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Old 04-21-2020, 08:55 AM   #61
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Sorry about your DW situation but if you need HI from the market although the unemployment wouldn't cover her wage loss, it might be just the ticket for ACA subsidy factors. Adding SS income to UI income might not be a good thing. A sharp pencil will be needed. With her wage you might be over the cliff for this year but perhaps pull retirement money to live on next year before 2021
Yep, health insurance is the wild card. We could always go on Cobra for awhile, if needed. I've never had to look into ACA before, but could see us going that route.
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Old 04-21-2020, 09:20 AM   #62
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DS, on the other hand, is pretty much screwed. He's graduating this year with his Accounting degree (like mom and dad) and nobody is hiring.
I'm sure it's not much consolation, but my nephew graduated law school in 2009, which had the largest percentage of unemployed new lawyers ever. He had to hustle for work, even working for an ambulance chasing shyster that he eventually had to sue for back wages. But now he's got a successful practice and is doing quite well. It may start out bad, but hopefully it will pull together in time.
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Old 04-21-2020, 09:21 AM   #63
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.... DS, on the other hand, is pretty much screwed. He's graduating this year with his Accounting degree (like mom and dad) and nobody is hiring.
It will be easier for him if he is willing to move.

Has he had any interviews? At my school, the firms came and interviewed in the fall and early winter.

What is he interested in? Public? Industry?
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Old 04-21-2020, 09:23 AM   #64
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Yep, health insurance is the wild card. We could always go on Cobra for awhile, if needed. I've never had to look into ACA before, but could see us going that route.
Cobra won't get you through until Medicare but you have a while to get this figured out.
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Old 04-21-2020, 09:39 AM   #65
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It will be easier for him if he is willing to move.

Has he had any interviews? At my school, the firms came and interviewed in the fall and early winter.

What is he interested in? Public? Industry?
He had a few interviews last Fall/Winter, but no offers. A lot of the offers (locally) that did go out last winter are being delayed or rescinded altogether.

He won't be moving since his GF lives with him and has another year left to get her masters. We've been helping her out over the years with subsidized rent/utilities. It's like we basically have two kids in college, but she's wonderful and we don't mind helping out.

He talked to a counselor about getting a finance degree in addition to his accounting degree. He would have to take 18 hours of finance. Not only would those hours possibly open up new opportunities, but it would get him up to the 150 hours needed to sit for the CPA exam - if he wants to go that route. We've got just enough left in his 529 plan to pay for one more year of college, so we'll probably go that route and see what the market is like next year.
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Old 04-21-2020, 09:45 AM   #66
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I'm sure it's not much consolation, but my nephew graduated law school in 2009, which had the largest percentage of unemployed new lawyers ever. He had to hustle for work, even working for an ambulance chasing shyster that he eventually had to sue for back wages. But now he's got a successful practice and is doing quite well. It may start out bad, but hopefully it will pull together in time.
Yep, oldest daughter graduated in 2009 with her masters. Slim pickins for a couple of years, but has since landed a great job. She will be starting a full-ride Phd program at Purdue next Fall, so she'll once again be a starving college student - just not on my dime!

DW and I should have planned the timing of our kids a little better.
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Old 04-21-2020, 10:16 AM   #67
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DW is 6+ years older than I am, and we have similar work records toward SS. Mine will be higher if I take it at age 64 or later (I'm 61 now). But because of the age difference and SS work records, there was no advantage for DW to wait until age 70 to take it because my own record would be higher than 50% of her maximum.

When DW was laid off a few months prior to turning 65, she started SS. This was her preference. Along with my modest pension that I started at the same time, ACA was pretty much out of the question. It didn't matter anyway since I had access to an under-65 retiree medical plan (which required starting the pension) that, while not a Cadillac plan, had much better maximum cost scenarios than with ACA, even with the subsidies considered. Not having to play the ACA tax game was a plus as far as I was concerned.

For myself, I am left with the decision of when to start SS. I could wait until 70, but family age history is not my friend. Also, DW's SS will always be higher than 50% of whatever I end up with on SS, so no benefit for her by waiting. I am leaning toward doing the same as her, starting at near 65 and have Medicare premiums taken out of that payment.
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Old 04-21-2020, 10:32 AM   #68
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DW is 6+ years older than I am, and we have similar work records toward SS. Mine will be higher if I take it at age 64 or later (I'm 61 now). But because of the age difference and SS work records, there was no advantage for DW to wait until age 70 to take it because my own record would be higher than 50% of her maximum.

When DW was laid off a few months prior to turning 65, she started SS. This was her preference. Along with my modest pension that I started at the same time, ACA was pretty much out of the question. It didn't matter anyway since I had access to an under-65 retiree medical plan (which required starting the pension) that, while not a Cadillac plan, had much better maximum cost scenarios than with ACA, even with the subsidies considered. Not having to play the ACA tax game was a plus as far as I was concerned.

For myself, I am left with the decision of when to start SS. I could wait until 70, but family age history is not my friend. Also, DW's SS will always be higher than 50% of whatever I end up with on SS, so no benefit for her by waiting. I am leaning toward doing the same as her, starting at near 65 and have Medicare premiums taken out of that payment.
If you died, wouldn't she be entitled to 100% of your benefit - not 50%?
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Old 04-21-2020, 10:36 AM   #69
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my feeling is to do a true comparison you have to keep it as nominal numbers without any what ifs throw in.

But your feeling makes your number completely worthless. Nominal numbers do keep things "simple." But between the always changing levels of inflation and investment returns, I've never lived through a period where "nominal numbers" held, with the exception of very short periods of time.

Why would you ignore inflation and earnings in your analysis? That's not what happens in the real world.
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Old 04-21-2020, 10:47 AM   #70
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I want that that larger benefit for her if I die before her.
Q: If you're waiting to claim at 70 just for this situation but die before then, does SS use the date of your death, or the closest trigger date, e.g., 62 or FRA (I assume not upward to 70 )?
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Old 04-21-2020, 11:38 AM   #71
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Will that tax 85% of your SS at 22 or 24% brackets.
Can you do Roth conversions to lower your RMDs before you're
72. If you can you wouldn't want to add SS to your income.
This question is very difficult because of so many variables.
Not to mention you don't know when you are going to die.
I expect our SS will not be taxed at all...we'll have a relatively low combined SS income in retirement.

Cashing in and paying LT capital gains on investments when needed.
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Old 04-21-2020, 01:18 PM   #72
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Spousal death benefit is amount entitled to based on the date of your death if after FRA.

So if you are already living exactly as you would if you were collecting at 70, by spending down say tIRA, tou have lost no quality of life by delaying. Assuming you have more than enough to delay, then the small amount used from savings essentially bought an annuity for your spouse. The reduction in portfolio is peanuts compared to the larger tax preferred benefit when the survivor is mow paying Taxes as Single.
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Old 04-21-2020, 01:21 PM   #73
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Q: If you're waiting to claim at 70 just for this situation but die before then, does SS use the date of your death, or the closest trigger date, e.g., 62 or FRA (I assume not upward to 70 )?
It would be calculated based on your age the month of your death.
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Old 04-21-2020, 03:43 PM   #74
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The 8% is NOT a return... it is the increase in your monthly SS if you defer benefits for a year... but not anything close to a return.
Thanks for posting that. In my opinion, the idea that deferring social security generates a return and that return is guaranteed is, in my view, possibly the most misleading piece of frequently dispersed financial "advice" there is.
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Old 04-21-2020, 05:05 PM   #75
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Absolutely agree. You are purchasing an annuity or insurance. There is no real ROI.
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Old 04-21-2020, 06:07 PM   #76
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You can calculate an ROI for the decision to defer based on differential cash flows... I'm not sure it means much but you can do it. Below is an example based on 100 PIA at FRA of 66 and 132 at 70.

Obviously, the IRR is negative until you reach the breakeven point and then improves the longer that you live.

AgeSS at 66SS at 70DiffIRR
66100 0 (100)NM
67100 0 (100)NM
68100 0 (100)NM
69100 0 (100)NM
70100 132 32 NM
71100 132 32 NM
72100 132 32 NM
73100 132 32 NM
74100 132 32 NM
75100 132 32 NM
76100 132 32 -9.8%
77100 132 32 -7.0%
78100 132 32 -4.8%
79100 132 32 -3.1%
80100 132 32 -1.7%
81100 132 32 -0.5%
82100 132 32 0.5%
83100 132 32 1.3%
84100 132 32 2.0%
85100 132 32 2.6%
86100 132 32 3.1%
87100 132 32 3.5%
88100 132 32 3.9%
89100 132 32 4.2%
90100 132 32 4.5%
91100 132 32 4.8%
92100 132 32 5.0%
93100 132 32 5.2%
94100 132 32 5.4%
95100 132 32 5.6%
96100 132 32 5.7%
97100 132 32 5.8%
98100 132 32 6.0%
99100 132 32 6.1%
100100 132 32 6.2%
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Old 04-22-2020, 06:03 AM   #77
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You’re right. It doesn’t mean much! An IRR of 4.5%@90 is hardly a reason, but it exists as a possibility.
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Old 04-22-2020, 07:03 AM   #78
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I dunno... 4.5% on a 25 year US government bond would be looking pretty good right now. Various longevity calculators suggest that either DW or I will live to early 90s.
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Old 04-22-2020, 07:10 AM   #79
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But by that age it really won’t make that much difference on that amount for yourself. Heirs, yes, yourself, meh.
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Old 04-22-2020, 11:06 AM   #80
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I dunno... 4.5% on a 25 year US government bond would be looking pretty good right now. Various longevity calculators suggest that either DW or I will live to early 90s.
Most reasonable longevity calculators show that I should have died years ago.
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