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Old 08-18-2020, 11:15 AM   #21
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Originally Posted by pb4uski View Post
That's a good reason that posters should rely on.
Just expressing my opinion. I have read countless posts with arguments both ways. Unless you know when you are going to die......so I just shared my opinion. I usually keep quiet on here but I don't appreciate your emoji.
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Old 08-18-2020, 12:16 PM   #22
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Originally Posted by FireCat View Post
We are comfortable, but I donít want to line our coffins with gold bars nor do we need to worry about leaving money to our kids.
If you have the funds to fiance your lifestyle between 62 and 70, and you don't care about leaving an estate, you can spend more money every year by taking SS at 70.

Here is the math.

Quote:
Maximize SS how much you get to spend


Here is a pretty simple calculation for those that wish to spend more money in retirement and do not care about leaving an estate. For those that have a Big enough Portfolio and can afford to wait until 70 to take SS, you'll have more to spend every year of retirement.

Let's Say you retire this year at age 62 with the $1 Million Portfolio and decide to take a 4% SWR. You get Social Security of $19,476 per year at age 62 and delaying to age 70 would get you $34,092 per year. Let's assume no inflation for ease of calculations.

Scenario age 62. Your SWR is $40K per year and Social Security of $19,476 gets you a Spending total of $59,476 for each year of your retirement period.

Scenario age 70. You stash 8 years of $34,092 from your portfolio into a savings account for a total of $272,736. Your portfolio is now down to $727,264. Your 4% SWR is now $29,090 per year and you remove $34,092 from your savings account giving you a total of $63,182 to spend each year for the rest of your 30 year retirement period.

The Delay to age 70 gives you $3,706 more every year starting at age 62 with no more increased risk.

No need for any ... 'break even analysis'.

If your WR is more conservative, such as a majority of the people here and myself, the results are even more compelling. At a 3% WR plus SS at age 62 scenario is a total of $49,476 and the age 70 scenario is $55,910. The delay of SS to age 70 now increases your annual spending by $6,434.



https://www.early-retirement.org/forums/f28/laurence-kotlikoff-maximize-my-ss-com-77660.html#post1604411
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Old 08-18-2020, 12:23 PM   #23
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It looks to me that in this case taking SS at either 62 or 70 are about equally good. There is a lot of uncertainty one has to deal with when deciding when to take SS, so there is no way to know what the best time to file is. One way to decide is to ask what the worst case scenarios are (e.g., one person dies early or lives a long life). If you would be fine under the worst case scenarios, just do whatever your initial gut reaction is.
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Old 08-18-2020, 12:43 PM   #24
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Originally Posted by iloveyoga View Post
Just expressing my opinion. I have read countless posts with arguments both ways. Unless you know when you are going to die......so I just shared my opinion. I usually keep quiet on here but I don't appreciate your emoji.
My point was a "I just want it" may work for you and that's fine with me but I'm not sure it is a reason that is particularly helpful to the debate.
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Old 08-18-2020, 01:07 PM   #25
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My point was a "I just want it" may work for you and that's fine with me but I'm not sure it is a reason that is particularly helpful to the debate.
well there is something to be said for the "bird in the hand argument", one could predecease his/her SS start date...

of course, unless an underlying condition is known to or will eventually exist, I prefer to use the expected value approach with mortality and interest rates
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Old 08-18-2020, 03:21 PM   #26
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I am taking mine when I turn 62. next year. I just want it.
If you are married, and the higher earner, then this is less than optimal, especially as one out of a married couple will probably live long past the breakeven point.
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Old 08-18-2020, 03:36 PM   #27
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That's a good reason that posters should rely on.
Along the same lines as selling all your equities.
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Old 08-18-2020, 04:31 PM   #28
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While I sold my equities, I never encouraged anyone to sell their equities... in fact even at the time I conceded that I wasn't sure if it was the right move but it was the right move for me... so I'm not sure what your point is.

Check with me in a year or two and we'll see how it all worked out.

In any event, I was lucky to be in a position where I didn't need equities... if it ends up that I was wrong then DD and DS will get less... but they'll never know.
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Old 08-18-2020, 06:45 PM   #29
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Yes. And a good reason for everybody to figure it out for themselves.
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Old 08-19-2020, 05:51 AM   #30
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I can only give you my opinion if I was in your shoes...
1st... you have 2 years before you have to decide....
2nd.... you have access to your nest egg for 3 years if you "need" extra.
3rd.... you have 5 years of practice so far and appears you've done well...
And do understand the wanting to enjoy v/s save...

We would be pull out from the nest egg to just under the next tax bracket and review each year.
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Old 08-21-2020, 03:42 PM   #31
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If you want to minimize taxes, delaying SS while you do Roth conversions may be useful.
Our plan precisely. Both healthy parents and in laws delayed filing which lends to similar strategy.
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Old 08-21-2020, 03:56 PM   #32
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I will be 69 in January, one more year!!!!
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Old 08-21-2020, 04:03 PM   #33
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Well the problem with that is as I stated we are just under the 22% tax threshold maybe by a couple of thousand so yes, some years I could do a Roth Conversion, but it doesn't make a lot of sense.
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Just to maximize inheritance for kids
Old 08-21-2020, 04:06 PM   #34
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Just to maximize inheritance for kids

I'm 60 now, had been thinking to wait to collect. But COVID has changed my calculation because I have a severely compromised immune system, and if I get that it will probably end me. The money doesn't make that big of a difference because we are financially set, but I don't want to leave anything on the table. So I am in the unpleasant situation of taking SS at 62, thus gambling that I will die sooner rather than later. Then again... Life itself is a gamble.
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Old 08-21-2020, 04:16 PM   #35
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Well the problem with that is as I stated we are just under the 22% tax threshold maybe by a couple of thousand so yes, some years I could do a Roth Conversion, but it doesn't make a lot of sense.
So once you collect SS you'll be in the 24% bracket, right? And that rate is scheduled to revert back to 28% in 2025 by law. That may or may not actually happen, but with all the extra debt being taken on with the coronavirus, I think it will. And what bracket would the survivor be in when the other dies? If it were me I'd be converting to the top of the 24% bracket, from what I know of your situation.
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Old 08-21-2020, 04:24 PM   #36
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Well the problem with that is as I stated we are just under the 22% tax threshold maybe by a couple of thousand so yes, some years I could do a Roth Conversion, but it doesn't make a lot of sense.
I'm not so sure... for one thing it is more likely than not that rates will go up in the future so 22% might be as good as it gets. Secondly, if something happens to one or the other of you and you are single, that 22% is going to look pretty good too.

I'm in a similar situation and starting in 2021 once we no longer are subject to state income taxes we'll start doing 22% or maybe even more for those reasons.
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Old 08-21-2020, 05:36 PM   #37
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I'm not so sure... for one thing it is more likely than not that rates will go up in the future so 22% might be as good as it gets. Secondly, if something happens to one or the other of you and you are single, that 22% is going to look pretty good too.

I'm in a similar situation and starting in 2021 once we no longer are subject to state income taxes we'll start doing 22% or maybe even more for those reasons.
Thanks to all for the thoughtful replies. I think we will wait until at least FRA for my DW and as far as Roth conversions go I am just not sure,It seems a good strategy might be to take the hit in taxes up to the 22 percent window each year until we run out of funds in our IRA's?
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Old 08-21-2020, 05:37 PM   #38
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Well the problem with that is as I stated we are just under the 22% tax threshold maybe by a couple of thousand so yes, some years I could do a Roth Conversion, but it doesn't make a lot of sense.
One more doing conversions. Iím just into 22% bracket without any conversions, but Iím converting about $50K into 24% to get more taxes paid before 2025, and plan to move most to Roth by My 70th when Iíll apply for SS.
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Old 08-21-2020, 05:58 PM   #39
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As usual, this discussion comes down to longevity (unknown), SS solvency (unknown), future tax rates (unknown), future market returns (unknown), etc. If the spouse isn't going to benefit from a delayed start, and the tax rates are already high (leaving little room for ROTH conversions), then I really thing it's a wash. $3K or $5K per year is nothing compared with all of the other uncertainties.

If Congress doesn't 'fix' SS in the next 12 years, I will bite the bullet and start at 67, instead of 70, so my wife has a larger income if I predecease her.
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Old 08-21-2020, 06:19 PM   #40
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Im a newbee and just read and follow online. Question what is DW?
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