, $93.54 at age 68, $100 at age 69 and $106.44 at age 70.
16.5*100=15.5*106.44

 

[pb4uski]

I believe he is right. The 16 (actually 16.5 )years is correct. One would not go from 100 to 108 at age 70. If he got 100 at age 69 and FRA was 66 then he would get 106.44 at age 70. The 8% per year is based on the FRA which in this case would be $80.64. Then would receive 8% per year from the $80.64 amount. Therefore $80.64 at age 66, $87.09 at age 67, $93.54 at age 68, $100 at age 69 and $106.44 at age 70.
16.5*100=15.5*106.44

Good point, I forgot that the 8% is on the PIA and is simple, not compounded.

So if his FRA was 66 and his age 69 benefit was 100 as I said then FRA age 66 benefit/PIA would have been $80.65 and his age 70 benefit would be $106.45... and 100/6.45 is 15.5 years. I stand corrected.

 

[ShokWaveRider]

Good point, I forgot that the 8% is on the PIA and is simple, not compounded.

So if his FRA was 66 and his age 69 benefit was 100 as I said then FRA age 66 benefit/PIA would have been $80.65 and his age 70 benefit would be $106.45... and 100/6.45 is 15.5 years. I stand corrected.

No worries, I respect all your input(s). It is actually 6.2% based on the numbers posted by SSA.GOV NOW, not including any COLA increases for 2023, we may be surprised.

 

[steelyman]

My full retirement age is 66.5 I believe. What I am more interested in is Medicare coverage and making sure it is in place when eligible.

My understanding is that I should wait until age 70 for social security.

I left work at age 53 and have a pension that started at 55.

 

[finnski1]

I made this spreadsheet a while ago for my own benefit. Maybe it will be of use to some others.
It has all the break evens for various birth years etc.

Input your FRA amount in the column (column D)corresponding to your birth year and it will spit out all the numbers for various claiming ages.
If you want to refute it . That's fine too

 

[TheWizard]

I took SS at 70 to give me more Roth conversion headroom prior to age 70.

Poor people and folks with large tax-deferred accounts should feel free to take SS earlier than 70...

 

[ShokWaveRider]

For those who have taken SS, doesn't matter when you took it, was the estimate on SSA.GOV close or equal to what you actually received?

 

[ShokWaveRider]

Poor people and folks with large tax-deferred accounts should feel free to take SS earlier than 70...

They are hardly poor with large tax deferred accounts, but I get you point. If they need more money today to live.

 

[target2019]

For those who have taken SS, doesn't matter when you took it, was the estimate on SSA.GOV close or equal to what you actually received?

Yes, from what I recall. After I applied I got a call in a few weeks, and we discussed when to make it effective, how much, and the option of going back for a lump sum payment. Then you can opt for taxes to be withheld. You can probably figure out a percentage ahead of time, and have that ready.

A few months later my part B started coming out, after I applied for that to start (had spouse group insurance until then). So you'll see similar.

PIA minus Part B minus estimated taxes. YMMV if you have other things in mind.