WaPo on seniors delaying SS in the wake of the pandemic

[explanade]

https://www.washingtonpost.com/busi...esignation-retiring-delaying-social-security/

Some seniors are flush with cash from stimulus and unemployment benefits. They also saw expenses plummet when they didn't go into the office for work.

Many have also seen their retirement account balances shoot up during the pandemic, allowing many to retire rather than go back to work -- a trend which is a part of the Great Resignation.

We just saw the biggest drop in the number of people applying for SS in a 12-month period in almost 2 decades, for the year ending 9/5/21.

It was a 5% year over year drop compared to the previous year. Another pandemic factor which may have contributed to the drop in applications is that a lot of SSA offices were closed or had limited service during a significant span of the pandemic.

Also during this same 12-month period with drop in the number of SS applications, there was a 5% increase in retirements among age 65-69 workers.

Story talks of some retirees delaying long-planned trips or even keeping their spending down so that they could retire.

But they are also seeing that even a year of waiting to apply for SS would give them 9% higher monthly payments.

One financial advisor quoted in the article says that a lot of people may be maximizing monthly SS checks instead of lifetime returns. She noted that one factor is that by waiting, they may be missing on a chance to invest excess savings that they may have now.

 

[Chuckanut]

She noted that one factor is that by waiting, they may be missing on a chance to invest excess savings that they may have now.

And they are maximizing one of the few fully COLA'd retirement plans around.

 

[Amethyst]

This is so strange. My expenses didn't drop after retiring. I always brought my own lunch. My work clothes were still going strong ten years after buy ing them.

Everything else costs what it did before.

We use the car less, is all. And gas was not a big line item for us, even when working.

https://www.washingtonpost.com/busi...esignation-retiring-delaying-social-security/

Some seniors are flush with cash from stimulus and unemployment benefits. They also saw expenses plummet when they didn't go into the office for work.

.

 

[RetMD21]

https://www.washingtonpost.com/busi...esignation-retiring-delaying-social-security/

One financial advisor quoted in the article says that a lot of people may be maximizing monthly SS checks instead of lifetime returns. She noted that one factor is that by waiting, they may be missing on a chance to invest excess savings that they may have now.

So they would miss the opportunity to pay 1% for an FA who would invest them in closet index fuds at historical market highs? Sad,

 

[Irishgirlyc58]

Then why is it taking SSA so long to process my application? [emoji848]

 

[Sunset]

A lot of people in the Great Resignation, are going to be surprised to find the money dropping from the sky stops.

I wonder if a few years from now we hear of the Great Job Hunting done by a bunch of folks that retired this past year

 

[jebmke]

This is so strange. My expenses didn't drop after retiring. I always brought my own lunch. My work clothes were still going strong ten years after buy ing them.

Everything else costs what it did before.

We use the car less, is all. And gas was not a big line item for us, even when working.

People stopped traveling, stopped going to restaurants, stopped getting haircuts, stopped going to the dentist...... it adds up.


We are both retired, did nothing different with our investments yet taxes went down significantly since dividends and interest payments declined quite a bit due to dividend cuts and lower interest rates.

 

[Alan]

Then why is it taking SSA so long to process my application? [emoji848]

My thoughts exactly. My wife applied back in April and when she logs on to SSA see it progress it says that her application reached the final step on July 1st and should be completed in 2-4 weeks. She even called them last month to see if they needed anything from her and after a very pleasant conversation the agent said he would flag her application and she should hear something within 7 to 14 days. Of course nothing has changed.

 

[Music Lover]

And they are maximizing one of the few fully COLA'd retirement plans around.

It's only maximized if they live long enough.

 

[VanWinkle]

"One financial advisor quoted in the article says that a lot of people may be maximizing monthly SS checks instead of lifetime returns. She noted that one factor is that by waiting, they may be missing on a chance to invest excess savings that they may have now."

Let's see, an advisor that thinks your increased SS payment is a detriment because you could have invested the excess savings sooner? Does that sound like a fiduciary advisor? They are so obvious sometimes.......

Vw

 

[pb4uski]

A lot of people in the Great Resignation, are going to be surprised to find the money dropping from the sky stops.

I wonder if a few years from now we hear of the Great Job Hunting done by a bunch of folks that retired this past year

What exactly is all this money dropping from the sky? There were the economic stimulus payments but those are long gone and everyone knows it. I guess there could be unemployment but obviously that should stop at some point... what else are you talking about?

DD is one of those in the great resignation... she was unhapy with her job/boss and will be leaving soon to take a break and if kiddies come along (they are looking to adopt) then it may be an extended break. But there is no money dropping from the sky for them other than last year's economic stimulus payments.

 

[jebmke]

What exactly is all this money dropping from the sky? There were the economic stimulus payments but those are long gone and everyone knows it. I guess there could be unemployment but obviously that should stop at some point... what else are you talking about?

DD is one of those in the great resignation... she was unhapy with her job/boss and will be leaving soon to take a break and if kiddies come along (they are looking to adopt) then it may be an extended break. But there is no money dropping from the sky for them other than last year's economic stimulus payments.

isn't there still an advanced child tax credit being paid out for those who qualify?

 

[USGrant1962]

isn't there still an advanced child tax credit being paid out for those who qualify?

Yup, my neighbor has 6 kids and I understand they are looking at something like $20K in child tax credits.

And I'm still getting virtually free ACA even though I'm above the subsidy limit because DW was unemployed for at least "one day" this year. That's worth ~$11K.

Add in money not spent in lockdowns and there is still a lot of money sloshing around.

 

[explanade]

My thoughts exactly. My wife applied back in April and when she logs on to SSA see it progress it says that her application reached the final step on July 1st and should be completed in 2-4 weeks. She even called them last month to see if they needed anything from her and after a very pleasant conversation the agent said he would flag her application and she should hear something within 7 to 14 days. Of course nothing has changed.

I didn't realize it took so long.

So do they calculate your payments from when you applied or when they confirm your application?

Sounds like it could be months so you may be a half year older by the time they complete the application?

 

[explanade]

What exactly is all this money dropping from the sky? There were the economic stimulus payments but those are long gone and everyone knows it. I guess there could be unemployment but obviously that should stop at some point... what else are you talking about?

DD is one of those in the great resignation... she was unhapy with her job/boss and will be leaving soon to take a break and if kiddies come along (they are looking to adopt) then it may be an extended break. But there is no money dropping from the sky for them other than last year's economic stimulus payments.

Even last summer, they were saying aggregate savings were the highest ever and the highest average savings rate per person in several decades.

I believe savings rate is still high though you wonder if retail investing as the market has been going up has been increasing over the course of the pandemic.

 

[explanade]

"One financial advisor quoted in the article says that a lot of people may be maximizing monthly SS checks instead of lifetime returns. She noted that one factor is that by waiting, they may be missing on a chance to invest excess savings that they may have now."

Let's see, an advisor that thinks your increased SS payment is a detriment because you could have invested the excess savings sooner? Does that sound like a fiduciary advisor? They are so obvious sometimes.......

Vw

As I understood it, her argument isn't that different from some of the SS threads we've had here over the years.

People calculated the breakeven if you took SS early vs. later. Then some people believed that you should also factor in additional market returns from taking SS early because you'd have extra funds to invest or not take out of the market for your living expenses.

 

[Irishgirlyc58]

My thoughts exactly. My wife applied back in April and when she logs on to SSA see it progress it says that her application reached the final step on July 1st and should be completed in 2-4 weeks. She even called them last month to see if they needed anything from her and after a very pleasant conversation the agent said he would flag her application and she should hear something within 7 to 14 days. Of course nothing has changed.

That is just ridiculous! I would be escalating my complaint if I had been waiting that long.
I actually only submitted my application 5 weeks ago.
If I haven’t heard by the middle of next month I will escalate.

 

[Alan]

I didn't realize it took so long.

So do they calculate your payments from when you applied or when they confirm your application?

Sounds like it could be months so you may be a half year older by the time they complete the application?

It will (should) be backdated to April 1st when the application first went in. The application was online through the Federal Benefits Unit at the US Embassy in London and they were quick and efficient, 2 phone calls with interviews and the application put into the system.

That is just ridiculous! I would be escalating my complaint if I had been waiting that long.
I actually only submitted my application 5 weeks ago.
If I haven’t heard by the middle of next month I will escalate.

Let me know how you escalate. My wife called them and it seemed to escalate it with the agent promising to flag it up for immediate review. My wife hates called them. If it was me I'd be calling them again. We have a US Skype account so it costs nothing, just hanging around for yonks waiting on the line.

 

[harllee]

I am taking my SS at 70 (I just turned 70 in October), a couple of weeks ago I got a letter from SS telling me the amount and that my payment will start the last Wednesday in November. I applied in July on the phone, my application went through quickly. I also got a new Medicare card in the mail the other day but its is the same number I already had so I just put it in the file. My age 70 SS is even larger than I anticipated. Wahoo!

 

[Chuckanut]

As I understood it, her argument isn't that different from some of the SS threads we've had here over the years.

People calculated the breakeven if you took SS early vs. later. Then some people believed that you should also factor in additional market returns from taking SS early because you'd have extra funds to invest or not take out of the market for your living expenses.

And then there are those who don't care about leaving an estate who realize that taking SS at 70 gives a person more to spend each year starting an 62. Just don't tell any heirs are that expecting a windfall at the time of your demise.

 

[foxfirev5]

One financial advisor quoted in the article says that a lot of people may be maximizing monthly SS checks instead of lifetime returns. She noted that one factor is that by waiting, they may be missing on a chance to invest excess savings that they may have now.[/QUOTE]

Or IMHO missing out on living their life while they have the opportunity. I am finding out that while I was bullet proof at 64 suddenly at 65 I'm not so sure.

 

[pb4uski]

^^^^ In most cases that's a bit of a red herring argument for anyone who has more than 8 years of SS at 62 in savings and that would be most people here.

 

[athena53]

I did the opposite. I just filed for SS on my own record to start when I turn 69 in February. I'm now collecting Survivor benefits on DH's record and this should give me another $18K/year (before taxes, of course).

I figure the bill is going to come due for all those stimulus packages and tax rates will go nowhere but up for people like me.

 

[youbet]

I wonder if a few years from now we hear of the Great Job Hunting done by a bunch of folks that retired this past year

Personally, I don't think so. I think they'll find FIRE a happy, rewarding and successful life experience! So many naysayers of FIRE these days!!

 

[Scratchy]

We just saw the biggest drop in the number of people applying for SS in a 12-month period in almost 2 decades, for the year ending 9/5/21.

It was a 5% year over year drop compared to the previous year. Another pandemic factor which may have contributed to the drop in applications is that a lot of SSA offices were closed or had limited service during a significant span of the pandemic.

Also during this same 12-month period with drop in the number of SS applications, there was a 5% increase in retirements among age 65-69 workers.

I don't mean to be grim but I wonder what portion of this is related to pandemic deaths.