Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Old 04-18-2020, 10:15 AM   #21
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: 36,263
Quote:
Originally Posted by Rianne View Post
Thank you, I know you're an accountant. OK, monthly increase 8%. I'll take it. Here's my VG 10 returns (right?) at 50/50. We do not take RMD's and will not for ~5 years.

10 yr - 4%
5 yr - 3.7%
3 yr - 2.7%
1 yr - -3%
pb4uski, I will humbly take your corrections. Do my returns suck?
I think the best way to assess your returns is to compare them to a similiar portfolio using Portfolio Visualizer. But the comparisons are only relevant if you have everything at Vanguard and everything is being included in the numbers that you posted above. Such a comparison wouldn't work for me because I have fair and increasing amounts outside of Vanguard.

50/50 Vanguard Total Stock/Total Bond Inv

10 years... Apr 2010 - Mar 2020.... +7.18%
5 years..... Apr 2015 - Mar 2020.... +4.79%
3 years..... Apr 2017 - Mar 2020.... +4.82%
1 year....... Apr 2019 - Mar 2020.... +0.36%

https://www.portfoliovisualizer.com/...location2_1=50
__________________
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
pb4uski 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 04-18-2020, 10:23 AM   #22
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: 36,263
Quote:
Originally Posted by RunningBum View Post
2. Waiting equals a higher total amount of payments. Not FACT. Waiting definitely increases the monthly amount. It does not automatically increase the total amount of payments you will receive over your lifetime. This is a HUGE distinction. And one that needs to be studied closely. The total amount of benefit you will receive is based on a number of things, one of the biggest of which is the next fact….
That was good, but the most insightful fact was just after that.... that "Most of us won't live forever"... and even that is wrong.... unless I slept through some medical breakthrough shouldn't it be that "Most All of us won't live forever" or "None of us will live forever"?

In any event, a perceptive glimpse of the obvious for which I will be forever indebted to the author.
__________________
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
pb4uski is offline   Reply With Quote
Old 04-18-2020, 10:36 AM   #23
Recycles dryer sheets
 
Join Date: Jul 2015
Posts: 395
Quote:
Originally Posted by RunningBum View Post
2. Waiting equals a higher total amount of payments. Not FACT. Waiting definitely increases the monthly amount. It does not automatically increase the total amount of payments you will receive over your lifetime. This is a HUGE distinction. And one that needs to be studied closely. The total amount of benefit you will receive is based on a number of things, one of the biggest of which is the next fact….
Which is not what you said. He made no statement on the "number of payments."

Like I said, this post would be unpopular in this community.

And for that reason, I'm out.
clobber is offline   Reply With Quote
Old 04-18-2020, 11:03 AM   #24
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: 36,263
Quote:
Originally Posted by clobber View Post
... And for that reason, I'm out.
Good talk.
__________________
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
pb4uski is offline   Reply With Quote
Old 04-18-2020, 11:43 AM   #25
Thinks s/he gets paid by the post
 
Join Date: Aug 2018
Posts: 1,003
Quote:
Originally Posted by clobber View Post
I know that this will likely be unpopular, but I did my own math and then I found the paper located here which is really good and confirmed my numbers. The conclusion is that the majority should claim at 62 unless there are extenuating circumstances.
One reason to claim at 62 is because the funds are needed to cover current living expenses. Most folks in general (but not most folks on E-R.org) probably DO need the funds to cover their living expenses. Concluding that the majority should claim at 62 is probably reasonable.
Lewis Clark is offline   Reply With Quote
Old 04-18-2020, 11:47 AM   #26
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: 36,263
It is true that most people claim at 62 or as soon as they stop working because they don't have any other choice.
__________________
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
pb4uski is offline   Reply With Quote
Old 04-18-2020, 12:16 PM   #27
Thinks s/he gets paid by the post
 
Join Date: Aug 2012
Posts: 1,824
Quote:
Originally Posted by pb4uski View Post
Well, while it varies based on your year of birth because of the transition of the FRA from age 65 to age 67... for someone whose full retirement age (FRA) is 66 you get 75% of what you would get at your FRA at age 62 and 132% of what you would get at your FRA at age 70 (4 years deferred * 8% a year simple).

So for the first one (x-62)*75 = (x-70)*132.... then 75x - 4,650 = 132x - 9,240... then 4,590 = 57x... then x= 80.52. Proof = (80.52-62)*75 = 1,389 = (80.52-70)*132.

For the second one (x-62)*75 = (x-66)*100.... then 75x - 4,650 = 100x - 6,600... then 1,950 = 25x... then x= 78... 78-66=12 years (not 8 years). Proof = (78-62)*75 = 1,200 = (78-66)*100.

Thank you for finally showing people that it is simple algebra.
I have been telling people this for years and they look at me like I have 2 heads.


This is straight forward from 8th grade. I know people start throwing in all kinds of scenarios of taking it early and getting 'x ' return etc.and therefore show an even longer break even age but my feeling is to do a true comparison you have to keep it as nominal numbers without any what ifs throw in.


I am enclosing a spread sheet I made years ago allowing one to put in thier FRA amounts based on year born and then it spits out breakeven points for a bunch of age scenarios.


hope somebody finds it as useful as I have and lets me know if there any errors
Attached Files
File Type: xls social security ages and breakevens for er.org.xls (36.5 KB, 80 views)
finnski1 is offline   Reply With Quote
Old 04-18-2020, 12:25 PM   #28
Full time employment: Posting here.
 
Join Date: Aug 2015
Posts: 987
I still don’t get why anyone cares about the breakeven point. If you want some longevity insurance and a larger amount left to a remaining spouse and can afford to, you delay. If you need the money or just want it now, you don’t.

I agree, the paper referenced by clobber is junk, regardless of which way you want to go. If I knew I could have a fixed account that earned 5% forever, then I would agree and file at 63 (my earliest). But it doesn’t exist, and when my mental state would most likely be the worst, having even more of my money invested vs a COLA annuity as cheap as SS is too risky. Income is the name of the game for many, not bottom line balance. Leaving more to my heirs is absolutely the last thing I would ever consider. You can tell the author is young, when he thinks 70 is old. Wait until you are 65, and see how old 70 feels.
Perryinva is offline   Reply With Quote
Old 04-18-2020, 12:29 PM   #29
Thinks s/he gets paid by the post
 
Join Date: Aug 2012
Posts: 1,824
Quote:
Originally Posted by rcbrad View Post
I read an article from Suze Orman who says: "That when you start taking SS at age 70, when you hit your early 80s your total payments will be more than if you started getting a lower benefit at age 62"


I had also heard elsewhere as an example, that if you start taking benefits at age 67, it will take you 8 years to make up for what you missed if you had started to take benefits at age 62.


Unless I am missing something, these seem to contradict each other? Perhaps her statement is misleading or I am misreading it?



Of course we do not know how long we will live and there are other variables, but I thought that generally the idea was that the intent to get about the same amount of benefits no matter when you start taking SS.


Thanks, just thought I would get some additional input.

well I guess 80.5 is early 80's
also it is not " about " 8 years from 67 vs 62 but is actually about 11.5 years depending on your birth year.
Also you are stating one example of 70 vs 62 and another of 67 vs 62 so of course one is a little longer break even.
finnski1 is offline   Reply With Quote
Old 04-18-2020, 12:32 PM   #30
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: 36,263
Quote:
Originally Posted by Perryinva View Post
I still don’t get why anyone cares about the breakeven point. If you want some longevity insurance and a larger amount left to a remaining spouse and can afford to, you delay. If you need the money or just want it now, you don’t.

I agree, the paper referenced by clobber is junk, regardless of which way you want to go.
+1 I look at deferring to age 70 as a decision to buy a COLA-adjusted annuity benefit. I forgo $75/month beginning at age 62 for 8 years... so I forgo $7,200 ($75/mo * 12 * (70-62) years).

Then beginning at age 70 I receive $57/month (extra) for life, COLA adjusted. That is a 9.5% payout rate. ($57 * 12 months)/$7,200 paid for life annuity. Pretty sweet deal.
__________________
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
pb4uski is offline   Reply With Quote
Old 04-18-2020, 02:32 PM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 13,202
Quote:
Originally Posted by clobber View Post
Which is not what you said. He made no statement on the "number of payments."

Like I said, this post would be unpopular in this community.

And for that reason, I'm out.
It was a stupid straw man argument. Make an absurd statement and then strike it down as proof of his point.
RunningBum is offline   Reply With Quote
Old 04-18-2020, 04:46 PM   #32
Full time employment: Posting here.
SnowballCamper's Avatar
 
Join Date: Aug 2019
Posts: 691
I'm curious what article RunningBum or pb4uski would suggest for someone to read about the SS decision (when to claim benefits?).
__________________
--At what age does spending less now in order to have more later stop making sense?
SnowballCamper is offline   Reply With Quote
Old 04-18-2020, 05:18 PM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 13,202
I don't have an article to suggest. I've given my opinion on this topic enough times to not repeat it again.
RunningBum is offline   Reply With Quote
Old 04-18-2020, 05:39 PM   #34
Full time employment: Posting here.
 
Join Date: Jul 2013
Posts: 953
Quote:
Originally Posted by Perryinva View Post
I still don’t get why anyone cares about the breakeven point. If you want some longevity insurance and a larger amount left to a remaining spouse and can afford to, you delay. If you need the money or just want it now, you don’t.
This it in a nutshell. If you decide to delay, and then something changes, you can always start claiming. I am doing a bunch of roth conversions before age 70, and not having the SS income leaves more headroom. I view the 'breakeven' discussion with a view that if either one of us lives past 82, then we made the best decision (I am not sure if that is really correct, but it seems like it to me.) But I am not so concerned about breakeven, but more for having a larger amount having COLA protection plus having more room for roth conversions.

There are very few truly wrong decisions to be made here, which is why it always stirs up such a fuss when someone argues that their approach is the definitive correct way for everyone to do it.

Sayre's Law- "In any dispute the intensity of feeling is inversely proportional to the value of the issues at stake." By way of corollary, it adds: "That is why academic politics are so bitter." Also stated- "Academic politics is the most vicious and bitter form of politics, because the stakes are so low."
__________________
Well it's all right, we're heading to the end of the line...
Clone is offline   Reply With Quote
Old 04-18-2020, 05:47 PM   #35
Thinks s/he gets paid by the post
Ready's Avatar
 
Join Date: Mar 2013
Location: Southern California
Posts: 3,995
Nothing gets people fired up in this forum more than a new thread with Suze Orman’s name in the title!

Anyhoo...The payment options for SS are supposed to be neutral from an actuarial point of view. The problem with this is that we don’t all live to the exact age of our country’s life expectancy. We have to make an assumption based on our current health and family history on how long we will live.

The longer we are likely to live the better off the waiting until 70 option becomes. The majority of people do take SS at 62. But I remember reading an article somewhere that did a look back of a large set of data points of people who died and determined that the majority of them in retrospect would have earned more money by waiting until 70.
Ready is offline   Reply With Quote
Old 04-18-2020, 05:55 PM   #36
Full time employment: Posting here.
 
Join Date: Jul 2013
Posts: 953
Quote:
Originally Posted by Ready View Post
The longer we are likely to live the better off the waiting until 70 option becomes. The majority of people do take SS at 62. But I remember reading an article somewhere that did a look back of a large set of data points of people who died and determined that the majority of them in retrospect would have earned more money by waiting until 70.
DW's parents took SS at 62, and then groused about it for the rest of their lives. "I never should have let ____ talk me into drawing SS early, it would have been so much more if I had waited!" The reality was- you were broke, and sinking fast. You could not afford to wait. But I didn't tell them that. They both had major health issues, and did not live into their 80s. So, in hind sight, it was the correct decision from a total payments point of view. But the economic realities had already made the decision for them.
__________________
Well it's all right, we're heading to the end of the line...
Clone is offline   Reply With Quote
Old 04-18-2020, 05:55 PM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ivinsfan's Avatar
 
Join Date: Feb 2007
Posts: 9,951
I have no comment except that to see a thread with both Suze and SS is like winning the lottery in COVID times....I long for more "normal" threads...
ivinsfan is offline   Reply With Quote
Old 04-18-2020, 06:03 PM   #38
Thinks s/he gets paid by the post
 
Join Date: Oct 2019
Posts: 3,657
If you take SS at 62 and invest it, you will most likely owe taxes, reducing the amount you can invest, and then you need to beat the yearly increase you would have got, if you had waited. 7%/8%

Also, I'm waiting until 70, because my bride is about 5 years younger, and

I want that that larger benefit for her if I die before her.

Clobber left because someone disagreed with him, hmm.
Time2 is offline   Reply With Quote
Old 04-18-2020, 06:43 PM   #39
Thinks s/he gets paid by the post
 
Join Date: Aug 2014
Location: Chicago West Burbs
Posts: 2,998
Quote:
Originally Posted by Ready View Post
....
Anyhoo...The payment options for SS are were supposed to be neutral from an actuarial point of view. The problem with this is that we don’t all live to the exact age of our country’s life expectancy. We have to make an assumption based on our current health and family history on how long we will live.
.....
In addition, life expectancy has increased since those numbers were determined. The chances of living past the breakeven point are greater than they were when the numbers were last adjusted. Just thought I'd add another point in favor of delaying.
CRLLS is offline   Reply With Quote
Old 04-18-2020, 06:52 PM   #40
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Location: St. Charles
Posts: 3,903
Quote:
Originally Posted by ivinsfan View Post
I have no comment except that to see a thread with both Suze and SS is like winning the lottery in COVID times....I long for more "normal" threads...
+1

At least here we can argue about the "normal" stuff

BTW, I liked Suze in the early years, now, not so much. Maybe I have learned more over the years than I knew back then?
__________________
If your not living on the edge, you're taking up too much space.
Never slow down, never grow old!
CardsFan is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
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 06:01 PM
Suze Orman opinions nnkrealtor FIRE and Money 133 01-09-2007 05:41 PM

» Quick Links

 
All times are GMT -6. The time now is 05:12 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.