What do you know about SS Leveling

[Dec2014]

Hello - I'm new to the boards, but will be retiring Dec 2014 at 30 years. I'll be 48 at the time of retirement and thinking about the Social Security Leveling (drawing money out of social security early before 62)... Anyone else currently go with this option? Any information or experience would be appreciated.

[braumeister]

Does your pension plan allow that option?
Best to research the fine print to see exactly how it works.

[REWahoo]

Quote:

Originally Posted by Dec2014 Hello - I'm new to the boards, but will be retiring Dec 2014 at 30 years. I'll be 48 at the time of retirement and thinking about the Social Security Leveling (drawing money out of social security early before 62)...

Don't think you'll be able to draw SS early.

I thought "Social Security Leveling" involved your pension fund paying your expected SS amount initially, then reducing the amount of pension payment by the SS amount once you begin drawing SS.

[Dec2014]

Yes, my pension plan allows this option. I'm just getting started with my research. Lucky to find this website with all sorts of information. Thinking the leveling option is good for me since I could be receiving the extra money for approx 14 yrs.

[pb4uski]

I suggest that you model out both alternative in Quicken Lifetime Planner or some similar retirement planning tool and see which alternative is better in terms of portfolio survivability.

[RetireAge50]

My pension has this feature but my initial thought (need to further analyze) was that this would not be a good idea. The big advantage of a pension is it pays until you die so want to keep the yearly payout as large as possible in the later years.

[travelover]

This feature was mandatory for my pension, optional for DW's. I think I will recommend that she not take this option as she will be 60 when retired and we plan to take SS at 62. The reduction is too great to justify the 2 year payout.

[Alan]

Quote:

Originally Posted by travelover This feature was mandatory for my pension...

+1

[HappyOutsourced]

Hello and welcome!
I took the social security option offered by my pension plan at age 55.
I think this is the same as what you're considering. The purpose is to even out the amount of total income you receive from combined pension and social security. If your pension is large, it may pay you about what your social security will be for years prior to drawing soc sec and then less when you start drawing.

Because my pension was not very large (only 18 years service), it will run out completely at age 65.

The reasons I chose this option are:

1) We needed more cash flow now and this seemed the best place to get it.

2) The only option my pension offered with survivor benefits was not very good and had no COLA.

3) Only one option offered COLA but it didn't pay a whole lot.

4) It allowed me to delay drawing social security until my full retirement age.
Unlike my pension, social security provides COLA and survivor benefits. My husband and I would draw roughly the same amount if we both drew at 62. If we did this, then when one of us dies, the amount of soc sec would be cut in half. Otherwise, if he draws at 62 and I wait until 66, then the survivor will receive the higher soc sec. It won't be as big a financial jolt.
.
5) If I had chosen the lifetime option that paid the most, I would have received about the same per month as the difference between drawing my soc sec at 62 and at 66. But that option didn't have a COLA or a survivor benefit. Besides, pensions are taxed more harshly than soc sec and can drive up provisional income, causing more of your social security to be taxed. So delaying soc sec seemed wiser.

6) Drawing my entire pension in 10 years has a couple of other advantages - the possibility I'll live long enough to get the whole value of the pension is pretty favorable and the lack of COLA is not as much a big deal at 10 years as opposed to a lifetime.

If you have a spouse, and you chose a pension option like I chose with no survivor benefits,and you're planning to delay taking social security, you may want to take out a small term life insurance until you draw social security. Last time I checked term policies were pretty cheap - that is if you're healthy.

I'm not a professional. That's my experience. Hope it helps!