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Old 11-21-2017, 10:14 AM   #101
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Originally Posted by razztazz View Post
I am 60 1/2 and have always planned on taking it at 62. I won't "make any money" on waiting till I'm 80. Like they say, there are no guarantees. If I live to 85 or 90 I doubt I'll be griping about "OH crap, man! If I had waited till 70 I'd have x thousand extra dollars now!" Then die the next day.
+1 I also "took the money and ran" at 62. Get grandfathered-in a much as possible against ch-ch-ch-changes.

Plus there's that 2034 thing that folks here were sweating about last week.
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Old 11-21-2017, 10:26 AM   #102
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When they last fixed SS in the 1980s, it was with a combination of increasing payroll taxes, raising the retirement age for younger people, and making SS benefits partially taxable for some recipients. But everybody on this thread seems to assume that the next time around, the fix will simply be a big across-the-board cut. What am I missing? How is it different this time?
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Old 11-21-2017, 10:31 AM   #103
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We have much less confidence in the ability of Congress to actually do something today than we would have in the 1980s. If they do nothing, then the inflow will be ~25% less than promised benefits and benefits will be reduced.... most likely across-the-board to all beneficiaries.
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Old 11-21-2017, 10:55 AM   #104
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^ +1. And it's an easy metric to prepare for a "worst case" that is reasonably possible.
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Old 11-21-2017, 12:44 PM   #105
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What if the new tax plan included a repeal of the tax on SS benefits? Now that might change some opinions both on electing at 62, and the repeal of medical itemization. So much CAN change, including future benefit rules, so take what you can, if you are able!

Even though our taxed benefits are dipping 85% in the current 28% bracket, it feels right to get what you earned. Who knew the benefit for itemizing home ownership costs would possibly become so worthless.
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Old 11-21-2017, 01:03 PM   #106
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This. Times 10. Far better to delay taking SS early ( as long as you don't really need it) than taking it early only to find that you live a long life and are in danger of running out of money. Better to leave money on the table than be broke at age 90. Some may argue that by taking SS early, one's portfolio can continue to grow. But what if you DO take SS early and at the same time we have a devastating long term bear market. Then your portfolio takes a huge hit AND you have a smaller SS benefit.
Your SS is a guaranteed annuity from Uncle SAm. Sure....they may cut benefits, delay COLA's , etc. but for most of us at or near retirement age SS will always be there.
It is possible to take SS at 62 and leave enough buffer to not have to worry about running out of money. I don't see that the options are mutually exclusive unless the retirement plan doesn't have much padding or margin for error.
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Old 11-21-2017, 02:14 PM   #107
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It is possible to take SS at 62 and leave enough buffer to not have to worry about running out of money. I don't see that the options are mutually exclusive unless the retirement plan doesn't have much padding or margin for error.
Sure, getting 1800/month, for example, by taking at 62 may be enough to not worry, but 3000/month taking at 70 is usually better longevity insurance, don't you think? It could mean the difference between flying first class on vacation vs. coach. You're not running out of money either way, but first class sounds more comfortable, especially at old age.
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Old 11-21-2017, 02:17 PM   #108
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One of the things you might consider is the applicability of the longevity calculator used. IMHO, the best are flexible calculators that take into consideration a number of important parameters. Abaris has a calculator that gives me a life expectancy of 93 or 94 (depending on whether or not I include the 3 months I smoked as a teenager.) That's a lot higher than what I'd get from SS which lumps me in with the entire population. Now they may be wanting to sell annuities but their methodology seems sound. That makes delaying SS much more attractive for me.
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Old 11-21-2017, 03:05 PM   #109
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62-70....Iíve decided to take it at 66, King Solomon would be proud.
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Old 11-21-2017, 05:19 PM   #110
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85 year old Dad just complained last week that he's sorry he took his at 62 instead of waiting.
That's interesting.

Virtually everyone makes a decision (early, FRA, late) and is happy with whatever decision they have made.

This is the first time I've heard of someone being unhappy. Ever.

Has he said what his reasoning was in starting at 62? And why he feels unhappy about that now?
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Old 11-21-2017, 05:25 PM   #111
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When they last fixed SS in the 1980s, it was with a combination of increasing payroll taxes, raising the retirement age for younger people, and making SS benefits partially taxable for some recipients. But everybody on this thread seems to assume that the next time around, the fix will simply be a big across-the-board cut. What am I missing? How is it different this time?
I don't think folks are predicting that's what will happen with "the fix".

Instead, they are predicting what will happen if there is no fix. In 2034 there will be across-the-board cuts for all SS recipients - unless legislation is enacted to "fix" it.

I'm betting that there will indeed be a fix before then.
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Old 11-21-2017, 05:26 PM   #112
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The government kind of expects me to take my SS at 62 because that's when they cut my FERS supplement off that I get for retiring early as a Fed LEO. So, I guess that's what I'll do.
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Old 11-21-2017, 05:39 PM   #113
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I don't think folks are predicting that's what will happen with "the fix".

Instead, they are predicting what will happen if there is no fix. In 2034 there will be across-the-board cuts for all SS recipients - unless legislation is enacted to "fix" it.

I'm betting that there will indeed be a fix before then.
Yes indeed. Things get fixed and there are many future issues to worry about. I'm guessing there is much pressure to extend the system for a generation or more. Extending things makes humans feel comfortable.

Seriously, in 2042 there's a huge issue with most major computer systems. Much bigger than Y2K! The TOD clock expires. Let's focus. 😂
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Old 11-21-2017, 05:56 PM   #114
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Ok mine and DH SS benefits are equal. He's 64, I'm 63. I've decided to start mine next year. He can get spousal on mine at FRA as his birthdate was 10 days before the cutoff. His will grow til 70. That gives us the best of both worlds unless we both live over 90. I've run the numbers with using the bridge strategy and looks like we are good either way. Only problem I have is that filing for SS will make me feel old and I'm not!
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Old 11-21-2017, 06:12 PM   #115
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My wife will take hers at age 62. That will save us about $5000 per year in self employment taxes. (Once you are drawing SS, income from CRP contracts is no longer earned income, therefore no SE tax on the payments.) I plan to take mine at age 70, so as to increase the survivor benefit for her. But the option is still open for me to take it earlier if situations change.
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Old 11-21-2017, 06:22 PM   #116
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I agree it's extremely unlikely for them to say "You've been collecting, so you'll keep getting the same amount, but this other person chose to delay, so we'll cut their benefit 25% (or more)".

But that's exactly what they have done with Medicare premiums.
With the Hold Harmless law, if you are collecting SS, your medicare premium is capped and your net (SS minus medicare) will not be decreased.

But if you are not collecting SS, your medicare premium is not capped.

This is effectively the same thing as what you deem unlikely.
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Old 11-21-2017, 06:32 PM   #117
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If a person starts SS @ age 62, I find it hard to believe a law change would further reduce said amounts for those who are already receiving SS payments.
Yes! This is actually the point of my starting this thread. Up to now there haven't been changes for a long time. My fear is that politics have fundamentally changed and now there may be changes to SS. I have no idea what those changes will be. I just think that taking the risk of applying now preferentially (maybe) protects me from all or some of those changes by already being in the system.
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Old 11-21-2017, 06:38 PM   #118
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Probably true, but based on history changes will be based on your age, regardless of starting benefits or not. I don't know where this idea comes from that starting benefits at 62 is more likely to preserve your benefits than a 62-year-old that hasn't started collecting.
It is true that past discussion about changes in SS benefits have focused on age. I remember proposals that would exempt those 55 and older. The question I proposed and worry about (a little) is has politics has fundamentally changed? Would any changes to SS now be applied differently. Consider attempts to repeal the ACA. Members of Congress seem to be very willing to vote to take away health care benefits and protections that people already have. Has the politics of not taking away benefits changed? And will that extend to any changes to SS if they come?
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Old 11-21-2017, 06:41 PM   #119
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IMO, this is a conservative way to increase your retirement spending. Let's take and example of 62 yo a retiree with $1 million saved and SS of $25k a year at their FRA of 66.

If they take SS at 62 and use a conservative 3.5% WR, then their inflation-adjusted spending can be $53,750 ($35,000 from portfolio and $25,000*75% or $18,750 from SS).

Alternatively, they carve out 8 years worth of age 70 benefits into a separate fund of $264,000 to provide $33,000 a year for ages 62-70 since their age 70 SS benefit will be $33,000 ($25,000 * (1+(8%*4))). They have $736k left and at a 3.5% WR that is $25,760... add the $33,000 and the total is $58,760.

So with some minimal financial engineering they have increased their retirement spending by 9.3%!

(I'm assuming that the $264k side fund earns the inflation rate so the $33,000 a year can be increased for inflation, but even if you bumped the $264k up a little bit to consider inflation more explicitly, it is still a winning strategy.)
Interesting! I'll look into this.
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Old 11-21-2017, 06:42 PM   #120
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But that's exactly what they have done with Medicare premiums.
With the Hold Harmless law, if you are collecting SS, your medicare premium is capped and your net (SS minus medicare) will not be decreased.

But if you are not collecting SS, your medicare premium is not capped.

This is effectively the same thing as what you deem unlikely.
That's seems a lot different, unless there's some history I don't know about. You know going in about the Hold Harmless law, and can choose at any point to start taking SS and take advantage of it. If you decide to wait until 67 to take SS, at that point you get the advantage of Hold Harmless. You didn't lose that benefit for good just because you failed to take it by a certain date and they changed benefits underneath you.

This is different from them permanently chopping the future benefits of anyone not yet taking SS even if they are eligible, and keeping the current benefits of those who have started taking it.

Admittedly I'm still learning about Hold Harmless, so please correct any misconceptions I've made.
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