Collecting Social Security benefits at age 62

[Perryinva]

That is true, and fear of that is a valid reason. For some reason, people feel that once they file, their amount is less likely to change due to government involvement. Or at the least, they can’t take back the amounts already given. True enough. But is the likelihood of that greater than a loss be cause of more dependence on your portfolio as you age and can not possibly invest wisely? I don’t have an answer. My personal feeling, at age 60, is that cuts are more unlikely for me in the next 7-8 years. But I can see increased taxation of SS based on income. As mentioned, no choice is bad. One just may turn out to be better historically after the fact. I think the bets are hedged better if one delays until there is a valid reason not to. Not much difference than people stating that it is obvious that once you are retired, you should not be invested in equities. You might lose everything. The ER people here scoff at that. Without equities most could never have ER and stayed ER. So in general, on this forum, there is more confidence with their own ability to preserve and determine their income with funds under their own control. The fact that someone posted that all you have to do is earn a consistent 9% with low inflation to beat the file at age 62, is more acknowledgment that for the long term, filing early is a smaller income for the vast majority. If anyone can consistently earn 9%, or 7% over inflation, then they would be wealthy to the point of laughing at SS amounts as anything to consider. Like most here, I’ve averaged over 9% this last 9 years. I don’t consider myself a good investor.

 

[CRLLS]

All these calculations makes my head hurt.

Our balance in later years will definitely have a higher balance in our portfolio by delaying especially if one of us kick the bucket. One thing we are considering in our decision to delay, is that we consider that higher balance as our LTC bucket. Both DW and I have good family genes. Nobody has spent more than 1 month in a facility. So we have no LTC insurance. We are reserving, well reserving is a loose term, we are allowing for that extra bump in our balance to be our self-managed LTC insurance in the unlikely event that we should need it. Maybe not a plan for everyone, but it is ours.

 

[bobandsherry]

So my thinking is take SS at 62 and invest it. Spend all the money you want from your investments and let your SS money that is invested earn and make you more money.

Why not just spend your SS and keep your investment money in your investments?

 

[street]

^ My post was to take at 62 and invest that money and in theory I will have more money then waiting till 70 to take SS.

If the breaking point is 82 years of age. Those would be the years for 82 to death that I would have to beat. My invested SS money starting at age 62 will only have to do better from age 82 to my death. I have not figured that % but if it is 9% that seems high for a return from 82 to my death which really we don't no for sure.

I still see SS being worth more to me taking it at 62 and making it work for you to get the best of the dollar. I look at it from about that 82 years of age not from 70.

 

[street]

Why not just spend your SS and keep your investment money in your investments?

EXACTLY!!! It was illustrated that way to make the point. You get it!!! Not saying it is a great plan but IMO that is the way I think. I'm not trying to persuade anyone I'm just saying how I feel I may do it. Because it is the best buy for my buck IMO.

 

[Perryinva]

Just saying “it is the best buy for your buck” proves nothing. If you want to believe that, based on a gut feel that is fine of course. There is nothing to “get”. You post like you had a revelation that hasn’t been though of before. How preposterous. This has been beat to death. That’s as valid as someone that says “I did the math in my spreadsheet and it shows...”. What does a spreadsheet that you did individually with your own assumptions and possible mistakes have to do with an unbiased calculator? Firecalc and RIP both show more income filing later for most scenarios MFJ with a tax bracket above 20% for the survivor. Better brains than ours have done the real math, and concluded for many scenarios, filing later is better. But apparently we have so many smarter people here that 2nd guessing something that you don’t comprehend fully, is a good reason. So the “I’ll invest it and come out ahead “ with no unbiased math means nothing. Just saying “it makes me feel better” is a more valid reason. I’m fine with that.

 

[street]

^ Wow! Some just aren't as smart as you. You really are KING and thanks for your opinion.

I have got to where I'm at on common sense just not number pushing to come up with my final discussion.

Every shoe doesn't fit every foot. It all depends on how long you live. Do you know how long you are going to live

 

[CRLLS]

I just had to check this out on my own. I ignored COLA increases and inflation. I considered several "real interest" rates (full interest earned minus inflation) and did not account for inflation (i.e. today's dollars). I looked at different starting account balances and a couple of different spending rates. Certainly taxes were not part of this evaluation. I may be oversimplifying it. Here is what I found: no matter how much you have, how much the SS benefit is, or how much you spend, the only thing that affects a breakeven age is assumed real rate of return. The lower the real interest earned, the lower the breakeven age.

This may be obvious to most of us but it was a bit of a surprise to me.

 

[daylatedollarshort]

Just saying “it is the best buy for your buck” proves nothing. If you want to believe that, based on a gut feel that is fine of course. There is nothing to “get”. You post like you had a revelation that hasn’t been though of before. How preposterous. This has been beat to death. That’s as valid as someone that says “I did the math in my spreadsheet and it shows...”. What does a spreadsheet that you did individually with your own assumptions and possible mistakes have to do with an unbiased calculator? Firecalc and RIP both show more income filing later for most scenarios MFJ with a tax bracket above 20% for the survivor. Better brains than ours have done the real math, and concluded for many scenarios, filing later is better. But apparently we have so many smarter people here that 2nd guessing something that you don’t comprehend fully, is a good reason. So the “I’ll invest it and come out ahead “ with no unbiased math means nothing. Just saying “it makes me feel better” is a more valid reason. I’m fine with that.

Many posters here seem quite sharp to me and have backgrounds in fields like accounting, engineering and programming. I value their opinions more than I do some random calculators on the Internet from people I don't know and don't know how well the calculators were tested. My guess is there are many posters here like me who have had jobs writing programs or creating spreadsheets more complex than SS calculations. I have had to call Fidelity at least once for a bug in their program, which they did fix, so it is hardly a flawless program. If you type in most retirement calculators are wrong into Google, you'll find no shortage of articles on the subject.

 

[Cut-Throat]

Why not just spend your SS and keep your investment money in your investments?

Ever heard of a 'Bear Market'?

 

[Independent]

So my thinking is take SS at 62 and invest it. Spend all the money you want from your investments and let your SS money that is invested earn and make you more money. Then at age 70 you will even have a bigger pay out. That is the case that most argue is you will have a bigger check if you wait till 70. You will have more if you take it early and invest it. Then you have both ends covered die early or live long you got everything that you could get.

Lots a ways to look at it I have no idea what is the best. One way is good for one and not the other.

Will you?

Suppose you keep the SS investment bucket separate from your other investments. At age 70, you can start withdrawing from this special bucket to supplement your SS benefit (which you are now spending instead of investing). How much will you withdraw from your SS investment bucket each month (or year)?

I'm asking for the math. I think it's very closely related to the table in post #184, but you're making the decision at age 70 when you don't know future investment returns.

 

[camfused]

I wonder, does everybody assume that SS benefit formulas and laws will never change from what they are today? We've just seen that the laws can change suddenly and in a way that nobody would have predicted 1 or 2 years ago.

Right! When I run the numbers in my plan, I assume that SS payouts are reduced by 23% in 2034. I hope everyone else has that in their calculations.

My current thoughts are to take at FRA for me, and 70 for DW, which is a compromise of the benefits taking it at 62 and the benefits of taking in at 70.

 

[bobandsherry]

Ever heard of a 'Bear Market'?

Appears you didn't even bother to read what I was replying to.

 

[Cut-Throat]

Appears you didn't even bother to read what I was replying to.

Just read it. And my statement still stands..... Unless your comment was sarcastic, which does not always transfer in a post.

 

[Floridatennisplayer]

I find all these arguments funny and pretty much pointless. Unless you know exactly when you are going to die you are ALL JUST GUESSING! So take it when you think it’s best for you. It’s still a guess and unless you are an outlier.....it is all a wash.

Do me a favor. Seriously, go walk through a cemetery. I did that just last weekend putting flowers on my dads grave. What a wake up call! BTW he died in 1991 unexpectedly of a heart attack at 58. I am still heartbroken 27 years later. As I walked around I was astounded at the ages people died. So many men in their 60’s and 70’s. I wondered how many bragged...we have good genetics in our family and longevity. We are waiting.......

Take it whenever you want, it’s just a guess, enjoy it, enjoy your decision, enjoy your life, you are just splitting hairs.

 

[Cut-Throat]

I find all these arguments funny and pretty much pointless. Unless you know exactly when you are going to die you are ALL JUST GUESSING! So take it when you think it’s best for you. It’s still a guess and unless you are an outlier.

It's a guess when you buy any insurance, and not at all pointless. Whether you buy Fire Insurance, Flood Insurance, Health Insurance, Life Insurance. It's called Risk Management.

I can tell you don't understand the issues.

 

[Floridatennisplayer]

It's a guess when you buy any insurance, and not at all pointless. Whether you buy Fire Insurance, Flood Insurance, Health Insurance, Life Insurance. It's called Risk Management.

I can tell you don't understand the issues.

I can tell you have poor comprehension skills. Re read what I said. Duh.

I said no one knows when they are going to die. So stating that you are going to do better than others by waiting until age 70 to claim is purely a guess!!!!!!!

I suppose you have some supernatural ability that no one else has and you know the exact time and date you will die.

The government isn’t stupid. They aren’t gambling with all this money in their possession! They KNOW that they are NOT GIVING AWAY EXTRA MONEY TO ANYONE WHO THINKS THEY ARE BEATING THE SYSTEM BY WAITING!!! Not at all. They know the statistics and a very close approximation as to our death rate. They know the odds!!!!! So all this calculating is a waste of time. It all becomes pretty much a wash. You are just guessing!

 

[Cut-Throat]

I can tell you have poor comprehension skills. Re read what I said. Duh.

I said no one knows when they are going to die. So stating that you are going to do better than others by waiting until age 70 to claim is purely a guess!!!!!!!

I think you need to read what I said...

Do you think people know when they are going to die when they buy Life Insurance? Do you think people know they are going to have a Fire, when they buy Fire Insurance? Do you think people know that they are going to get Sick when they buy Health Insurance?

 

[Floridatennisplayer]

I think you need to read what I said...

Do you think people know when they are going to die when they buy Life Insurance? Do you think people know they are going to have a Fire, when they buy Fire Insurance? Do you think people know that they are going to get Sick when they buy Health Insurance?

We are talking about social security and when to take it. No idea why you are throwing in life insurance, fire insurance.. has zero comparisons.

 

[street]

I find all these arguments funny and pretty much pointless. Unless you know exactly when you are going to die you are ALL JUST GUESSING! So take it when you think it’s best for you. It’s still a guess and unless you are an outlier.....it is all a wash.

Do me a favor. Seriously, go walk through a cemetery. I did that just last weekend putting flowers on my dads grave. What a wake up call! BTW he died in 1991 unexpectedly of a heart attack at 58. I am still heartbroken 27 years later. As I walked around I was astounded at the ages people died. So many men in their 60’s and 70’s. I wondered how many bragged...we have good genetics in our family and longevity. We are waiting.......

Take it whenever you want, it’s just a guess, enjoy it, enjoy your decision, enjoy your life, you are just splitting hairs.

I agree with your post. Not every shoe fits every foot and when ever you take it (SS) it may work out giving you the most or it may not.
It all comes down to how long are you going to live and you are spot on.

 

[Cut-Throat]

We are talking about social security and when to take it. No idea why you are throwing in life insurance, fire insurance.. has zero comparisons.

I know that you have no idea.... Delaying SS. to age 70 is Old Age Insurance.

https://en.wikipedia.org/wiki/Social_insurance

 

[Music Lover]

It's a guess when you buy any insurance, and not at all pointless. Whether you buy Fire Insurance, Flood Insurance, Health Insurance, Life Insurance. It's called Risk Management.

I consider CPP (or SS) be income, not insurance. Many people here retired early at the peak of their earning potential rather than work a few years longer to build a larger retirement fund. By taking CPP or SS early, they are doing exactly the same thing...enjoying the money now rather than trying to eke out the maximum return.

 

[Chuckanut]

I said no one knows when they are going to die. So stating that you are going to do better than others by waiting until age 70 to claim is purely a guess!!!!!!!

I would say it's a decision based upon the odds. And one's own foreseeable needs.

Odds seem to say that I will live long enough to make taking SS at 70 a good idea for a number of reasons. I base that on my reality, not a stroll through a cemetery full of deceased people I don't know anything about. As far as I know the cemetery may be in a town where coal mining was the main employer for the last 100 years. Or I might walk through a cemetery in Acciaroli, Italy where 10% of the people live to be over 100. I doubt if either is very relevant to my life.

Just my 2¢. Take what you wish and leave the rest.

 

[Independent]

By taking CPP or SS early, they are doing exactly the same thing...enjoying the money now rather than trying to eke out the maximum return.

The people who think the 4% SWR guideline makes sense can actually enjoy more money early in retirement by deferring their SS start date.

 

[Floridatennisplayer]

I would say it's a decision based upon the odds. And one's own foreseeable needs.

Odds seem to say that I will live long enough to make taking SS at 70 a good idea for a number of reasons. I base that on my reality, not a stroll through a cemetery full of deceased people I don't know anything about. As far as I know the cemetery may be in a town where coal mining was the main employer for the last 100 years. Or I might walk through a cemetery in Acciaroli, Italy where 10% of the people live to be over 100. I doubt if either is very relevant to my life.

Just my 2¢. Take what you wish and leave the rest.

No, I said the government knows the odds and they aren’t giving anything away. They are like Vegas. People go there every day thinking they’re going to beat the house and go home empty-handed. They know the odds! Sure you might by chance be an outlier. I didn’t base anything on my cemetery visit. I just mentioned a lot of people in their graves younger than I expected. Nothing to do with SS actuarial tables.