Social Security at 70

[postpete]

I went to opensocialsecurity today and it told me that there is only a $1700 total difference between filing now (turn 62 this month) or filing at their determined optimal age of 65 and 4 months. I have been thinking about when to file (like many here). My original plan was both spouses to take at 70 but being a Fed retiree I am losing $1000/month starting next month due to loss of special supplement. I currently withdraw $1000/month from TSP. If I file now I can stop the withdrawal and make up for the loss of supplement. With today's market (although it has been rising as of late) is it a no brainer to file now? Wife will continue to work till 65, five more years, and file at 70,she is the higher earner. Thanks for input and sorry for continuing the age old question!

 

[imnontrad]

Another thing to consider is tax/Medicare consequences, not only for you but also a spouse, and heirs.
If you have too much in pre-tax retirement accounts, you may face higher taxes and Medicare premium surcharges (IRMAA) later in life, especially if one spouse dies. In addition, your heirs of the pre-tax accounts may face a hefty tax bill.
Taking time to reduce these accounts by withdrawing/spending, or converting to Roth may be the better option for a while. Delaying SS will mean more "runway" before going into the next tax/Medicare premium bracket. And your SS benefit will continue to grow.

 

[RockLife]

Yeah, it really sucks to make so much dough that you have to pay taxes eh?

Well...they did take this money decades ago without compound interest. It's certainly a form of tax already paid, no?

 

[pb4uski]

^^^ Actually, most of what you get is "interest"... or at your receive much more than what you paid in... on average about 85%... which is why for many 85% of SS benefits are taxed.

If I take my SS statement and divide what I paid in SS taxes by my PIA I get back every penny that I paid in in 3-1/2 years... if I do the same calculation for DW, who was a lower earner, it is less than a year.

And those calculations are using all the social security that we paid in... in reality about 28% of that was for disability insurance and survivor benefits and not retirement benefits so that would reduce the 3-1/2 years to 2-1/2 years.

 

[pb4uski]

I went to opensocialsecurity today and it told me that there is only a $1700 total difference between filing now (turn 62 this month) or filing at their determined optimal age of 65 and 4 months. I have been thinking about when to file (like many here). My original plan was both spouses to take at 70 but being a Fed retiree I am losing $1000/month starting next month due to loss of special supplement. I currently withdraw $1000/month from TSP. If I file now I can stop the withdrawal and make up for the loss of supplement. With today's market (although it has been rising as of late) is it a no brainer to file now? Wife will continue to work till 65, five more years, and file at 70,she is the higher earner. Thanks for input and sorry for continuing the age old question!

I'm 66-1/2 and delaying until 70 as the higher earning spouse and DW is 67 and started collecting at her FRA of 66-2 months. For us, the difference between filing now is negligible, but there are two reasons that I'm not filing and we are using savings instead. First, if I started collecting it would reduce the amount that I can do low tax-cost Roth conversions and second, deferring SS is a great deal to buy a COLA adjusted annuity that I can't buy anywhere else.

 

[TheWizard]

I'm 66-1/2 and delaying until 70 as the higher earning spouse and DW is 67 and started collecting at her FRA of 66-2months. For us, the difference between filing now is negligible, but there are two reasons that I'm not filing and we are using savings instead. First, if I started collecting it would reduce the amount that I can do low tax-cost Roth conversions and second, deferring SS is a great deal to buy a COLA adjusted annuity that I can't buy anywhere else.

Totally agree with pb on this.
That's exactly what I did and I'm single.
I'm 72 now, so will no longer be doing significant Roth conversions, just small ones in December up close to the next higher projected IRMAA threshold.

Now if you are in poor health or have minimal savings, then it's a quite different situation...

 

[old medic]

At 59 I'm not in the position to have to decide yet, but lots of good reading. DW is 54 and still has a few years left to work before she reaches her full pension. She will have insurance where I don't. So current plan is for me to wait till 65 and Medicare before I consider SS. We both will have 100% survivors' pension with COLA, and SS.

 

[ShokWaveRider]

We both will have 100% survivors' pension with COLA, and SS.

Retirement Nirvana

 

[Perryinva]

^^^ I guess that you could but I'm pretty sure that they'll find a way to claw it back anyway... and as a taxpayer you should be glad that they clawback any benefits paid that the recipient isn't entitled to.

Actually, as you would expect, the clawback is an automated process with no follow up. If there is money in the automated DD account, then they claw it back. If the account is empty, you never hear from them. All 4 parents were in hospice situations for short periods and we kept the accounts at minimum, pulling out their SS the day deposited. One DID coincidentally pass on the 1st, with an end of month birthday, so there would be no clawback, but the other 3 would have.

 

[Perryinva]

Everyone has their reasons for taking it when they do. Not everyone who takes it early needs the money, and not everyone who waits until 70 made the right choice.

I'm taking CPP at 60 (Canada). I don't need the money but my investments are minimal and the majority of my income is a solid COLA pension. ….. I've already won the game, all that's left is to do is to make the most of what's left.

CPP is tiny with much longer requirements to get the full amount. The average amount is around $620 (CND) with the maximum@ 65 around $1300. I agree, the amounts are not really enough to delay for. Plus you have to have
contributed for 39 years before age 65 vs 30 in the US for maximum. However the pay in rate is lower , currently 5.7% vs 7.65 for US (inc Medicare) and more importantly Canadians only pay in up to $61k income, less than half what US taxpayers pay in up to and it was much lower than that years ago. However, at least CPP is higher than the UK State Pension amounts!

I’m planning on waiting until my SS is over $4k, which would be be close to almost 68 the way things are going. I plan to file to collect in Feb 2026 to get the full previous years delayed credits.

 

[ShokWaveRider]

CPP is tiny with much longer requirements to get the full amount.

DW and I get ~$500 Canadian CPP between us. We do not qualify for OAS. Not much use to us here in the US so we keep it in a Canadian Account. Give most as gifts to DW's aging father.

 

[baffld]

I'm 66 now, and plan to wait until 70 to take it.

On my paternal side most of my aunts and uncles lived into their early 90's, and one aunt lived to 104.

I take after my paternal side in every other way, so it's a (fairly) safe bet I will have a long life, all things being equal.

I am single, so no need to consider a survivor, and I don't give even one second of thought to a so-called "break even" point. If I croak before 70, the lack of social security funds in my account won't really bother me, what with the whole "being dead" thing.

Note: it is relatively easy for me to take this route since my pension more than covers all my expenses. I realize not everyone is this fortunate.

Same situation here, just closer to 70. We are very lucky.

 

[RetireBy90]

DW took hers at FRA of 66, my plan was to wait till 70 (now 66) in case I go first she would have a cushion in monthly income. We do well on other income we have now, but I have considered what we could do with the extra income each month.

 

[thatguy]

If I understand this stuff right, It occurs to me that my reduced age 62 SS amount will not make any difference when I'm gone, if younger DW's yet unclaimed SS benefit exceeds mine.
Now were 21 and 12 years retired, DW's age 70 SS is 19 months away. I might last 20 more years, but at this age you never know.

I did not reinvest my early SS, but it's safe to say any money not withdrawn to fund our early retirement, stayed invested.

 

[RetireBy90]

If I understand this stuff right, It occurs to me that my reduced age 62 SS amount will not make any difference when I'm gone, if younger DW's yet unclaimed SS benefit exceeds mine.
Now were 21 and 12 years retired, DW's age 70 SS is 19 months away. I might last 20 more years, but at this age you never know.

I did not reinvest my early SS, but it's safe to say any money not withdrawn to fund our early retirement, stayed invested.

A good point that I often overlook is if you take SS early maybe you don't have to draw down other savings and they can continue to grow. Not everyone is in this situation and it points to how SS decisions can be very dependent on your personal situation.

 

[Chuckanut]

A good point that I often overlook is if you take SS early maybe you don't have to draw down other savings and they can continue to grow. Not everyone is in this situation and it points to how SS decisions can be very dependent on your personal situation.

Keep in mind that if you don't want to leave an estate (granted, a big IF) and you have the funds to finance your lifestyle from 62 to 70, you can spend more money every year by taking SS at 70. It's just math. (I can post it if you like.) And, if it works for you, great. If not, there are other options. Like you said, it's very personal.

Also, the choice to take SS at 62 or 70 is not binary. If you delay SS, every month between 62 and 70 is another chance to change your mind and start SS. You can always turn it on if things start looking not-so-good.

 

[Koolau]

Keep in mind that if you don't want to leave an estate (granted, a big IF) and you have the funds to finance your lifestyle from 62 to 70, you can spend more money every year by taking SS at 70. It's just math. (I can post it if you like.) And, if it works for you, great. If not, there are other options. Like you said, it's very personal.

Also, the choice to take SS at 62 or 70 is not binary. If you delay SS, every month between 62 and 70 is another chance to change your mind and start SS. You can always turn it on if things start looking not-so-good.

Yep, as I waited for 70, I always knew I could start SS at any time before 70. It was a comforting back-up to my overall plan. YMMV

 

[pb4uski]

^^^ like holding an option that you can invoke at any time of your choosing if you want or need to while watching your benefit increase 0.67% monthly while you wait.

 

[Koolau]

^^^ like holding an option that you can invoke at any time of your choosing if you want or need to while watching your benefit increase 0.67% monthly while you wait.

One of the few things that made it worth getting older. YMMV

 

[pb4uski]

Amen!

 

[copyright1997reloaded]

^^^ like holding an option that you can invoke at any time of your choosing if you want or need to while watching your benefit increase 0.67% monthly while you wait.

Like getting 30 years in the old mega-corp. which allowed "30 and out" pension calculations. Even if fired, that unreduced pension was yours.

 

[Time2]

^^^ like holding an option that you can invoke at any time of your choosing if you want or need to while watching your benefit increase 0.67% monthly while you wait.

Yes, at 67 and 7 months, I'm looking forward to 70, when we will take SS. At that time, SS will cover 80% of what we spend, resulting in 0.6% withdrawal rate at today's valuation. I'm hoping for an 'Intervention' to help me learn to BTD!

 

[jazz4cash]

^^^ like holding an option that you can invoke at any time of your choosing if you want or need to while watching your benefit increase 0.67% monthly while you wait.

As I approach FRA in a few months, I’m finding reasons to delay, not necessarily to 70, just OMM (One More Month).

 

[ElizabethT]

DH and I are 7 years apart, so our plan is to file more or less together in two years, when he reaches 70 and I reach 62. His will be slightly over $50,000 a year, mine will be slightly over $20,000. He'll never 'trade up' to mine should I die first, so me taking at 62 seems the best approach, since my waiting till age 70 puts him at 77, to close to the beginning of those slow-go years.

The above plus two modest pensions puts us in a position of living nicely without needing to utilize any funds from our portfolio. That is NOT the current plan - the current plan is to keep withdrawing as we have been (2.5%) and simply BTD wirh regard to the new SS funds. - however it's very comforting to know it's an option if need be.

Me moving into Medicare in five years will be another nice financial bump, with a savings to us of about $10,000 a year. Our strategy entering FIRE was to set a sustainable withdrawal rate and wait for the new monies to arrive before increasing our spend. We relied on our youthful energy in the early years to supplement our fun, which as I approach my slightly-slowing 60's I can see it definitely did.

I'm glad we waited. We are excited about the possibilities this new money flow is going to afford, particularly as our grandchildren enter adolescence.