Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 04-24-2020, 05:12 PM   #101
Recycles dryer sheets
 
Join Date: Feb 2018
Posts: 248
[QUOTE=pb4uski;2413650]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.

I took your chart and expanded. I started with collecting $1,000 at age 66 and I factored in a COLA for each year. I used 1%, 2% and 3% COLA.

That made a difference - the "break even point" changed by at most one year for each increase. But the cumulative amount received added up. Putting in a different amount like $24,000 to start changed the cumulative amount but did not change any of the break even years.

My life expectancy (based on the outdated tables currently being used) is 83. But most in my family live longer. My mother lived to 89 and I am better health at this age than she was. So (as long as I survive 2020), I expect to live longer.

In addition, waiting until 70 means I will have more time to do Roth conversions. That will mean lower RMD starting at age 72 and possibly lower income taxes and lower Medicare premiums.

0% COLA
Break even age
67 79
68 80
69 80
70 81

Cumulative income at age 100
66 420,000
67 440,640
68 461,894
69 483,729
70 506,102

1% COLA
Break even age
67 80
68 81
69 81
70 82

Cumulative income at age 100
66 499,923
67 521,740
68 544,042
69 566,781
70 589,898

2% COLA
Break even age
67 81
68 82
69 82
70 83

Cumulative income at age 100
66 599,934
67 622,518
68 645,414
69 668,560
70 691,881

3% COLA
Break even age
67 82
68 83
69 83
70 84

Cumulative income at age 100
66 725,545
67 748,183
68 770,914
69 793,660
70 816,337
imnontrad is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-24-2020, 05:55 PM   #102
Recycles dryer sheets
 
Join Date: Dec 2017
Location: Gillette
Posts: 119
The thread never had a chance (I only made it through page 2)

No fair discussion from the get go.
Oakster is offline   Reply With Quote
Old 04-24-2020, 06:20 PM   #103
Recycles dryer sheets
 
Join Date: May 2018
Location: Port Orange
Posts: 61
When I looked at mine, taking anything before FRA cost me a big % due to income. At 66, nothing was paying much interest. I built a spreadsheet and ran the numbers. Crossover between starting at 66 and waiting to 70 was about 9 years for me. I actually started in Dec to get the COL raise. Difference between Dec and Apr did not make it worth delaying and losing the COL increase.
Global Wizzo is offline   Reply With Quote
Old 04-24-2020, 06:45 PM   #104
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RobbieB's Avatar
 
Join Date: Mar 2016
Location: Central CA
Posts: 6,277
Since the covid is gonna kill us early, might as well take it early.
__________________
Retired at 59 in 2014. Should have done it sooner but I worried too much.
RobbieB is offline   Reply With Quote
Old 04-24-2020, 06:48 PM   #105
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 29,183
Quote:
Originally Posted by imnontrad View Post
.... I took your chart and expanded. I started with collecting $1,000 at age 66 and I factored in a COLA for each year. I used 1%, 2% and 3% COLA. ...
An interesting point I hadn't thought about... since the cash flows increase with inflation then the returns in the chart that I posted are real rather than nominal... so that 4.5% if you live to age 90 is pretty good if it is real. The addition of inflation also cuts back the breakeven point by a couple years.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...target 65/35/0 AA TBD
pb4uski is offline   Reply With Quote
Old 04-25-2020, 07:31 AM   #106
Full time employment: Posting here.
 
Join Date: Aug 2015
Posts: 832
Why would increased COLA cause the break even to take longer? (Not that I care one whit about break even). It should be a wash, as the delayed amounts increase by the same COLA as the claimed early amounts. Of course the total amounts collected increase, but without knowing true inflation it matters not, as actual personal inflation can be totally whack compared to inflation used by SSA. And again, without taking personal tax (both as income tax and Roth conversion gains) situations and incomes in to account (impossible) you may as well be comparing the same gross dollar gains in a tIRA with those in a Roth....apples and kumquats. Silly comparisons.

Though the gains are real gains, the larger the difference is in absolute dollars, then the larger a percentage of overall income is tax reduced. Taken to an extreme, a couple both living entirely off of age 70 claimed SS and a modest portfolio of Roth and taxable that fills the zero% bracket can have a tax free $120k income, for life, while a 62 filer could easily pay 12/15 for life on that same income. Everyone’s situation can be so totally different, comparisons like this are just another data point that may not even apply. Though I agree most here are likely always looking at 85% of SS taxed, either way. The higher your tax bracket, the less delaying means to you in real dollars as a percentage of your working income.
Perryinva is offline   Reply With Quote
Old 04-25-2020, 07:36 AM   #107
Recycles dryer sheets
ceciledian's Avatar
 
Join Date: Oct 2011
Posts: 69
Quote:
Originally Posted by finnski1 View Post
The ACA has certainly added another consideration for when to start taking ss, as if it weren't enough of a decision already for many folks.
In our case, the ACA made the decision for us, at least until DH starts Medicare at 65, then we reconsider.
ceciledian is offline   Reply With Quote
I can't believe I'm posting to a thread with Suze in the title
Old 04-25-2020, 07:43 AM   #108
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 5,827
I can't believe I'm posting to a thread with Suze in the title

But, I guess we've moved on from there.

I'm sorry clobber left as I wanted to hear more on his interpretation. I actually agreed with him after re-reading the article carefully but the article written so poorly it's splitting hairs to analyze some statements and others are clearly overblown. That corny attempt to be witty obscures the author's point that filing early and investing the payments beats waiting to file even with the 8% increase in payments from FRA to age 70. I'd like to hear some informed opinions from the forum on any holes in that specific point. Eventually I'll take a deep dive into the author's math but for now it is pulling on me to file 30 months ahead of FRA.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is online now   Reply With Quote
Old 04-25-2020, 07:48 AM   #109
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 29,183
Quote:
Originally Posted by Perryinva View Post
Why would increased COLA cause the break even to take longer? (Not that I care one whit about break even). It should be a wash, as the delayed amounts increase by the same COLA as the claimed early amounts. Of course the total amounts collected increase, but without knowing true inflation it matters not, as actual personal inflation can be totally whack compared to inflation used by SSA. And again, without taking personal tax (both as income tax and Roth conversion gains) situations and incomes in to account (impossible) you may as well be comparing the same gross dollar gains in a tIRA with those in a Roth....apples and kumquats. Silly comparisons.
I worded it awkwardly and you misread it... it makes the breakeven shorter rather than longer. Not alot... just a couple years. I suspect due to compounding... what you forgo only has 4 years of compounding whereas what you receive has a lot more.

But since you think it is a silly comparison then just chose to ignore it.

Table below is same as previous but with benefits increased 2% annually.

 No COLA    2% COLA   
AgeSS at 66SS at 70DiffIRR SS at 66SS at 70DiffIRR
66100 0 (100)NM 100 0 (100)NM
67100 0 (100)NM 102 0 (102)NM
68100 0 (100)NM 104 0 (104)NM
69100 0 (100)NM 106 0 (106)NM
70100 132 32 NM 108 143 35 NM
71100 132 32 NM 110 146 35 NM
72100 132 32 NM 113 149 36 NM
73100 132 32 NM 115 152 37 NM
74100 132 32 NM 117 155 37 NM
75100 132 32 -186.6% 120 158 38 NM
76100 132 32 -9.8% 122 161 39 -7.1%
77100 132 32 -7.0% 124 164 40 -4.2%
78100 132 32 -4.8% 127 167 41 -2.0%
79100 132 32 -3.1% 129 171 41 -0.2%
80100 132 32 -1.7% 132 174 42 0.3%
81100 132 32 -0.5% 135 178 43 2.5%
82100 132 32 0.5% 137 181 44 3.5%
83100 132 32 1.3% 140 185 45 4.3%
84100 132 32 2.0% 143 189 46 5.0%
85100 132 32 2.6% 146 192 47 5.6%
86100 132 32 3.1% 149 196 48 6.2%
87100 132 32 3.5% 152 200 49 6.6%
88100 132 32 3.9% 155 204 49 7.0%
89100 132 32 4.2% 158 208 50 7.4%
90100 132 32 4.5% 161 212 51 7.7%
91100 132 32 4.8% 164 217 52 7.9%
92100 132 32 5.0% 167 221 54 8.2%
93100 132 32 5.2% 171 225 55 8.4%
94100 132 32 5.4% 174 230 56 8.6%
95100 132 32 5.6% 178 234 57 8.7%
96100 132 32 5.7% 181 239 58 8.9%
97100 132 32 5.8% 185 244 59 9.0%
98100 132 32 6.0% 188 249 60 9.1%
99100 132 32 6.1% 192 254 62 9.2%
100100 132 32 6.2% 196 259 63 9.3%
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...target 65/35/0 AA TBD
pb4uski is offline   Reply With Quote
Old 04-25-2020, 08:00 AM   #110
Full time employment: Posting here.
 
Join Date: Aug 2015
Posts: 832
Quote:
Originally Posted by Global Wizzo View Post
When I looked at mine, taking anything before FRA cost me a big % due to income. At 66, nothing was paying much interest. I built a spreadsheet and ran the numbers. Crossover between starting at 66 and waiting to 70 was about 9 years for me. I actually started in Dec to get the COL raise. Difference between Dec and Apr did not make it worth delaying and losing the COL increase.
You always get the COLA, whether filed in Dec or April. Its never lost. What you do lose is earned delayed credits (called DRCs). Which is related to when your birthday day is relative to the first of the year and when you claim. The only exception after FRA is at age 70, when all credits are applied regardless of your birthday.

If your birthday is in July & you claim at age 68 in Nov, then you lose the credits earned from Jan through Oct for both Nov & Dec payments, with them starting in Jan of the next years payment. No retroactive payments. So a “loss” of 20 month-credits. If you claim in Jan of the following year all those credits are applied in Jan, plus the credits for Nov & Dec. No lost credits, but of course 2 less monthly payments. Apply in March, and you lose the Jan & Feb credits for 10 months until the following year. The credits are earned monthly but only applied annually.
Perryinva is offline   Reply With Quote
Old 04-25-2020, 08:14 AM   #111
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 29,183
Interesting. So my birthday is in November and I plan to wait until 70 to claim SS so if I claimed "on-time" as I understand it the first benefit payment would be in December for the month of November since SS is paid in arrears.

So if I apply "on-time" and get a payments in December and January for November and December they would not reflect the 8% delayed retirement credit for my last year of delaying? But if I wait and apply a month or two later retroactive to when I turn age 70 then they would?
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...target 65/35/0 AA TBD
pb4uski is offline   Reply With Quote
Old 04-25-2020, 08:15 AM   #112
Full time employment: Posting here.
 
Join Date: Aug 2015
Posts: 832
Bad timing. Took me a long time to post that. I was referring to @ imnontrad who showed increased breakeven date with increased COLA, not @pb4uski, who just mathematically showed what I was trying to get across, that it should be a wash or an increase due to Compounding of the differential & makes a difference.
Perryinva is offline   Reply With Quote
Old 04-25-2020, 08:16 AM   #113
Full time employment: Posting here.
 
Join Date: Aug 2015
Posts: 832
Quote:
Originally Posted by pb4uski View Post
Interesting. So my birthday is in November and I plan to wait until 70 to claim SS so if I claimed "on-time" as I understand it the first benefit payment would be in December for the month of November since SS is paid in arrears.

So if I apply "on-time" and get a payments in December and January for November and December they would not reflect the 8% delayed retirement credit for my last year of delaying? But if I wait and apply a month or two later retroactive to when I turn age 70 then they would?
Yes. Insane as that sounds, that is sort of correct, because you actually can apply for full credit at age 70 in advance (like 3 months) and lose nothing. But if you filed poorly and claimed at age 69 & 11 months, you WOULD lose those credits earned that year until the following Jan.
Perryinva is offline   Reply With Quote
Old 04-25-2020, 08:20 AM   #114
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 29,183
Sounds like and easy decision... and close to a free lunch... an 8% bump on my November and December benefit payments for waiting a month or two to get them.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...target 65/35/0 AA TBD
pb4uski is offline   Reply With Quote
Old 04-25-2020, 09:43 AM   #115
Dryer sheet aficionado
Shardo's Avatar
 
Join Date: Oct 2010
Location: Charleston, SC
Posts: 32
I did a quick and dirty calc totaling the SS$ received each year and saw that the lines crossed at 78 years old whether starting benefits at 62 or 66.7 yrs.

Since none of my mom's family made it to 78, I started benefits at 62.

Didn't really need it and still don't but wanted to try and get my share of what I had put in.
Shardo is offline   Reply With Quote
Old 04-25-2020, 11:01 AM   #116
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: No fixed abode
Posts: 8,276
Quote:
Originally Posted by Perryinva View Post
Yes. Insane as that sounds, that is sort of correct, because you actually can apply for full credit at age 70 in advance (like 3 months) and lose nothing. But if you filed poorly and claimed at age 69 & 11 months, you WOULD lose those credits earned that year until the following Jan.
Now that's the kind of information I hang around here for. Free money. And I only had to read 10,000 meaningless posts to find it.
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Anonymous (not Will Rogers or Sam Clemens)
DW and I - FIREd at 50 (7/06), living off assets
harley is offline   Reply With Quote
Old 04-25-2020, 11:05 AM   #117
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 29,183
Now the only question is whether I'll remember this in 5+ years when I turn 70. It seems that sometimes I have trouble remembering what we had for dinner last night, so remembering this neat trick might be a stretch... I guess I'll have to write it down.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...target 65/35/0 AA TBD
pb4uski is offline   Reply With Quote
Old 04-25-2020, 11:13 AM   #118
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ivinsfan's Avatar
 
Join Date: Feb 2007
Posts: 6,944
Quote:
Originally Posted by harley View Post
Now that's the kind of information I hang around here for. Free money. And I only had to read 10,000 meaningless posts to find it.
The good news is gems like this do get repeated in fact , we used this info when deciding when to apply for DH's SS...
ivinsfan is offline   Reply With Quote
Old 04-25-2020, 11:14 AM   #119
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 10,890
Quote:
Originally Posted by jazz4cash View Post
But, I guess we've moved on from there.

I'm sorry clobber left as I wanted to hear more on his interpretation. I actually agreed with him after re-reading the article carefully but the article written so poorly it's splitting hairs to analyze some statements and others are clearly overblown. That corny attempt to be witty obscures the author's point that filing early and investing the payments beats waiting to file even with the 8% increase in payments from FRA to age 70. I'd like to hear some informed opinions from the forum on any holes in that specific point. Eventually I'll take a deep dive into the author's math but for now it is pulling on me to file 30 months ahead of FRA.
It depends what investment rate of return you use. The higher the rate you assume, the more risk you are undertaking. There certainly isn't a guarantee you'll get a good enough return to offset the increased benefit as you wait. You certainly might though.
RunningBum is offline   Reply With Quote
Old 04-25-2020, 01:31 PM   #120
Full time employment: Posting here.
 
Join Date: Aug 2015
Posts: 832
A shorter family history expiration date is definitely the good reason to file early. Both my parents filed at 62, and DM passed at 69, DF at 81, though both were smokers, never exercised, had other health issues, so they chose wisely. Their parents except my grandmother (Died young from untreated pneumonia) on DM’s side lived in to their 90’s, and none of them were any pictures of healthy living. I see 90, health wise as a base for me to plan with until I find otherwise.
Perryinva is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
The Suze Orman Report!!!!! Zoocat FIRE and Money 36 10-13-2008 11:13 AM
Suze Orman on Oprah ohfrugalone FIRE and Money 13 09-23-2008 09:33 PM
Score One for Suze Orman Dog FIRE and Money 64 09-04-2008 02:41 PM
Uh oh, I think Suze Orman got me into trouble cute fuzzy bunny Other topics 7 03-03-2007 07:01 PM
Suze Orman opinions nnkrealtor FIRE and Money 133 01-09-2007 06:41 PM

» Quick Links

 
All times are GMT -6. The time now is 01:21 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.