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09-04-2019, 12:53 PM
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#101
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Thinks s/he gets paid by the post
Join Date: Sep 2008
Posts: 1,011
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"How many of those choking deaths happen between 62 and 80 or so?"
Not sure, but...
"choking is the fourth leading cause of unintentional injury death. Of the 5,051 people who died from choking in 2015, 2,848 were older than 74"
__________________
"I couldn't wait for success, so I went ahead without it." Ret. 2013 @ 51.
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09-04-2019, 12:57 PM
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#102
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gone traveling
Join Date: Mar 2015
Posts: 3,508
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Quote:
Originally Posted by almost there
Am in great health. Thats why I am taking it early.
Plan to pull on it for over 30 years.
And those 8 yrs will produce $288000 in my case.
And between 70 and 92 it would grow to
just over $600k with a 3 1/2% return.
Not sure how I could ever make that up waiting to take it at 70.
Would have to live a long long Guinness book time...............
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Either your math is wrong, or you are forgetting that between 70 and 92 you could have a significantly higher inflation-protected benefit coming in each month and not realizing that you don't have to make up $600k.
Those who believe in breakeven analysis find that breakeven occurs in the early 80s, not a long long Guinness book time.
"Nonetheless, the decision to delay Social Security can be evaluated based on the implicit rate of return it creates by choosing to delay, and over longer time horizons – when clients may “need the money most” as they have more years of retirement expenses to cover in the first place – the return of the Social Security delay becomes quite compelling. In fact, the return is generally far superior to any risk-adjusted returns that can be achieved over comparable time periods by the available alternatives, whether investing in risk-free bonds, growth equities, or buying a commercially available annuity. And because the system is indexed to inflation, its real returns will be maintained even if inflation rises, and will only become better if longevity continues to increase as well. In fact, ultimately the decision to delay Social Security delivers the best results when there is either unexpected inflation, unusually long longevity, or especially bad market returns, which are the exact three scenarios that traditional portfolios are the least effective at managing, making the decision to delay Social Security the ultimate form of “anti-fragile” triple hedge!"
https://www.kitces.com/blog/how-dela...money-can-buy/
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09-04-2019, 01:05 PM
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#103
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gone traveling
Join Date: Mar 2015
Posts: 3,508
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Quote:
Originally Posted by almost there
"How many of those choking deaths happen between 62 and 80 or so?"
Not sure, but...
"choking is the fourth leading cause of unintentional injury death. Of the 5,051 people who died from choking in 2015, 2,848 were older than 74"
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It's sad. It indicates that 2,203 died from choking while younger than 74. If choking is a major concern, one might worry about the impact on a survivor of claiming a smaller benefit early, and choking young.
This is getting morbid.
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09-04-2019, 01:08 PM
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#104
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Thinks s/he gets paid by the post
Join Date: Sep 2008
Posts: 1,011
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Your right, its about even at 92 - 94 ish.
The only difference in my case is the xtra 2k a month coming in for 22 yrs.
V.S.having it in the bank the entire time....
Choking is of no concern to me. The point is, none of them planned on it.
__________________
"I couldn't wait for success, so I went ahead without it." Ret. 2013 @ 51.
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09-04-2019, 01:11 PM
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#105
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gone traveling
Join Date: Mar 2015
Posts: 3,508
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Quote:
Originally Posted by almost there
Your right, its about even at 92 - 94 ish.
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Hmm... I'd have to see the math. Seems high ish.
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09-04-2019, 01:16 PM
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#106
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2012
Posts: 6,181
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Quote:
Originally Posted by joeea
Excellent! You have done well to get yourself in that position where you can choose.
What do you feel you are gaining in exchange for giving up this $100k?
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Nothing based on logic or maximizing potential income.
Since my longevity is not guaranteed, and I have little family history to go on, it is the irrational joy of getting more passive income earlier into my greedy little hands , when I am relatively more healthy and more able/willing to spend it or invest it.
I'm one of the fortunate ones who hit the maximum SS contribution from my paycheck for 35 years, so even my reduced benefit is pretty good.
It is similar to why I have a relatively conservative AA and larger cash stash than many would say I need... so that I do not need to sell equities at "down" times in the market and can sleep well at night.
__________________
FIREd date: June 26, 2018 - "This Happy Feeling, Going Round and Round!" (GQ)
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09-04-2019, 01:21 PM
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#107
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gone traveling
Join Date: Mar 2015
Posts: 3,508
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Quote:
Originally Posted by jollystomper
Nothing based on logic or maximizing potential income.
it is the irrational joy of getting more passive income earlier into my greedy little hands , when I am relatively more healthy and more able/willing to spend it or invest it.
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Okay. So this irrational joy is worth $100k to you. We all get to choose how to spend our money.
Quote:
I'm one of the fortunate ones who hit the maximum SS contribution from my paycheck for 35 years, so even my reduced benefit is pretty good.
It is similar to why I have a relatively conservative AA and larger cash stash than many would say I need... so that I do not need to sell equities at "down" times in the market and can sleep well at night.
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Well done!
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09-04-2019, 01:26 PM
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#108
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,376
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Quote:
Originally Posted by almost there
Am in great health. Thats why I am taking it early.
Plan to pull on it for over 30 years.
And those 8 yrs will produce $288000 in my case.
And between 70 and 92 it would grow to
just over $600k with a 3 1/2% return.
Not sure how I could ever make that up waiting to take it at 70.
Would have to live a long long Guinness book time...............
And it would be in my account, not SS's...
There is no right answer. Thats why we have options.
Just posting the other side of waiting till 70 coin.
No harm, no foul.
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Your analysis is wrong if you plan to receive 30 years of benefits. With 3.5% return, taking at 70 wins by a wide margin. I dunno your numbers but these are for someone with a FRA of 66 and a PIA of $1,000/month. If you're 66 and your PIA is $2,000/month then just double the numbers.
Even with 3.5% interest the crossover is 85... not in your 90s.
| Cash flows | | | Accumulated bal @ 3.5% | | | 75% PIA at 62 | 132% PIA at 70 | | 75% PIA at 62 | 132% PIA at 70 | 62 | 9,000 | 0 | | 9,156 | 0 | 63 | 9,000 | 0 | | 18,633 | 0 | 64 | 9,000 | 0 | | 28,441 | 0 | 65 | 9,000 | 0 | | 38,593 | 0 | 66 | 9,000 | 0 | | 49,100 | 0 | 67 | 9,000 | 0 | | 59,974 | 0 | 68 | 9,000 | 0 | | 71,229 | 0 | 69 | 9,000 | 0 | | 82,879 | 0 | 70 | 9,000 | 15,840 | | 94,935 | 16,115 | 71 | 9,000 | 15,840 | | 107,414 | 32,794 | 72 | 9,000 | 15,840 | | 120,330 | 50,056 | 73 | 9,000 | 15,840 | | 133,698 | 67,923 | 74 | 9,000 | 15,840 | | 147,533 | 86,415 | 75 | 9,000 | 15,840 | | 161,853 | 105,554 | 76 | 9,000 | 15,840 | | 176,674 | 125,364 | 77 | 9,000 | 15,840 | | 192,014 | 145,866 | 78 | 9,000 | 15,840 | | 207,890 | 167,086 | 79 | 9,000 | 15,840 | | 224,323 | 189,049 | 80 | 9,000 | 15,840 | | 241,330 | 211,781 | 81 | 9,000 | 15,840 | | 258,933 | 235,308 | 82 | 9,000 | 15,840 | | 277,152 | 259,659 | 83 | 9,000 | 15,840 | | 296,008 | 284,861 | 84 | 9,000 | 15,840 | | 315,525 | 310,946 | 85 | 9,000 | 15,840 | | 335,724 | 337,944 | 86 | 9,000 | 15,840 | | 356,631 | 365,887 | 87 | 9,000 | 15,840 | | 378,269 | 394,808 | 88 | 9,000 | 15,840 | | 400,664 | 424,741 | 89 | 9,000 | 15,840 | | 423,844 | 455,722 | 90 | 9,000 | 15,840 | | 447,834 | 487,787 | 91 | 9,000 | 15,840 | | 472,665 | 520,974 | 92 | 9,000 | 15,840 | | 498,364 | 555,323 | | | | | | | Nominal | 279,000 | 364,320 | | | | PV @ 3.5% | 168,626 | 187,899 | | | |
__________________
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
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09-04-2019, 02:45 PM
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#109
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Thinks s/he gets paid by the post
Join Date: Dec 2014
Location: St. Charles
Posts: 3,919
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Quote:
Originally Posted by jollystomper
I have done a similar analysis, with similar results, except that I use 64 as my earliest SS date, primarily because at that is the earliest age my SS + DW SS + my pension fully covers our planned living expenses, and our savings/investments become extra money to spend/build an estate from. From opensocialsecurity, the projected lifetime difference of taking it at 64 is around $100K less that the optimal strategy... which is not a lot to sway me strongly to delay to 70. Or, perhaps I should say, there would have to be additional reasons beyond this difference to make delaying until 70 a strong case in my situation.
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Curious, did you used the default discount rate of 0.16% (current TIPS rate, per the author), or did you selected advanced options and change it?
I have found it makes a big difference. For example, in our case:
Comparing at age 65 to the optimal
3% discount: $5,000 difference (about 1%)
2% discount: $19,000 difference (about 2.4%)
1% discount: $42,000 difference (about 4.7%)
Default (0.16%): $68,000 difference (about 6.6%)
So, if our real rate of return over the rest of our (statistical) lives is 3% or greater, it just doesn't matter.
And, if it really is just 0.16%, that simply means the heirs inherit $68,000 less than they MIGHT have.
These analyses leave me with the feeling I am either measuring with a micrometer and cutting with an ax, or measuring with a yard stick and cutting with a laser.
Statistically, there is little difference. And, the unknown (and unknowable) will have the greatest weight on the outcome.
__________________
If your not living on the edge, you're taking up too much space.
Never slow down, never grow old!
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09-04-2019, 02:49 PM
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#110
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Thinks s/he gets paid by the post
Join Date: Sep 2008
Posts: 1,011
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pb4uski where is the $93778 of interest from the $82,879.00 (your example at 69)
(22 yrs at 3.5% at 92)) I must be missing something. lol lol screw lose perhaps...
__________________
"I couldn't wait for success, so I went ahead without it." Ret. 2013 @ 51.
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09-04-2019, 02:59 PM
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#111
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,376
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Quote:
Originally Posted by almost there
Looks good. (example above) But I do not see the $93678.00 in interest from 22 yrs / 3.5% of $82,879 from 69? Would that not make it $592042 V.S $555,323 at 92?
Just having fun. Something to BS about.
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The $498,364 and $555,323 are the accumulated balance if you invested all the SS cash flows in the left columns in an account that earned 3.5%/annum... so the $498,364 includes interest on the $82,879.
The balance for each year is the prior balance * (1+3.5%) plus the current year cash flow * (1+3.5%)^.5 .... since the cash flows are received evenly through the year.
Math is hard. Do you now agree that the crossover with 3.5% interest is age 85? and not some Guinness Book of Records age?
__________________
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
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09-04-2019, 03:25 PM
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#112
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Thinks s/he gets paid by the post
Join Date: Sep 2008
Posts: 1,011
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Yea, just didnt see where it was added in. Was not sure how 3.5% came into play if you take it at 70. My example banked 62-70 at 3.5%. Not possible taking it at 70.
Nominal would then be $372678 VS $364320 at 92. Using your example.
And yes, math still kicks my butt... lol lol
__________________
"I couldn't wait for success, so I went ahead without it." Ret. 2013 @ 51.
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09-04-2019, 03:27 PM
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#113
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2012
Posts: 6,181
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Quote:
Originally Posted by CardsFan
Curious, did you used the default discount rate of 0.16% (current TIPS rate, per the author), or did you selected advanced options and change it?
I have found it makes a big difference. For example, in our case:
Comparing at age 65 to the optimal
3% discount: $5,000 difference (about 1%)
2% discount: $19,000 difference (about 2.4%)
1% discount: $42,000 difference (about 4.7%)
Default (0.16%): $68,000 difference (about 6.6%)
So, if our real rate of return over the rest of our (statistical) lives is 3% or greater, it just doesn't matter.
And, if it really is just 0.16%, that simply means the heirs inherit $68,000 less than they MIGHT have.
These analyses leave me with the feeling I am either measuring with a micrometer and cutting with an ax, or measuring with a yard stick and cutting with a laser.
Statistically, there is little difference. And, the unknown (and unknowable) will have the greatest weight on the outcome.
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Thanks - I used the default. Interesting. When I change it to 3%, the difference for my situation mentioned above drops to $14K.
As you mentioned, this only impacts what our heirs would inherit.
__________________
FIREd date: June 26, 2018 - "This Happy Feeling, Going Round and Round!" (GQ)
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09-04-2019, 03:27 PM
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#114
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,376
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Quote:
Originally Posted by almost there
.... Was not sure how you used 3.5% taking it at 70?
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I don't understand your question. Please elaborate.
__________________
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
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09-04-2019, 03:49 PM
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#115
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,376
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Maybe this will help you.
| Cash flow difference | Accumulated difference at 3.5% | 62 | -9,000 | -9,156 | 63 | -9,000 | -18,633 | 64 | -9,000 | -28,441 | 65 | -9,000 | -38,593 | 66 | -9,000 | -49,100 | 67 | -9,000 | -59,974 | 68 | -9,000 | -71,229 | 69 | -9,000 | -82,879 | 70 | 6,840 | -78,821 | 71 | 6,840 | -74,621 | 72 | 6,840 | -70,274 | 73 | 6,840 | -65,775 | 74 | 6,840 | -61,118 | 75 | 6,840 | -56,299 | 76 | 6,840 | -51,310 | 77 | 6,840 | -46,148 | 78 | 6,840 | -40,804 | 79 | 6,840 | -35,273 | 80 | 6,840 | -29,549 | 81 | 6,840 | -23,625 | 82 | 6,840 | -17,493 | 83 | 6,840 | -11,147 | 84 | 6,840 | -4,578 | 85 | 6,840 | 2,220 | 86 | 6,840 | 9,257 | 87 | 6,840 | 16,539 | 88 | 6,840 | 24,077 | 89 | 6,840 | 31,878 | 90 | 6,840 | 39,953 | 91 | 6,840 | 48,310 | 92 | 6,840 | 56,959 |
__________________
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
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09-04-2019, 03:50 PM
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#116
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Thinks s/he gets paid by the post
Join Date: Sep 2008
Posts: 1,011
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This started when I mentioned taking SS at 62 and banking it. Then pretend you take it at 70 (stop banking it) . Using your example you would have $82,879 at that point (70). And at 3.5% it would add up over the years. And be there in the event of un planned spontaneous combustion.
For whomever....didn't get caught up in the blast.
__________________
"I couldn't wait for success, so I went ahead without it." Ret. 2013 @ 51.
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09-04-2019, 07:39 PM
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#117
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gone traveling
Join Date: Mar 2015
Posts: 3,508
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Quote:
Originally Posted by almost there
And be there in the event of un planned spontaneous combustion.
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LOL! Lightning, choking, spontaneous combustion. You've got a lot of worries going on!
Good luck. Hang in there.
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09-04-2019, 08:18 PM
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#118
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Recycles dryer sheets
Join Date: May 2014
Posts: 485
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I took in May at my current age of 64. Just went to a funeral today of a high school friend who was in fantastic shape and had an unexpected heart attack last week. Ugh!!!
I have a zero withdrawal rate. Zero........ “Oh, but you could get a higher check at age 70!” So freaking what.
I am enjoying my life...playing tennis daily, spending time with my grandkids, nice lunches with the family, reading the Word daily, playing my guitars, bike rides, sunshine, visiting friends, cruising in my Benz, heading back and forth to FLA. Whoopee....I might get an additional $300 a month if I wait until 70.
My mother is 87. An additional $300 or $3,000 a month is meaningless at that point. It would not change her life, make it better at all......or mine.
I honestly think so many people here place so much importance on ..hey...you are giving up three or four hundred a month by taking your SS early! Honestly, will that make a difference in your life?
Now awaiting death threats.....lol.
__________________
Central Ohio and Ft.Myers, Florida
Retired January 2019, age 63
35/65 AA
0.00 WR
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09-04-2019, 09:11 PM
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#119
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Thinks s/he gets paid by the post
Join Date: Sep 2008
Posts: 1,011
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Agree, my dad is 85 and could give a crap about a few 100's a month.
He's in good shape. But still lives below CD interest and SS.
Go figure...........
__________________
"I couldn't wait for success, so I went ahead without it." Ret. 2013 @ 51.
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09-04-2019, 09:53 PM
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#120
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Recycles dryer sheets
Join Date: Feb 2014
Location: Austin
Posts: 247
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Quote:
Originally Posted by joeea
Hmm... I'd have to see the math. Seems high ish.
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Actually, using historical rates of returns from 1928 forward, the break even point is typically in the mid 90s, although it can vary quite a bit from that. That doesn’t include taxes, which would lower the crossover age a bit. Of course, with the stock market priced so high, one would expect a younger crossover age. How much younger? Ask again in 30 years.
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