The age when you actually retire, vs. the age when you begin taking social security

[Teacher Terry]

Does anyone know if you are the FRA and on SS that if you start working as a 1099 consultant does SS automatically recalculate the benefit you are receiving? It occurred to me that since I am paying in again and don’t have 35 years in that I might have to ask them to recalculate my benefit.

 

[GenXguy]

Does anyone know if you are the FRA and on SS that if you start working as a 1099 consultant does SS automatically recalculate the benefit you are receiving? It occurred to me that since I am paying in again and don’t have 35 years in that I might have to ask them to recalculate my benefit.

I have read that it's automatically recalculated, even if you are already collecting benefits.

 

[aja8888]

Does anyone know if you are the FRA and on SS that if you start working as a 1099 consultant does SS automatically recalculate the benefit you are receiving? It occurred to me that since I am paying in again and don’t have 35 years in that I might have to ask them to recalculate my benefit.

When I did the same, the benefit was automatically recalculated each year.

 

[Tetto]

Admittedly, I should have done a deeper dive on SS options when I retired at 55 but even so I likely would've made the same choice to start SS at 62. Why? The men in my family tend to die early. My dad made it to 48, most of his brothers were gone by 60. I will be 74 in 4-months.

Sounds like my MIL's family. 8 brothers and sisters all passed around 60s to 70's. My MIL will be 92 next month, I suspect you may have the same trajectory. I hope so

 

[youbet]

Admittedly, I should have done a deeper dive on SS options when I retired at 55 but even so I likely would've made the same choice to start SS at 62. Why? The men in my family tend to die early. My dad made it to 48, most of his brothers were gone by 60. I will be 74 in 4-months.

Starting SS at 62 doesn't necessarily mean you made a financial mistake even if you beat the odds and live to a ripe old age. The 11 - 12 years you've been collecting SS have been good years in the market so the money you didn't withdraw from your portfolio because you were receiving SS has likely grown nicely.

I also started my SS at 62 but in my case the reason was to protect my DW who is impacted by GPO.

 

[f35phixer]

We both started at 62, with Pensions / SS we make a butt load so ..... Why not !!! I'm 65 / DW 64

Spend it vise 401K.

 

[GenXguy]

After I get my benefit level, I assume a 25% haircut since I won't be collecting until the trust fund runs out if nothing changes before then. Hopefully that haircut doesn't actually happen.

 

[Teacher Terry]

Thanks gen x and AJA for your answers!!

 

[street]

We both started at 62, with Pensions / SS we make a butt load so ..... Why not !!! I'm 65 / DW 64

Spend it vise 401K.

I like your thinking!!!
I agree and I think people are wanting that bigger pay out at 70. In relativity at age of low 80's the game in payments starting at 62 or starting at 70 the payments are about the same. I for one don't need more money in my early 80's going forward. The thousands of dollars I haven't spent taking SS has make me a lot of money.

I'm not convincing anyone to take it at 62 just saying the game is even in early 0's regardless of when you take it.

 

[Finance Dave]

We are waiting to collect until 70 so that we can do Roth conversions. We don't need the income at the moment.

I don't have any data to support this, but I would think that if you only had the minimum number of quarters to qualify, then not working from 62 to FRA would make a moderate sized difference, whereas if you had, let's say, 30 years of credits...it won't impact much at all.

I still earn a tiny income from some self-employed handyman work...about $8,000/year. But I have a few very low earning years on the front end when I was a dishwasher at age 15-17. Unclear if my $8,000 today replaces that $1,800 from when I was 16...and I don't really care...but I call those early years the "dishwasher years" and my DW laughs when I used to tell her I was replacing those dishwasher year earnings.

 

[almost there]

After seeing 10k different SS scenarios here over the years I realized it's just a personal decision. With no wrong answer.

Retired at 51 without a pension. Waited 6 months to 62 1/2 to take SS. We both started taking it last month. Me $2520/mo.. Wife turned 62 last Dec. $1165/mo. Have been doing Roth conversions, have just over 1/2 converted now. Will continue conv. the next 13 years to 75. But only 30k a year now to stay in the 12% married tax bracket. $3700 / mo in SS is fine with me. Never really banked on it through years. But hoped it would still be there. Now just hoping the 12% married tax bracket stays at $94300 or above and the standard deduction for married couples filing jointly stays at $29,200, If so, my plan will workout. Allowing most of the IRA to be converted at 12%. Rather than 20%, My conv. average is probably 15-16% now. That was the goal. And when RMD's hit will maybe have 200k in the old IRA to worry about. Thats the plan anyway. Not sure I will ever need to use the IRA/Roth money? I guess those who wait to take SS look at SS the same way? They don't need it, so why take it? Just a couple different ways of looking at it. With no wrong answer.

 

[Rustic23]

62

 

[old medic]

57.... not yet

 

[Koolau]

Retired at 58 took SS at 70. Not much loss between 58 and FRA because my 35 years of 4 quarters was already in place and near the top. YMMV

 

[mickeyd]

I retired from working about age 58 and began my own SSA @ 70. During the 12 year gap we lived on spouse pay, I got SSA "spouse pay" 4 years, investment income/savings, and pensions. What a mixture huh? It worked.

 

[pastoral]

Seems to me:

a. If you don't need the SS money soon, but you want to leave more money for heirs, then you may want to take SS early (unless you are confident you'll live to 100 with 30 years collecting SS).

b. If you don't need the SS money soon, and you don't have heir or don't care leaving money for heirs, then use as much your savings as you can first, then live on the max SS startomg at 70 (unless you are in poor health).

c. If you need the SS money for daily expense, then take it soon.

Any faulty reasoning above?

 

[audreyh1]

Being part of a married couple plays into the decision in a major way in terms of survivor benefits so it’s not as simple as your list.

 

[Midpack]

I retired at 56 and will take SS in two years when I am 70.

I've met many people who think that when you stop working that you need to start SS... I suppose that many people do.

I retired at 57 and start Soc Sec next month when I turn 70. Still can’t believe I’ll be getting a significant check, with COLA, for the rest of my life. Then DW two years later.

Not the right choice for everyone, but with extreme longevity in my family, odds are the best choice for me. Waiting has made larger Roth conversions possible as well.

 

[Andre1969]

I don't have any data to support this, but I would think that if you only had the minimum number of quarters to qualify, then not working from 62 to FRA would make a moderate sized difference, whereas if you had, let's say, 30 years of credits...it won't impact much at all.

I don't know for certain, but I think percentage-wise, both scenarios would work out the same. IIRC, every year you wait between 62 and your FRA gets you another 7%. And every year you wait, between your FRA and age 70, gets you another 8%.

However, I believe that 7 and 8% are simple interest, and not compounded. So if your benefit at 62 is $1,000/mo, it would be $1,070 at 63, $1,140 at 64, $1,210 at 65, etc.

However, the actual amount is usually higher, because of inflation/COLA adjustments.

With regards to 40 quarters (the bare minimum) vs 30 years though, actually working one extra year probably benefits the bare minimum scenario more than the 30 year scenario, because that one extra year represents a larger percentage of your income history.

 

[Winemaker]

Retired at 56, now soon to be 66, plan to take at 70, high earner.
DW retired at 58, started SS at 65, low earner.

 

[5Miler]

Retired at 58 and started SS at 68 and 5 months living off my severance and monthly IRA distributions until SS time. DGF just filed to start SS and Medicare at 65 effective July this year. She retired 10 years ago in July 2014 painfully managing her income for ACA subsidies. She is so glad those days are behind her.

We have been together for 31 years now but will probably not marry unless one of us gets a wild hair to do so. Her SS benefit is about $1K per month less primarily due to her early start at 65. That amount is really not consequential to her if/when I am gone. I will turn 71 the day before she turns 65. Who knows what the future holds.

 

[almost there]

31 yrs together? I would think her SS would go up if you married taking the spousal benefit? Also at tax time the married $29,200 deduction might come in handy. Just thinking out loud over here. (Might be an easy 20k / year tying the knot)

 

[5Miler]

31 yrs together? I would think her SS would go up if you married taking the spousal benefit? Also at tax time the married $29,200 deduction might come in handy. Just thinking out loud over here. (Might be an easy 20k / year tying the knot)

Actually, her SS with the spousal benefit would be lower by $864/mo not even including the haircut for her starting at 65 with an FRA of 66 and 10 mos. She was not a low earner. She is actually eligible for spousal from her ex husband as he was a good friend of mine for over 30 years and his benefit is very similar to mine if not identical.

I have to start RMAs in 2 years which would impact her tax situation when we need to rebuild her Roth account after 10 years of ACA income games. She has over $2.5M of her own with significant amounts in her 401K we can begin to work on.

Financial aspects aside, we have both been married before, me twice. Been there, done that as they say.

 

[indiajust]

The terminology I have heard is actuarially adjusted for neutral compensation at estimated death date.

Thus you can file early, on time, or late. If you die on schedule your payout is identical.

I wonder what interest rate is used in the assumptions, if any, as early payments are worth more than later. DCF kind of question.

Of course, those who live beyond their death date benefit from filing later, proportionally more the longer they outlive the death date. Likewise if you die before estimated death date which progressively benefits earlier filing.

I think the questions implications around marginal returns with additional FICA credits are addressed well by others.

 

[RE2Boys]

Retired from career job at age 50 with an early pension. Stopped working sesonal job in 2018 at age 68. Took WEP reduced SS at age 63 as my minor aged sons could collect a dependence share. Earned my 40th quarter to insure SS benefits at age 51.



Wife has not started SS yet, her benefit is about 3X mine. She's 65 this year.