Whats the best age to take SS?

[RunningBum]

I don’t gamble. I think waiting until 70 is gambling with the government that you will live long enough to recoup or exceed the SS you could have received in earlier years.

Isn't taking at 62 just a different way of gambling, that you won't outlive your savings and would need the highest SS benefit you can have?

Of course you can hedge your bets and take somewhere in between 62 and 70, but that still leaves a possibility of downside on either side.

 

[bobandsherry]

Roughly speaking, if you live past 82 it is better to wait until 70. But also depends on what other assets you have and if you need the SS money now. And lastly, another way to look at it is if you draw now you have more to spend when you are younger, so have more now to spend on travel and other experiences. From looking at my parents, they did a lot more when they were 62-70. Slowed down into their early 70s and now pushing 80 they just don't have the interest or desire to travel. So they had more $$$ to spend for travel and now spend much less so they really don't miss the few extra dollars they'd have now if they waited.

 

[Irishgirlyc58]

Isn't taking at 62 just a different way of gambling, that you won't outlive your savings and would need the highest SS benefit you can have?

Of course you can hedge your bets and take somewhere in between 62 and 70, but that still leaves a possibility of downside on either side.

I understand your point and acknowledge that I probably come from a different perspective since I have a pension. Taking SS at the time I retired isn’t going to make my pension any more or any less 10 years from now. I’m just adding to my monthly income. I guess it doesn’t seem as risky to me. Waiting to see if I live long enough to “break even” if I wait until 70 feels too risky for me. It also feels like I’m tempting fate!

Isn’t betting that the government is going to lose money on the age set for the higher SS benefits sort of like betting against the house?
The house ensures that it wins the majority of the time.

Which leads me to add to what I think/predict the government will do about SS running out of funding. I think they will increase the minimum retirement age from 62 to 64. Normal retirement age-67, extended retirement benefits 74 ish.

But I agree with the person who said-take the benefits at an eligible age that makes you happy.
A person just needs to decide for themselves what that age is.

 

[COcheesehead]

Right, but there are other factors that weigh towards taking it at age 70, like the spousal survivor, leaving room to do Roth conversions, etc.

Taking it at age 62 is great if low IRA balances, single, and plan to die at age 83

You missed the point. It does not matter.

 

[RunningBum]

Isn’t betting that the government is going to lose money on the age set for the higher SS benefits sort of like betting against the house?
The house ensures that it wins the majority of the time.

No, social security isn't set up like a casino where the house always has an advantage. My understanding is that on average it works out to be even no matter at what age you take it. You choose the tie-breaker based on your factors and your goals, such as health, family longevity, the need for money early, longevity insurance, etc. I really don't think your gambling analogy holds up.

Which leads me to add to what I think/predict the government will do about SS running out of funding. I think they will increase the minimum retirement age from 62 to 64. Normal retirement age-67, extended retirement benefits 74 ish.

Yes, that is the one factor that still has me scratching my head. If they cut benefits either directly or by moving ages out and they don't do it in a way that's fair to people eligible but not yet receiving benefits, how much does that move my breakeven age out? I want longevity insurance, but not if my breakeven age is 99.

 

[youbet]

Roughly speaking, if you live past 82 it is better to wait until 70.

Of course, the 82 figure assumes zero time value to money, which isn't true. Just another complicating factor.

 

[RobbieB]

I'm between FRA and 70. Still thinking about it. Sometime between now and 70 -

 

[Sunset]

You missed the point. It does not matter.

If you are making a joke, you are right, I didn't get it.

If you are being serious, I understand about actuarial equivalence which only applies up to age ~83, hence my comment:

Taking it at age 62 is great if low IRA balances, single, and plan to die at age 83

 

[youbet]

, I understand about actuarial equivalence which only applies up to age ~83,

"83" isn't involved at all. I believe that the SS so-called "actuarial equivalence" is based on lifetimes, not age 83.

 

[Sunset]

"83" isn't involved at all. I believe that the SS so-called "actuarial equivalence" is based on lifetimes, not age 83.

It's not exactly age 83, could be 82.x , but that is where the equivalent amount of money from starting SS at age 62 or 70 meet.
After that age the person who picked starting at age 70 will get more total money than the person who started at age 62.
This difference in money will grow increasingly larger each year.

 

[skipro33]

It depends on what you want to use the money for. If you just want the most amount/biggest bank balance when you die, then later than sooner. If you want to use it to have fun with 'their' money, then sooner rather than later. That's what we did: drew it at 62 and been enjoying the heck out of that extra dough ever since. Instead of waiting until age 70 when we would be too old, we took a road trip last week to Moab, Utah and hiked, mountain biked and road my motorcycle and DW's RZR throughout that area. Past age 70 and I doubt either of us could have done near the amount we are doing in our 60's.
Then there's health: have cancer so I don't expect to live to what I might have otherwise, but hey, anyone can be gone tomorrow. No promises for life. Enjoy it now, while you can, who knows what tomorrow will bring.

 

[big-papa]

Look at opensocialsecurity.com. It's the best site for analyzing your options and you can change the various assumptions about the future. Be sure to scroll all the way to the bottom of the results page, where there is a graph showing the change in the value of lifetime benefits for various claim ages.

This!
Unsurprisingly, it recommends I wait till age 70 and my wife starts at 62 (her current age). Remember what it optimizes on - it tries to maximize the present value of all future SS income, using life expectancy tables.

I had already planned on waiting to age 70. Same for my wife, but plans could change depending on, you know, real life.

Cheers,
Big-Papa

 

[Time2]

Right, but there are other factors that weigh towards taking it at age 70, like the spousal survivor, leaving room to do Roth conversions, etc.

Taking it at age 62 is great if low IRA balances, single, and plan to die at age 83

You hit both my reasons for waiting until 70 with your post. I want to maximize my wife's income after I'm gone and I'm doing Roth Conversions as fast as I can while keeping in the 12% tax bracket, although last year I went to the top of the 22% bracket.
When I hit 70yrs my young bride will be 65 years and 8 months, not a lot of sense in her waiting, as she will collect on my earnings when I'm gone and if I'm collecting SS, not much room left for the Roth conversions. Hopefully I'll have reduced the tax deferred accounts enough to make a difference in our forced (RMDs) and unneeded income. Only 2 years 5 months to go!
My question, my birthday is in March, Do we take 9 months of SS which will pretty much knock the Roth conversion down to less than $15k, (forgoing the tax bracket changes coming) or just start it on Jan 1 of the year I turn 70 and give up on anymore Roth conversions?

 

[Rianne]

Is opensocialsecurity.com updated to new inflationary payouts?

 

[Sunset]

.....
My question, my birthday is in March, Do we take 9 months of SS which will pretty much knock the Roth conversion down to less than $15k, (forgoing the tax bracket changes coming) or just start it on Jan 1 of the year I turn 70 and give up on anymore Roth conversions?

Either way, taking in January or waiting until March when age 70 means you won't miss out on that weird issue with SS (I forget what it's called) where you don't get all the money. Just don't claim it for February of that year.

Personally, I'd wait to March as I like to maximize things, and you'll get both max SS and more Roth conversion.

 

[HI Bill]

It’s the same no matter what. You get less for longer if you take it early or you get more, but for a shorter time if you wait.

This is true if you die according the age listed in the actuarial tables. If you die sooner, you should have taken it earlier, and if you live longer, you should have taken it later.

Spousal benefits and survivor's benefits may be a reason to defer until at least FRA. Taxes are another consideration. There's no perfect answer, and I think most of us here sweat the details of the decision too much, as we can't know if we're 'average' with respect to our life expectancy.

 

[SecondAttempt]

This is true if you die according the age listed in the actuarial tables. If you die sooner, you should have taken it earlier, and if you live longer, you should have taken it later.

Spousal benefits and survivor's benefits may be a reason to defer until at least FRA. Taxes are another consideration. There's no perfect answer, and I think most of us here sweat the details of the decision too much, as we can't know if we're 'average' with respect to our life expectancy.

I have a spreadsheet where I calculate the total amount I get based on when I start SS and when I die. If I start at 62 I have to live past 75 to make a delay the better choice. Of course I hope I do. But my mother died at 69 and my father at 72. My health is not bad but neither was their as my age (57).

If I wait to start SS until FRA (67) I have to live until I am 80 for it to have been a better choice and even then to total cost to me would be $28000. I will personally take the start at 62 bet.

Spousal benefits can be a big factor of course. But my honey has her own SS and will inherit enough to make the incremental spousal benefit hardly matter.

But you really need to do an analysis based on your personal sintuation.

 

[bada bing]

One factor not yet mentioned is working between age 62 and FRA. Not surprising considering this the Early Retirement forum.. I consider myself retired, but make over the $19,560 earnings limit from my "hobby business". I personally wouldn't file early now anyway for several reasons, but the earnings limit would be a fairly big roadblock if I were inclined to file early.

 

[Stormy Kromer]

I'm going to apply at age 62.5 This is when DW turns full retirement age at age 67.

I was the higher earner and she will qualify for 50% of my FRA when she reaches 67. For her to start benefits, I must apply first. If we wait 4.5 years for me to reach FRA at age 67 it would not increase her benefits.

When we do start, we plan on investing my benefits from age 62.5 - 67 and then drawing on this account once I reach 67 and adding it to my benefits each month.

Every situation is different.

 

[Midpack]

We're both waiting until we're 70 to start SS because that's what we expect to maximize our lifetime benefit. But we both have well above average longevity in our families, and we're fortunate to have the $ resources to wait. If you can't wait, and/or you have good reason to think you won't live into at least your 80's, taking SS earlier might be a better option.

 

[COcheesehead]

This is true if you die according the age listed in the actuarial tables. If you die sooner, you should have taken it earlier, and if you live longer, you should have taken it later.

Spousal benefits and survivor's benefits may be a reason to defer until at least FRA. Taxes are another consideration. There's no perfect answer, and I think most of us here sweat the details of the decision too much, as we can't know if we're 'average' with respect to our life expectancy.

I agree, you don’t know when you are going to die. I watched my Dad in his later years receive more money than he could spend so he donated most of it. He was not able to travel. Watched the TV with the volume up so loud it hurt your ears, but he was rolling in the bucks.
All the calculators I use tell us to take hers at 65, mine at 70, but I have visions of becoming my Dad and writing lots of checks with the TV on very loud. If I take it early, the government will tax a-lot of the money back to them. No perfect answer.

 

[big-papa]

I agree, you don’t know when you are going to die. I watched my Dad in his later years receive more money than he could spend so he donated most of it. He was not able to travel. Watched the TV with the volume up so loud it hurt your ears, but he was rolling in the bucks.
All the calculators I use tell us to take hers at 65, mine at 70, but I have visions of becoming my Dad and writing lots of checks with the TV on very loud. If I take it early, the government will tax a-lot of the money back to them. No perfect answer.

The calculators I run show something similar, suggesting I take mine at 70 and my wife at 62 (as in right now). I have significantly higher lifetime income than she did, so I see where it's coming from.

But as they say, no single person is "average". So we consider our family history, current health, different actuarial tables available, etc. in ultimately making the decision. For now, the planning is both of us waiting till 70 with NPV math giving us additional withdrawals from our savings before SS actually starts so that we can do the things we want to do when we're relatively younger and effectively smooths out income somewhat over a lifetime.

Cheers
Big-Papa

Cheers.

 

[Car-Guy]

The DW and I both took ours at 62 and have never regretted it. We didn't need it then, we don't need it now, and suspect we will never need it. But we earned it and wanted it then.

Anyway, "assuming" the government doesn't change the rules at some point, , neither of us expect to be here long enough to be collecting at the break even point.

 

[SJhawkins]

Not at a time we have to make this decision its comming faster then we want Im afraid.

Delaying looks to be the right answer for us but when the time comes it maybe something completely different, we are out a good 8 years before we need to really think about it. If life has tought me anything a lot can happen in 8 years, so for me I dont give it much thought. I check the benefit amount one time a year, dream a little of the future and move on to something more fun!

I do wonder how much of a behavioral decision it becomes when one is in the middle of it however. You retired at 60, plan to delay to 70, the market takes a dump at 65, maybe you blood work was not the best at your last physical and you say screw it Im taking it now.

Of the number of people who plan to delay to 70 I have to wonder how many decide on something different at 65, 66, 67 etc. In otherwords, think its good to have options!

 

[Chuckanut]

Of the number of people who plan to delay to 70 I have to wonder how many decide on something different at 65, 66, 67 etc. In otherwords, think its good to have options!

An excellent point. It's not a binary choice of 62 or 70 and you are stuck for life with that choice (Unless you choose 62, and even then IIRC you have six months to undo that choice) . If one decides to delay collecting SS there are 95 more points where one can decide to turn SS on if the situation merits doing so.

Edit to correct stupid mental error....