If you are not working, why would someone wait until 70 to collect Social Security?

[jollystomper]

In my situation the decision is simple. If I need the money at 62, I'll take it. If not, I'll delay it until I need the money.

Based on our planned retirement spending Our withdrawals to supplement my pension can taken from cash, without having to touch investments, through the year I turn 63. This is the earlier I would consider taking SS. Based on what our portfolio looks like then will determine if I start taking SS to reduce the amount of the withdrawals. If it looks like they are not needed I will delay. I consider myself VERY fortunate to have a pension that helps give me this flexibility.

Since I made much more than DW over the years, the delay would also be to maximize her spousal benefit. That is what my dad did, he delayed SS until 70 so maximize the spousal benefit for my mom. He died at 72 but mom (who was 6 years younger) lived until 86, so it definitely helped her.

 

[bclover]

One more thing:

All the article that tell us we should wait until we are 70 years old to collect Social Security act like we are going to come out ahead and get more money from Uncle Sam. But according the government, they have figured it all out. Their math experts have determined that on average they will not pay out any more or any less if a person retires at age 62, 66, or 70. It's all a wash.

Some people decide to wait until they are 70 to collect and die the next year, while others collect age age 62 and live for years. The government has got it all figured out, what ever age people start collecting, the final cost to the government is going to be the same.

So who are these people who are pushing so hard to try to convince people to wait and and not collect Social Security until you are seventy (70) years old. Are they writing these articles to really help you because they want you to get more money from the Social Security trust fund over your life? I suspect it is the financial service industry, who want you to work longer and put more money into your Fidelity Mutual Fund and 401k, 403B and IRA Accounts.

What do you think?

Nope,
First the person who thought I should wait until I was as close to 70 as possible was me.

Next, as a general rule I don't stress to much about what the government is going to do or not do 5-10 years down the road . but I do find it interesting that you say you don't trust the government yet use government math to make a case??
Anyhoo, as of right now waiting does increase my benefits about 8% so since I don't need the money, I'll take the increase. Now as long as I don't remarry before 60 I believe, I can collect my old guys benefits and let mine sit until I'm 70.

It really is that simple

 

[devans0]

I and SO are planning on taking SS at 70.

Longevity and good health runs in both our families.
We are TIRA rich and it will take that long to convert to a Roth IRA ladder and still hold taxes down.
If we did take SS now, we would be giving up much in excess taxes anyway.
We have enough to do quite well until 70.5, and by drawing on taxable 4% SWR returns only.
Healthcare price index is high, and it is a cheap longevity insurance.
SS is always available to draw if early sequence of returns losses. It is catastrophic market loss insurance.
We both have non-COLA pensions. Value will erode over time. SS is COLA insurance too.

Our daughter's SO may well need Roth inheritances for health expenses. We would like to buffer health expenses, so those won't leave grandchildren growing up destitute without education and a good start.

We grew up thinking generationally, not solely focused on our lifetime.

 

[Chuckanut]

What do you think?

I think most people are capable of making a judgement on when SS is collected that is best for themselves. We can offer our stories and tell others why we did it this way or that way, and let them make up their own minds.

 

[OrcasIslandBound]

If you are not working, why would someone wait until 70 to collect Social Sec...

My DW and I have pretty much decided to take one SS at 62 and the other at 70. The first at 62 (hers) because we want the money (and she doesn't think she'll live that long) and mine at 70 because one of us might actually live a long long time. SS is not vulnerable to market fluctuations like stocks and bonds are. It is a great diversifying asset. The larger SS is preserved if one spouse dies, so it's a good insurance.

I don't buy the hoopla about the US running out of money. Nonsense.


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[Chuckanut]

2) It's not about choosing a claiming strategy that results in the highest expected number of dollars. It's about choosing the claiming strategy that results in the best overall "utility".

+1

Exactly. SS is one part of how we fund our retirement. Most of us want to be able to enjoy our retirement and not have to worry that some unfortunate event will cause us to drastically reduce our standard of living. If claiming SS at 70 helps to assure a person that their financial future is more secure, then that person can spend more in the earlier years of retirement. If claiming at 62 allows one to allow one's investments to grow to a sizeable sum and thus help insure a better retirement and allowing one to spend as one wishes, then that is the thing to do.

The idea that one's plans for SS have to conform to another person's goals and beliefs is foolish.

 

[samclem]

If claiming at 62 allows one to allow one's investments to grow to a sizeable sum and thus help insure a better retirement and allowing one to spend as one wishes, then that is the thing to do.

Yes. If I were in the OP's shoes, I think I would probably try to delay SS to get the larger checks (inflation adjusted, for life). But, even saying that, I would stop short of spending down all of my savings to get there. Having $50K or so available in a lump can be a handy thing and can have very high utility in its own right--to move to a new residence, to make a downpayment, to handle a medical emergency, to buy a car or make home repairs without needing to save up the money from monthly cash flow, etc.

 

[2017ish]

As is clear from above, it is an individual, fact-intensive choice, and married couples are a different kettle of fish than singles.

For us, I'm still, extremely conservatively, estimating "$0" for expected Social, just as I have since the mid-1980s. If the laws don't change, DW is our primary wage earner and will nearly max the SS numbers even though retiring 31 years after graduating. Given that her grandparents all hit 90+, that her parents are quite physically active on the far side of 85, that she has run 5K+ 3-5 days a week since age 30, is presently 5 pounds heavier than before the first of our 3 kids, has never smoked, and has an M.D., it is pretty safe to plan that she'll live past 80.

Thus, she will claim at 70 if we remain eligible. As for me, I don't yet know. We'll see what the laws are in a few years.

 

[mathjak107]

we are holding out to 70 . we want to have as small a dependency on markets ,rates and sequence risk as we can get on our outcomes .

we will go from a 3.50% draw now to 2% once ss kicks in .

we can also spend a bit more now while delaying since ss has zero sequence risk and no money on that portion has to be held in reserve for poor sequences .

our budget is bigger now by delaying until later .

 

[misanman]

DW claimed at 62 and I picked up the spousal benefit at 66. Then I switched to my full benefit at 70 and she switched to a spousal benefit on my record. (I realize that this approach is now restricted).

We have a substantial TIRA so have been trying to spend it down while delaying SS. I have looked at it as purchasing an annuity at attractive rates. Also wanted to "shift" income to SS because of it's tax advantages.

Also doing Roth conversions as we are able.

Not sure how well this has worked since TIRA balance has "balooned" and RMDs will still be an issue. I guess at least it's been minimized to some extent.

My SS benefit is $3450/mo and DW's is $906.

I guess I'm happy with how this worked out but only time will tell if it was the optimal solution.

 

[ivinsfan]

OP are you still there, was this a real life question you had, or I'm just getting the feeling you're like the teacher who posts an essay question just to see what happens?

After all, you do say that you have "time to kill".

 

[mathjak107]

we can still do restricted application since we are of age .

my wife was collecting since 62 . she just stopped her benefit at her fra and will let it grow to 70 .

when she is 70 i will be 68-10 months . i will file restricted application for 1/2 hers . at 70 i will take my own and since 1/2 mine is more than her full she will get a 4500.00 dollar adder to hers when i file .

that plan came out of the new fidelity in house tool they have for optimizing ss. it is not an on line tool

 

[scrabbler1]

I am living on my non-retirement assets as I have been for the last 8 years. When I turn ~60, which is 6-7 years from now, I will be able to tap into my "reinforcements," which I define as unfettered access to my IRA, (the first one), my frozen company pension (at 65), and SS (which I can begin using at 62, if I need to).


But my FRA for SS is 67 which is how I have added it to my long-term plan. My financial picture only improves once I begin my 60s, not that it is in any trouble right now. I will also become eligible for Medicare at 65 so my health care costs should decline compared to the ACA plan I have now.


A few things I will review frequently going forward are: (1) my health, as I was diagnosed with diabetes last year, something which may reduce my life expectancy in the long-term. (2) If I happen to need access to a large, lump-sum amount, then only my IRA and current investments could provide that, not SS or the frozen pension. I could see at some point buying out my brother's half of my dad's house when he passes away although my dad is in good health at age 85. Reducing my portfolio this way would put some pressure on me to begin taking SS.

 

[Greg V]

For me it's not about getting the maximum possible payout. That's something I can't really control, anyway. DW will probably outlive me (she's 4 yrs younger) and waiting until 70 to claim SS maximizes her survivor benefit; income that is COLA'ed and not dependent on investment returns. A secondary reason is longevity insurance...but that's not nearly as important as Reason #1.

Do your own analysis and make your own choice. There's plenty of good ideas in this thread to get you started.

 

[Joylush]

What is wrong with my thoughts on this?

I won't ever need SS.

I'm thinking it makes more sense to take it early so my own assists can continue to accrue. I can leave them to my heirs. Can't do that with SS that hasn't been taken.

 

[travelover]

........I won't ever need SS.............

I doubt that I'll need it either, but I don't know for sure. And it would really, really suck to need it and be limited to my partial age 62 payout.

 

[Joylush]

I doubt that I'll need it either, but I don't know for sure. And it would really, really suck to need it and be limited to my partial age 62 payout.

You don't know for sure so your concern is certainly valid. I do know for sure. So I don't see how it makes any sense to spend my own assets which can continue to grow and be saved and passed along after death by waiting to take social security benefits which once not taken are lost forever and at the expense of my other assets.

 

[travelover]

You don't know for sure so your concern is certainly valid. I do know for sure. So I don't see how it makes any sense to spend my own assets which can continue to grow and be saved and passed along after death by waiting to take social security benefits which once not taken are lost forever and at the expense of my other assets.

Great. You have your answer. I have no ability to predict the future, I can only hedge my bets.

 

[ChrisC]

DW claimed at 62 and I picked up the spousal benefit at 66. Then I switched to my full benefit at 70 and she switched to a spousal benefit on my record. (I realize that this approach is now restricted).

We have a substantial TIRA so have been trying to spend it down while delaying SS. I have looked at it as purchasing an annuity at attractive rates. Also wanted to "shift" income to SS because of it's tax advantages.

Also doing Roth conversions as we are able.

Not sure how well this has worked since TIRA balance has "balooned" and RMDs will still be an issue. I guess at least it's been minimized to some extent.

My SS benefit is $3450/mo and DW's is $906.

I guess I'm happy with how this worked out but only time will tell if it was the optimal solution.

We'll be doing the same here. With our pensions, we have enough to sustain our lifestyles and will always be, at minimum, in the 25 percent federal tax bracket. Our balances in tIRAs and 401Ks will likely result in tax torpedo land once RMDs start for us in 6 years. Started Roth conversions before we became SS eligible. Once eligible for SS, we've delayed; I'll take my WEP-reduced SS benefits next year at 63, wife will file a restricted application and apply for spousal benefits on my record and then file at 70 for her SS retirement benefits. (Wife got grandfathered under the new SS rules to file a restricted application.) I figure this provides us with an extra space to do the Roth conversions up to the 28 percent bracket. Delaying SS benefits for my wife until she hits 70, who will be the biggest SS retirement recipient in our family with longevity genes running high in her family, makes sense to us.

 

[W2R]

You don't know for sure so your concern is certainly valid. I do know for sure. So I don't see how it makes any sense to spend my own assets which can continue to grow and be saved and passed along after death by waiting to take social security benefits which once not taken are lost forever and at the expense of my other assets.

(emphasis mine) Wow, I was once told that the only things that were sure in life were death and taxes. I guess we can amend that to say that the only things that are sure in life are, death, taxes, and Joylush's retirement income. Just teasing and I'm glad you have a retirement income that you feel is absolutely bulletproof.

 

[Joylush]

Great. You have your answer. I have no ability to predict the future, I can only hedge my bets.

Yes, I do have my answer that I'll never need it. I'm trying to figure out if there is something I'm missing in my thought process. So far I'm not seeing how it makes sense to forgo the SS at the expense of spending my own assets which if not used continue to grow and belong to me/my heirs. Everyone's situation is definitely different.

 

[RunningBum]

What is wrong with my thoughts on this?

I won't ever need SS.

I'm thinking it makes more sense to take it early so my own assists can continue to accrue. I can leave them to my heirs. Can't do that with SS that hasn't been taken.

When are you going to die, and how well are your investments going to do?

If you wait until 70 to take SS, from that point on you get a larger SS check and are able to starting leaving more of your assets alone to accrue. Unless you did really well investing the extra assets in the early years, eventually you will make up for the 8 years when you used more of your assets between 62-70, and crossover to having more assets to leave to your heirs by taking the larger SS payment at 70. Put together a spreadsheet for your situation, including your estimated rate of return. That crossover point may come later than you believe you are likely to stay alive, or it could be that you'll invest well enough that you'll never hit a crossover point. There is no absolute right way unless you magically know the answers to my first two questions.

 

[Joylush]

(emphasis mine) Wow, I was once told that the only things that were sure in life were death and taxes. I guess we can amend that to say that the only things that are sure in life are, death, taxes, and Joylush's retirement income. Just teasing and I'm glad you have a retirement income that you feel is absolutely bulletproof.

I'm very conservative and a master of analyzing doomsday scenarios. So I guess you can say I've reached a comfort level that gives me enough confidence to make that assertion.

Surely you can envision a scenario where you would feel confident saying the same? It would be interesting to hear what others feel they would have to have net worth-wise and/or in income producing assets at a certain age to feel confident they wouldn't need social security.

I guess you could say I've been technically retired for a couple years already (since 52). Portfolio/assets continue to grow because I don't spend nearly close to what I earn. I don't see that changing. I've done the calculations.

 

[LARS]

If you are not working, why would someone wait until 70 to collect Social Sec...

Skimmed thread so perhaps someone else mentioned this: assuming you're receiving an Obamacare subsidy, it is a strong financial incentive to not claim SS until 65 and Medicare as SS will increase income for subsidy purposes (unless I am mistaken).


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[Sunset]

I'm very conservative and a master of analyzing doomsday scenarios. So I guess you can say I've reached a comfort level that gives me enough confidence to make that assertion.

Surely you can envision a scenario where you would feel confident saying the same? It would be interesting to hear what others feel they would have to have net worth-wise and/or in income producing assets at a certain age to feel confident they wouldn't need social security.

I guess you could say I've been technically retired for a couple years already (since 52). Portfolio/assets continue to grow because I don't spend nearly close to what I earn. I don't see that changing. I've done the calculations.

If I had 1MM more than I do now, I'd feel fine taking SS early and missing out on the expected extra $$ at the breakeven point.
The 1MM more would be far more than the difference, but to cut it closer would be not as comfortable.