Social Security at 70

[Sunset]

Quote:

Originally Posted by artsy-B Oh how I wish I were in some of your shoes. As a single, black woman being the sole support of a child, I have lived paycheck to paycheck for over 40 years. ...... So, even though I am so very tired of working, I cannot afford to until I help my daughter finish paying off her student loans because I feel bad leaving her in debt. .......

While your daughter can borrow to go to school (let's hope it is an education that will actually pay a decent wage), you cannot borrow to retire.

Most advice I read in this situation is to not pay the daughter's debt, save your money for your retirement as you will have 30 more years to live. Besides, in these days there seems to be a lot of talk of forgiving student debt (but only the folks that still owe).

[Imackenzie]

I really feel for you, but this is no time to be giving money to your daughter for anything less than life threatening. She has many, many years to earn and save. You do not. Stop paying her debt now. We were much more fortunate in our finances and yet we made all three children borrow for part of their education and pay it back themselves.

Quote:

Originally Posted by artsy-B Oh how I wish I were in some of your shoes. As a single, black woman being the sole support of a child, I have lived paycheck to paycheck for over 40 years. When you start off life so far behind, it is so difficult to get even, more less, make decent money. No inheritances, no family wealth. Literally born owning money. I am now 65. Worked Social Security Jobs for 13 years, then took an OPERS job for 20 years (no Soc Sec), just a pension. Now I am back working for a Social Secuity Employer at age 65. I retired from my OPERS job at 60 - that pays $1800/month forever (no increases ever) I went to work right away for a regular employer, and am five years in. So, even though I will have 19 years of "minimum" Social Security income, WEP was calculated to take 2/3 of that. So, SocSec says I qualify for $1010/month based on my work history, but I will only be paid $453/month. So my monthly retirement income will be $2253 forever, with which I will have to pay for Medicaid A B and Prescription plan. So, even though I am so very tired of working, I cannot afford to until I help my daughter finish paying off her student loans because I feel bad leaving her in debt. So, the majority of you talk about your problems with having to make due with $5K/mo and more, do not appreciate what you have.

[Koolau]

All 3 of our kids needed to borrow for school. They all got jobs and began to pay off their debts. Once we could see that we were financially secure in retirement, we helped them pay off their student debt. It's difficult to see your kids in stress, but kids have a lot more options than retirees.

Check back here with any questions. We have a lot of experience and expertise. Blessings on you and your daughter.

[Rianne]

Just looked at opensocialsecurity.com. If DH takes SS on 1/1/2023 (65 + 1 month)
I take it on 9/2022 (65) instead of waiting until 70. Just based on what open SS says, we'd forfeit $250,000 between 65 and 70. The thought is, not to touch portfolio and live on SS + pension due to this downturn.

And the idea to spend while we're healthy cash flow without WD. Taxes on that + capital gains (dividends) would be @ $4000 according to the 2022 IRS tax formula.

This downturn has us rethinking our R spending and income.

[levindb]

Quote:

Originally Posted by Rianne This downturn has us rethinking our R spending and income.

This is a very complex question, and it depends on what goals you are trying to achieve. If the downturn today concerns you, what if another downturn happens in 10-15 years. SSA payments are inflation adjusted.

Would it be better to have 25% to 35% more safe income at that time?

You may not be able to undo your SSA decision, so make sure you take a long look at what is best for you and your family many years into the future.

[Rianne]

Quote:

Originally Posted by levindb This is a very complex question, and it depends on what goals you are trying to achieve. You may not be able to undo your SSA decision, so make sure you take a long look at what is best for you and your family many years into the future.

Fair, but SS and pension are not transferable upon death. So we are thinking about our beneficiaries. If the prediction is positive long term, good for them and security for us. If the predictions are negative, beneficiaries lose out and we use up our portfolio. WD from the portfolio can be damaging for us depending on the predictions. Yes, I get it, the market always recovers. But in what time frame? 2 years, 5 years, 10 years? If recovery isn't for 5 years, we're letting our portfolio recover over 5 years. Good for beneficiaries and for us. If recovery is 10 years, we reduce our spending. We can easily do that with no debt.

[HarryHawk]

Quote:

Originally Posted by Sunset While your daughter can borrow to go to school (let's hope it is an education that will actually pay a decent wage), you cannot borrow to retire. Most advice I read in this situation is to not pay the daughter's debt, save your money for your retirement as you will have 30 more years to live..

You may not be doing your daughter any favors if someday in the future she will find herself having to support you because you do not have the means to support yourself.

If in 20 years your financial situation improves and your daughter still owes, you can pay off her debt then.

[Accidental Retiree]

Quote:

Originally Posted by artsy-B Oh how I wish I were in some of your shoes. As a single, black woman being the sole support of a child, I have lived paycheck to paycheck for over 40 years. When you start off life so far behind, it is so difficult to get even, more less, make decent money. No inheritances, no family wealth. Literally born owning money. I am now 65. Worked Social Security Jobs for 13 years, then took an OPERS job for 20 years (no Soc Sec), just a pension. Now I am back working for a Social Secuity Employer at age 65. I retired from my OPERS job at 60 - that pays $1800/month forever (no increases ever) I went to work right away for a regular employer, and am five years in. So, even though I will have 19 years of "minimum" Social Security income, WEP was calculated to take 2/3 of that. So, SocSec says I qualify for $1010/month based on my work history, but I will only be paid $453/month. So my monthly retirement income will be $2253 forever, with which I will have to pay for Medicaid A B and Prescription plan. So, even though I am so very tired of working, I cannot afford to until I help my daughter finish paying off her student loans because I feel bad leaving her in debt. So, the majority of you talk about your problems with having to make due with $5K/mo and more, do not appreciate what you have.

I recall that 20 years of substantial earnings is the cutoff for less of a WEP impact. (I am also affected by WEP but have 21 years of substantial earnings.)

Is it possible for you to work an extra year or at least to look and see what impact an extra year of SS earnings might have on your SS payment?

Also, I concur with those who suggest that you not help pay off your daughter’s school loans.

[Chuckanut]

Quote:

Originally Posted by Sunset While your daughter can borrow to go to school (let's hope it is an education that will actually pay a decent wage), you cannot borrow to retire. Most advice I read in this situation is to not pay the daughter's debt, save your money for your retirement as you will have 30 more years to live. Besides, in these days there seems to be a lot of talk of forgiving student debt (but only the folks that still owe).

Clark Howard often reminds parents that while there are scholarships for college there are no scholarships for retirement.

Don't get me started on the high cost of college and student loans. Like housing in some areas, colleges are pricing a lot of people out of the market. How well will that work for them in the long run?

[pb4uski]

Quote:

Originally Posted by Rianne Just looked at opensocialsecurity.com. If DH takes SS on 1/1/2023 (65 + 1 month) I take it on 9/2022 (65) instead of waiting until 70. Just based on what open SS says, we'd forfeit $250,000 between 65 and 70. The thought is, not to touch portfolio and live on SS + pension due to this downturn. And the idea to spend while we're healthy cash flow without WD. Taxes on that + capital gains (dividends) would be @ $4000 according to the 2022 IRS tax formula. This downturn has us rethinking our R spending and income.

I guess that it depends, in part on how long your think that you will live and whay you think your opportunity cost of money is. If your retirement is well funded as many people here are, the whole "spend while we are healthy" is a red herring IMO. Money is fungible and in most cases you have enough or plenty with the spending while healthy level of spending... it is just a matter whether the source of those funds is SS or retirement savings. We spend what we want to and it didn't change one iota when I started my pension or when DW started SS, nor will it change when I start SS. I don't see that issue as relevant unless one's retirement isn't robustly funded or one lives under a paycheck-to-paycheck spending mentality.

For us, delaying is the clear choice. We are in good health and have good family longevity so it is likely that we will live long... in fact it is likely that one or the other of us will live into our early 90s so the more inflation adjusted cash flow the better. Secondly, because our "capital preservation" AA is lower than most (~32/66/2) the opportunity cost of money is lower than many.
The cherry-on-top is that delaying allows us to do more low tax cost Roth conversions from tax-deferred accounts and slightly reduce the tax torpedo come RMD time.

[pb4uski]

Quote:

Originally Posted by Sunset While your daughter can borrow to go to school (let's hope it is an education that will actually pay a decent wage), you cannot borrow to retire. Most advice I read in this situation is to not pay the daughter's debt, save your money for your retirement as you will have 30 more years to live. Besides, in these days there seems to be a lot of talk of forgiving student debt (but only the folks that still owe).

Quote:

Originally Posted by Imackenzie I really feel for you, but this is no time to be giving money to your daughter for anything less than life threatening. She has many, many years to earn and save. You do not. Stop paying her debt now. We were much more fortunate in our finances and yet we made all three children borrow for part of their education and pay it back themselves.

Quote:

Originally Posted by HarryHawk You may not be doing your daughter any favors if someday in the future she will find herself having to support you because you do not have the means to support yourself. If in 20 years your financial situation improves and your daughter still owes, you can pay off her debt then.

Quote:

Originally Posted by Chuckanut Clark Howard often reminds parents that while there are scholarships for college there are no scholarships for retirement....

I agree. My advice to you would be to focus on you and your needs. As time evolves if you get comfortable with your financial situation and end up having the resources to help youR daughter with her college loan payments then you can do so. OTOH, if your financial situation continues to be tenuous, then your daughter will have work income coming on to make those college loan payments. Besides, there may well be some student debt forgiveness around the corner.

[Time2]

I'm 67 and 4 months, I have planned to wait until 70. Two major reasons, my SS is twice what my wife's is, if i die, ( I pretty much expect to) then she can collect my higher amount. Then we have to much in tax deferred accounts and I'm doing Roth conversions as fast as I can while staying in a lower tax bracket. Having SS would add income reducing the amount I could Roth Convert while staying in the lower tax bracket.
The market downturn has at least make me think about collecting SS earlier, but we have enough, so I doubt that will happen, but it is a thought.

[pb4uski]

That is the beauty of being over 62 if delaying SS... you effectively hold an option to start at any time if the SHTF and you become financially uncomfortable with continuing to defer.

[MarieIG]

Quote:

Originally Posted by pb4uski That is the beauty of being over 62 if delaying SS... you effectively hold an option to start at any time if the SHTF and you become financially uncomfortable with continuing to defer.

Exactly. It's good to know the option is there.

[11522914]

Quote:

Originally Posted by pb4uski That is the beauty of being over 62 if delaying SS... you effectively hold an option to start at any time if the SHTF and you become financially uncomfortable with continuing to defer.

Great point. I just turned 62 and will be reviewing month to month. Plan is to hold off as long as possible. Not uncomfortable yet but could get there faster than I originally thought.

[Koolau]

Quote:

Originally Posted by pb4uski That is the beauty of being over 62 if delaying SS... you effectively hold an option to start at any time if the SHTF and you become financially uncomfortable with continuing to defer.

Yes, that sustained me from 62 to 70. I knew at any time, I could change my mind and claim SS. It was a real comfort and a major plan back-up.

[Chuckanut]

Quote:

Originally Posted by pb4uski That is the beauty of being over 62 if delaying SS... you effectively hold an option to start at any time if the SHTF and you become financially uncomfortable with continuing to defer.

+1

A lot of the discussion around SS seems to focus on a binary choice of 62 or 70. In reality between 62 and 70 you have an additional 95 points where you can turn it on at anytime. And you can collect an inflation adjusted increase as the reward for your patience.

[latexman]

Quote:

Originally Posted by pb4uski That is the beauty of being over 62 if delaying SS... you effectively hold an option to start at any time if the SHTF and you become financially uncomfortable with continuing to defer.

The SS rip cord!

[Imackenzie]

That's where I am at 65 almost 66. It's a great comfort to know if I have to, money is right there and if I don't need it now, then after FRA my check will grow 8% compounded annually and adjusted for inflation. There isn't a better deal out there if you can hold on. But I wouldn't suffer to wait--if you are hurting, take the money now!

Quote:

Originally Posted by pb4uski That is the beauty of being over 62 if delaying SS... you effectively hold an option to start at any time if the SHTF and you become financially uncomfortable with continuing to defer.

[camfused]

Quote:

Originally Posted by 11522914 ...Great point. I just turned 62 and will be reviewing month to month...

You may wish to find less boring hobbies in your retirement