Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 05-28-2021, 11:13 PM   #61
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 12,382
Quote:
Originally Posted by Navigator View Post

Since I retired, I’ve come to the conclusion that anyone who has enough assets to worry about taking SS at 62 or 70 will be fine no matter what they do.
Yeah, me too. I've been collecting SS for about 12 years. Started at 62. My main motivation for starting at 62 was to provide financially for a person who cannot collect SS based on my record. In my case this was my wife who is impacted by GPO. But it could be anyone you want to provide something for but who doesn't qualify for any portion of your SS.

Because market returns on the money I invested every month were excellent those 8 years, the extra stash provides more than enough to compensate for the reduced benefit. But, to your point, unless those 8 years had been a complete bust investment-wise, there would have been little impact on our retirement one way or the other.

Everyone's situation and goals are different.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet 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!

...seems no one answered you... the answer is NO,
Old 05-29-2021, 06:23 AM   #62
Recycles dryer sheets
 
Join Date: Dec 2016
Posts: 315
...seems no one answered you... the answer is NO,

Quote:
Originally Posted by Time2 View Post
Maybe we are talking about two different things. My point is my wife's benefit after I die.

"When a Social Security beneficiary dies, his or her surviving spouse is eligible for survivor benefits. A surviving spouse can collect 100 percent of the late spouse’s benefit if the survivor has reached full retirement age",
From, https://www.aarp.org/retirement/soci...ouse-dies.html

And,
  • The rules are different for survivor benefits. A widow or widower whose spouse waited until 70 to file for Social Security is entitled to the full amount the deceased was getting — including the delayed retirement credits — so long as the surviving spouse has reached full retirement age.
  • From, https://www.aarp.org/retirement/soci...y-benefit.html




She doesn't need to collect 50% of my benefit, her benefit will be more than 50% of mine.

Are you saying she could collect 50% of mine before FRA, then when she is FRA, she can collect on her own at full benefit?
Sorry... but NO in both cases
that situation was eliminated in legislation a few years ago (and due to your recent addition of info that she already had greater than 50% of your benefit, she currently is not eligible)...

it's called "deemed filing"
{see:https://secure.ssa.gov/apps10/poms.nsf/lnx/0200204035} .. .for any benefits she applies for she is filing for ALL potential benefits she could be entitled to... in this case it would be for her own SS benefits (since it's over the 50% of yours and therefore not eligible). What you referred to was the old "file and suspend" which was what was eliminated in the legislation... and yeah, it would have been nice for those with a few years difference in age (but we missed out on it too, and it was part of our original possible plan).

One last thing: much of the thread assumes an older male has the higher PIA and should wait until 70...ain't necessarily so
In our case, older male has slightly lower PIA ... will probably file just after FRA (some "mortality credits, but more importantly time to do some Roth conversions on current IRA (some being after tax variety, so pro-rata issues)... then will convert other 401k to IRA and start withdrawals from it to supplement/and do RMD's at 72+ ). Spouse (slightly higher PIA) will wait until 70....
if I predecease her, then SURVIVING SPOUSE gets the benefit I was already drawing (that I delayed to get at FRA+)... and can then at 70 apply for her LARGER social security benefits (it's unlikely that I, if she predeceases before 70, would get any increase... but if after her 70 start, then I would be eligible for the higher benefit, since I had waited until my FRA)
FI_RElater is offline   Reply With Quote
Old 05-29-2021, 07:11 AM   #63
Thinks s/he gets paid by the post
 
Join Date: Oct 2019
Posts: 2,674
I just ran opensocialsecurity.com and it says My wife should retire at 62, two months from now and collect $13k I should wait until 70 and collect $31,900.


However, I wonder how the $13k will affect the amount I can Roth Convert.
Obviously it will reduce it, that will increase the amount of RMDs I have.
Time2 is online now   Reply With Quote
Old 05-29-2021, 07:13 AM   #64
gone traveling
 
Join Date: Aug 2020
Posts: 682
Quote:
Originally Posted by Out-to-Lunch View Post
Context is everything. That quote, in full, reads

But, as Latexman points out, you CANNOT have your cake and eat it too. Your article is from 2008, and it says that you can start claiming at 62, and decide at 70 to take a "do-over" and withdraw your application, pay back the funds, and start over with a new (higher) benefit. Maybe you could back then? But you cannot now. Therefore, the conclusion that the article draws, and that you appear to take stock in, is founded on a false premise.
Yeah, that's not my point.

The point is to take SS at 62 if you "don't need it". Invest the money and you will be ahead, or no worse than, waiting until FRA or longer. It's a simple. Take it at face value.

So much groupthink and "conventional wisdom" on the personal finance topic is not good. It's meant for people who are not willing or able to carry out the financial analyses themselves. Always look under the covers. Always test and question and dig deeper. I don't see enough of that on this board and the "B" board. Too many people drinking the kool-aid.
chassis is offline   Reply With Quote
Old 05-29-2021, 08:53 AM   #65
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 Navigator View Post

Since I retired, I’ve come to the conclusion that anyone who has enough assets to worry about taking SS at 62 or 70 will be fine no matter what they do.
I tend to agree but not because of the size of their pile of dollars. Rather, they probably have developed the financial and spending habits that will increase their chances of success no matter when they choose to take SS.

We've been riding a huge Bull market, pretty much since the crash of 2008 ended. And many of us have not seen a viscous sustained BEAR market like that of 73-74. The Bear knocked people down, chewed off a good part of them. Then it dragged people into the bushes, and repeatedly came back to chew up more of it's helpless victims.

It took over 20 years for the US stock market to get back to where it was before the Bear in real terms.

Also, I don't like these snappy one line sayings that pretend to have taken all factors into account.
Quote:
"If you are wealthy enough to delay taking Social Security until age 70, you're wealthy enough to take it at 62, and save and invest the monthly benefit."
Really? That is true for everybody?
What nonsense.
__________________
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 05-29-2021, 09:15 AM   #66
Full time employment: Posting here.
 
Join Date: Jul 2011
Location: Reading, MA
Posts: 852
I delayed SS until age 70 a year ago so I could do larger Roth conversions for seven years as well as spend down a bit of my tax-deferred 403(b) accumulation.

Having succeeded in that, I no longer need to withdraw $$$ from my various portfolio sectors for spending on a regular basis. It's a good situation to be in...
TheWizard is offline   Reply With Quote
Old 05-29-2021, 09:47 AM   #67
Full time employment: Posting here.
 
Join Date: Dec 2017
Posts: 881
Quote:
Originally Posted by Chuckanut View Post
Also, I don't like these snappy one line sayings that pretend to have taken all factors into account.
Really? That is true for everybody?
What nonsense.
Well, people know what worked for them. The confidence that people have in offering advice doesn't necessarily correlate with their knowledge. I'm not just referring to the "nonsense" you cited.That's why I suggest that people read a book mentioned in this thread:
https://www.early-retirement.org/for...ey-109380.html

https://www.simonandschuster.com/boo.../9781684510504

Many of the posters on this forum seem to have enough assets that claiming ages don't matter much. I think that the higher survivor benefits from delayed claiming could make a real difference for some folks.
RetMD21 is offline   Reply With Quote
Old 05-29-2021, 09:54 AM   #68
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 Time2 View Post
I just ran opensocialsecurity.com and it says My wife should retire at 62, two months from now and collect $13k I should wait until 70 and collect $31,900.


However, I wonder how the $13k will affect the amount I can Roth Convert.
Obviously it will reduce it, that will increase the amount of RMDs I have.
Your thinking is correct that her SS earnings will reduce your Roth conversions if you are converting to the top of a defined tax bracket.

A minor nit though is that opensocialsecurity.com is suggesting that your wife start collecting SS at 62... retirement is a separate issue though if she earns too much her benefits will be temporarily reduced.
__________________
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 05-29-2021, 09:57 AM   #69
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 chassis View Post
Yeah, that's not my point.

The point is to take SS at 62 if you "don't need it". Invest the money and you will be ahead, or no worse than, waiting until FRA or longer. It's a simple. Take it at face value.

So much groupthink and "conventional wisdom" on the personal finance topic is not good. It's meant for people who are not willing or able to carry out the financial analyses themselves. Always look under the covers. Always test and question and dig deeper. I don't see enough of that on this board and the "B" board. Too many people drinking the kool-aid.
It all depends on what the money that you would otherwise be using because you are deferring benefits is earning and how long you live... see post #27... so the reality isn't that simple.
__________________
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 05-29-2021, 10:03 AM   #70
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 Navigator View Post
.... Since I retired, Iíve come to the conclusion that anyone who has enough assets to worry about taking SS at 62 or 70 will be fine no matter what they do.
Totally agree. And while we fret and debate when to take SS at least in our case and I suspect many others it is not a life changing decision but more just a tweak.

In 2020 I ran opensocialsecurity.com under various scenarios and compared the expected present values of the results of taking at their optimal, as early as possible (we were both over 62 in 2020), at 65, at FRA and as late as possible.... and all the expected present values were within 9% of each other. While 9% isn't chicken feed it isn't life changing either.

 No haircutHaircut
Optimal solution100.0%100.0%
Both now91.2%94.0%
Both 6592.3%94.9%
Both at FRA94.5%96.6%
Me 70/DW FRA100.0%100.0%

Assumptions were 2017 non-smoker preferred mortality and 0% real rate of return (since we have so little in equities now).

I did the same exercise in 2019 with a 3.3% real rate of return (discount rate) and the results were much narrower.

 No haircutHaircut
Optimal solution100.0%100.0%
Both now97.8%98.9%
Both 6599.0%99.7%
Both at FRA99.2%99.2%
Me 70/DW FRA98.7%96.3%
__________________
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 05-29-2021, 10:07 AM   #71
Thinks s/he gets paid by the post
 
Join Date: Sep 2006
Posts: 2,794
Quote:
Originally Posted by Chuckanut View Post
I tend to agree but not because of the size of their pile of dollars. Rather, they probably have developed the financial and spending habits that will increase their chances of success no matter when they choose to take SS.

We've been riding a huge Bull market, pretty much since the crash of 2008 ended. And many of us have not seen a viscous sustained BEAR market like that of 73-74. The Bear knocked people down, chewed off a good part of them. Then it dragged people into the bushes, and repeatedly came back to chew up more of it's helpless victims.

It took over 20 years for the US stock market to get back to where it was before the Bear in real terms.
.
This is a good point, and even 2008 was reversed rapidly, another point that is missed is that a couple that both are earning the maximum from Social Security, if that was their only income would have 94K in income and pay zero federal income tax. But at an all time high with no more than a 1 or 2 year bear market for 40 years, investing appears bullet proof.
__________________
But then what do I really know?

https://www.early-retirement.org/forums/f44/why-i-believe-we-are-about-to-embark-on-a-historic-bull-market-run-101268.html
Running_Man is offline   Reply With Quote
Old 05-29-2021, 10:36 AM   #72
Thinks s/he gets paid by the post
 
Join Date: Oct 2019
Posts: 2,674
Quote:
Originally Posted by pb4uski View Post
Your thinking is correct that her SS earnings will reduce your Roth conversions if you are converting to the top of a defined tax bracket.

A minor nit though is that opensocialsecurity.com is suggesting that your wife start collecting SS at 62... retirement is a separate issue though if she earns too much her benefits will be temporarily reduced.

We're not working for income, and have about $10k of dividends, so all other income is chosen. We do some Roth conversions and sell some LTCGs
to pay for taxes and expenses.
Time2 is online now   Reply With Quote
Old 05-29-2021, 10:42 AM   #73
Thinks s/he gets paid by the post
 
Join Date: Oct 2019
Posts: 2,674
Quote:
Originally Posted by chassis View Post
Yeah, that's not my point.

The point is to take SS at 62 if you "don't need it". Invest the money and you will be ahead, or no worse than, waiting until FRA or longer. It's a simple. Take it at face value.

Does this include a high tax bracket individual in California wanting to do Roth Conversions? Does your one size fits all theory take into account taxes now and taxes after SS and RMDs?



Quote:
So much groupthink and "conventional wisdom" on the personal finance topic is not good. It's meant for people who are not willing or able to carry out the financial analyses themselves. Always look under the covers. Always test and question and dig deeper. I don't see enough of that on this board and the "B" board. Too many people drinking the kool-aid.

I would think yours is just a different flavor kool-aid.
Time2 is online now   Reply With Quote
Old 05-29-2021, 11:08 AM   #74
gone traveling
 
Join Date: Aug 2020
Posts: 682
@pb4uski You mean longevity, correct? Is this what you mean by "how long you live"?

@Time2 Taking SS early applies to people, for example, who "don't need" SS. A high tax bracket individual in California hopefully doesn't need SS to have a successful portfolio to their life expectancy. Hopefully they are living below their means and not frittering away their resources. I am anti-Roth conversions for a similar reason as delaying Social Security. The Roth benefit is non-existent for many people, and negligible for many other people. Any benefit, if present, breaks even very late in life. Not worth the machinations. Juice not worth the squeeze.

Roth conversions are part the mainstream Kool-Aid passed around in plastic cups by financial advisors, custodian firms and financial news sites.
chassis is offline   Reply With Quote
...and think of less portfolio hit if one passes early
Old 05-29-2021, 12:07 PM   #75
Recycles dryer sheets
 
Join Date: Dec 2016
Posts: 315
...and think of less portfolio hit if one passes early

Quote:
Originally Posted by pb4uski View Post
Totally agree. And while we fret and debate when to take SS at least in our case and I suspect many others it is not a life changing decision but more just a tweak.

In 2020 I ran opensocialsecurity.com under various scenarios and compared the expected present values of the results of taking at their optimal, as early as possible (we were both over 62 in 2020), at 65, at FRA and as late as possible.... and all the expected present values were within 9% of each other. While 9% isn't chicken feed it isn't life changing either.

 No haircutHaircut
Optimal solution100.0%100.0%
Both now91.2%94.0%
Both 6592.3%94.9%
Both at FRA94.5%96.6%
Me 70/DW FRA100.0%100.0%

Assumptions were 2017 non-smoker preferred mortality and 0% real rate of return (since we have so little in equities now).

I did the same exercise in 2019 with a 3.3% real rate of return (discount rate) and the results were much narrower.

 No haircutHaircut
Optimal solution100.0%100.0%
Both now97.8%98.9%
Both 6599.0%99.7%
Both at FRA99.2%99.2%
Me 70/DW FRA98.7%96.3%

I have already done a similar estimate, but in actual dollars expected per year (using a 25% haircut) and saw, dollarwise, that FRA (or shortly thereafter) vs 70 didn't move the needle that much for life expectancy of 85 or even 92... but that with even modest returns (3-5% for portfolio) the benefit for the surviving spouse of the portfolio, which could then likely be drawn at a higher rate than (even) 4% would mean a better outcome (since those returns would be at long term rates versus ordinary income...and Roths could be drawn tax free)
hence...FRA (slightly after, to beginning of next year, so as to allow for Roth conversions) for me. [70 for her]

we still have to presume a last-2-die of almost 30 years, as it's highly unlikely that I would come anywhere close to that but that the "either" for joint mortality still pushes it out that far, but we also only use a 3.5% wr as max {that's what would be pumped up... likely to 6%... if I passed before and spouse was below 80... otherwise it could still go higher if it's later.
FI_RElater is offline   Reply With Quote
Old 05-29-2021, 12:56 PM   #76
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 pb4uski View Post
It all depends on what the money that you would otherwise be using because you are deferring benefits is earning and how long you live... see post #27... so the reality isn't that simple.
Quote:
Originally Posted by chassis View Post
@pb4uski You mean longevity, correct? Is this what you mean by "how long you live"?

@Time2 Taking SS early applies to people, for example, who "don't need" SS. A high tax bracket individual in California hopefully doesn't need SS to have a successful portfolio to their life expectancy. Hopefully they are living below their means and not frittering away their resources. I am anti-Roth conversions for a similar reason as delaying Social Security. The Roth benefit is non-existent for many people, and negligible for many other people. Any benefit, if present, breaks even very late in life. Not worth the machinations. Juice not worth the squeeze.

Roth conversions are part the mainstream Kool-Aid passed around in plastic cups by financial advisors, custodian firms and financial news sites.
On the first part, yes, I'm refering to longevity... how long you live. If you go back to the second table in post #27 which looks at the differential cash flows of claiming SS at 62 vs 70 assuming a 2% annual COLA and 7% nominal investment rate, the IRRs become increasingly attractive from the early to mid-80s.... so IMHO, if one is in good health deferring is a smart play. I concede that we disagree on this but that's ok.

On the second part, we also disagree but it can be situational and it may be that Roth conversions are less advantageous in your situation. We've converted almost $1/2 million over the last 10 years and paid on average 9% in federal tax... much less than the 28% or more in federal tax that we saved when we deferred that income and also much less than the 22% that we would pay on RMDs if we didn't do those conversions... so for us it is a good thing. Also, the conversions will reduceur RMDs enough that some of our future RMDs will be at 12% rather than 22%. It seems that the real punch of Roth conversions is where one is trading 22% for 12%... but if you are trading 24% for 22% then there isn't anywhere near the benefit. But to make a blanket statement that for Roth conversions that the juice isn't worth the squeeze is untrue for many.
__________________
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 05-29-2021, 01:29 PM   #77
gone traveling
 
Join Date: Aug 2020
Posts: 682
@pb4uski It is quite simple. A taking the government's money early is a no brainer when the money isn't needed for immediate consumption. Financial market returns exceed the incentives the government (SSA) is offering to delay/defer, so the government handout is invested in the market. Your analysis points to this; you likely have a different expectation of market return than I do. Using your model, what market returns (you call it "real return") are required to achieve equivalency among all claiming scenarios?

Regarding longevity, no one knows how much time we have. You and I could die before the sun sets today.

Decisions that have such marginally small consequence as age of SS claiming (when one doesn't "need" it) make no practical difference from a longevity point of view. "Not life changing" as you put it.
chassis is offline   Reply With Quote
Old 05-29-2021, 01:36 PM   #78
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
Ok, I surrender.... you obviously know it all and I'm just a dumb-ass.

At least I have a lot of company with other dumb-asses that think that delaying SS and Roth conversions can be smart plays.

P.S. You might want to google what a "real return" is.
__________________
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 05-29-2021, 02:05 PM   #79
gone traveling
 
Join Date: Aug 2020
Posts: 682
Quote:
Originally Posted by pb4uski View Post
Ok, I surrender.... you obviously know it all and I'm just a dumb-ass.

At least I have a lot of company with other dumb-asses that think that delaying SS and Roth conversions can be smart plays.

P.S. You might want to google what a "real return" is.
@pb4uski What does your model tell you? What returns required to achieve parity between all SS claiming scenarios?
chassis is offline   Reply With Quote
Old 05-29-2021, 02:20 PM   #80
Recycles dryer sheets
 
Join Date: Nov 2020
Posts: 381
Quote:
Originally Posted by chassis View Post
@pb4uski What does your model tell you? What returns required to achieve parity between all SS claiming scenarios?
I did a calculation a while back and (ignoring inflation) came up with:

Age Die>break even discount rate

83>3%
85>4%
89>5%
96>6%
104>6.5%
qwerty3656 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 01:28 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.