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Old 07-03-2022, 10:50 AM   #441
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Yes, but it is 80.5 when taking between 62 and 70 as stated in his example. You are correct that it is 82 1/2 when taking form age 67 to 70.
In fact it is age 82 1/2 for everyone when comparing their FRA to their age 70 benefit. I'm sure this was by design of the SS system to assure some kind of fairness or equality in the results.
Yes, after I posted I saw that he was basing it on 62 vs 70 so I added a paragraph addressing that and came up with 80.4... but 80.5 is close enough.
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Old 07-03-2022, 10:56 AM   #442
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Originally Posted by pb4uski View Post
Yes, after I posted I saw that he was basing it on 62 vs 70 so I added a paragraph addressing that and came up with 80.4... but 80.5 is close enough.
Yeah I saw that and amended my post.
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Old 07-03-2022, 10:56 AM   #443
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These sre the break evens I got when comparing age 62 to age 70 benefit.
70 v 62
born before 1954 80.53
born in 1955 80.49

born in 1956 80.48
boirn in 1957 80.45
born in 1958 80.42
born in 1959 80.40
born in 1960 or later 80.37
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Old 07-03-2022, 11:04 AM   #444
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In either case, a lot lower than 86. Just curious, where did you get the 86 from?
Yes. I don't know why I bother but I keep seeing numbers like that that are not true. In most cases people already have made up their minds when to file and even if it would "only be 80.5" don't think it would change anybody's mind and so I probably should ignore it but..... can't help myself
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Old 07-03-2022, 11:04 AM   #445
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Breakeven age is 82-1/2 for someone whose FRA is 67.
That is looking at it from a pure "Total" SS return perspective.

But the increase in monthly income between 62 and 70 is IMHO opinion well worth it, especially if one has the funds to get buy till 70. From a Couples perspective with 2 SS recipients. Having the lower earner collect at 62 and the high earner waiting is a winner.

I would even say more so now in the pandemic age. E.G: We stopped travelling because we could not put up with the hassle and we live in a resort anyway, so it is not such a big deal. When I am 70 we will downsize and do some real BTD frivolous luxury travel for 5 to 10 years.

Of course this does not work if you absolutely need the money, although IMHO taking a stipend from one's 401k or IRA to make up some income is still better than not waiting to draw from a COLA'd SS. MMDV
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Old 07-03-2022, 11:30 AM   #446
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But with the uncertain situation of SS long term, there could be a benefit to taking it earlier to get grandfathered into existing payouts.

Vs. what the politicians may decide are future payouts.
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Old 07-03-2022, 12:02 PM   #447
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80.5

But does this take into effect the limited Roth conversions I could make because of the extra income from SS, causing me to have larger RMDs and thus be in a higher income tax bracket? Assuming I make it to 72. And if I don't the much larger RMDs my surviving wife would have and the still higher tax bracket? More of a rhetorical question, as it can get very complicated.
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Old 07-03-2022, 12:55 PM   #448
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The reason that age 62 is the highest is because many people live beyond their means, have little retirement savings and their bodies are making the physical work that they do increasingly difficult so they have little choice and have to take SS at 62.
Well, that's one of several possible reasons. Probably a significant one though.
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Old 07-03-2022, 02:40 PM   #449
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I found a good quote for that kind of behavior from checkbook.org: "There's a big difference between splurging on luxuries and throwing money away." Not throwing money away on the small stuff leaves more money for the things that matter.
.
During the months of the Covid lockdown, like many I noticed that my bank account was going up as my spending on many activities went to zero. I as tempted to spend some of the money, but then I thought, "What's the point of spending money just to spend money?" There is no satisfaction in that. Later when we started traveling again, I did spend extra $$'s to get an ocean front room on the Oregon coast. Now that was worth it.
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Old 07-03-2022, 02:48 PM   #450
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But with the uncertain situation of SS long term, there could be a benefit to taking it earlier to get grandfathered into existing payouts.

Vs. what the politicians may decide are future payouts.
From everything that I have read in the subject, there will not be any grandfathering so that's not really a good reason... people will get a percent of what the would otherwise be expecting.
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Old 07-03-2022, 04:23 PM   #451
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But with the uncertain situation of SS long term, there could be a benefit to taking it earlier to get grandfathered into existing payouts.

Vs. what the politicians may decide are future payouts.

As recent as 6 months ago I would have said "there is nothing to worry about --they will never cut social security", but now I'm not so sure.

Politicians and courts are capable of anything.



I really hope I'm wrong because my plan is to wait till 70 to start taking SS and am really banking on it to make my final years really financially worry-free.
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Old 07-03-2022, 04:24 PM   #452
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Our plan was to wait for SS at FRA for DW (younger lower earnings) and 70 for me but Opensocialsecurity.com calculates 0.3% higher payout for starting DW immediately so we are doing that. She is 63.5
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Old 07-03-2022, 04:56 PM   #453
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Sounds like you retired way too late. Your kids will be rich unless you figure out a way to BTD.

I have one kid that is a great saver and the other has a high income, yet to be seen if she is a saver, but yes, I expect they will get a large inheritance, but that is yet to be seen. I retired in 2016 at close to $1.7M. Our small business was destroyed by hurricane Michael in Oct. 2018 this forced my wife to retire, finally! She was 59. By the end of 2021 we added another $1M to what we had, even though we had paid $220,000 in tuition between 2018 and 2021. The market bloomed at the right time for us.

Not to bad for a couple of hi skool gradates earning a middle, middle class income!
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Old 07-03-2022, 05:13 PM   #454
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Breakeven age is 82-1/2 for someone whose FRA is 67.

Say that their PIA (benefit at age 67) is 100... therefore their benefit at 70 would be 124 (100 +100*8%*3). So if they wait to 70 they forgo collecting 3,600 of benefits (100*12*(70-67)) but get 24 more each month (124-100). 3,600/24 = 150 months or 12.5 years, which when added to age 70 results in a breakeve point of 82-1/2 (ignoring interest).

If you change it to 62 your age 62 benefit would be 70. So you would forgo 6,720 from age 62 to 70 (70*12*(70-62)). But your benefit would be 54 higher (124-70). 6,720/54 = 124 months = 10.4 years so the breakeven point would then be 80.4 (ignoring interest).

In either case, a lot lower than 86. Just curious, where did you get the 86 from?
I think you are taking break even for just the individual. When you add in spousal benefits at 67 the payback is longer. Not everyone's situation is the same
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Old 07-03-2022, 08:40 PM   #455
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I think you are taking break even for just the individual. When you add in spousal benefits at 67 the payback is longer. Not everyone's situation is the same
On the first part, please show your calculations. On the second part...not everyone's situation is the same... no kidding Sherlock, but if you follow the thread backwards you'll see that we were responding to a situation for an individual and not for a couple.
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Old 07-03-2022, 09:52 PM   #456
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sherlock eh . . . I did follow the thread. I was responding to your comment on how it could be 86 years. I am not trying to start something so I will back out of this discussion. My calculations for my situation won't address the persons question and situation as you said.
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Old 07-04-2022, 06:09 AM   #457
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I think you are taking break even for just the individual. When you add in spousal benefits at 67 the payback is longer. Not everyone's situation is the same
It looks like the breakeven for spousal is actually shorter, not longer, assuming that they are the exact same age and the spouse is not entitled to any benefits based on their own work record so the non-working spouse receives 1/2 of the working spouses PIA.

Using the same example above except that the spouse would be entitled to 50 monthly (50% of the working spouses PIA of 100) at their FRA of 67. If the spouse takes at 62 then the benefit would be reduced by 32.5% to 33.75. So from 62 to 67 the nonworkign spouse would forgo 2,025 (33.75*(67-62)) and the working spouse would forgo the same 6,720 from the prior example from 62 to 70... for a total of 8,745.

Using goal seek, I derived a breakeven of 79.7:

((50-33.75)*12*(79.7-67))+((124-70)*12*(79.7-70)) = 8,762

Obviously, if the sopuses are of different ages or the non-working spouse has some benefit that they are entitled to based on their own work record it changes.
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Old 07-05-2022, 03:55 AM   #458
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It looks like the breakeven for spousal is actually shorter, not longer, assuming that they are the exact same age and the spouse is not entitled to any benefits based on their own work record so the non-working spouse receives 1/2 of the working spouses PIA.

Using the same example above except that the spouse would be entitled to 50 monthly (50% of the working spouses PIA of 100) at their FRA of 67. If the spouse takes at 62 then the benefit would be reduced by 32.5% to 33.75. So from 62 to 67 the nonworkign spouse would forgo 2,025 (33.75*(67-62)) and the working spouse would forgo the same 6,720 from the prior example from 62 to 70... for a total of 8,745.

Using goal seek, I derived a breakeven of 79.7:

((50-33.75)*12*(79.7-67))+((124-70)*12*(79.7-70)) = 8,762

Obviously, if the sopuses are of different ages or the non-working spouse has some benefit that they are entitled to based on their own work record it changes.
I'll just assume your theory and math are correct, but most of our DWs (or, I suppose, DHs) DO receive SS on their own record. YMMV
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Old 07-05-2022, 08:20 AM   #459
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Not sure if this has been mentioned, but have heard some financial advisors are telling folks to take it at 62, even if still working. To hedge against future cuts. I was surprised.
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Old 07-05-2022, 08:28 AM   #460
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Not sure if this has been mentioned, but have heard some financial advisors are telling folks to take it at 62, even if still working. To hedge against future cuts. I was surprised.
Not surprising at all. On another board, someone reported that their Edward Jones rep was telling them to take it early because the dollar difference in waiting was "negligible". For that person, it was $900/month, which I don't consider negligible especially with COLA- but it also means money left longer in their EJ accounts since they have other income.

Coincidence? I think not.
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