Collecting Social Security benefits at age 62

[DCJennifer]

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.

Thanks for clarifying the term GPO for me.

 

[Sunset]

I am sorry, but I am new --what is the Hold harmless for Medicare? also what is GPO?

Hold Harmless only applies when you are 65 paying for Medicare, and just to be clear, taking SS earlier than 65 has no effect on Hold Harmless.

 

[Chuckanut]

The last thing they mention is silly and fails to recognize that money is fungible.

.

Bingo!

 

[34rlsa]

From the link below

What is the $16,122 Social Security bonus most retirees completely overlook?

Just quickly, here's one article that states reasons you would want to take SS at 62.

And read the third reason from this article.

3 Reasons It's Smart to Take Social Security Benefits at 62 - Nasdaq.com

So there's a couple for ya.

 

[DCJennifer]

From the link below

What is the $16,122 Social Security bonus most retirees completely overlook?

I was wondering the same thing..it looks like some kind of scam to me just by the way it is presented. Anyone else know anything?

 

[joeea]

I know a lot of people in their 80s..... Every single one of them that took their S.S. at age 62, wished they would have delayed to age 70....

And all of the ones that delayed to age 70, never wished they had taken it at age 62.

I will poll the graveyard next week and let you know the results of the ones that have passed away.

Interesting. That's not my experience at all.
My second home is in a 55+ community. Many are in their 70s and 80s. I don't know anyone who regrets their choice to claim SS at whatever age they actually chose.

Perhaps those that do regret their choice don't want to admit it.

 

[REWahoo]

Perhaps those that do regret their choice don't want to admit it.

Or maybe they are so tired of the subject they will agree with whatever point of view is being touted, hoping it will help move the conversation to another topic.

 

[skipro33]

The plain fact for us is that we can certainly enjoy the extra money early SS could provide while still young enough to enjoy it. When we get older, our expenses won't be nearly so much. Why save if you aren't going to be able to enjoy the benefits of saving anyways? A bigger bottom line when our life is over? Just because one SS option allows for a larger lifetime worth doesn't mean that it was accessable when it would have done the most benefit.

Money earlier in life has more benefit than money later in life.

 

[bobandsherry]

Interesting. That's not my experience at all.
My second home is in a 55+ community. Many are in their 70s and 80s. I don't know anyone who regrets their choice to claim SS at whatever age they actually chose.

Perhaps those that do regret their choice don't want to admit it.

Not my experience either.

And we can't poll those who died while still "young" as to what they would have done differently. Example, a friend of mine expected to live well into his 90's as both his parents did. He delayed SS until 70, then at 72 found he had cancer which claimed his life at 73.

Always easy in hindsight to know what you should or could have done. People have a tendency to forget their circumstances and market forecast that drove them towards their decision.

 

[MichaelB]

People's low awareness of saving and retirement finance is a regular topic of discussion around here. Social Security pension is part of that, so why should we expect the majority of people to make well informed and rational decisions about when to begin SS?

My guess is people start SS at age 62 mostly for 2 reasons: because they must, or because it's there to take.

The good news is there has been a shift over the past couple of decades and half the eligible population is waiting, according to Boston College Center for Retirement Research . http://crr.bc.edu/wp-content/uploads/2015/05/IB_15-8.pdf

 

[Chuckanut]

Perhaps those that do regret their choice don't want to admit it.

I suspect that they may regret a financial/health/family situation that may have forced a decision to take SS at a certain age, rather than allowing them the luxury of being able to play with ideas that would maximize their spending while protecting their overall financial health.

 

[bobandsherry]

The plain fact for us is that we can certainly enjoy the extra money early SS could provide while still young enough to enjoy it. When we get older, our expenses won't be nearly so much. Why save if you aren't going to be able to enjoy the benefits of saving anyways? A bigger bottom line when our life is over? Just because one SS option allows for a larger lifetime worth doesn't mean that it was accessable when it would have done the most benefit.

Money earlier in life has more benefit than money later in life.

That is exactly a reason that one of the articles I provided stated. Great real life example.

I'm still far away from needing to make the decision. As the day draws nearer I'll make a decision based on what I know then. If market continues to project 20%+ returns I know I'll delay to 70. If market has outlook of extended low or negative returns I may just do it early so to keep my money in the market for better returns. Something between those two extremes, I'll just make the best decision I can with facts I know at that time.

 

[ShokWaveRider]

The good news is there has been a shift over the past couple of decades and half the eligible population is waiting, according to Boston College Center for Retirement Research . http://crr.bc.edu/wp-content/uploads/2015/05/IB_15-8.pdf

Why is that "Good" news. It depends which side of the fence you are on surely? Good news for SS I suppose, as more money is left in the system.

 

[bobandsherry]

My guess is people start SS at age 62 mostly for 2 reasons: because they must, or because it's there to take.

I'd say those cover all bases, unless someone started SS because they did so by accident.

 

[MichaelB]

Why is that "Good" news. It depends which side of the fence you are on surely? Good news for SS I suppose, as more money is left in the system.

Improved financial awareness is always good news IMO. Why would it be otherwise?

I'd say those cover all bases, unless someone started SS because they did so by accident.

All the bases? My point is that, for many people the choice to begin SS at age 62 is not the result of deliberate informed choice with awareness of the long term consequences. We debate this here and attribute deliberation to their choice, and I think it is not so.

In other words, most people who delay SS to a later age are clear why they do that. Not so for people who choose to begin benefits at age 62.

 

[LRDave]

When I found this great on-line community many years ago, I was in search of confirmation that I'd be LUCKY even if I got any SS and that OF COURSE one should take it at 62. As I educated myself with the patient guidance of the folks here, I discovered the power of deferring until 70 as longevity insurance and the survivor benefit for DW. By the time we put our first retirement budget on paper together, the plan was for DW to hers at FRA and me at 70. We had it figured out and, oh my, look at the big difference compared to the dumb idea of taking it at 62!


Well I am ashamed to say I really had not understood how devastating WEP & GPO will be to DW's SS benefits. We are also retiring to a 5.0% income tax state that does not tax retiree's SS income or pension income but does tax 401(K)/tIRA distributions. We have NO Roth IRA - All tIRA plus after-tax investments. So we've got some tax calculus to do.


Add to all these d@mn numbers and such is the conclusion by DW & I that all periods of time in retirement will not be equal and that we are willing to take some small cat-food-risk to live it up in the golden years from the late 50s-to-65. (To Skipro33's comments above....)


Point is: Hell, I don't really know when I'll take SS now. I've learned I still got some learnin' to do......

 

[Carpediem]

Just curious - If I (the higher income earner) decide to delay to 70 and I die before 70, does DW receive my FRA amount?

 

[camfused]

Camfused,

How does taking SS at 62 keep MAGI down ( for ACA purposes) ?

It doesn't. Sorry, I was distracted with w*rk when I was typing that. My plan keeps it down, but taking SS @ 62 does not. Everything else in there is correct.

 

[ceciledian]

DH will be 62 in a couple years. If there is still an ACA subsidy he will delay SS so we will still be eligible for the subsidy. By then the tax credit will probably be as much as his SS!

 

[joeea]

Or maybe they are so tired of the subject they will agree with whatever point of view is being touted, hoping it will help move the conversation to another topic.

Perhaps. Knowing these folks that seems unlikely - they seldom agree on anything! And they are seldom tired of any subject when we are having coffee!

 

[joeea]

I was wondering the same thing..it looks like some kind of scam to me just by the way it is presented. Anyone else know anything?

Not a scam, just a salespitch for "Motely Fool Rule Your Retirement" newsletter - 1yr for $99 along with their report "Money for a Lifetime: 7 Simple Steps to Getting the Most From Social Security".

 

[joeea]

The plain fact for us is that we can certainly enjoy the extra money early SS could provide while still young enough to enjoy it. When we get older, our expenses won't be nearly so much. Why save if you aren't going to be able to enjoy the benefits of saving anyways? A bigger bottom line when our life is over? Just because one SS option allows for a larger lifetime worth doesn't mean that it was accessable when it would have done the most benefit.

Money earlier in life has more benefit than money later in life.

The same train of thought can also work the other way.

Knowing you have a higher inflation-adjusted lifetime SS benefit coming your way in later years allows some folks to spend more money from their portfolio in their younger years.

 

[joeea]

Just curious - If I (the higher income earner) decide to delay to 70 and I die before 70, does DW receive my FRA amount?

If your widow is at her full retirement age or older, she will receive your benefit amount.

Thus, she would get more if you died at 70, than if you died at 69 or your full retirement age, assuming you had not yet claimed your benefit.

If your benefit amount is reduced because you already claimed early, say at 62, she would receive less than your full retirement benefit.

In general, to maximize survivor benefits, the higher earner should plan on delaying until 70.

 

[DCJennifer]

The plain fact for us is that we can certainly enjoy the extra money early SS could provide while still young enough to enjoy it. When we get older, our expenses won't be nearly so much. Why save if you aren't going to be able to enjoy the benefits of saving anyways? A bigger bottom line when our life is over? Just because one SS option allows for a larger lifetime worth doesn't mean that it was accessable when it would have done the most benefit.

Money earlier in life has more benefit than money later in life.

Bravo!! This is one very pertinent point of view.

 

[joeea]

Why is that "Good" news. It depends which side of the fence you are on surely? Good news for SS I suppose, as more money is left in the system.

Actually, it's just the opposite.

On average, folks claiming early leave more money in the system for the rest of us (mostly due to the out of date actuarial tables used these days in the SS calculations).