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Old 01-08-2018, 05:32 PM   #61
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Originally Posted by Sunset View Post
You are right folks should know that they cannot qualify for Medicare at age 62.
Just like they should know they cannot qualify for hold harmless at age 62.
Nor at age 63.
Nor at age 64.
I didn't post it was the qualifying age. You read that into it. If I write about the various reasons I am leaving Tuesday to get to a concert in a distant city on Saturday, it doesn't mean I could not have waited until Saturday morning, especially if I am talking to friends who all know when the concert is.
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Old 01-08-2018, 05:38 PM   #62
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Originally Posted by rec7 View Post
I heard the break even point is in the early eighties. I don't know if this is true.
The break even time period depends on your SS amount, marital status and tax bracket. But it normally is around 81-82. . However, break even is not a financial reason to take it early or delay. That is an emotional response to a gut feel, typically incorrectly “supported” by a non related calculation.

In order for the “break even” date for income to be a valid reason, one would BOTH HAVE to die before that date AND spend the SS at a rate that is comensurate with dying before the break even. If you are spending at a rate that is safe in case you live past break even, then if you can afford to delay, you would have more to spend from day one because your income is guaranteed. It would be no different hypothetically than choosing an SWR of 8%, because you know you have a guaranteed ROI of 12%. With no risk or sequence of risk, then a higher income can always be assumed. So financially, break even is not a reason.

However, not wanting your investments to be reduced while delaying, in case you die before the investments recover and surpass where they would have been, (like daylatedlarshort mentioned) is a prefectly valid reason. He does not want to assume a possible risk, for the gained income. It is weighing an emotional decision against a financial risk and is perfectly understandable.
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Old 01-08-2018, 05:46 PM   #63
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Speaking of breaking even, there is this analysis offered by another contributor:


http://www.early-retirement.org/foru...ml#post1604411

OK, I quoted the entire thing so people can see the math. Keep in mind this is for people who don't care about leaving an estate. Obviously, estate size is one of the many factors that go into deciding when to take SS.


Quote:
Maximize SS how much you get to spend

Here is a pretty simple calculation for those that wish to spend more money in retirement and do not care about leaving an estate. For those that have a Big enough Portfolio and can afford to wait until 70 to take SS, you'll have more to spend every year of retirement.

Let's Say you retire this year at age 62 with the $1 Million Portfolio and decide to take a 4% SWR. You get Social Security of $19,476 per year at age 62 and delaying to age 70 would get you $34,092 per year. Let's assume no inflation for ease of calculations.

Scenario age 62. Your SWR is $40K per year and Social Security of $19,476 gets you a Spending total of $59,476 for each year of your retirement period.

Scenario age 70. You stash 8 years of $34,092 from your portfolio into a savings account for a total of $272,736. Your portfolio is now down to $727,264. Your 4% SWR is now $29,090 per year and you remove $34,092 from your savings account giving you a total of $63,182 to spend each year for the rest of your 30 year retirement period.

The Delay to age 70 gives you $3,706 more every year starting at age 62 with no more increased risk.

No need for any ... 'break even analysis'.

If your WR is more conservative, such as a majority of the people here and myself, the results are even more compelling. At a 3% WR plus SS at age 62 scenario is a total of $49,476 and the age 70 scenario is $55,910. The delay of SS to age 70 now increases your annual spending by $6,434.


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Old 01-08-2018, 05:48 PM   #64
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The break even time period depends on your SS amount, marital status and tax bracket. But it normally is around 81-82. . However, break even is not a financial reason to take it early or delay. That is an emotional response to a gut feel, typically incorrectly “supported” by a non related calculation.
If you do a Google search on SS and break even there are quite a few articles by major publications and financial writers using breakeven as a factor in deciding when to take SS.
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Old 01-08-2018, 05:52 PM   #65
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I am very sorry about your friend's cancer. There are few things I dread more than this type of thing. Thank goodness he has such a good friend in you!
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Old 01-08-2018, 06:05 PM   #66
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I am very sorry about your friend's cancer. There are few things I dread more than this type of thing. Thank goodness he has such a good friend in you!
Thanks -
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Old 01-08-2018, 06:05 PM   #67
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I took it at 62 because I was not aware that the sophisticated answer is to delay until 70.
The usual uninformed reasons..........break even at 83 or so; if I lost the bet and lived longer, at least I got the longer life. If I "won" the bet and lived shorter, at least I got some bucks back. If I had bet the other way and lost.......I could have been a double loser.....no bucks and no life.

No regrets tho...........one unexpected benefit. Since we have very meager pensions, when the 2008 recession hit, it was of great comfort to have SS coming in every month to cover almost all the costs...........and not having to worry about how long or how deep the recession would be. Priceless! As others have mentioned you often don't really know about longevity. You can be fine and then in one day you can be diagnosed w/ some very serious medical condition. Your decision, make yourself happy .......don't worry about others.
+1 conceptually.

Our pensions and portfolio are rather modest (as is our lifestyle). I was able to retire at 60 with a higher than 4% burn rate. Knowing that SS would get our burn rate well below 4% at 62 was a key component to retirement decision. Plus, DW is older than me and has a few health issues that won't get better with age.

We plan to use the extra flexibility to travel while able to do so. Assuming we survive to our 80's, I'll have a unique pension that will kick in. It will either juice our income or offset the looming SS haircut.

The highlight of many days is our walk the dog walk. We hold hands, have long talks (or say very little) and bask in the moment. Were DW to predecease me, I would not trade these days any amount of money.

Anyhoo, I too did not get sophy "only at 70" memo. Lemme go check the mail box.
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Old 01-08-2018, 06:12 PM   #68
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Originally Posted by Chuckanut View Post
Speaking of breaking even, there is this analysis offered by another contributor:

Maximize SS how much you get to spend

http://www.early-retirement.org/foru...ml#post1604411



*
Spot on.
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Old 01-08-2018, 06:12 PM   #69
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Originally Posted by daylatedollarshort View Post
If you do a Google search on SS and break even there are quite a few articles by major publications and financial writers using breakeven as a factor in deciding when to take SS.
Just because everyone refers to the break even age as a number to soot for doesn't make it right, or even safe. I think that no-one here would retire if they had only a 50% chance of success using any of the commonly used calculators. Using the breakeven age as a reason for taking it early OR late, is like playing roulette and putting all your money on "black" Maybe you win, Maybe you lose. But what if you are one of the 50% who lose? What then?

I prefer to look at the 90% age where 90% have died and 10% survive past that and then add a couple more years for good measure.
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Old 01-08-2018, 06:26 PM   #70
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If you look at my original post, I made a made a one sentence list with our reasons for taking at 62, of which hold harmless was one of many reasons, not the only reason.
Hold harmless was an artifact of the low inflation rate so it only becomes an issue if you believe near zero inflation will continue. For 2018 hold harmless did not apply since the approx 2% increase allowed the premiums for those under hold harmless to rise to the same level as others.
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Old 01-08-2018, 06:26 PM   #71
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Just because everyone refers to the break even age as a number to soot for doesn't make it right, or even safe. I think that no-one here would retire if they had only a 50% chance of success using any of the commonly used calculators. Using the breakeven age as a reason for taking it early OR late, is like playing roulette and putting all your money on "black" Maybe you win, Maybe you lose. But what if you are one of the 50% who lose? What then?

I prefer to look at the 90% age where 90% have died and 10% survive past that and then add a couple more years for good measure.
By losing I assume you mean running out of money? Not everyone here is worried about running out of money regardless of how long they live or when they take SS. That is why most people agree there is no one size fits all answer. If you need longevity insurance, it is a good reason to delay.
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Old 01-08-2018, 06:32 PM   #72
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To answer the OP. DH started his at 62, about a year ago. No regrets. Nice to see the money every month on the third Wednesday. As mentioned, there are plenty of threads on this, but here is my answer.
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Old 01-08-2018, 06:51 PM   #73
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This is chart from ssa.gov site. Shows the % of distribution by age of award by age of claimant, just some food for thought as to what the majority of people are doing.

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Old 01-08-2018, 07:59 PM   #74
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Ages 65 and below, but not above, would kick in the hold harmless.
I am sorry, but I am new --what is the Hold harmless for Medicare? also what is GPO?
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Old 01-08-2018, 08:09 PM   #75
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I am sorry, but I am new --what is the Hold harmless for Medicare? also what is GPO?
I am not impacted by GPO but hold harmless definition is here:

"A medicare hold harmless provision is a legal statement prohibiting an increase to Medicare B premiums for the vast majority of American citizens. The Medicare hold harmless provision ensures that Medicare B premiums can not rise more than the previous year's cost of living increase in Social Security benefits."
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Old 01-08-2018, 08:20 PM   #76
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I am sorry, but I am new --what is the Hold harmless for Medicare? also what is GPO?


GPO is Government Pension Offset. It is a reduction in the benefit for people that receive a government pension for a job that did not require SS taxes to be paid.
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Old 01-08-2018, 08:27 PM   #77
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I am not eligible for FRA till I am 66 but SERIOUSLY considering taking SS at 65. If only for the Hold Harmless provision. My longevity based on family history and current health issues is not really conducive of me living into my 90's.


I never thought of that. I was hoping to wait for FRA at 66 and 4, but the hold harmless ( which I just heard about on here a few days ago) is probably worth a tiny reduction in benefit. I am getting ready to do a deep dive as I approach 62 in a few months. Thanks for the suggestion.
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Old 01-08-2018, 08:45 PM   #78
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I am sorry, but I am new --what is the Hold harmless for Medicare? also what is GPO?
The definition DLDS posted is correct. I think the relevance for this thread is the "vast majority".

People who are getting SS benefits, and having the Medicare premium deducted from those benefits, can never see a decrease in their net deposit. If an individual's COLA driven benefit increase is $10 per month, and the Med premium increase should be $15/mo, the gov't will discount the Med premium by $5 so this individual's net deposit will not go down.

However, there is a minority of people who haven't started SS benefits, but are on Medicare. They pay Medicare premiums by check. They are not protected in this way - their premiums would go up the whole $15.

As it happens, my wife and I are a perfect example. She was getting SS benefits in 2015 and 2016. The 2016 COLA for SS was 0%, the increase in Medicare premiums was about $15/mo, but she didn't see any decrease in her monthly SS bank deposit. The gov't simply waived the $15.

I was over 65, on Medicare, not getting SS benefits, and paying Med premiums by check quarterly. I paid the entire increase.

Also, people who simply started Medicare in 2016 paid the full 2016 premium.
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Old 01-08-2018, 09:03 PM   #79
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This is chart from ssa.gov site. Shows the % of distribution by age of award by age of claimant, just some food for thought as to what the majority of people are doing.

While this is interesting, the reason that so may recipients take SS at 62 or before their FRA is because in many cases they have no choice... they have little or no retirement savings to rely on while delaying SS... so I would not read a lot into that distribution.
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Old 01-08-2018, 09:28 PM   #80
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IMO, Hold Harmless has less benefit the higher the SS monthly benefit is. Run thru the formulas yourself. Further, when the time ends where Hold Harmless helps, then the beneficiaries of that benefit are saddened when they may have to catch up to the rest of the pack in later years reducing or eliminating any SS monthly increase while they catch up to the rest of the group.

I once thought Hold Harmless was a big thing to consider. When I learned more, it is merely a footnote for our SS planning.

Full disclosure: DW is in the process of filing at FRA and I will be getting spousal at the end of 2018. We will be eligible to benefit if Hold Harmless comes into play. But it was not in any play of our decision process.
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