Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 05-27-2021, 02:28 PM   #21
Full time employment: Posting here.
latexman's Avatar
 
Join Date: Mar 2014
Location: Apex
Posts: 854
Quote:
Originally Posted by Out-to-Lunch View Post
One difference is that the SS increases are not compounded.
True, but SS is at 6-8% plus inflation. AFAIK, OP is only compounding his AA by 5%.

I hope the OP follows up after looking into other programs. I am keenly interested in what they find..
latexman 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 05-27-2021, 03:24 PM   #22
Recycles dryer sheets
 
Join Date: Aug 2019
Location: Triangle region
Posts: 52
Quote:
Originally Posted by Exchme View Post
As Dash Man mentioned, the first place to go is opensocialsecurity.com. Sounds like you like customized, detailed analyses, so if you have Excel, I recommend Pralana Gold (IIRC it is $99 1st year, $49/yr updates). To get everything right, it requires detailed input, but it's well organized and does everything you can imagine. One module optimizes SS claim age for you (and your spouse if applicable) for your particular assumptions for rate of return, taxes, etc.
Concur with the Pralana Gold recommendation. It will provide a very comprehensive look at the impact of different SS start ages on your overall financial condition. As the developer states in the Pralana Gold 2021 User manual (https://pralanaretirementcalculator.com/manuals/) on pp 138-9:

"The analysis Pralana performs during this process is considerably more involved than just determining the start ages that result in the largest long term income; it also examines the long term effects of this income on the interest on your savings, taxes, and survivor scenarios to provide you with the best overall solution which, in turn, will enable you to maximize your standard of living."

After using Pralana Gold and iterating various scenarios, it was clear that in our case taking SS at approx FRA made the most sense. For us taking SS at 62 or 70 resulted in sub-optimum results. However, "sub optimum" results were within 3% of the "optimum" result.

When I used the same scenarios in ORP I got the same results, with annual disposable income levels changing by $1,000 to $2,000 at most.

Bottom-line: DW and I have FRA as a pencil mark on the wall for us to begin taking SS, a number we feel free to change if and when circumstances change (health, zombie apocalypse, etc.) without much concern.
__________________
Plans are of little importance, but planning is essential - Winston Churchill

If you don't know where you are going, you'll end up someplace else - Yogi Berra
schenbew is offline   Reply With Quote
Old 05-27-2021, 04:10 PM   #23
Thinks s/he gets paid by the post
 
Join Date: Aug 2016
Location: Northern Virginia
Posts: 4,830
Quote:
Originally Posted by flintnational View Post
OP, I don't think you posted your AA. Depending on what it is, it may be hard to get a 5% return over the next decade. I would rerun the model with lower investment returns and see how sensitive your results are to your investment return assumption.

That being said, I am considering a similar strategy. If stock values seem high at a future date (SS age), I may elect to sell stocks to fund retirement spending and allow SS to grow. If stocks appear to be reasonably priced (or low priced) I may take SS to avoid selling stocks.
I tend to agree with you. One neat thing about SS is you can change your plan any day.

We are planning to wait until FRA. But I would probably go sooner if not for Roth conversions.

As much as people try to model this, there is no way to do so without knowing your date of death. Accordingly timing is often based in other factors.
Montecfo is offline   Reply With Quote
Old 05-27-2021, 05:16 PM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 14,812
Quote:
Originally Posted by RunningBum View Post
I see some posts talking about decent or maybe even historically just average market returns making it better to take SS at 62, to be able to keep more invested. But I step back and look at when (in which scenarios) SS is going to be most important to me.


Now, which situation is more important to me? Clearly the second, because my retirement is going to be more difficult if the market drops. I'd rather optimize my situation for that bad situation than optimize it for an already good situation.

Whether this applies to others in different situations, is up to each person. I'm just sharing my thought process.
The other factor I take into account is my level mental health. In my 60's and 70's I should be able to manage my investments with a simple AA. After that, who knows? I could become a bit 'unstable' and do stupid things with my money, or be conned into investing it with the next Bernie Madoff, or send it to Mexico to bail out my grandchild, or whatever scam somebody thinks up.
__________________
The worst decisions are usually made in times of anger and impatience.

Self proclaimed President for Life of Outliers United.
Chuckanut is offline   Reply With Quote
Old 05-27-2021, 05:30 PM   #25
Thinks s/he gets paid by the post
 
Join Date: Oct 2019
Posts: 2,674
Quote:
Originally Posted by Chuckanut View Post
The other factor I take into account is my level mental health. In my 60's and 70's I should be able to manage my investments with a simple AA. After that, who knows? I could become a bit 'unstable' and do stupid things with my money, or be conned into investing it with the next Bernie Madoff, or send it to Mexico to bail out my grandchild, or whatever scam somebody thinks up.

Well, if I'm going to lose it, can I have fun watching it go?
Attached Images
File Type: jpg Anna Nicole.jpg (172.1 KB, 90 views)
Time2 is online now   Reply With Quote
Old 05-27-2021, 05:50 PM   #26
Thinks s/he gets paid by the post
 
Join Date: Nov 2016
Location: Washington State
Posts: 2,080
Quote:
Originally Posted by Brianjone5 View Post
I retired at 55. Six years later I am approaching the point where 'when to take Social Security' (SS) becomes more than an academic question.

I have been modelling different scenarios around taking SS at 62, 65, 67 and 70 years of age.

How has any modelling you have done played out?
What I do is log on to "My Social Security" account and determine the amounts that would be paid at each age (62, 63, etc.). Then I multiply each of those values by 75% to account for the "haircut" if social security is not fixed before the trust fund runs out.

Next, I enter each value in "Flexible Retirement Planner" as a separate entry in the "additional inputs" section. I use a "track inflation" COLA and assume 85% of SS will be taxed.

I also enter all other values in FRP as usual, pensions, savings, other income sources, etc.

Once I have everything in FRP I can experiment by selecting different SS options for my wife and I. For example, if I start at 62 and she starts at 67. Or if we both start at 62, or both at 70.

I find there is a tradeoff. The longer we wait to take SS, the more of our personal retirement savings we'll spend down. It's a matter of balancing how low we want our savings to get before we start SS.

A couple years ago it looked like 62 was going to be the best time for both of us to start SS. As our retirement savings have grown over the last few years, we will probably be able to wait until 64 or 65. We still have a couple years before we retire, so we may end up pushing the SS start dates even further.

Basically, we will wait and see where we are when we get closer to starting SS. If we need the money, we'll take it. Otherwise, we'll postpone SS as long as possible.
mountainsoft is offline   Reply With Quote
Old 05-27-2021, 06:51 PM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 32,242
A few years ago before opensocialsecurity.com was around, I did this simulation. Assumes $1,000/month PIA at age 67.... 70% at age 62 or 124% at age 70. Table looks at differential cash flows and IRR of taking at 70 depending on how long you live to. Also looks at accumulated value of differential cash flows at various accretion rates (5% real base rate).

Note that since the cash flows in the first table don't include any estimated COLA adjustments, the IRR's and 5% accretion rate are real, not nominal. The second table assumes that COLA is 2% annually and nominal rate of return is 7%.

How long do you expect to live?

 Claim at 62Claim at 70DifferenceFV at5.00%IRRs (real)
628,400 -8,4008,607 N/A
638,400 -8,40017,645 N/A
648,400 -8,40027,135 N/A
658,400 -8,40037,099 N/A
668,400 -8,40047,562 N/A
678,400 -8,40058,547 N/A
688,400 -8,40070,082 N/A
698,400 -8,40082,193 N/A
708,40014,8806,48079,663 N/A
718,40014,8806,48077,006 N/A
728,40014,8806,48074,216 N/A
738,40014,8806,48071,287 N/A
748,40014,8806,48068,212 N/A
758,40014,8806,48064,982 N/A
768,40014,8806,48061,591 N/A
778,40014,8806,48058,031 -3.19%
788,40014,8806,48054,292 -1.65%
798,40014,8806,48050,367 -0.40%
808,40014,8806,48046,245 0.62%
818,40014,8806,48041,917 1.48%
828,40014,8806,48037,373 2.20%
838,40014,8806,48032,602 2.81%
848,40014,8806,48027,592 3.33%
858,40014,8806,48022,332 3.77%
868,40014,8806,48016,808 4.16%
878,40014,8806,48011,008 4.50%
888,40014,8806,4804,919 4.80%
898,40014,8806,480-1,475 5.06%
908,40014,8806,480-8,189 5.29%
918,40014,8806,480-15,239 5.49%
928,40014,8806,480-22,640 5.67%
938,40014,8806,480-30,413 5.83%
948,40014,8806,480-38,573 5.97%
958,40014,8806,480-47,142 6.10%
968,40014,8806,480-56,139 6.22%
978,40014,8806,480-65,586 6.32%
988,40014,8806,480-75,505 6.41%
998,40014,8806,480-85,921 6.50%
1008,40014,8806,480-96,857 6.57%

Below is with 2% COLA included:
 Claim at 62Claim at 70DifferenceFV at7.00%IRRs
628,400 -8,4008,689 N/A
638,568 -8,56818,160 N/A
648,739 -8,73928,471 N/A
658,914 -8,91439,685 N/A
669,092 -9,09251,868 N/A
679,274 -9,27465,093 N/A
689,460 -9,46079,434 N/A
699,649 -9,64994,976 N/A
709,84217,4347,59293,770 N/A
7110,03917,7837,74492,324 N/A
7210,24018,1397,89990,615 N/A
7310,44418,5018,05788,624 N/A
7410,65318,8718,21886,327 N/A
7510,86619,2498,38383,699 N/A
7611,08419,6348,55080,713 -3.23%
7711,30520,0278,72177,342 -1.26%
7811,53120,4278,89673,554 0.32%
7911,76220,8369,07469,317 1.59%
8011,99721,2529,25564,596 2.64%
8112,23721,6779,44059,353 3.51%
8212,48222,1119,62953,547 4.24%
8312,73222,5539,82247,136 4.86%
8412,98623,00410,01840,073 5.39%
8513,24623,46410,21832,308 5.85%
8613,51123,93410,42323,788 6.25%
8713,78124,41210,63114,457 6.59%
8814,05724,90010,8444,252 6.89%
8914,33825,39811,061-6,892 7.16%
9014,62525,90611,282-19,044 7.39%
9114,91726,42511,507-32,281 7.60%
9215,21526,95311,738-46,682 7.78%
9315,52027,49211,972-62,334 7.95%
9415,83028,04212,212-79,329 8.09%
9516,14728,60312,456-97,767 8.22%
9616,47029,17512,705-117,753 8.34%
9716,79929,75812,959-139,401 8.45%
9817,13530,35413,218-162,832 8.54%
9917,47830,96113,483-188,177 8.63%
10017,82731,58013,752-215,576 8.71%
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 05-27-2021, 07:33 PM   #28
Full time employment: Posting here.
 
Join Date: Dec 2017
Posts: 881
Quote:
Originally Posted by pb4uski View Post
A few years ago before opensocialsecurity.com was around, I did this simulation. Assumes $1,000/month PIA at age 67.... 70% at age 62 or 124% at age 70. Table looks at differential cash flows and IRR of taking at 70 depending on how long you live to. Also looks at accumulated value of differential cash flows at various accretion rates (5% real base rate).

Note that since the cash flows in the first table don't include any estimated COLA adjustments, the IRR's and 5% accretion rate are real, not nominal. The second table assumes that COLA is 2% annually and nominal rate of return is 7%.

How long do you expect to live?

 Claim at 62Claim at 70DifferenceFV at5.00%IRRs (real)
628,400 -8,4008,607 N/A
638,400 -8,40017,645 N/A
648,400 -8,40027,135 N/A
658,400 -8,40037,099 N/A
668,400 -8,40047,562 N/A
678,400 -8,40058,547 N/A
688,400 -8,40070,082 N/A
698,400 -8,40082,193 N/A
708,40014,8806,48079,663 N/A
718,40014,8806,48077,006 N/A
728,40014,8806,48074,216 N/A
738,40014,8806,48071,287 N/A
748,40014,8806,48068,212 N/A
758,40014,8806,48064,982 N/A
768,40014,8806,48061,591 N/A
778,40014,8806,48058,031 -3.19%
788,40014,8806,48054,292 -1.65%
798,40014,8806,48050,367 -0.40%
808,40014,8806,48046,245 0.62%
818,40014,8806,48041,917 1.48%
828,40014,8806,48037,373 2.20%
838,40014,8806,48032,602 2.81%
848,40014,8806,48027,592 3.33%
858,40014,8806,48022,332 3.77%
868,40014,8806,48016,808 4.16%
878,40014,8806,48011,008 4.50%
888,40014,8806,4804,919 4.80%
898,40014,8806,480-1,475 5.06%
908,40014,8806,480-8,189 5.29%
918,40014,8806,480-15,239 5.49%
928,40014,8806,480-22,640 5.67%
938,40014,8806,480-30,413 5.83%
948,40014,8806,480-38,573 5.97%
958,40014,8806,480-47,142 6.10%
968,40014,8806,480-56,139 6.22%
978,40014,8806,480-65,586 6.32%
988,40014,8806,480-75,505 6.41%
998,40014,8806,480-85,921 6.50%
1008,40014,8806,480-96,857 6.57%

Below is with 2% COLA included:
 Claim at 62Claim at 70DifferenceFV at7.00%IRRs
628,400 -8,4008,689 N/A
638,568 -8,56818,160 N/A
648,739 -8,73928,471 N/A
658,914 -8,91439,685 N/A
669,092 -9,09251,868 N/A
679,274 -9,27465,093 N/A
689,460 -9,46079,434 N/A
699,649 -9,64994,976 N/A
709,84217,4347,59293,770 N/A
7110,03917,7837,74492,324 N/A
7210,24018,1397,89990,615 N/A
7310,44418,5018,05788,624 N/A
7410,65318,8718,21886,327 N/A
7510,86619,2498,38383,699 N/A
7611,08419,6348,55080,713 -3.23%
7711,30520,0278,72177,342 -1.26%
7811,53120,4278,89673,554 0.32%
7911,76220,8369,07469,317 1.59%
8011,99721,2529,25564,596 2.64%
8112,23721,6779,44059,353 3.51%
8212,48222,1119,62953,547 4.24%
8312,73222,5539,82247,136 4.86%
8412,98623,00410,01840,073 5.39%
8513,24623,46410,21832,308 5.85%
8613,51123,93410,42323,788 6.25%
8713,78124,41210,63114,457 6.59%
8814,05724,90010,8444,252 6.89%
8914,33825,39811,061-6,892 7.16%
9014,62525,90611,282-19,044 7.39%
9114,91726,42511,507-32,281 7.60%
9215,21526,95311,738-46,682 7.78%
9315,52027,49211,972-62,334 7.95%
9415,83028,04212,212-79,329 8.09%
9516,14728,60312,456-97,767 8.22%
9616,47029,17512,705-117,753 8.34%
9716,79929,75812,959-139,401 8.45%
9817,13530,35413,218-162,832 8.54%
9917,47830,96113,483-188,177 8.63%
10017,82731,58013,752-215,576 8.71%
In the simplified situation where you don't care about survivor or spousal benefits it is just a matter of how long you live, right?
RetMD21 is offline   Reply With Quote
Old 05-27-2021, 07:38 PM   #29
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 32,242
Yes... and spousal benefits are an issue for us and that is why I prefer opensocialsecurity.com .... it covers off such things.

But the analysis is indicative.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 05-27-2021, 07:42 PM   #30
Recycles dryer sheets
 
Join Date: Sep 2016
Location: Way up North
Posts: 462
Another way to model SS is to treat it as a bond while it's being deferred and to adjust your AA on your other portfolio assets to reflect that "bond".

SS is actually a very good bond at today's interest rates. A rough estimate of the value of mortality credits for age 60-70 decade is 3% per year. Although actuarial mortality credits aren't linear, my first approximation is to assume so over the decade. Subtracting mortality credits from annual payout increases leaves an interest return on a "SS bond" of ~3.5% for 62 to FRA and ~5% for FRA to 70. That's a much better return than a comparable 30 year treasury. SS internal ROR has not been adjusted in recent years to account for the fall in interest rates and you can arbitrage that against your portfolio AA.

It also seems appropriate to use the same 3.5% & 5% (real) return numbers to compare with alternative portfolio returns for taking early. If you factor in risk, there doesn't seem to be much chance that deferring SS isn't a smoking deal. I wouldn't want to bet on 5% real portfolio returns now.

The limitations of the above estimates are that you individually have to be the same or better mortality risk as the current actuarial table. If you're likely to die early, absolutely take SS early. If you don't have portfolio assets to cover spending while deferred, the choice is also moot.
bada bing is offline   Reply With Quote
Old 05-27-2021, 07:53 PM   #31
Thinks s/he gets paid by the post
 
Join Date: Apr 2008
Posts: 1,493
Spousal benefits were not a big issue for us. DW started at 65 @ ~91% of the maximum benefit for age 65 at the time on her own work record. She's 6.5 years older than I am, so by the time I get to 70, she'll already be 76.5.

I just turned 62. My benefit is ~93.5% of the maximum benefit. I figure I'll wait at least until 65 also, then re-evaluate whether to go out further.
statsman is offline   Reply With Quote
Old 05-27-2021, 08:19 PM   #32
Full time employment: Posting here.
 
Join Date: Oct 2020
Posts: 557
Quote:
Originally Posted by schenbew View Post
Concur with the Pralana Gold recommendation. It will provide a very comprehensive look at the impact of different SS start ages on your overall financial condition. As the developer states in the Pralana Gold 2021 User manual (https://pralanaretirementcalculator.com/manuals/) on pp 138-9:

"The analysis Pralana performs during this process is considerably more involved than just determining the start ages that result in the largest long term income; it also examines the long term effects of this income on the interest on your savings, taxes, and survivor scenarios to provide you with the best overall solution which, in turn, will enable you to maximize your standard of living."

After using Pralana Gold and iterating various scenarios, it was clear that in our case taking SS at approx FRA made the most sense. For us taking SS at 62 or 70 resulted in sub-optimum results. However, "sub optimum" results were within 3% of the "optimum" result.

When I used the same scenarios in ORP I got the same results, with annual disposable income levels changing by $1,000 to $2,000 at most.

Bottom-line: DW and I have FRA as a pencil mark on the wall for us to begin taking SS, a number we feel free to change if and when circumstances change (health, zombie apocalypse, etc.) without much concern.
Congrats, that's the best kind of cross check between complex analyses- try two tools and compare, glad you got similar answers!

I'm normally very cheap about software, but figured with my retirement, there was a lot more money riding on the decisions I needed to make than the cost of the software. So I bought a copy of Pralana Gold in February and have been very happy. You do need Excel and need to have an interest and willingness to learn.

I got P-G primarily for Roth planning. There are some shortcuts in the tax packages in free alternatives like I-ORP or Bogleheads' Retiree Portfolio Manager that can affect me and Pralana handles them rigorously (non-deductible contributions to mine and my wife's IRAs, lots of pre-existing cap gains in taxable, inherited IRA, NIIT, phaseouts, IRMAA). Since it also applies a tax rate to your heirs, you can avoid the errors a lot of people make there too. It reports the overall asset allocation and allows you to reset allocations within accounts several times to keep the overall AA tuned in. It takes work, but it's the only consumer level tool I know of that allows you to build a reasonable Roth plan, everything else people do is riddled with logic problems, primarily asset allocation issues.

In the SS module, with my usual return and life expectancy assumptions is 70 for me (much higher earner) and 65-67 for my wife depending on the details. That compares well with opensocialsecurity.com.
Exchme is offline   Reply With Quote
Old 05-27-2021, 09:16 PM   #33
Dryer sheet aficionado
 
Join Date: Jun 2017
Location: Western Washington
Posts: 44
Quote:
Originally Posted by A Gold One View Post
I too retired at 55 and am just at the point where I can apply for benefits at age 62. I also just finished up a SS modeling exercise last week.

I considered the estimated annual payout for 62,63, 64, 65, 66+10M and 70. I considered the cumulative after tax difference for each year, the after tax investment earnings on that difference (assumed a 4.5% investment return), the months to break even and my age at break even among other factors. All scenarios showed a break even between 79 and 81 vs. starting the SS benefit at 62. So that is 17 - 19 years before break even.

After mulling it for a bit, and knowing that in our situation we conservatively won't depend on SS, I ended up just feeling happier taking the benefit now and getting a monthly 'paycheck' vs. making more money in my 80's. ;-)


Excellent point. I probably won’t care at that point since I will likely have more than enough.
lesjrp is offline   Reply With Quote
Old 05-27-2021, 09:27 PM   #34
gone traveling
 
Join Date: Aug 2020
Posts: 682
Quote:
Originally Posted by Brianjone5 View Post
Hi all,
I retired at 55. Six years later I am approaching the point where 'when to take Social Security' (SS) becomes more than an academic question.

Our NW is $5m. Half our net worth is in stocks and bonds, targeting 5% growth. It has repeatedly exceeded that, but I think the market is a bit weird, recently.

One quarter of NW is in company pensions that grow about 1.5% a year.

One quarter is in property we own free and clear.

I have been modelling different scenarios around taking SS at 62, 65, 67 and 70 years of age. I am making the following assumptions:

*SS continues to increase by 8% for each year you delay starting it.
*SS COLAs matches the recent decade with +1.5% per year
*I will pay 40% tax on my SS
*I will pay 20% tax on gains from investments to cover income delayed by not taking SS.

What I am looking at is the impact on my investments if I pull from there to replace income I am not getting because of not starting SS, and what that money would deliver at 5% compounding, out until I am 80 and 85.

My modelling shows very clearly (if correct) that taking SS at 62 is the best route. This is because although you get a smaller SS payment, the invested funds remain invested and have longer to compound to 80 and 85.

So many financial advisers push the 'leave it until late' mantra for SS. I am not clear at all that works for everyone, even leaving aside the question of longevity.

On our company pensions, the same logic applies, to me at least. As these grow so slowly, conserving the equivalent funds as investments is even more obvious, and I should start those pensions asap. It is hard to know our exact budget in post-Covid life, but I estimate SS plus pensions could leave us with a SWR of zero.

How has any modelling you have done played out?

Cheers,

B
@Brianjone5 This is good thinking. The "leave it in" mantra is an example of conventional wisdom in personal finance that is not wisdom at all. As well spelled out in your post.

I agree with your logic and am likely to take the same approach when I reach age 62. The breakeven analysis, in addition to PV, FV and sum of flows analyses help frame the decision well.
chassis is offline   Reply With Quote
Old 05-27-2021, 10:23 PM   #35
Recycles dryer sheets
gamboolman's Avatar
 
Join Date: Sep 2012
Location: Spring, Texas
Posts: 425
On Open Social Security

How do you input/account for Spouse getting the 1/2 Spousal Benefit?

I am not very computer literate - so apologies in advance, but would appreciate any advice and guidance.

Thanks, gamboolman....
gamboolman is offline   Reply With Quote
Old 05-28-2021, 07:26 AM   #36
Recycles dryer sheets
 
Join Date: Nov 2020
Posts: 381
Quote:
Originally Posted by latexman View Post
True, but SS is at 6-8% plus inflation. AFAIK, OP is only compounding his AA by 5%.

I hope the OP follows up after looking into other programs. I am keenly interested in what they find..
The 5% and the 6%-8% are not comparable numbers. The cashflows start on different dates, but end on the same date. A simple example I will either give you (a) $100 this year plus $105 next year or I will give you b) $150 next year - which do you choose? (option (a) grows at 5% and option (b) grows at 50%)
qwerty3656 is online now   Reply With Quote
Old 05-28-2021, 07:57 AM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 32,242
Quote:
Originally Posted by gamboolman View Post
On Open Social Security

How do you input/account for Spouse getting the 1/2 Spousal Benefit?

I am not very computer literate - so apologies in advance, but would appreciate any advice and guidance.

Thanks, gamboolman....
Since you input both your and your spouse's birthdates and PIA amounts, the program includes spousal benefits if it is applicable.

Another thing for people to keep in mind is that opensocialsecurity.com also includes mortality in its calculations... the proability that you and/or your spouse will be alive to receive the SS benefit for that claiming strategy. Prelana and ORP don't consider moratilty in their calculation to my knowledge. You can select different mortality tables using the checkbox at the top of input page.

Opensocialsecurity.com also allows you to select your own real discount rate for the time value of money. The default is the 20 year TIPS rate. I disagree with the author on that assumption since so few people invest in TIPS. I prefer to use the estimated real rate of return on the funds that will be used if SS is deferreed, which is usually signficantly higher than the 20-year TIPS rate.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 05-28-2021, 08:22 AM   #38
Recycles dryer sheets
 
Join Date: Jan 2012
Posts: 140
Quote:
Originally Posted by Chuckanut View Post
Here's another way to look at when to take SS. It has its limitations, the primary one being that it works only if you have no plans to leave a big estate to your heirs. That is a big IF for many of us.

https://www.early-retirement.org/forums/f28/laurence-kotlikoff-maximize-my-ss-com-77660.html#post1604411

I thought this was insightful. I had never considered how when taking social security could impact the size of one’s estate. So, conversely to the example shown about not caring about the size of one’s estate…..if you do care about how much coin you leave the kids (e.g. more being better), taking social security sooner rather than later might be a sensible option. If we only knew when we would expire, planning would be much simpler.
ProGolferWannabe is offline   Reply With Quote
Old 05-28-2021, 08:28 AM   #39
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 12,379
Quote:
Originally Posted by lesjrp View Post
Excellent point. I probably won’t care at that point since I will likely have more than enough.
Unless you don't have enough at that point. Then you will care. Wouldn't the larger monthly benefit be nice in that case? Maybe not likely for that to happen, but not impossible?
RunningBum is offline   Reply With Quote
Old 05-28-2021, 08:36 AM   #40
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 12,379
Quote:
Originally Posted by ProGolferWannabe View Post
I thought this was insightful. I had never considered how when taking social security could impact the size of one’s estate. So, conversely to the example shown about not caring about the size of one’s estate…..if you do care about how much coin you leave the kids (e.g. more being better), taking social security sooner rather than later might be a sensible option. If we only knew when we would expire, planning would be much simpler.
Is it though? If you do care about leaving your heirs more, this is where breakeven analysis comes into play. Assuming you spend the same in either case, if you outlive the breakeven point, you will leave your heirs more by delaying SS. And of course if you die earlier, you leave your heirs more by taking SS sooner.

Another factor in this is, if you die early, you likely won't have chewed through a lot of your investment savings. So even though you didn't optimize SS benefits for your heirs, you still left them a lot. If you live past the breakeven, you might have used more of your savings, but at least you optimized SS and left as much as you could.
RunningBum is offline   Reply With Quote
Reply


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

Advanced Search
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


Similar Threads
Thread Thread Starter Forum Replies Last Post
Social Security Torpedo Tax with Pensions? MrLoco FIRE and Money 39 04-17-2017 12:55 AM
What mortgage number to use in retirement modelling jazzbo FIRE and Money 9 01-27-2017 12:21 PM
Deficit panel leaders' plan curbs Social Security and Other Sacred Cows MasterBlaster FIRE and Money 140 11-15-2010 05:59 AM
Modelling health care cost in early retirement? maldini Health and Early Retirement 37 10-10-2007 01:53 PM
Valuing pensions and other income streams two4theroad FIRE and Money 2 05-10-2007 05:16 PM

» Quick Links

 
All times are GMT -6. The time now is 12:24 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.