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Old 11-22-2017, 02:13 PM   #141
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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.
These two sentences seem to contradict one another.

Congress attempted to repeal the ACA, but has completely failed so far.
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Old 11-22-2017, 02:24 PM   #142
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Well, certainly if you donít expect to live long, it makes sense to take it as soon as possible. Thatís not debatable.
It's very debatable.

It depends on how you define "live long", and your situation with your significant other.

I consider living to 100 as "long".
I consider living to 70 as "not long".
There's a lot of gray area in between.
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Old 11-22-2017, 03:10 PM   #143
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I took SS at 62 1/2. DH was similar. I have the slightly higher benefit but they are close enough together not to make a huge difference.

In the end, I looked at how much of our portfolio we would need to deplete by waiting to take it -- either for both of us or just me. We could have done that. And, again, I understand the longevity reasons to do that. But, I felt that doing it would deplete the portfolio to a point that I would feel uncomfortable. Right now, if SS were to get cut in the future we would still have a sufficient portfolio that things would be OK. But, if we depleted our portfolio and SS benefits were cut then that would really hurt. SO I felt more comfortable preserving more of the portfolio.
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Old 11-22-2017, 03:20 PM   #144
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I took SS at 62 1/2. DH was similar. I have the slightly higher benefit but they are close enough together not to make a huge difference.

In the end, I looked at how much of our portfolio we would need to deplete by waiting to take it -- either for both of us or just me. We could have done that. And, again, I understand the longevity reasons to do that. But, I felt that doing it would deplete the portfolio to a point that I would feel uncomfortable. Right now, if SS were to get cut in the future we would still have a sufficient portfolio that things would be OK. But, if we depleted our portfolio and SS benefits were cut then that would really hurt. SO I felt more comfortable preserving more of the portfolio.
Bingo! +10
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Old 11-22-2017, 03:21 PM   #145
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emphasis added

I don't think you are right on that... if they fail to act from everything that I have read both current and future benefits will be be haircut... essentially across the board.
Will they cut benefits retroactively? Otherwise the 23% cut isn't expected before 2034. Our portfolio is the money not subject to the 23% cut I was referring to by "money under our control".
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Old 11-22-2017, 03:33 PM   #146
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I took SS at 62 1/2. DH was similar. I have the slightly higher benefit but they are close enough together not to make a huge difference.

In the end, I looked at how much of our portfolio we would need to deplete by waiting to take it -- either for both of us or just me. We could have done that. And, again, I understand the longevity reasons to do that. But, I felt that doing it would deplete the portfolio to a point that I would feel uncomfortable. Right now, if SS were to get cut in the future we would still have a sufficient portfolio that things would be OK. But, if we depleted our portfolio and SS benefits were cut then that would really hurt. SO I felt more comfortable preserving more of the portfolio.
Thatís my thinking: preserving our portfolio to cover that potential SS decrease in 2034.

I just turned 62 and am mulling over starting SS early next year.

My amount will be somewhat reduced by WEP since I have a small public sector pension.

My SS will add maybe $10,000 to next yearís income, but my filing will also allow DH to claim spousal benefits on my record at his FRA. His filing will recoup some of that WEP haircut and also allow him to let his own SS grow until age 70. His age 70 amount would provide an increase for me if he predeceases me, despite the GPO offset lurking out there.

I figure I can file and see what my actual benefit will be and then have a year to change my mind.
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Old 11-22-2017, 03:34 PM   #147
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Will they cut benefits retroactively? Otherwise the 23% cut isn't expected before 2034. Our portfolio is the money not subject to the 23% cut I was referring to by "money under our control".
Yes, from everything I have read if congress fails to act benefits will be cut across the board, so if someone is collecting $100, then will then receive $77 as the taxes collected will only be sufficient to pay 77% of the promised benefits.
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Old 11-22-2017, 03:37 PM   #148
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Yes, from everything I have read if congress fails to act benefits will be cut across the board, so if someone is collecting $100, then will then receive $77 as the taxes collected will only be sufficient to pay 77% of the promised benefits.
I meant will they ask for the money back that we make from when we are 62 to 2034? We will be collecting benefits long before 2034 happens.
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Old 11-22-2017, 03:37 PM   #149
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Yes, from everything I have read if congress fails to act benefits will be cut across the board, so if someone is collecting $100, then will then receive $77 as the taxes collected will only be sufficient to pay 77% of the promised benefits.
My only concern is I do not consider SS & Medicare Payment a Tax. It is an investment/insurance in our future that We make from OUR OWN Pockets. Like an insurance policy it is a "Promise to Pay". I think any reduction in SS or lack of Medicare services is a result of lack of forethought. Therefore it is foreseen and should be corrected early. Just letting it break is not an option IMHO. If we know it will break in 2034, we are obliged to fix it, even if it means raising the percentages of what the pre-eligible folk are paying. I really hope and think that will be the eventual outcome.
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Old 11-22-2017, 03:41 PM   #150
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Please go back and read post #126, and try to avoid getting this thread closed.
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Old 11-22-2017, 03:44 PM   #151
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While I don't disagree with you... what we think really doesn't matter a rat's a$$.

Medicare is a totally separate issue/potential problem.

The SS fund is legally prohibited from borrowing so once they have redeemed the money that they have lent to the general fund, their hands are tied (unless something is done, which I think/hope will happen).... what they can pay out is limited to what they are taking in.
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Old 11-22-2017, 03:44 PM   #152
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I meant will they ask for the money back that we make from when we are 62 to 2034? We will be collecting benefits long before 2034 happens.
I would very seriously doubt it. Of all of the uncertainty about what will happen in 2034 or as it approaches, clawing back that money seems to be the least likely thing. And there's no reason to. A 23% or 25% cut would apparently allow SS to continue without going in the red.
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Old 11-22-2017, 03:46 PM   #153
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I meant will they ask for the money back that we make from when we are 62 to 2034? We will be collecting benefits long before 2034 happens.
No clawback that I have heard of.

For me, it is breakeven. I was born in 1955. So let's say that I could collect $1,000 at my FRA of age 66 + 2 months.

From 62 to FRA I would collect $750/month for 50 months or $37,500. Beginning at FRA I would collect an additional $250/month so it would take me 150 months or 12 1/2 years to "breakeven" which will be 2034... so I'll take my chances with FRA because if I am collecting $1,000 and get haircut 23% that is $770/month from 2034 on vs if I start at 62 it be $750 haircut to $578.

$750 for the rest of my life from 2034 on is better than $578.
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Old 11-22-2017, 03:49 PM   #154
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I would very seriously doubt it. Of all of the uncertainty about what will happen in 2034 or as it approaches, clawing back that money seems to be the least likely thing. And there's no reason to. A 23% or 25% cut would apparently allow SS to continue without going in the red.
I doubt it as well. That is why we will probably go with 62. I'm just not sure what other point pb4uski was trying to make regarding my initial post about claiming at 62.
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Old 11-22-2017, 04:44 PM   #155
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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.)
Not arguing the SS early or late question. But, the problem with this comparison is that in the first case 62-70 annual spending is $53,750 and, in the second case itís $33,000. To be apples-to-apples, the Ďcarve outí would be $430k (not $264k), leaving $570k*WDR (not $736k) + Age 70 SS.
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Old 11-22-2017, 04:45 PM   #156
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I doubt it as well. That is why we will probably go with 62. I'm just not sure what other point pb4uski was trying to make regarding my initial post about claiming at 62.
You understand that there is a breakeven point, where if you live long enough to get enough of the larger checks from delaying to 70 (or 67, or whatever), that you will come out ahead in the long run by taking SS later, right? I don't know if he factored in investment returns on the money you'd keep invested if you take SS early, but there is still a breakeven. And he will hit it right around 2034. So if he lives to 2034 and the cuts come then, he's already broken even, so getting a larger check (taking at 70) at that point puts him ahead.

For my case, I won't have hit that breakeven point in 2034 yet, but I'll be partway there. A reduction in benefits just moves the breakeven out a couple years or so.

Bottom line, there are so many unpredictable factors like what your investment return will be between 62 & 70, what will the changes to the actual benefits be (if any), how long will you live, etc, that there is no way to know the best strategy. You can make assumptions and look at it mathematically, you can set priorities (longevity insurance vs. spending more in early retirement years), or emotionally (I'm taking it now because I can!). I feel like this is something where you can use the information you identify with and through out the info you don't, because it's an educated guess anyway. I like to contribute to the discussions because I learn things and my strategy evolves as I learn more and get closer to 62.
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Old 11-22-2017, 04:51 PM   #157
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Not arguing the SS early or late question. But, the problem with this comparison is that in the first case 62-70 annual spending is $53,750 and, in the second case itís $33,000. To be apples-to-apples, the Ďcarve outí would be $430k (not $264k), leaving $570k*WDR (not $736k) + Age 70 SS.
Nope. Deja vu all over again.

 SS at 62SS @ 70 (62-70)SS @ 70 (70+)
Nestegg @ 3.5% 35,00025,76025,760
SS Replacement Side-fund033,0000
SS18,750033,000
Total53,75058,76058,760
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Old 11-22-2017, 04:58 PM   #158
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Mine is still 100% dependent on the ACA subsidies, as DW is 5 years younger than me. I "was" going to take SS at 62, then changed that to 65, and now I think FRA (66) will be the day. Because even though I will be on Medicare her subsidies are based on combined income. If ACA subsidies are defunded by then, we will need to re-evaluate. So it really is speculation at this point. Or move back to the Frozen North one of the many options.
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Old 11-22-2017, 05:10 PM   #159
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Nope. Deja vu all over again.
Yup.

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 SS at 62SS @ 70 (62-70)SS @ 70 (70+)
Nestegg @ 3.5% 35,00025,76025,760
SS Replacement Side-fund033,0000
SS18,750033,000
Total53,75058,76058,760
And, $53,750/yr*8yrs=$430k (leaving $570k) or, $58,760/yr*8yrs=$470k (leaving $530k); making the WDRs @ age 70 = 4.5% & 4.9% respectively.
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Old 11-22-2017, 05:17 PM   #160
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Yup.



And, $53,750/yr*8yrs=$430k (leaving $570k) or, $58,760/yr*8yrs=$470k (leaving $530k); making the WDRs @ age 70 = 5.5% & 6.0% respectively.
How do you get the 5.5% and 6.0%... please show your calculations.

You do realize that for the $53,750 that $18,750 is coming from SS and only $35,000 is coming from the $1m in retirement funds.... that a 3.5% WR (WR is measured at retirement).

Same with the other alternative.

The problem of measuring WR at age 70 is if you are going to do that then you also need to adjust the demoninator for 8 years worth of investment results (and arguably the numerator for 8 years of inflation).
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