Whats the best age to take SS?

[TheWizard]

I filed for SS two and a half years ago at age 70, for the usual reasons...

 

[ShokWaveRider]

I did not file at 62 because I did not need the money. I am filing at 69 because I am not sure it will be as we know it for long after 2024.

 

[imnontrad]

"delaying drawing those down may result in higher taxes and possibly higher Medicare premiums"

Bingo.
Plus, if you take it early, there is no law that says you have to spend it.
So for me? Prob 62.

That is true BUT then, if you have a spouse, you are betting that you will not die earlier than expected AND you are relying on the "sequence of returns" in your favor. Many have this belief of filing at 62 and banking it. But there are fallacies with this approach -

 

[kgtest]

Lots of factors. I would say take it when you need it. If you don't need it right away, delay it and reconsider later.

If you are in bad health or limited time left on earth, take it sooner.

I like seeing the common theme here that partner takes it early, and other takes it later. I think finding the balance is key.

I might live to be 100. I might die in a car crash tomorrow. I just don't know. For me, I will try and hold off but maybe I won't. If I knew I could earn more than the taxable rate on it in the markets, I might take it now. But it comes with a tax consequence so who knows.

I will likely have sizeable inheritance and I like the idea of using my own 401k money to reduce RMD later somehow. i-opr.com and opensocialsecurity.com will help me plan.

 

[Romer]

I plan to take at 62. Found this article interesting.
Making Optimal Social Security Claiming Decisions - A Four Stage Analysis by Daniel Amerman

Thanks for sharing

A key item I saw was the following paragraphs I pasted from the link. Not something I realized and makes me think more about age 65 (not 62). I was planning on 67. Maybe this requires a couple of months ahead of 65 to lock in the Medicare payment method. I would like to understand this more

If someone is currently collecting Social Security AND like most people they choose at age 65 to have their Medicare Part B premiums deducted from their Social Security payments, then under current law in most (but not all) cases they will be protected against excessive Medicare premium increases for the rest of their lives. The "hold harmless" provision of Social Security states that increases in Medicare Part B premiums cannot result in net Social Security payments being cut.

So if the monthly size of someone's Social Security payment goes up by $30 because of inflation-indexing, and their Medicare premium which is deducted from that payment is supposed to increase by $40, then it would appear that their benefit payment would go down by $10 per month. The "hold harmless" provision which applies to most retirees keeps that from happening, as their Social Security payments net of Medicare deductions are not allowed to fall.

For most retirees (there are several excluded categories) in that situation, their Medicare premium could not go up by more than $30 per month. It does not matter whether their monthly premium would otherwise go up by $30, or $40 or $80, they are protected and capped out at a $30 increase - which means their net payment is unchanged. (There is an exception, however, if the government simply doesn't have the money to pay, as covered in the Trust Funds section that follows.)

 

[a60dan]

We’re limiting our taxable income until age 65 to qualify for most affordable medical insurance.

Will re-evaluate then.

 

[Sirka]

It is only 8 years

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.

+1
Looking back at 72, it seems like small detail. We took ours at 62, so we would have a steady income to pay the bills. The Great Resesion was not helping our retirement and living off the interest. Zero interest rates will steal income from you if they come back. Life is full of surprises...

 

[Shardo]

I did a little analysis of the total amount received starting at 62 and at FRA which was 66.7 for me I think.

The amounts were roughly the same at 78 yrs old. Seeing as no one in my mom's family made it to 78, I took SS at 62.

 

[almost there]

That is true BUT then, if you have a spouse, you are betting that you will not die earlier than expected AND you are relying on the "sequence of returns" in your favor. Many have this belief of filing at 62 and banking it. But there are fallacies with this approach -

Thanks for the link. Have been doing Roth conversions the past 8 years, with one more to go in 2023. Then plan to take at 62 in 2024. Not to receive the absolute most out of it, just to keep future income as low as possible. As I am banking on higher taxes over the next 20-30 years. Not to mention health of the SS program in general. My plan is not for everyone. LOL LOL But thats my plan.

 

[fishfactory]

Imnontrad, yes social security will be around, but a what funding level ? Odds are payouts will be cut around 30% based on projections, so I am taking as early as possible to get as much in pocket before cuts. And by taking early and having a smaller monthly payout, they may have a progressive cut where lower monthly payouts are cut at a lower % than higher payouts. This is also covered in this article I posted earlier.

Making Optimal Social Security Claiming Decisions - A Four Stage Analysis by Daniel Amerman

 

[tenant13]

I treat SS as a long term financial "insurance". So as long as I can maintain my lifestyle without it (just turned 59), I'll just ignore it. And once my savings deplete to the point I'll feel the need of having additional income - I'll turn the faucet with SS money. In the meantime I will also try to do ROTH conversions so I'm not pushed into RMDs.

I think that at some - not so distant - point in the future my needs will dwindle to basics so that strategy seems like it makes most sense to me. Right now I travel a lot and that's the majority of my spending. That won't last forever.

 

[11522914]

I plan to take at 62. Found this article interesting.

Making Optimal Social Security Claiming Decisions - A Four Stage Analysis by Daniel Amerman

Wow. Thanks for sharing this.

I'll have to read this again just to fully comprehend it. This really puts a kink in my decision to wait until 70.

And the implications of inflation, continuing increases in our public debt, increases in Medicare and rosy predictions by our government is just downright scary. I'm an optimist at heart but this article is hard to argue against.

How in the hell are we going to fund both programs in full in the future, particularly if we continue down this same 40 year path.

I have a lot to think about now.

 

[fishfactory]

I was also planning to wait until 70 but will now start at 62. I do think some sort of cut is inevitable, so a bird in the hand....

 

[NoEZmoney]

Too Soon or Too Late?

As for us (DW and I) we've positioned ourselves to be able to wait until 70. For the next 5 yrs we're going to do Roth Conversions and basically live off our cash bucket and spend down taxable accounts. The strategy is to take SS at 70 and dip into the Roth accounts after the taxables are depleted which will be at about the same time for SS.

Our B/E analysis was if taken at 70 compared with 65, we'd need to live to about 86 or so. Not a big deal as she'll likely live to 105 (lol-- good genes and family history) me, I'll be thrilled to make it to 92. (mixed family health history).

We'll keep on track unless we have a super game-changer (major medical event, catastrophic event, etc.) But we've come to be happy with our spending habits, and have no need to get rockstar crazy in retirement.

Had a single friend who got laid off and instead of finding a side-gig or job to get by until FRA, he took SS at 62 and was hoping his mutual funds would fill the gaps. Unfortunately he has fallen in the "just scraping by" category and he panicked with withdrawing too much from the 401K instead of weathering the ebbs and flows of the market.

[MOD EDIT]

 

[daylatedollarshort]

We took our SS at 62 and pension at 55, together they cover most of our annual retirement expenses. We took our SS early over the possibility of future cuts and to make sure we got at least some of the SS money for our kids in case we passed early.

As we age our mortgage expense will decrease as the mortgage is paid off, so we should need less money in the future, not more. Or, if we downsize as we get older that would also lower our expenses quite a bit.

 

[bobbyr]

I treat SS as a long term financial "insurance". So as long as I can maintain my lifestyle without it (just turned 59), I'll just ignore it. And once my savings deplete to the point I'll feel the need of having additional income - I'll turn the faucet with SS money. In the meantime I will also try to do ROTH conversions so I'm not pushed into RMDs.

I think that at some - not so distant - point in the future my needs will dwindle to basics so that strategy seems like it makes most sense to me. Right now I travel a lot and that's the majority of my spending. That won't last forever.

We align with most everything you said (except I'm 64, DW is 59)...we have plans to travel a lot, but pinned down taking care of moms.