25% of SS recipients sorry they took payments early...

[NW-Bound]

Very apt comparison of ER to early SS! Both are about getting less now, rather than OMY.

 

[sengsational]

An interesting question to myself, at age 62, is when I will be taking SS. At 56 the answer is "I will wait".

I've been doing my best to ignore the whole question until the question means something to me as well.

Also - the poll is skewed by people still alive.

Never a more teachable moment for the term "survivorship bias"

 

[NW-Bound]

60 now, so only 2 more years before the question becomes real.

I may go for somewhere in between. Maybe 65? I dunno. Depends a lot on how the market moves.

 

[Big_Hitter]

When a decision becomes irreversible, I don't see much point in whining or regrets.

thanks for that gem - I used an edited version of it in an article I wrote yesterday

 

[NW-Bound]

Except that they used to allow early SS recipients to give back all the money, and not even charge them interest, so as to claim more at 70. With a mulligan allowed like that, there's no reason not to take it early, then change your mind later if you want to.

Son of a gun! The younger people are getting worse and worse deals. My children may have to work till 80. I keep telling them to save for themselves if they do not want to work till they die.

 

[Tadpole]

I have been running some projections and it has become more difficult to handle SS COLA since, for all I know, all future COLAs will just transfer funds from the SS Trust Fund to cover increases in Medicare. If so, many people will find that, for planning purposes, SS is not COLAed. Has this occurred to anyone else?

 

[ERD50]

...

A person who is not well-off eats cat food from 62 to 70, in order to get more later. At 69, he's diagnosed with a terminal disease. Won't he regret not eating better food for the 7 years before his death, or taking those European trips? ...

That ignores the point Cut-Throat has made time and time again.

You can spend more now, with the knowledge that you will be getting more in the future.

-ERD50

 

[Big_Hitter]

I have been running some projections and it has become more difficult to handle SS COLA since, for all I know, all future COLAs will just transfer funds from the SS Trust Fund to cover increases in Medicare. If so, many people will find that, for planning purposes, SS is not COLAed. Has this occurred to anyone else?

very doubtful - COLA on your accrued SS benefit is part of the "promise"

 

[Independent]

I have been running some projections and it has become more difficult to handle SS COLA since, for all I know, all future COLAs will just transfer funds from the SS Trust Fund to cover increases in Medicare. If so, many people will find that, for planning purposes, SS is not COLAed. Has this occurred to anyone else?

It's certainly possible that both health care costs and Medicare premiums will go up by more than the CPI-W. Some people here explicitly plan for that, or at least use it for worst case projections.

But, I'm not sure how this would impact the decision on when to start SS. I know there can be years, in fact 2016 is one of them, when paying Medicare out of your SS benefit can be cheaper than paying in cash. But, I view this as and unusual and short-lived situation for people with "normal size" SS benefits.

 

[euro]

I plan on taking SS at 62 (according to the principle "you've got what you've got" - too many uncertainties about solvency of SS, life expectancy, etc). Alas, if I live past the break-even date, then I will probably regret that decision..... c'est la vie

 

[garyt]

That article confuses me. It says the study surveyed 1000 people age 50 and older. That means at least some of the people aren't of age to take SS yet. Certainly people who aren't even eligible for SS aren't going to regret a decision they haven't had to commit to or act upon, right? And don't tell me that they didn't include those in the numbers, because they say 77% of those retired 10 years or more would not change and 69% of those recently retired would not change, so it would take a larger number of the pre-retireds not regretting that future decision to bring that number back to 23% regretting their decision.


Odd that the people retired longer, and thus closer to the break even point, seem less regretful of the decision to take SS early.

Bingo! Ask a bunch of 80 year olds and they'd probably say they regret it. But they can't remember the fun that extra money early on hopefully brought them.

 

[gayl]

I bet 100% of those who took social security between the ages of 50 and 60 regret not waiting as they would be taking it on Social Security disability as well as many who took between 60 and 62. It'll be interesting to find out how many of those were on disability versus widow's benefits. But I think even a lot of those on widow's benefits would prefer to have their spouse

 

[Mulligan]

I have been running some projections and it has become more difficult to handle SS COLA since, for all I know, all future COLAs will just transfer funds from the SS Trust Fund to cover increases in Medicare. If so, many people will find that, for planning purposes, SS is not COLAed. Has this occurred to anyone else?

I ran some projections too. Thanks to WEP I will draw about $100 if I take at 62. If I wait until 66 it jumps to near $150. Decisions , decisions and only 10 years left to come up with the correct decision. I hope I don't screw this one up.
At least medicare will come out of your check. Heck, they will not only take that money, but I will have to write them a check each month to pay the medicare balance. Poor me....Hope I don't go senile and forgot to cut the check and lose my medicare.


Sent from my iPad using Tapatalk

 

[NW-Bound]

That ignores the point Cut-Throat has made time and time again.

You can spend more now, with the knowledge that you will be getting more in the future.

-ERD50

When I ran FIRECalc using my actual stash size and actual SS benefits (not discounting for likely SS reduction in the future), it does not make much difference between me taking at 62 or 70.

If I take it at 62, I will be drawing less from my savings. My savings will support a longer period, due to the lower WR.

If I take it at 70, I will draw down my savings more until 70. And when SS finally kicks in, it will be higher to make up for my savings withdrawal, which will get cut back at that point due to its smaller balance.

The budgets that the two cases support are within 1% of each other, so well within variations of changes in future market returns, tax law changes, benefit cuts due to SS short fall, etc...

If the amount I can spend is the same, why not take it early if the market tanks, or if I fear they may change some laws?

I still have that option to choose. Other people may not.

 

[imoldernu]

Studies that look at investment advice, and decisions to be made, can really be skewed by using history... even long term history. While the law of averages suggests that safety lies in "going with the odds"... as in FIRECAC... even this has to be considered in the light of possible major changes.

SS, especially is affected by historical norms. In 1998, when we began taking SS at age 62, we were still receiving 11% interest on some 5 year laddered CD's. As we were financing our retirement from savings, it was a no-brainer to take the Social Security to supplement what we were taking from our savings, and to continue to earn higher interest on investments.

While it appears that very few ER members consider the possibility of hyper inflation in the future, still, it is a possibility, given the national macroeconomics and the expanding national debt. Future increases in SS due to waiting could be obviated by rapid inflation, as increased entitlements rarely rise during these times.

So, yes... this is "old" thinking, and counter to presently accepted financial advice. Probably influenced by living in the aftermath of hard times in the 1930's.

 

[braumeister]

While it appears that very few ER members consider the possibility of hyper inflation in the future

Maybe only those who don't remember the 70s and 80s, which are a very vivid memory for the rest of us.

 

[RunningBum]

If the amount I can spend is the same, why not take it early if the market tanks, or if I fear they may change some laws?

Sure. I will do the same in those cases. Absent those cases, I will delay so that if I live beyond the average, I'll get the higher benefit. Living short of the average is not a consideration, because I'm not going to spend even more to take "advantage" of this unless I have a terminal illness and know for sure I won't need the money later.

The point being made by ERD is that SS+pension+IRAs+taxable is, for the most part, one big pile of money to spend from. Just because you are deferring SS until later doesn't mean you can't spend from other sources in the meantime. Yet again and again people are saying they want to take SS early so they can spend more in their 60s while they are healthier. As long as you have enough other money you can spend from other sources.

There are some very valid reasons to take SS early. Being able to spend more early is not really one of them for most of us here.

 

[RunningBum]

As far as inflation goes, that seems like an easy one to address. If it ramps up, I agree that locking up some high CD rates and taking SS at that point might be the right move. But I'm not seeing any reason to take SS early on the chance that SS might jump in the future. The choices aren't "take it at 62 or wait until 70"; I can start any month in between them as well.

 

[marko]

When I ran FIRECalc using my actual stash size and actual SS benefits (not discounting for likely SS reduction in the future), it does not make much difference between me taking at 62 or 70.

If the amount I can spend is the same, why not take it early if the market tanks, or if I fear they may change some laws?

Same here. In fact, I ran some numbers for my brother last week and he's slightly better taking it as early as possible vs FRA or 70.

Our fellow poster "mathjak" always harps on us about how dividends are a 'net zero' gain because the price of the equity drops in line with the dividend.

To me, if SS breaks even at age 79 or so--slightly more when you factor in taxes and withdrawn investment avoidance, the age discussion does become moot.

As NW notes, we might be trading off longevity against the drumbeat of real possibility of changes to SS's benefits; "take the money and run".

 

[Chuckanut]

One reason many people l know take SS early is the belief that SS may be cut-off or severely cut back in the not so distant future. They seem to think they will be grandfathered in to their current SS payment since they are already getting a SS check. No cuts for them! At the same time those who waited for SS full retirement age or beyond will be told to 'take a hike' as there is no money left over. IMHO, they are sadly mistaken.

 

[Big_Hitter]

I plan on taking SS at 62 (according to the principle "you've got what you've got" - too many uncertainties about solvency of SS, life expectancy, etc). Alas, if I live past the break-even date, then I will probably regret that decision..... c'est la vie

there should be no hindsight on irrevocable decisions

 

[euro]

One reason many people l know take SS early is the belief that SS may be cut-off or severely cut back in the not so distant future. They seem to think they will be grandfathered in to their current SS payment since they are already getting a SS check. No cuts for them! At the same time those who waited for SS full retirement age or beyond will be told to 'take a hike' as there is no money left over. IMHO, they are sadly mistaken.

I agree that it is likely everyone takes a haircut when things come to a head with SS insolvency. That said, whatever happens at that point, if I have been collecting since age 62, then I have already cashed those checks and they are secure. Everything else is unknown

 

[euro]

there should be no hindsight on irrevocable decisions

I do agree with that completely - as you say, no real point in worrying if you can't do anything about it anyway

 

[marko]

One reason many people l know take SS early is the belief that SS may be cut-off or severely cut back in the not so distant future. They seem to think they will be grandfathered in to their current SS payment since they are already getting a SS check. No cuts for them! At the same time those who waited for SS full retirement age or beyond will be told to 'take a hike' as there is no money left over. IMHO, they are sadly mistaken.

Yes, but:
1) The money I've already received is spent and/or has mitigated my withdrawals until that time and,

2) There is a slight chance that grandfathering would be in place. If not, see #1.

Every day that goes by without a haircut is money in the bank. Waiting doesn't provide that option.

If timing SS is neutral (until age 79) AND there are cuts coming (actual or tax), all the more reason to take it now. As I said "take the money and run"

 

[marko]

Alas, if I live past the break-even date, then I will probably regret that decision..... c'est la vie

If I live past the break-even date--in the words of the great wit Mike Tyson "I won't know whether to be ecstatic or ludicrous".

I'll be so happy to hit 80, "losing" a little money on a decision I made 18 years earlier won't even enter my mind.