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Old 08-05-2020, 02:05 PM   #41
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Fire, My main concern is converting lots of tax deferred to Roth.... We will at some point be saving this SS money, our pensions will get us by ;-)
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Fair Enough
Old 08-05-2020, 02:48 PM   #42
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Fair Enough

Quote:
Originally Posted by pb4uski View Post
Not really. Below is an example where someone takes SS at 62 and saves it for 5 years and then starts spending their age 62 SS benefit. The other columns are where someone waits until 67, but then starts but takes the extra (over the age 62 benefit that they are spending) and invest it. So both people are spending the same amount.

Assumes 4% return and 2% COLA. After age 80 the person taking at 67 has more money than the person that took at 62 and if they live to 90 they have a lot more.

 Claim at 62FV at Claim at 62Claim at 67Excess of 67 over 62FV atI
628,4008,566   004.00%
638,56817,647   004.00%
648,73927,265   004.00%
658,91437,446   004.00%
669,09248,217   004.00%
67 50,145 9,27413,2493,9754,0534.00%
68 52,151 9,46013,5144,0548,3504.00%
69 54,237 9,64913,7844,13512,9014.00%
70 56,407 9,84214,0604,21817,7194.00%
71 58,663 10,03914,3414,30222,8154.00%
72 61,009 10,24014,6284,38828,2034.00%
73 63,450 10,44414,9204,47633,8964.00%
74 65,988 10,65315,2194,56639,9084.00%
75 68,627 10,86615,5234,65746,2534.00%
76 71,372 11,08415,8344,75052,9484.00%
77 74,227 11,30516,1504,84560,0074.00%
78 77,196 11,53116,4734,94267,4474.00%
79 80,284 11,76216,8035,04175,2854.00%
80 83,496 11,99717,1395,14283,5404.00%
81 86,835 12,23717,4825,24592,2304.00%
82 90,309 12,48217,8315,349101,3754.00%
83 93,921 12,73218,1885,456110,9944.00%
84 97,678 12,98618,5525,566121,1104.00%
85 101,585 13,24618,9235,677131,7434.00%
86 105,649 13,51119,3015,790142,9184.00%
87 109,874 13,78119,6875,906154,6584.00%
88 114,269 14,05720,0816,024166,9884.00%
89 118,840 14,33820,4836,145179,9344.00%
90 123,594 14,62520,8926,268193,5234.00%
Fair enough, I was too lazy to show my math so I can not complain about yours. The longer you live the more it will favor waiting. What my laziness failed to provide was that I was talking about a 4% return after inflation which would in fact be a 6% rate of return. What I outlined in my answer only had a real growth rate of 2% which is hardly indicative of the long term market.
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Old 08-05-2020, 06:07 PM   #43
Recycles dryer sheets
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My thought....get rid of public sector unions
Quote:
Originally Posted by f35phixer View Post
To not have me take my SS at 62....

Pensions:
Sugar Mama = state employee = 7100/month take home = 85,200 COLA adjusted and health care taken out for life, full survivor benefits, reduced donít have the amount for either pension.

Slug Daddy = federal employee = 1700/month take home= 20,400 Cola adjusted and health care taken out for life, full survivor benefits

Total year = 105600, expenses ~80k / years

Mama and Daddys IRAís 2.2Mil total, no Rothís yet, waiting till I retire in Dec 2020 to start Roth conversions, we made to much (MAMA made to much ;-)

SS 62/66 8 months/70 for Mr. Slug: month 1993/2817/3605, year 23900/33800/43260

So my fidelity roll over dividends for last three years in December is 2017-44.8k, 2018- 51k, 2019-32.5k
Also getting 880/month bond dividends

My TSP (Iím 62 ) I could move over to L Fund income and start a monthly check of XXX > 23900 as an example

I could take the dividends from fidelity and move them into our accounts to use as we see fit
.
My thought is either one of these is better than taking the SS at 62 which she wants me to do.

Thoughts please
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Old 08-05-2020, 07:16 PM   #44
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My thought....get rid of public sector unions
My thought... get rid of irrelevant comments. Dweeb.
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Old 08-05-2020, 08:20 PM   #45
Recycles dryer sheets
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My issue was that I WANTED to retire. I also thought about the number of years of "quality" life I would have if I retired at 70. My perception for me was that I would be a tired old man with a lot of money. Didn't make sense to me so I retired at 62 + a few months.
One thing that I have going for me (at least I think) is that I don't care what the Jones' have.
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Old 08-05-2020, 11:31 PM   #46
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In what way, on a FIRE forum, would anyone choose retiring at 70 vs 62 for more money, unless they absolutely had to? No one is talking about w*rking to 70 for a larger SS, everyone is planning on spending at the same level from age at 62 on, ie: the source of funding is different; basically whether the small cost from ones own portfolio is worth the longevity insurance/annuity that delayed filing brings to the mix. As long as you expect one half of a couple to live to age 80, it is a safe bet delaying makes sense. If you are single and have reasons to believe 80 is as old as you will get then there is little reason to consider it.

One refreshing thing about this forum is that I cannot recall anyone caring about what other people have. We do all, however, have different desires and acceptable levels of personal achievements. I know what I want and don’t want, and about what that cost. I have never demanded a lifestyle to impress or keep up with anyone but myself. What I did discover is that the level I thought was just fine at 25, was not good enough for me at 35, which was not good enough at 45, & then 55. But from about there, I’ve been pretty happy with everything. To each their own.
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Old 08-06-2020, 07:54 AM   #47
Recycles dryer sheets
 
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Quote:
Originally Posted by f35phixer View Post
Fire, My main concern is converting lots of tax deferred to Roth.... We will at some point be saving this SS money, our pensions will get us by ;-)
The Reality... you wont be saving this SS money... all of that SS money will be going towards paying your taxes.... the IRS will get it all back from you
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Old 08-06-2020, 08:17 AM   #48
Recycles dryer sheets
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Quote:
Originally Posted by Perryinva View Post
In what way, on a FIRE forum, would anyone choose retiring at 70 vs 62 for more money, unless they absolutely had to? No one is talking about w*rking to 70 for a larger SS, everyone is planning on spending at the same level from age at 62 on, ie: the source of funding is different; basically whether the small cost from ones own portfolio is worth the longevity insurance/annuity that delayed filing brings to the mix. As long as you expect one half of a couple to live to age 80, it is a safe bet delaying makes sense. If you are single and have reasons to believe 80 is as old as you will get then there is little reason to consider it.

One refreshing thing about this forum is that I cannot recall anyone caring about what other people have. We do all, however, have different desires and acceptable levels of personal achievements. I know what I want and donít want, and about what that cost. I have never demanded a lifestyle to impress or keep up with anyone but myself. What I did discover is that the level I thought was just fine at 25, was not good enough for me at 35, which was not good enough at 45, & then 55. But from about there, Iíve been pretty happy with everything. To each their own.


Wise post regarding SS decision-making, hedonic adaptation and significance of personal ambition and desires.
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Old 08-06-2020, 08:46 AM   #49
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Assumes 4% return and 2% COLA. After age 80 the person taking at 67 has more money than the person that took at 62 and if they live to 90 they have a lot more.
Yes. But why did you use 4% return?

A more realistic scenario is to look at the historical long-term returns of a 60/40 portfolio.
Or perhaps the historical N-year periods, where N is the number of years you expect to live after 62.

80 - 62 is 18 years,
The average return for a 60/40 portfolio (S&P500 / 10 ytr T-bill) for 18 year periods is 9.5%. The lowest was 5.4%.
The best was 15.0%, but we are interested in the worst-case (failure) performance, so we need to look at returns on the low end.

At 5.4% and 2% COLA, the age 62 portfolio has more money up to age 85.
At 9.5% and 2% COLA, the age 62 portfolio ALWAYS has more money.

At 8.2%, the age 62 portfolio has more money up to age 100. That's below the average historical return, so the odds are in your favor of taking SS at 62.
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Old 08-06-2020, 12:46 PM   #50
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With the added risk of that, and without taking in to account Roth conversions and tax preference of SS income. Our situation makes delayed filing more sense as my much larger pension disappears if I die first, and the larger SS for DW is more important than an extra $180k in the stash. She would be tax free upon my death. She is scared to death to invest.

Many of us did not FIRE at much less than 62, and are not confident that they have the ability to or DESIRE to base as much as possible of their income on their investments Sure, I did (way) better than 10%/yr avg over the last 18 years. But I believe that was the luck of a few right equity decisions, the long bull, and coupled with real estate appreciation, the egg is more than large enough. It also was because I could invest aggressively knowing I had both the time to recover and we have over $60k/yr in pensions, medical covered, and I will have max SS. I know I would have been more conservative without those safety nets.

Conversely, if you have always been a 60/40 (or better) buy & hold 100% portfolio & retired at 45 to 50 for instance and know that not only can you and have flourished will that plan & will stay that course regardless from 62 on, and especially single, then yes, then it makes little sense to file later than 62. You stick with what works for you.

Regardless, the actual difference between either choice is relatively small potatoes for all the press and threads it garners. If DW died in a year, I would file latest at FRA to take advantage of Roth conversions and the lower rate. No point in delaying past that for me then.
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Old 08-06-2020, 01:21 PM   #51
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Yes. But why did you use 4% return?...
Come on ray. Use a couple of those brain cells. Go back to my post and look back further to the post that I was responding to.

That poster used 4% and since I was responding to his post that is what I used.
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Old 08-06-2020, 01:27 PM   #52
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....80 - 62 is 18 years,
The average return for a 60/40 portfolio (S&P500 / 10 ytr T-bill) for 18 year periods is 9.5%. The lowest was 5.4%.
The best was 15.0%, but we are interested in the worst-case (failure) performance, so we need to look at returns on the low end.

At 5.4% and 2% COLA, the age 62 portfolio has more money up to age 85.
At 9.5% and 2% COLA, the age 62 portfolio ALWAYS has more money.

At 8.2%, the age 62 portfolio has more money up to age 100. That's below the average historical return, so the odds are in your favor of taking SS at 62.
At 5.4% and 2% COLA I get a crossover at 83, not 85.
At 8.2% and 2% COLA I get a crossover of 94, not 100
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