Is the Bear Market Causing Anyone to Consider Taking SS Earlier Than They Planned?

marko said:
This is a constant discussion here but always a personal decision based on so many other factors, such that "it depends" is the only answer.

What I have come to believe however is that there are two types of people who take SS at 62: Those who really need the money and those who don't need it at all. The former is obvious, the latter is 'fun bonus money' to enjoy while still young enough. Those in the middle want to maximize their benefit for any number of financial reasons.

My personal reason for 62 was that I'm in the 'don't need it' group but with the added concern that future changes could reduce the benefit; I'm a 'take the money and run' type.
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Yeah, we are in the middle group, with heavy IRA tilted portfolio. So lots of decisions in how to manage the future RMD's.
 
I never understood waiting past 62. If you don't need it, take it @62 and bank it for later.
(Add it to your SS monthly at 65-67-70 and pretend you waited) LOL
It ensures you at least get some of your investment back. As you never know if SS could change. Or you unexpectedly leave the planet early.
Brokers want you invested forever and recommend you wait. Thinking you will live forever giving them more $$. SS is betting you will kick the bucket. Both typically recommend you wait past the normal 65/67. As it's to their advantage. Not yours. Just my take.
 
almost there said:
Brokers want you invested forever and recommend you wait. Thinking you will live forever giving them more $$. SS is betting you will kick the bucket. Both typically recommend you wait past the normal 65/67. As it's to their advantage. Not yours. Just my take.
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Qui bono? (who stands to gain)

Follow the money!
 
almost there said:
I never understood waiting past 62. If you don't need it, take it @62 and bank it for later.
(Add it to your SS monthly at 65-67-70 and pretend you waited) LOL
It ensures you at least get some of your investment back. As you never know if SS could change. Or you unexpectedly leave the planet early.
Brokers want you invested forever and recommend you wait. Thinking you will live forever giving them more $$. SS is betting you will kick the bucket. Both typically recommend you wait past the normal 65/67. As it's to their advantage. Not yours. Just my take.
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You don't understand the concept of longevity insurance?
 
I don't think the trade-off is worth it. Bank the 8 yrs if you feel you need insurance.
$200k before taxes, rather than an extra $800 a month from 70 to whenever. (in my case)
What's the break even point? 90? Just my take. Check with your financial advisor. :eek: They will most likely recommend you wait till 70.....
 
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I guess not. Just math. And average longevity.
Would also rather leave any extra to my kids / over the Gov.
 
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"who stands to gain?" Your right. Maybe not you. The Gov. stands to gain if you wait till 70. Statistically speaking anyway.
 
marko said:
This is a constant discussion here but always a personal decision based on so many other factors, such that "it depends" is the only answer.

What I have come to believe however is that there are two types of people who take SS at 62: Those who really need the money and those who don't need it at all. The former is obvious, the latter is 'fun bonus money' to enjoy while still young enough. Those in the middle want to maximize their benefit for any number of financial reasons.

My personal reason for 62 was that I'm in the 'don't need it' group but with the added concern that future changes could reduce the benefit; I'm a 'take the money and run' type.
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I see this stated all the time and just do not understand it.



Please explain why you think that those currently collecting SS would be exempt from any future cuts in benefits?



Those of use nearing the age to collect vote just as much as those collecting; so "exempting" those already collecting would probably cause even more of a ruckus with politicians.



A "fair" ( YEs I realize life is not fair) would be if there are future benefit reductions...is that ALL recipients ( current and future) collectively take a haircut. This way the pain could be spread across the board and less money needs to be taken from future recipients if everyone shares in the reduction of benefits.


Makes sense to me.
 
almost there said:
I never understood waiting past 62. If you don't need it, take it @62 and bank it for later.
(Add it to your SS monthly at 65-67-70 and pretend you waited) LOL
It ensures you at least get some of your investment back. As you never know if SS could change. Or you unexpectedly leave the planet early.
Brokers want you invested forever and recommend you wait. Thinking you will live forever giving them more $$. SS is betting you will kick the bucket. Both typically recommend you wait past the normal 65/67. As it's to their advantage. Not yours. Just my take.
Click to expand...



Assuming you do not wish to leave much of an inheritance, taking SS at 70 gives you more money to spend each year starting at 62. This has been shown several times in other threads.
 
Must have missed it. All I can go by is my Estimated Benefits.
62 $1967 mo. $23,604 yr. 18 yrs to 80 $424,872
67 $2794 mo. $33,528 yr. 13 yrs to 80 $435,864
70 $3465 mo. $41,580 yr. 10 yrs to 80 $415,800
And yes, I would like to leave an ok inheritance. If possible.
I just don't see the big advantage of waiting till 70.
Unless you based your retirement around it. Which I didn't do.
I honestly don't have that much faith in our Gov. Just me I guess.
Especially going out to 2042. But agree it could be looked at as a plus after 80.
I expect to be spending less after 80 V.S. 60-80.
Again, probably just me.
 
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almost there said:
Brokers want you invested forever and recommend you wait. Thinking you will live forever giving them more $$.
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Actually, brokers should want you to take SS early, if they are paid by percent of assets under management. If you wait, you'll withdraw more from your savings between 62-70, thereby decreasing their commissions.
 
almost there said:
Must have missed it. All I can go by is my Estimated Benefits.
62 $1967 mo. $23,604 yr. 18 yrs to 80 $424,872
67 $2794 mo. $33,528 yr. 13 yrs to 80 $435,864
70 $3465 mo. $41,580 yr. 10 yrs to 80 $415,800
And yes, I would like to leave an ok inheritance. If possible.
I just don't see the big advantage of waiting till 70.
Unless you based your retirement around it. Which I didn't do.
I honestly don't have that much faith in our Gov. Just me I guess.
Especially going out to 2042. But agree it could be looked at as a plus after 80.
I expect to be spending less after 80 V.S. 60-80.
Again, probably just me.
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Fine but what if you live beyond 80? Population wide averages may be quite inapplicable to an individual. Try a longevity calculator that let's you input various key lifestyle and health parameters and see what you come up with. My life expectancy is well into my 90s.
 
almost there said:
"who stands to gain?" Your right. Maybe not you. The Gov. stands to gain if you wait till 70. Statistically speaking anyway.
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Go back and read about "longevity insurance" as recommended by others.

"Statistically speaking anyway."? Careful how you apply those statistics. "All of us" are average, yet, none of us is average. IOW, averages apply to a group, they do not apply to an individual.

-ERD50
 
I'm not basing my decision on averages.

If I die before the breakeven point, it doesn't matter. I'm dead. Sure, my heirs could've come out a little better if I took at 62, but since I died early, I didn't come close to spending down my assets, so they get enough.

If I die after the breakeven point, every month I get further and further ahead if I've deferred. Less likely to run out of money even if I live a really long time. And as a bonus, my heirs come out better too. I've likely spent down a lot of assets living so long, but I will have more because I've deferred and took the bigger check.

For that reason I'm willing to defer even if my likely lifespan is a little before the breakeven. If there's a reasonable chance I'll outlive the breakeven, I'll take it, even if it's less than 50%.

Longevity insurance in a nutshell. Just setting aside your own money isn't insurance, because you haven't passed off part of the longevity risk to someone else.
 
^ Exactly! I just talked to a banker that I've known for 30 plus years, and he is worth a lot. He just turned 62 and he told me he is taking SS right away. He said he run numbers every which way you could and in every situation and said there is no right way or wrong. The one thing that taking it early (62) has over the other options is if you die early at least you get something out of it.
 
street said:
The one thing that taking it early (62) has over the other options is if you die early at least you get something out of it.
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If your main goal is to avoid not getting any social security benefits in the event you die early, then you should indeed start collecting as soon as you can. And you should hope you don't die before 62. After you are dead, your survivors can say "He was wise to get some."

If you live into your 80s or longer, then you are giving up some money. But at least you'll always be able to say "Well sure, my checks are now about 57% of what they could have been if I waited until 70. But at least I got some."

And of course if you have a spouse that would prefer to have your maximum survivor benefits, well you won't be around to see any potential sorrow anyway.
 
If I died at 70, not having collected SS, I'd be out about $200K. And I'd be dead so I wouldn't care. And I'd leave behind a lot of other assets, so I don't think my heirs will care that much.

If I'm still living at 98, I might be over $500K ahead by deferring until 70. And I'll still be alive to enjoy it.

But yeah, there might be 8 years from 62-70 where I'll be sleeping poorly, fretting that I'll die before getting any.
 
Think you nailed it.

its the emotional reactions to, and inability to answer definitively, our individual unknowns regarding our mortality, plus the same type reactions to fears of changes to the system of benefits, that cause those who do not need to to go ahead and take it early anyway. The only way to overcome those fears is to dig into the numbers, which several on this forum have so graciously provided, that show we are actually better off to wait, regardless of mortality.

Numbers are hard tho, and until that emotional wall is climbed, are largely ignored. Or so it was for me until benefiting from the wisdom of others caused me to change to planning for age 65 at the earliest.

Only a truly severe bear, like 50% or more, timed right before 62 for me, might, and only might, change me back.
 
MrLoco said:


I see this stated all the time and just do not understand it.



Please explain why you think that those currently collecting SS would be exempt from any future cuts in benefits?



Those of use nearing the age to collect vote just as much as those collecting; so "exempting" those already collecting would probably cause even more of a ruckus with politicians.



A "fair" ( YEs I realize life is not fair) would be if there are future benefit reductions...is that ALL recipients ( current and future) collectively take a haircut. This way the pain could be spread across the board and less money needs to be taken from future recipients if everyone shares in the reduction of benefits.


Makes sense to me.
Click to expand...

Your talking about grandfathering. So am I.

I never meant to say (and don't think I did) that those currently receiving SS would be impacted. My point was exactly as you say: "Get in, take the money and run, (and hope to be grandfathered against any changes)

Having said that, I recall some discussion here about everyone possibly getting a (15%??) haircut in 2034. In that case, if one were to reach FRA in 2033, taking SS at 62 might get one more total dollars...but I haven't done the math.

Just a few years ago, there was a change to spousal benefits. IIRC, those who applied just days before the change were not affected.
 
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Bir48die said:
So the answer is he has a different opinion than yours
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He said he didn't understand waiting past 62. For anyone, I was presuming. I stated longevity insurance as a reason for waiting. Longevity insurance isn't an opinion. His continued responses show that he is oblivious to longevity insurance.

Everyone has their own reasons for doing what they want, but I'd hope it'd be an informed decision. Not my problem though.
 
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