Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 06-14-2017, 06:24 AM   #21
Thinks s/he gets paid by the post
 
Join Date: Sep 2013
Location: Ventura County
Posts: 1,276
It's also an assertion allocation issue. SS is a COLA"d income stream. Those that already have a large COLA'd pension already have longevity insurance and may see less of an advantage in delaying SS than the rest of us.
stepford is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-14-2017, 09:16 AM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 15,694
Quote:
Originally Posted by brucethebroker View Post
How about "was planning on taking SS at age 70, but died at 69, and with my dying breath said "could have used the extra cash those last 7 years..."
AGAIN, it is not just about YOU... if you are married you have to think about your spouse... so, if I die at 69 I can say 'honey, at least I am leaving you with more coming in from SS and not leaving you with a small pension'....


And as of today I do not need the extra cash... but then again I am not yet 60....
Texas Proud is offline   Reply With Quote
Old 06-14-2017, 09:52 AM   #23
Thinks s/he gets paid by the post
 
Join Date: Aug 2014
Location: Chicago West Burbs
Posts: 1,953
RE:Longevity,

According to longevityillustrator.org, if 2 people are the same age, non-smokers, and in average health reach 65 yrs old, there is a 50% chance of the male reaching age 86 and the female reaching 88 yrs. But here is the kicker, there is also a 50% chance of one of them reaching age 92! In addition there is a 25% chance of one reaching age 97 and a 10% chance of one reaching 101.

Their calculator is based on actual SS raw data. Unfortunately, the calculator starts at no lower than age 65.

The need for longevity planning is not trivial. This illustrates the reason I'm letting my SS benefit delay as much as possible, for the survivor. I'm also fortunate that I can start claiming spousal benefits on my DW's at age 66, helping to fill the 4-1/2 year delayed filing gap; and setting my Medicare base premium. YPMV (Your plan may vary)
CRLLS is offline   Reply With Quote
Old 06-14-2017, 10:00 AM   #24
Full time employment: Posting here.
 
Join Date: Jul 2013
Posts: 953
Quote:
Originally Posted by brucethebroker View Post
How about "was planning on taking SS at age 70, but died at 69, and with my dying breath said "could have used the extra cash those last 7 years..."
In this case, the surviving spouse will have a larger benefit for the balance of their life. If it was snug before, it could have been really tough for the surviving spouse when they move from 2 SS checks to just one (assuming both drew earlier).

A larger benefit for the surviving spouse is one of the reasons to delay drawing. But if you need the SS income, draw when you need it! Actuarialy neutral!

One of the reasons that we have so much debate on this forum is that we have a large population of folks that financially have the option to delay. Next, we have a diverse population with different goals for the end game. (Leave a pile for heirs vs spend it all)

In hindsight, we can run the numbers and show what would have been the optimum choice. Going forward, it is more like a game of market timing. We may have some indicators of what the expiration date is on the tag, but we certainly are dealing with imperfect knowledge.

I have our plan for when we begin to draw, but it is subject to change. We have income that is treated as earned income until the recipient begins to draw SS. Post SS the income is not subject to self employment tax. So the timing of SS is more complicated there. In essence, once the recipient begins drawing SS, you no longer pay self employment tax (15%), and the income goes up.

We are fortunate to be in a position where we need to make decisions.
Clone is offline   Reply With Quote
Old 06-14-2017, 11:21 AM   #25
gone traveling
 
Join Date: Mar 2015
Location: Greenville
Posts: 653
I may be mistaken, but I think the "Survivor Benefit" is capped at FRA for the surviving spouse? So waiting past FRA (67 for me) is about the additional payout for us while I am alive, not what she would get if I get hit by the beer truck....

Based on that, I was planning FRA for taking SS....
Pilot2013 is offline   Reply With Quote
Old 06-14-2017, 12:01 PM   #26
Thinks s/he gets paid by the post
 
Join Date: Aug 2014
Location: Chicago West Burbs
Posts: 1,953
Quote:
Originally Posted by Pilot2013 View Post
I may be mistaken, but I think the "Survivor Benefit" is capped at FRA for the surviving spouse? So waiting past FRA (67 for me) is about the additional payout for us while I am alive, not what she would get if I get hit by the beer truck....

Based on that, I was planning FRA for taking SS....

Someone correct me if I am wrong. I got this from the SS website. I think it means the widow or widower gets the higher amount.

Quote:
4. Use of Delayed Retirement Credits in Computing Widows' and Widowers' Benefits

The worker's PIA, increased by any delayed retirement credits accrued prior to the death of the insured individual, is deemed to be the PIA on which the widow's or widower's benefit is based. Payments based on PIA's increased by these credits are effective for all widows' and widowers' benefits for months after May 1978.
Straight Spousal benefit is capped at FRA and does not increase by the primary delaying benefits.
CRLLS is offline   Reply With Quote
Old 06-14-2017, 12:02 PM   #27
Thinks s/he gets paid by the post
MissMolly's Avatar
 
Join Date: Jun 2010
Posts: 1,576
Quote:
Originally Posted by Pilot2013 View Post
I may be mistaken, but I think the "Survivor Benefit" is capped at FRA for the surviving spouse? So waiting past FRA (67 for me) is about the additional payout for us while I am alive, not what she would get if I get hit by the beer truck....

Based on that, I was planning FRA for taking SS....
This is not the way I understand that this works. The surviving spouse gets the higher of the two, but will be dependent upon the age of the surviving spouse. If the higher earning spouse waited until 70 to claim SS, then the surviving spouse would get the age 70 amount in place of their own lower amount, depending on their age.

If the higher earner dies before claiming SS, but after full retirement age, then the amount they would have been eligible for on their date of death is the amount the surviving spouse can draw. However, again, when the surviving spouse files can determine whether or not there is a reduction in the benefits.

If the surviving spouse is at full retirement age or beyond, they will receive 100% of the deceased eligible benefit. If they file for survivor benefits between 60 and full retirement age, they will receive a reduced benefit.

If the deceased was not yet at full retirement age, and the surviving spouse waits until their full retirement age, then they will receive 100% of the deceased full retirement benefits.

At least, this is how I understand it.
__________________
And whatever your labors and aspirations in the noisy confusion of life, keep peace in your soul. With all its sham, drudgery, and broken dreams, it is still a beautiful world. Be cheerful. Strive to be happy.- Desiderata by Max Ehrmann
MissMolly is offline   Reply With Quote
Old 06-14-2017, 01:32 PM   #28
gone traveling
 
Join Date: Mar 2015
Location: Greenville
Posts: 653
I took a look, and found what you were referring to about the surviving spouse's age relative to FRA reducing their benefit, but I am 99% sure that the max they can collect on a Souses record is the SPOUSE FRA amount. I'll do more searching when I get home.
Pilot2013 is offline   Reply With Quote
Another SS Staff Story
Old 06-14-2017, 01:36 PM   #29
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2014
Posts: 5,107
Another SS Staff Story

I'm a Surviving Spouse, not FRA, and I get 100% of late DS' amount. May have been reduced a little since I'm not FRA. Planning to collect on my own at age 70.

Given how many widows find it a shock that they collect the larger benefit their husband got, but no Spouse benefit (so household income reduced by 1/3), I can't imagine the disaster if it went from 150% of husband's benefit to only 50%.
athena53 is offline   Reply With Quote
Old 06-14-2017, 01:44 PM   #30
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 19,217
Quote:
Originally Posted by Pilot2013 View Post
I took a look, and found what you were referring to about the surviving spouse's age relative to FRA reducing their benefit, but I am 99% sure that the max they can collect on a Souses record is the SPOUSE FRA amount. I'll do more searching when I get home.
I think the confusion stems from your conflating spousal benefit with survivor benefit.

You're right about the spousal benefit being limited to the spouse's FRA amount, but the survivor benefit is 100% of the deceased spouse's actual amount.
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 06-14-2017, 01:54 PM   #31
Dryer sheet wannabe
 
Join Date: Feb 2017
Posts: 11
Consistent with the "it's not just about You" line of thinking, couldn't you also surmise that you should factor in the impact to your children's inheritance. With all of the Monte Carlo simulations of withdrawl rates less than 4% likely leading to having more in your retirement accounts than when you retired (minimal longevity risk), spending down your retirement accounts to increase an income stream (SS) that can't be bequeathed to your children (or charity) could be a concern. I'm probably going to hedge my bets and take SS at 62 and my 4 years younger wife take it at 70, since we likely won't need her SS.
gatored is offline   Reply With Quote
Old 06-14-2017, 02:01 PM   #32
Thinks s/he gets paid by the post
 
Join Date: Mar 2017
Location: New York City
Posts: 2,838
Ok, since im not good in this area here is a question. My mother began collecting a widows benefit when she turned 60, it was from what i was told, it was half my fathers. She is 91 now and gets about 950 a month. Does collecting the husbands full not apply if the husband doesnt live to 62,65, or 70? She did make several calls about collecting her own but was told her husbands half was more. She doesnt get his whole thing. More info, my dad died at 57 so he never collected a dime. Never filed etc. I just googled this, but the rules are not clear to me. They wont talk to me over the phone either just tried.
***********************
I found this but dont know what is means in layman terms to my question.
"If your deceased spouse had not begun benefits...
and died prior to FRA, then as the widow(er) you are entitled to 100% of your deceased spouse’s PIA if you have reached your own FRA. The widow(er) benefit will be reduced if you begin benefits prior to your FRA. This means if your spouse passes at age 64 and had not started benefits yet, then as a widow/widower you can receive what they would have gotten at their age 66 (assuming 66 was their FRA, and assuming you have reached your own FRA). Most people born from 1943 to 1954 have an FRA of 66."
__________________
Withdrawal Rate currently zero, Pension 137 % of our spending, Wasted 5 years of my prime working extra for a safe withdrawal rate. I can live like a King for a year, or a Prince for the rest of my life. I will stay on topic, I will stay on topic, I will stay on topic
Blue Collar Guy is offline   Reply With Quote
Old 06-14-2017, 02:20 PM   #33
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 19,217
That sounds about right, BCG, based on what I know and what my mom was receiving.

You can get a start at understanding it here:
Survivors Benefits For Your Widow Or Widower
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 06-14-2017, 02:23 PM   #34
Thinks s/he gets paid by the post
 
Join Date: Mar 2017
Location: New York City
Posts: 2,838
Quote:
Originally Posted by braumeister View Post
That sounds about right, BCG, based on what I know and what my mom was receiving.

You can get a start at understanding it here:
Survivors Benefits For Your Widow Or Widower
So mom gets half of dads, reduced by the 60 year old reduction, and never gets his portion.
__________________
Withdrawal Rate currently zero, Pension 137 % of our spending, Wasted 5 years of my prime working extra for a safe withdrawal rate. I can live like a King for a year, or a Prince for the rest of my life. I will stay on topic, I will stay on topic, I will stay on topic
Blue Collar Guy is offline   Reply With Quote
Old 06-14-2017, 02:43 PM   #35
Thinks s/he gets paid by the post
 
Join Date: Oct 2012
Location: Colorado Mountains
Posts: 3,073
Quote:
Originally Posted by Blue Collar Guy View Post
So mom gets half of dads, reduced by the 60 year old reduction, and never gets his portion.
I think Mom gets 100% of Dad's at his FRA reduced to about 50% when filing at 60 rather than waiting for her FRA.

BYW, I did exactly this at 63 but when I reach 70 I will file on my own account which will be much larger than the late DW's.
Hermit is offline   Reply With Quote
Old 06-14-2017, 03:05 PM   #36
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 19,217
Quote:
Originally Posted by Hermit View Post
I think Mom gets 100% of Dad's at his FRA reduced to about 50% when filing at 60 rather than waiting for her FRA.
That's my understanding. She gets what he would have received (after considering the zero years after his death), reduced by her early claim. Someone at your local office could probably show you the calculations, but the amount sounds about right to me.
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 06-14-2017, 03:06 PM   #37
Thinks s/he gets paid by the post
 
Join Date: Mar 2017
Location: New York City
Posts: 2,838
Quote:
Originally Posted by braumeister View Post
That's my understanding. She gets what he would have received (after considering the zero years after his death), reduced by her early claim. Someone at your local office could probably show you the calculations, but the amount sounds about right to me.
Thanks
__________________
Withdrawal Rate currently zero, Pension 137 % of our spending, Wasted 5 years of my prime working extra for a safe withdrawal rate. I can live like a King for a year, or a Prince for the rest of my life. I will stay on topic, I will stay on topic, I will stay on topic
Blue Collar Guy is offline   Reply With Quote
Old 06-14-2017, 03:20 PM   #38
gone traveling
 
Join Date: Mar 2015
Location: Greenville
Posts: 653
From EN-05-10084:

How much will I receive?

We base the benefit amount on the earnings of the person
who died. The more the worker paid into Social Security,
the greater your benefits will be.

Social Security uses the deceased worker’s basic benefit
amount
to calculate the percentage survivors can get.

The percentage depends on the survivor’s age and
relationship to the worker. If the worker who died was
getting reduced benefits, we’ll base your survivor’s benefit
on that amount.

In most typical claims for benefits:
• A widow or widower, at full retirement age or older,
generally gets 100 percent of the worker’s basic
benefit amount
;
A widow or widower, age 60 or older, but under full
retirement age, gets about 71-99 percent of the
worker’s basic benefit amount


Now, what I am trying to understand is the bold/underlined statements. I think that is the deceased persons FRA amount.
Pilot2013 is offline   Reply With Quote
Old 06-14-2017, 07:26 PM   #39
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 4,628
Quote:
Originally Posted by Blue Collar Guy View Post
Hind sight is 20/20. Seems to me it will take about 12 years to break out even. That money you didnt take and thus lost opportunity to invest, i think it will take long past your lifespan to break out even. why did you wait? Im a collect at 62 type person(if i live to 62). Im trying to understand the wait to 70 crowd. Im glad you got a good answer from the local office.
My post was intended to be about the possibility of getting different answers from different staffers. In this case, I'm betting the local person is correct. I'll know for sure when I get my first check.

The "when to start?" question is debated on many threads. In my case, it's significant that my wife will get my increased benefit if I die first, so the actual benefit years will be until the second death, not just until my death.

You mentioned "invest". It's correct that if you want to calculate a breakeven year, you need to make some assumption about investment returns.

Of course, if we did breakeven calculations for auto, home, life, or health insurance, we'd always find that companies pay fewer dollars in benefits then they get in investment-adjusted premiums. On that basis, we'd never buy private insurance. Deferring SS is a little like buying longevity insurance.

For me, deferring is a defensive strategy. As others have said, my heirs will come out with less if I die sooner. I don't care, my goal isn't to maximize my heirs upside potential, but protect me from the downside that could occur in the case the actual investment returns for my retirement years are lousy and I (or my wife) live a long time.

But, it's a very close call. I entirely understand why other people with other health, financial, and personality situations will make the other call. There are lots of valid pros and cons.

I will say there are two arguments I sometimes see that I believe are not valid:

Some say if you take SS early you can spend more in the earlier retirement years. For anyone who accepts something like the 4% guideline (or 3% these days), that is not true. You can actually spend a little more in the early years by delaying SS.

Some say that the roughly 8% annual increase in benefits is like an 8% investment return. It isn't. The 8% increase comes at the cost of losing a year's benefit. The actual IRR depends very much on how long you live, but it is well below 8%.
Independent is offline   Reply With Quote
Old 06-14-2017, 07:31 PM   #40
Thinks s/he gets paid by the post
 
Join Date: Mar 2017
Location: New York City
Posts: 2,838
Quote:
Originally Posted by Independent View Post
My post was intended to be about the possibility of getting different answers from different staffers. In this case, I'm betting the local person is correct. I'll know for sure when I get my first check.

The "when to start?" question is debated on many threads. In my case, it's significant that my wife will get my increased benefit if I die first, so the actual benefit years will be until the second death, not just until my death.

You mentioned "invest". It's correct that if you want to calculate a breakeven year, you need to make some assumption about investment returns.

Of course, if we did breakeven calculations for auto, home, life, or health insurance, we'd always find that companies pay fewer dollars in benefits then they get in investment-adjusted premiums. On that basis, we'd never buy private insurance. Deferring SS is a little like buying longevity insurance.

For me, deferring is a defensive strategy. As others have said, my heirs will come out with less if I die sooner. I don't care, my goal isn't to maximize my heirs upside potential, but protect me from the downside that could occur in the case the actual investment returns for my retirement years are lousy and I (or my wife) live a long time.

But, it's a very close call. I entirely understand why other people with other health, financial, and personality situations will make the other call. There are lots of valid pros and cons.

I will say there are two arguments I sometimes see that I believe are not valid:

Some say if you take SS early you can spend more in the earlier retirement years. For anyone who accepts something like the 4% guideline (or 3% these days), that is not true. You can actually spend a little more in the early years by delaying SS.

Some say that the roughly 8% annual increase in benefits is like an 8% investment return. It isn't. The 8% increase comes at the cost of losing a year's benefit. The actual IRR depends very much on how long you live, but it is well below 8%.
I want to thank you very much for this well thought out reasoning that i was able to understand. I need to research this more for whats best for our situation.
__________________
Withdrawal Rate currently zero, Pension 137 % of our spending, Wasted 5 years of my prime working extra for a safe withdrawal rate. I can live like a King for a year, or a Prince for the rest of my life. I will stay on topic, I will stay on topic, I will stay on topic
Blue Collar Guy is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
GE corporate audit staff? almorhf Young Dreamers 3 04-21-2014 06:12 AM
GE corporate audit staff? TheGeneral Young Dreamers 44 04-21-2014 06:07 AM
Did your staff make you feel guilty? Nuiloa Other topics 22 01-13-2012 05:12 PM
The staff of life calmloki Other topics 40 07-13-2010 09:30 AM

» Quick Links

 
All times are GMT -6. The time now is 09:42 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.