Social Security at 62, 66 or 70?

[gozzie]

I'd would like to revisit this topic. I tried to follow the discussion on the now closed board but frankly, it was too complicated for me. I am 59, spouse 56. I believe we have enough assets to retire but the problem is health care. I can get COBRA for 18 mos. and thereafter, State high risk pool. My thought is that I would take SS at 62 and use that money to fund our health care needs until ( and probably after) I qualify for medicare. It occurs to me that taking the money as soon as possible to protect our savings makes sense because the reduction in benefits will not affect our lifestyle. Does anyone know of any simple guidelines or rules of thumb on when to take benefits? Thanks. Gozzie.

[haha]

The best discussion of this that I have ever seen is on our Best_Of board. Go through that until you have a specific question, then ask that question. Plenty of people can help when they know what the sticking point is. Otherwise, you are asking for us to do all that again.

Ha

[REWahoo]

Quote:

Originally Posted by gozzie Does anyone know of any simple guidelines or rules of thumb on when to take benefits?

No. Unfortunately, no.

[cute fuzzy bunny]

If you can tell me when you're going to die, I can give you a great answer.

[unclemick]

84.6 plus or minus 0.1 yrs. My friends at the IRS know everything and would never stear me wrong. Right?

heh heh heh heh heh heh heh heh heh heh heh heh heh heh - I suppose I can still cash them out at 70 and reset the clock - should I strike it rich. 8)

[chinaco]

Most information that I have read on the subject consider several factors. Things like expected life, if you have a spouse, and several other issues.

I read one article that gave several good rules of thumb. For example if you have a spouse and no family history that would lead you to believe you would have a premature death... The spouse with the lower benefits amount would begin taking ss at 62. The other spouse would wait till full retirement (66.?) or late 70. This would enable the surviving spouse to have a larger indexed annuity (i.e., SS) for life. There were some calculations to back it up... But essentially the probability of at least one spouse living into the 80's is a fairly high. To make it work, you must be able to get by without the income for ss for 4-8 years (depending on the length of delay).




Here are some articles

http://www.fpanet.org/journal/articl...p0306-art8.cfm
http://www.boston.com/business/perso...rity_benefits/

[Gearhead Jim]

It's hard to quantify, but the spending spree our government has been on, and shows no sign of stopping, is likely to result in higher taxes and/or reduced benefits in the years ahead. That gives an extra push to the idea of "take it now, befoe they take it away or tax it away."

Does that concept factor seriously into your ss planning, or do you just run the "normal" numbers?

[Alex]

Personally, I will take the SS the day I am able at age 62. Bird in hand and all....

[macdaddy]

I've read several places that if you can earn 8% on the money it's best to take it at 62 and start investing it yourself.

[Cut-Throat]

Quote:

Originally Posted by macdaddy I've read several places that if you can earn 8% on the money it's best to take it at 62 and start investing it yourself.

Where can I get 8%?

[Sam]

Quote:

Originally Posted by macdaddy I've read several places that if you can earn 8% on the money it's best to take it at 62 and start investing it yourself.

Never thought of it that way. Have you gone through the calculation yourself? 8% sounds reasonable to me.

[MasterBlaster]

Quote:

Originally Posted by macdaddy I've read several places that if you can earn 8% on the money it's best to take it at 62 and start investing it yourself.

The 8 percent return that you'll need is for a very low-risk investment compared to the no-risk approach of delaying SS. Also the 8 percent that you need is an after tax amount.

That probably means that you'll have to be in the equity (or other) markets and take some market risk which violates the low-risk approach.

[Gearhead Jim]

Quote:

Originally Posted by Masterblaster The 8 percent return that you'll need is for a very low-risk investment compared to the no-risk approach of delaying SS...

I'm not sure that delaying ss is a "no-risk" approach.

[Cut-Throat]

Quote:

Originally Posted by Gearhead Jim I'm not sure that delaying ss is a "no-risk" approach.

This thread has now been doused with Gasoline. - The match will soon follow.

[Goonie]

Well, before the match strikes.....

I plan on taking SS @ 62....I have a DB pension and the 'reduced' SS benefit will put me up to where my wage would be if I was still w*rking. I go along with the 'bird in hand' also! 8)

[jdw_fire]

The answer to this question really depends on several things, some of which follow. First, how you are funding your retirement i.e. do you have a large pension and almost no portfolio or are you funding via a portfolio only? Second, do you want to maximize your spending early in your retirement? Third, how healthy are you? Fourth, do you want to leave an inheritance to someone?

The thread mentioned earlier addresses the second question and to some extent the fourth. However the answer to the first question may make all the other questions moot i.e you need to have the spendable assets to implement the delay strategy discussed. The third question is a mitigating factor in the earlier discussion.

[cute fuzzy bunny]

Beaten to death here: http://early-retirement.org/forums/i...p?topic=9788.0

Which also references at least 4 other threads where it was equally beaten to death.

Bottom line from this corner is that for an actual early retiree with a reasonably well funded retirement plan, firecalc says you can withdraw more for the entire length of your ER with a higher survivability rate if the SS income stream shows up earliest, reducing your withdrawal requirements at that point.

And no, you dont have to make a 'risky' 8% on the money to make taking it and investing the money yourself become a winning strategy, as is outlined by Dory in the thread referenced above.

But hey, if you're still working into your 60's, have a poorly planned and funded retirement plan, blow all your money in your 50's, or have a working spouse making six figures...all bets are off. And you're not retired, early retired, or anything else having to do with this forum!

[jdw_fire]

Here is the thread I was refering to http://early-retirement.org/forums/i...?topic=11795.0. If you read it you will see that not everyone agrees with CFB about when is the most financially advantageous age to start taking SS.

[gozzie]

I appreciate all the comments. My wife and my investments (1.5 mil. and paid up house) are the basis for our retirement. We have no kids and don't need to leave anyone an inheritance. Health is okay although my wife smokes (dammit). We don't necessarily want to spend more now, although I imagine we'll spend less if and when we grow older simply because of the ravages of old age.

[cute fuzzy bunny]

CFB has an opinion, but CFB also provided actual numbers, data and firecalc run information, along with links to reports and articles that give everyone all of the information to help make a sound decision on the matter.

Some other participants provided funny or no math, wanted to obscure or pretend some risks and factors didnt exist, and made assumptions that are either not accurately assumable or not workable for a lot of people.

But as always, I think this is a decision thats made by a couple of hairballs and then the facts are orderly arranged or mitigated to suit that decision.