Social Security and Pension question

[Cut-Throat]

Cut-Throat - By chance have you requested a SS statement with your ER age particulars, and compared it to the output of Calculator #3? I'm interested in what you found, if you have.

I have not. - The statements that I get, indicate about $40 a month higher than the calculator shows.

 

[MJ]

Re: SS Calculator fluke or

Today, while I was at home sick (a paid bonus of the working stiff) I did some doodling with SSA downloaded calculator and noticed something strange to me.
I entered that I would retire in 2005 and it calculated that my monthly benefit would be $1404 @ 62. Then I did a what if, by added 6 years to my birthday and deducted 6 years from my retiring age so that my younger twin would retire in 2005 as well. With the same work history, the older and real me got the $1404 while the younger me got $1483.
I may not be able to got 6 years of life back but how bout a date of birth change to get another $79 a month.

MJ

 

[mickeyd]

Even though I will not need the income at the time, my plans are to begin receiving my SS at age 62.  I plan on investing 100% of the distribution in a no-load equity fund , probably Vanguard Total stock market index fund, for at least 4 years (age 66).  I figure that I can come out better in the long run by doing it this way rather than delaying the recept of the payments untill age 66 or so.

 

[John Galt]

I plan to draw at 62 also, but intend to spend every
penny from 62 on, as long as I don't have to eat into my
"base". However, in 1993 I thought I would have to draw on my IRA immesiately and I still have not touched it, so I suppose something might happen to change my SS
plans too.

John Galt

 

[haha]

So if you get a statement that says you'll get $1000 at 62 if you retire at 50, that $1000 will likely be increased significantly (per average wage levels) throughout those 12 years between 50 and 62. It won't be frozen at $1000.

What Bob_Smith says is definitely true. I have been retired long enough that the SocSec people have given up on me ever going back to work. My statements for several years have said right out that they are based on -0-earnings in the years to come. For several years my statements have shown an increasing full retirement age benefit, in spite of no new SS earnings.

There is also a cogent theoretical reason for this. Before age 62, your actual yearly SS earnings are multiplied by a factor that reflects wage increases since that given year. Because these factors are derived from a ratio between average wage levels in the present year, to average levels in the past year in question, these yearly factors will increase as long as wages increase.

At age 62, your yearly earnings factors are frozen. From this point on, you full retirement benfit(which also determines all your other benefits, given no new SS work) is increased by yearly CPI inflation. This is normally less favorable than the increases prior to age 62, but still very helpful IMO.

As regards the parallel question of when to take benefits, the only absolute rule is do not delay past age 70. At age 70 your monthly benfit reaches its maximum, and will not increase beyond this amount.
Mikey

 

[Zipper]

John, I turned 60 in October 2003, and received my first CPP payment in November. Canada saw the funding crisis of the babyboomers and acted several years ago by jacking the contribution rate. We are now actuarily sound beyond 2020. From what I read your SS will be in deep sh*t in a dozen years. I know you are a bit younger than I am , but if you were here, you would be almost ready for your first cheque! . Our Old Age Security, the second leg of our entitlement kicks in at 65.

 

[Cut-Throat]

John, I turned 60 in October 2003, and received my first CPP payment in November. Canada saw the funding crisis of the babyboomers and acted several years ago by jacking the contribution rate. We are now actuarily sound beyond 2020. From what I read your SS will be in deep sh*t in a dozen years. I know you are a bit younger than I am  , but if you were here, you would be almost ready for your first cheque! . Our Old Age Security, the second leg of our entitlement kicks in at 65.

Zipper,

Our SS should be in pretty good shape until 2038. It's Medicare that is the real problem!