When To Take Social Security? Study takes a statistical approach.

[audreyh1]

It appears that when a person gets older, and wound up needing more medical care, they'll wound up making them spend all the extra savings they've accumulated by drawing SS late. Then these medical facilities wound up making a lot of people sale their houses, and other assets. Because of this, a lot of people use to put their assets in somebody else's name, so they could qualify for medicaid. But medicaid implemented the 5 year look-back period.

This is another reason why many people start drawing SS at 62. Why not take it early, if they're gonna come back, and take their house and their savings later anyway, at a time they'll more likely need that medical care. Looks like the system is designed to get theirs back anyway they can.

From the numbers I'm seeing, the money they'll save by drawing at 70, will be swallowed up in only a few years by the medical expensive they'll probably acquire as being a part of the elderly.

But even if a person stay perfectly healthy into their mid 80 or 90's, what is it that they could buy by that time, that they couldn't have enjoyed when they were 62, assuming they don't have an estate. Like I said earlier, the pie might be bigger by then, but you may not have the same taste buds.

I expect that people who expect to be on Medicaid for LTC don’t wait until 70 to draw SS, they probably take it at 62.

 

[bada bing]

Yeah, the reality is most (especially males) will be dead sometime in their 80s.

So my retirement models all end at age 95, not age 100 or later.

It's much more likely I'll be dead by age 85, though.

You can crunch numbers, but it's obvious that there is an emotional component to claiming strategies and we all don't have the same emotional perspective. I certainly hope I live into my 90's but realize the numbers say probably not. What I'm afraid of is screwing something up financially in the later years. My delaying SS is a way to offload some risk and management burden from my older, possibly less capable self . I have plans laid out to be entirely SIRE instead of FIRE by age 70, by deferring SS and pension until then. Getting into a position that's hard to screw up is worth something to me. It isn't far from my optimal claiming solution according to opensocialsecurity, but feelings and fears tweak my plan a bit away from the mechanical maximum.

 

[ERD50]

Y ...I certainly hope I live into my 90's but realize the numbers say probably not....

Probably not, but the odds aren't extreme.

Vanguard used to have a nice simple longevity calculator with a clear output, but it's gone. This ones a bit convoluted, but gets it done:

www.longevityillustrator.org

For a 65 YO couple (non-smokers, average health), there's a 25% chance of male living to 92, and a 25% that one of the couple will live to 96.

A 10% chance of Male living to 96, and 10% chance of one of he couple will live to 100.

I don't ignore something that has a 1 in 10 chance of occurring. And someone with known health issues may not fit this profile.

-ERD50

 

[SecondCor521]

Probably not, but the odds aren't extreme.

Vanguard used to have a nice simple longevity calculator with a clear output, but it's gone. This ones a bit convoluted, but gets it done:

www.longevityillustrator.org

For a 65 YO couple (non-smokers, average health), there's a 25% chance of male living to 92, and a 25% that one of the couple will live to 96.

A 10% chance of Male living to 96, and 10% chance of one of he couple will live to 100.

I don't ignore something that has a 1 in 10 chance of occurring. And someone with known health issues may not fit this profile.

-ERD50

There is a surprisingly great tool from Social Security which provides a lot of longevity charts, graphs, and percentages:

https://www.ssa.gov/policy/tools/longevity-visualizer/index.html

I've been using it pretty extensively to plan financial things for myself and occasionally for my Dad as well.

It can do joint survivability stuff too, although I haven't used it for that.

 

[TheWizard]

If I take SS at 62, the amount I will get from 62 to 70 is approx. $230,000.
That's funds I won't take from the Fixed Income allocation in my 403B now earning 5.22%.
My broker's annuity calculator says if I convert that amount to an annuity at age 70, I will be getting approx $2,300/month in lifetime annuities. Since I have no heir and kids, it works out the same for me.

Option 2 is to do the opposite:
Annuitize that fixed income allocation at start of retirement (age 62?) and delay SS until close to age 70.
That's what I did and it's worked out great.

Assuming your "fixed income allocation" is in TIAA Traditional, you could have a really good payout rate depending on the extent of your loyalty bonus. And TIAA does unscheduled increases in your payout every year or two; it's not a truly fixed payout...

 

[CRLLS]

There is a surprisingly great tool from Social Security which provides a lot of longevity charts, graphs, and percentages:

https://www.ssa.gov/policy/tools/longevity-visualizer/index.html

I've been using it pretty extensively to plan financial things for myself and occasionally for my Dad as well.

It can do joint survivability stuff too, although I haven't used it for that.

Thanks for that link. I just ran it and there is about a 10% chance that both I and DW will be alive at age 91; and 10% chance that one of us will be alive at age 100. I've got to update my retirement plan to 105.

 

[qwerty3656]

I posted this in another thread:

See attached file on Life expectancy

So, for example, an average health married couple has a 50% chance of 1 party making to 90 (72% chance for a healthy couple).

 

[Koolau]

Probably not, but the odds aren't extreme.

Vanguard used to have a nice simple longevity calculator with a clear output, but it's gone. This ones a bit convoluted, but gets it done:

www.longevityillustrator.org

For a 65 YO couple (non-smokers, average health), there's a 25% chance of male living to 92, and a 25% that one of the couple will live to 96.

A 10% chance of Male living to 96, and 10% chance of one of he couple will live to 100.

I don't ignore something that has a 1 in 10 chance of occurring. And someone with known health issues may not fit this profile.

-ERD50

Heh, heh, move to the Islands and the statistics look even better!