Join Early Retirement Today
Reply
 
Thread Tools Display Modes
If retire now, take SS at 62
Old 05-08-2012, 11:48 PM   #1
Thinks s/he gets paid by the post
 
Join Date: Aug 2010
Posts: 1,089
If retire now, take SS at 62

I am 56 now.

Running SS online statement, I see that I will receive $1700/month if I take it at 62. The assumption is to continue working till 62 for this calculation.

Using the Quick Calculator on SS site, I entered $110,100 for current year earning since that is maximum earnings covered by SS for 2012. If I choose Jan, 2013 to retire, I will get $1673 at 62.

Working and contributing to SS for 6 more years, will only increase $27 per month for me.
fh2000 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 05-09-2012, 05:01 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Mar 2004
Posts: 3,431
Quote:
Originally Posted by fh2000 View Post

Working and contributing to SS for 6 more years, will only increase $27 per month for me.

You have just discovered what many of the FIREd folks here also learned...and what helped propel them into early retirement. Working X more years does not substantially increase SS.

omni
omni550 is offline   Reply With Quote
Old 05-09-2012, 05:34 AM   #3
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,337
The one small error in this calculation is that increased SS wage maximum (if met) will increase the SS check above what you calculated. This is because this new higher amount will replace the $110,000 you used in your calculation.

Is it a big number? It isn't if you are only dropping out of the system a few years early. It could be a significant effect for someone retiring a decade or more before their "normal" retirement age.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 05-09-2012, 10:53 AM   #4
Thinks s/he gets paid by the post
GalaxyBoy's Avatar
 
Join Date: Jul 2009
Location: The Beautiful Blue Ridge Mountains
Posts: 2,781
Quote:
Originally Posted by 2B View Post
The one small error in this calculation is that increased SS wage maximum (if met) will increase the SS check above what you calculated. This is because this new higher amount will replace the $110,000 you used in your calculation.
Or is it the case that the calculation uses constant 2012 dollars, and that the increase in the wage maximum is a function of inflation? Theoretically, at least.
GalaxyBoy is offline   Reply With Quote
Old 05-09-2012, 11:17 AM   #5
Full time employment: Posting here.
 
Join Date: Jun 2006
Posts: 927
SS is computed based on your 35 best years of contributions. If you already have or are close to 35 good years you will not change your SS benefits much by working more years.
__________________
CW4, USA-(ret)
RN, BSN-(ret)
jclarksnakes is offline   Reply With Quote
Old 05-09-2012, 11:48 AM   #6
Confused about dryer sheets
 
Join Date: Apr 2012
Posts: 4
Also, if your average monthly income (adjusted for inflation) in those best 35 years is over $4,624 each dollar above that is only worth $0.15 in the benefit calculations. Averages over $767 are only worth $0.32 per dollar.
MrSaturday is offline   Reply With Quote
Old 05-09-2012, 03:02 PM   #7
Thinks s/he gets paid by the post
teejayevans's Avatar
 
Join Date: Sep 2006
Posts: 1,691
Best way to increase it is to delay taking SS if you can, if you wait to full retirement age it will go up about 30%, if you wait until 70 it goes up another 8%/year.
TJ
teejayevans is offline   Reply With Quote
Old 05-09-2012, 03:54 PM   #8
Thinks s/he gets paid by the post
 
Join Date: Aug 2010
Posts: 1,089
Quote:
Originally Posted by 2B View Post
The one small error in this calculation is that increased SS wage maximum (if met) will increase the SS check above what you calculated. This is because this new higher amount will replace the $110,000 you used in your calculation.

Is it a big number? It isn't if you are only dropping out of the system a few years early. It could be a significant effect for someone retiring a decade or more before their "normal" retirement age.
The maximum numbers for the past few years:
Social Security Wage Limits


2006 $94,200
2007 $97,500
2008 $102,000
2009 $102,000
2010 $102,000
2011 $106,800
2012 $110,100

You are right. Depending on the number of skipped years, it might be somewhat different.
fh2000 is offline   Reply With Quote
Old 05-09-2012, 08:00 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,671
Quote:
I see that I will receive $1700/month if I take it at 62.
The big question that you need to answer is~ "Do I absolutely need this income stream from SS to live on at age 62." If the answer is yes, take the cash. If the answer is no, delay as long as you can stand it.

Oh yea, I assume that you will live a long time. So there's that...
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Old 05-09-2012, 08:05 PM   #10
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
I think the big question is, am I going to keep breathing? It's good to wait if you live long enough.
__________________
Work is something you do to get enough $ so you don't have to....Me.
73ss454 is offline   Reply With Quote
Old 05-09-2012, 09:06 PM   #11
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 2,525
Quote:
Originally Posted by mickeyd View Post
The big question that you need to answer is~ "Do I absolutely need this income stream from SS to live on at age 62." If the answer is yes, take the cash. If the answer is no, delay as long as you can stand it.

Oh yea, I assume that you will live a long time. So there's that...
I think this horsey hasn't been flogged enough lately. Yes "delay as long as you can stand it" As long as SS really ends up paying what it promises 20-40 years into the future. Consult ye olde crystal ball otherwise well, think otherwise...
ejman is offline   Reply With Quote
Old 05-09-2012, 10:59 PM   #12
Full time employment: Posting here.
urn2bfree's Avatar
 
Join Date: Feb 2011
Posts: 852
Quote:
Originally Posted by ejman

I think this horsey hasn't been flogged enough lately. Yes "delay as long as you can stand it" As long as SS really ends up paying what it promises 20-40 years into the future. Consult ye olde crystal ball otherwise well, think otherwise...
+1
And let's see, can I invest that $1700 a month and grow it better than whatever the powers that be will do to it a nd how much can I get IF they decide if I am worthy of getting any of it when I finally get around to asking for it. Uh uh. Not me...I am taking my $$$ when I can and will invest it if I don't need it.
urn2bfree is offline   Reply With Quote
Old 05-10-2012, 02:17 AM   #13
Thinks s/he gets paid by the post
obgyn65's Avatar
 
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
I think there is some consensus that SS benefits do not increase that much after say 20 or 30 years of work. This is why I guess many FIRE much earlier than age 55 or even 50.
__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 is offline   Reply With Quote
Old 05-10-2012, 10:15 AM   #14
Thinks s/he gets paid by the post
 
Join Date: Nov 2011
Posts: 3,877
I know SS is indexed for inflation, but is the same index applied for those who choose to start benefits at 62 as those who delay?
GrayHare is online now   Reply With Quote
Old 05-10-2012, 11:45 AM   #15
Full time employment: Posting here.
lemming's Avatar
 
Join Date: May 2008
Posts: 597
Quote:
Originally Posted by fh2000 View Post
I am 56 now.

Running SS online statement, I see that I will receive $1700/month if I take it at 62. The assumption is to continue working till 62 for this calculation.

Using the Quick Calculator on SS site, I entered $110,100 for current year earning since that is maximum earnings covered by SS for 2012. If I choose Jan, 2013 to retire, I will get $1673 at 62.

Working and contributing to SS for 6 more years, will only increase $27 per month for me.
This makes the calculator think you will earn $110,000(adjusted up each year) until you take SS. You need to add a zero salary in last year to project your benefit more correctly.
lemming is online now   Reply With Quote
Old 05-12-2012, 12:53 PM   #16
Recycles dryer sheets
Speculator's Avatar
 
Join Date: Apr 2012
Location: Very Small Town in Vermont
Posts: 84
I would take it at 62 and.......

https://my.porsche.com/usa/accessori...mentestimator/
Speculator is offline   Reply With Quote
Old 05-14-2012, 01:37 PM   #17
Thinks s/he gets paid by the post
Finance Dave's Avatar
 
Join Date: Mar 2007
Posts: 1,854
I simply use Excel DCF to get an NPV of each option. The key is what assumption you use for your lifetime end date.

There are also confounding factors for spousal benefits and so on...with a myriad of possibilities.

Changes in the law can really throw a wrench into this. I doubt they'd do away with SS entirely...but for those under 55 I'd be prepared for a haircut...particularly if you're "wealthy".
__________________
"Live every day as if it were your last, and one day you'll be right" - unknown
Finance Dave is offline   Reply With Quote
Reply


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


» Quick Links

 
All times are GMT -6. The time now is 05:23 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.