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Old 01-10-2018, 08:47 AM   #141
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Originally Posted by joeea View Post
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On average, folks claiming early leave more money in the system for the rest of us (mostly due to the out of date actuarial tables used these days in the SS calculations).
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Odds are, it’s a wash. And the government knows it. Actuarial tables don’t lie. Doesn’t really matter when you take it, you end up with about the same benefit.
You two should talk.
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Old 01-10-2018, 09:09 AM   #142
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Old 01-10-2018, 09:13 AM   #143
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Old 01-10-2018, 09:44 AM   #144
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All I can say is I took my SS early because I retired in 2009 when the market was down down. Now almost 8 years later we are sitting on a net worth that has grown 80%. I did not have a lot of money in my 401k but did have a good pension. I almost died in 2015 from a heart attack so i consider myself very blessed in many ways. Taking SS early or late is a gamble sometimes you win and sometimes you lose. i can safety say I won. Just my 2 cents worth.
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Old 01-10-2018, 10:25 AM   #145
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I concede that the differences are not cataclysmic. Below is a table of the differences in our cases... I was a high earner and DW was a SAHM.. as a result, her FRA benefit is about 28% of mine. She is about 9 months older (cougar alert! ).

The percentages are based on the present value of our lifetime retirement benefits from SSAnalyze using expected ages of 91 for me and 93 for DW from the longevity calculator linked to SSAnalyze.

For discount rates, I used the 2% (SSAnalyze's suggested discount rate) and 6% (my expected aggregate investment earnings rate based on our 60/35/5 AA). I added a 65/65 scenario because that is the Medicare age so the hold harmless might be a factor.

DW/me2%6%
62/6287%94%
65/6595%98%
FRA/FRA100%100%
FRA/70107%101%

While we are on the fence between FRA/70 and FRA/FRA, given the slight difference in PVs I may lean towards FRA/FRA just to keep this easy and simple and to get the benefit of the hold harmless for 4 years.
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Old 01-10-2018, 10:36 AM   #146
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I concede that the differences are not cataclysmic. Below is a table of the differences in our cases... I was a high earner and DW was a SAHM.. as a result, her FRA benefit is about 28% of mine. She is about 9 months older (cougar alert! ).

The percentages are based on the present value of our lifetime retirement benefits from SSAnalyze using expected ages of 91 for me and 93 for DW from the longevity calculator linked to SSAnalyze.

For discount rates, I used the 2% (SSAnalyze's suggested discount rate) and 6% (my expected aggregate investment earnings rate based on our 60/35/5 AA). I added a 65/65 scenario because that is the Medicare age so the hold harmless might be a factor.

DW/me 2% 6%
62/62 87% 94%
65/65 95% 98%
FRA/FRA 100% 100%
FRA/70 107% 101%
While we are on the fence between FRA/70 and FRA/FRA, given the slight difference in PVs I may lean towards FRA/FRA just to keep this easy and simple and to get the benefit of the hold harmless for 4 years.
I thought, in your case, your wife would get 50% of your fra benefit if both of waited til fra to collect.
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Old 01-10-2018, 10:41 AM   #147
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She does and that is what is included in the analysis... I said her FRA is 28% of mine... so what she will collect and is included in the cash flows is her FRA benefit from when she files until I file and then her spousal benefit once I file.

In all cases where we file at the same age that means that she collects based on her FRA for 9 months since she is 9 months older than me (our FRAs are the same)... for the FRA/70 alternative she collects her FRA benefit for 43 years and 7 months before it steps up to half of my FRA benefit. I think that is part of why the PVs of the FRA/FRA and FRA/70 alternatives are so close.

Edited: to change 4 years and 7 months to 3 years and 7 months.. math is hard!
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Old 01-10-2018, 11:14 AM   #148
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She does and that is what is included in the analysis... I said her FRA is 28% of mine... so what she will collect and is included in the cash flows is her FRA benefit from when she files until I file and then her spousal benefit once I file.

In all cases where we file at the same age that means that she collects based on her FRA for 9 months since she is 9 months older than me (our FRAs are the same)... for the FRA/70 alternative she collects her FRA benefit for 4 years and 7 months before it steps up to half of my FRA benefit. I think that is part of why the PVs of the FRA/FRA and FRA/70 alternatives are so close.
Thanks for the explanation. I have to admit all the ins and outs of ss causes brain freezes.
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Old 01-10-2018, 11:18 AM   #149
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Originally Posted by pb4uski View Post
I concede that the differences are not cataclysmic. Below is a table of the differences in our cases... I was a high earner and DW was a SAHM.. as a result, her FRA benefit is about 28% of mine. She is about 9 months older (cougar alert! ).

The percentages are based on the present value of our lifetime retirement benefits from SSAnalyze using expected ages of 91 for me and 93 for DW from the longevity calculator linked to SSAnalyze.

For discount rates, I used the 2% (SSAnalyze's suggested discount rate) and 6% (my expected aggregate investment earnings rate based on our 60/35/5 AA). I added a 65/65 scenario because that is the Medicare age so the hold harmless might be a factor.

DW/me2%6%
62/6287%94%
65/6595%98%
FRA/FRA100%100%
FRA/70107%101%

While we are on the fence between FRA/70 and FRA/FRA, given the slight difference in PVs I may lean towards FRA/FRA just to keep this easy and simple and to get the benefit of the hold harmless for 4 years.
And I would expect the gap to even be much less with a more realistic (according to the National average age of death) of let’s say 81-83. Or even 83-85
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Old 01-10-2018, 11:22 AM   #150
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Actually, the longevity calculator indicates that DW and I have a 75% chance of living to 86/83 and our estimated life expectancy is 94/91 (which I suspect means a 50% chance of living to those ages).

See https://annuities.blueprintincome.co...g-will-i-live/
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Old 01-10-2018, 11:32 AM   #151
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I’m still waiting to see one realistic mathematically illustrated reason, based on net income, MFJ, when in the 25% and above bracket in retirement and living in a state that is SS tax free, but not deferred retirement account free, where filing at 62 provides more income for life with low risk.
The only one I can think of is for the couple to die at 63 or so.

I agree with your thoughts. I try to jump in with suggestions about how to consider the filing choice logically.

But what I find is that folks choose to start their benefits based on a gut feel. Then they go looking for reasons that support their choice rather than reasons that don't. So I generally stop trying to point out logical errors when the person has already made up their mind and isn't looking to be convinced.

There are two discussions that seem to happen repeatedly where folks already have made up their mind - the decision about when to start collecting social security and the decision about paying off a low-interest mortgage.

I'm always happy to talk about them logically, but most folks don't really want to do that.

The good thing about social security claiming age is that it isn't really about good and bad choices. It's really about good and better choices. The same is true about paying off or not paying off your low-interest mortgage.
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Old 01-10-2018, 11:37 AM   #152
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You two should talk.
LOL! I'm fairly sure it wouldn't help. This is just one of those discussions that people enter with their minds already made up.

I'm fairly sure that if I pointed out that the current SS rules regarding starting benefits early and delaying benefits were established in the days of higher interest rates, it wouldn't matter.

I'm pretty sure that if I pointed out that 8% risk free per year is much higher than other risk free investments, and thus a terrific reason to delay, it wouldn't matter.

I'm sure if I mentioned that while the rules were actuarially neutral when they were created, but no longer are, it wouldn't change anyone's mind.

So I doubt talking would help.
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Old 01-10-2018, 11:46 AM   #153
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If his wife is struggling, then he lost, but she pays the price. A big point, IMHO.
It sounds like he "won".
It sounds like she is "losing".

I know which one I feel bad for.
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Old 01-10-2018, 11:56 AM   #154
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Actually, the longevity calculator indicates that DW and I have a 75% chance of living to 86/83 and our estimated life expectancy is 94/91 (which I suspect means a 50% chance of living to those ages).

See https://annuities.blueprintincome.co...g-will-i-live/
I got similar results.
Apparently, I would live a bit longer if I drank a bit more.

Challenge accepted!
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Old 01-10-2018, 12:29 PM   #155
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I am currently 64, according to SSA.gov I will get $xxxx.xx pm if I apply now and $yyyy.yy at 66. What I would like to know is how much I will get in a years time when I am 65?

Is it simply: $xxxx.xx X 8.3% +=?

Thanks
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Old 01-10-2018, 12:34 PM   #156
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I am currently 64, according to SSA.gov I will get $xxxx.xx pm if I apply now and $yyyy.yy at 66. What I would like to know is how much I will get in a years time when I am 65?

Is it simply: $xxxx.xx X 8.3% +=?

Thanks
"In the case of early retirement, a benefit is reduced 5/9 of one percent for each month before normal retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of one percent per month."

So in your case, if you will be exactly 12 months short of your full retirement age of 66, then you will receive 93.333 % of $yyyy.yy.
Also remember that SSA.gov is an estimate. The actual number could be slightly different depending on your earnings for the addition year and any COLA increases.

https://www.ssa.gov/oact/quickcalc/early_late.html
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Old 01-10-2018, 12:36 PM   #157
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Not 8.3% probably 8% but it depends on the year you were born.

https://www.ssa.gov/planners/retire/delayret.html
My FRA is 66.
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Old 01-10-2018, 12:40 PM   #158
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It’s actually pretty simple, people just make it complicated. The government is not stupid they’re not giving anyone free money they have a very good grasp on when people will pass away. Unless you live well beyond the normal life expectancy or die before the life expectancy, then it all becomes neutral if you take it early you’ll get smaller checks but a lot more of them if you take it later you will get larger checks but less of them so if you die within the normal life expectancy it all becomes a wash.
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Old 01-10-2018, 01:01 PM   #159
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LOL! I'm fairly sure it wouldn't help. This is just one of those discussions that people enter with their minds already made up.

I'm fairly sure that if I pointed out that the current SS rules regarding starting benefits early and delaying benefits were established in the days of higher interest rates, it wouldn't matter.

I'm pretty sure that if I pointed out that 8% risk free per year is much higher than other risk free investments, and thus a terrific reason to delay, it wouldn't matter.

I'm sure if I mentioned that while the rules were actuarially neutral when they were created, but no longer are, it wouldn't change anyone's mind.

So I doubt talking would help.
+1. Bada bing. Love the low mortgage analogy, too. I’m not trying to convince anyone of anything. Teach a pig to sing joke. I only point out either faulty logic or logic I do not understand. I know I will not file at 70. It is an emotional reason. I admit it. I know I want to go to at least 68. Not at all because I need the money, but for reasons I’ve listed. I plan on taking a much higher WR from 62 until filing in order to do exactly what the “spend more now while you are younger” respondents are claiming y filing at 62. After I file, with a higher fixed income, doesn’t really matter how long it takes (or if) the portfolio recovers, as I won’t need much or possibly any from it when RMDs are levied.
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Old 01-10-2018, 01:18 PM   #160
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It’s actually pretty simple, people just make it complicated. The government is not stupid they’re not giving anyone free money they have a very good grasp on when people will pass away. Unless you live well beyond the normal life expectancy or die before the life expectancy, then it all becomes neutral if you take it early you’ll get smaller checks but a lot more of them if you take it later you will get larger checks but less of them so if you die within the normal life expectancy it all becomes a wash.
Not really. We know that life expectancies have gotten longer in the last 20 to 30 years with advances in medicine, less smoking and generally healthier lifestyles (partially offset higher obesity) but the discounts and premiums for taking SS early or late are no different than they were 20 to 30 years ago.
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