Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 08-22-2020, 08:54 AM   #61
Dryer sheet wannabe
 
Join Date: Jun 2019
Posts: 17
Quote:
Originally Posted by Sunset View Post
When OP dies, his DW will be getting a pension of approximately $49,000 plus her SS.

DW taking SS at age 70 would be far better for her if she lives longer.

OP is not affected by whatever age DW takes SS, as OP cannot collect it, so does not care as does not affect him if he lives longer.

The increase to spending of 60K appears designed to spend every penny of the $1 million savings in less than 20 yrs, as it's a 6% withdrawal rate.
The simple calculator below says taking out $60K per yr from $1M fund, will exhaust the fund by age 78. Note if you put in taking out $40K per year then it lasts to age 90, so it seems fairly accurate.

https://money.usnews.com/money/perso...alculator#card
Exactly this ^^^ Running out of money by 78 is pretty damn scary if you happen to come from a long-lived family.

Life is full of surprises at any age!
So trying to down spend to zero just in time for your demise seems a somewhat silly, if not a financially dangerous undertaking.

To protect DW it makes sense financially for her to take SS at age 70.

We all have different circumstances and reasons for our retirement decisions. I'd say look at the math from every angle first then consider your priorities and go from there.
A stash of one mil is great, but realistically simply not quite enough to consider playing guessing games with your finances.
Just my totally unqualified two cents.
Freedom2021 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 08-22-2020, 09:03 AM   #62
Thinks s/he gets paid by the post
RetireBy90's Avatar
 
Join Date: Feb 2009
Location: Cville
Posts: 1,248
WSJ this morning had a great touching story about a couple 90 and 92 still kicking and spending $$. An argument in favor of waiting till 70, but then my dad died at 70 so that would favor taking early for me. Who knows ?
__________________
FIRE 31 Aug, 2018 - Always leave every place better than you found it, always give more than expected
RetireBy90 is offline   Reply With Quote
Old 08-22-2020, 09:59 AM   #63
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 HunterAdvisor View Post
.... There is also the ability if you take SS now to leave your retirement funds to grow or in some cases recover. Converting to a ROTH will ward off the evil RMD. ...
But if you are collecting SS then you significantly reduce your ability to do low tax cost Roth conversions by about 85% of the SS that you collect.
__________________
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 08-22-2020, 10:04 AM   #64
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 RetireBy90 View Post
WSJ this morning had a great touching story about a couple 90 and 92 still kicking and spending $$. An argument in favor of waiting till 70, but then my dad died at 70 so that would favor taking early for me. Who knows ?
You don't know... which is why I find it useful to frame the SS delay debate as the purchase of a COLA-adjusted annuity... you make monthly installment payments equal to the SS that you would have received if you claimed early... and receive a COLA adjusted life annuity (or joint life annuity if married) for the increase in your monthly benefit as a result of delaying.

DF died at 75... DM is still kicking at 90. DGM and a couple great aunts on DM's side lived into their mid-late 90s.
__________________
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 08-22-2020, 11:11 AM   #65
Thinks s/he gets paid by the post
 
Join Date: Oct 2012
Location: Reno
Posts: 1,004
In terms of planning, I've intended to take SS at full withdrawal age. But I also thought if I hit a really bad set of returns, I might take it early to avoid drawing down.
I turned 62 in May and with COVID, I thought, well, I'll wait a year or two and see, even though I have cash for 3-4 years.
Here we are and the portfolio is above where I was in January, even though I've pared stocks from 60% to 45% over the last 18 months (a big paring of stocks in Dec, Jan, Feb, and early March).
So much for planning.
RobLJ is offline   Reply With Quote
Old 08-22-2020, 01:54 PM   #66
Recycles dryer sheets
 
Join Date: Aug 2020
Posts: 171
1. Run the scenario where you take SS at 62 and put 100% of it in a growth portfolio for the entirety of your life expectancy. There are NPV and sum of cashflows numbers to calculate.

2. Think about the potential of not living to your life expectancy, calculate this NPV and sum of cashflows.

Where is the breakeven, in terms of age (year) where scenario 1 = scenario 2 on an NPV or sum of cashflows basis? The numbers will be close, and they will be in the mid-late 70s of age.

Take your money from the government as soon as you can. It's yours and it doesn't belong to them.
chassis is offline   Reply With Quote
Old 08-22-2020, 04:27 PM   #67
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 chassis View Post
1. Run the scenario where you take SS at 62 and put 100% of it in a growth portfolio for the entirety of your life expectancy. There are NPV and sum of cashflows numbers to calculate.

2. Think about the potential of not living to your life expectancy, calculate this NPV and sum of cashflows.

Where is the breakeven, in terms of age (year) where scenario 1 = scenario 2 on an NPV or sum of cashflows basis? The numbers will be close, and they will be in the mid-late 70s of age.

Take your money from the government as soon as you can. It's yours and it doesn't belong to them.
LOL, what's the point of doing any calcs at all if you're just going to do the bolded part.

I can't figure out what you're trying to calculate in steps 1 & 2. For example, I don't know how to do an NPV on the potential of not living to my life expectancy. In any case, I already know how to do a breakeven analysis, and this ain't it.

By all means, take SS when you want to. I'm trying not to keep repeating myself in every SS thread, but this one was too funny to pass up.
RunningBum is offline   Reply With Quote
Old 08-22-2020, 08:06 PM   #68
Recycles dryer sheets
 
Join Date: Aug 2020
Posts: 171
Quote:
Originally Posted by RunningBum View Post
LOL, what's the point of doing any calcs at all if you're just going to do the bolded part.

I can't figure out what you're trying to calculate in steps 1 & 2. For example, I don't know how to do an NPV on the potential of not living to my life expectancy. In any case, I already know how to do a breakeven analysis, and this ain't it.

By all means, take SS when you want to. I'm trying not to keep repeating myself in every SS thread, but this one was too funny to pass up.
@RunningBum OK I didn't word scenario 2 well. I'll try again.

1. SS payments starting at 62 lasting until today's life expectancy. Invest the funds in a growth portfolio. There is an NPV and sum of cash flows for this scenario.

2. SS payments starting at 65, lasting until today's life expectancy. Invest the funds in a growth portfolio. Likewise NPV and sum of cashflows.

Compare 1 and 2. Consider the year (age) they cross over.

If one dies before the crossover age, it's better to take SS at 62. If one dies after both the crossover age and 65, it might be better to take SS at 65.

In my view any NPV or sum of cashflows benefit of taking SS at 65 is small enough to be trivial for most people. And given the choice to get my money from the government sooner, rather than later, I will choose sooner in this case.

My risk tolerance is fairly high. Not everyone has this tolerance.
chassis is offline   Reply With Quote
Old 08-22-2020, 10:21 PM   #69
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 10,890
OK, that sounds pretty similar to what I do, though I also consider deferring SS to 70. The big difference is that my goal for SS is longevity insurance, not maximizing SS for whatever age I think I'm most likely to die. But it's not for me to decide what anyone else's goal should be.
RunningBum is offline   Reply With Quote
Old 08-23-2020, 06:11 AM   #70
Recycles dryer sheets
Archman's Avatar
 
Join Date: Nov 2010
Posts: 109
In my situation,I took Social Security at age 63½, and therefore drawing less from my retirement savings, My break even point is at age 86,assuming the markets cooperate. Taking less from your investments mitigates the sequence of portfolio bad returns that might occur early in retirement.

Sequence-of-returns risk involves the actual order in which investment returns occur. Typically, negative returns earlier in retirement have a more severe impact on your portfolio than negative returns later in retirement. That’s because your portfolio’s value is reduced by both negative market performance and any withdrawals you take to fund your day-to-day expenses. This means that a smaller amount is left behind to experience any potential future growth.

However, if I was fortunate not to tap into my savings as Firecat did, I would at least delay it to FRA.
Archman is offline   Reply With Quote
Old 08-23-2020, 09:19 AM   #71
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 Archman View Post
In my situation,I took Social Security at age 63½, and therefore drawing less from my retirement savings, My break even point is at age 86,assuming the markets cooperate. Taking less from your investments mitigates the sequence of portfolio bad returns that might occur early in retirement.

Sequence-of-returns risk involves the actual order in which investment returns occur. Typically, negative returns earlier in retirement have a more severe impact on your portfolio than negative returns later in retirement. That’s because your portfolio’s value is reduced by both negative market performance and any withdrawals you take to fund your day-to-day expenses. This means that a smaller amount is left behind to experience any potential future growth.

However, if I was fortunate not to tap into my savings as Firecat did, I would at least delay it to FRA.
Interesting. I like this kind of thinking because it's a worst case kind of scenario. I'm more interested in protecting myself from failure in those cases than optimizing my wealth when everything is rosy. In most cases, my SS benefit isn't a big piece of my plan. But in a market plunge, SS takes on a more important role since I have less of my own investment assets.

Have you modeled this? It seems to me that you'd have to live pretty long to have SORR make you fail. In other words, if I hit SORR but only live to 72, I won't have run out of money. I'm wondering how much, if any, it would push back the crossover date. If you have a fairly low investment balance at the crossover, you'd really appreciate the larger SS benefit if you'd delayed to 70. But it's possible the crossover point comes so late that your chances of hitting it are slim.

My thought has been that if the market plunged at any time before 70, at that point I'd start taking SS, so I wouldn't have to sell off as many depressed investments for my living expenses. You're saying that rather than reacting to a market drop, you'd act in case of an early market drop. If there is no such drop, your plan should work anyway because your investments didn't get hammered. No big deal if you pass the crossover date and still have lower SS benefits, because you don't need SS so much.

And this is why I still participate in SS threads. You never know when someone comes up with a new (to me) idea worth considering.
RunningBum is offline   Reply With Quote
Old 08-23-2020, 09:44 AM   #72
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 11,310
Quote:
Originally Posted by Archman View Post
In my situation,I took Social Security at age 63½, and therefore drawing less from my retirement savings, My break even point is at age 86,assuming the markets cooperate. Taking less from your investments mitigates the sequence of portfolio bad returns that might occur early in retirement.

Sequence-of-returns risk involves the actual order in which investment returns occur. Typically, negative returns earlier in retirement have a more severe impact on your portfolio than negative returns later in retirement. That’s because your portfolio’s value is reduced by both negative market performance and any withdrawals you take to fund your day-to-day expenses. This means that a smaller amount is left behind to experience any potential future growth.

However, if I was fortunate not to tap into my savings as Firecat did, I would at least delay it to FRA.
It seems the SORR danger/worry caused you to take SS early, which seems (IMHO) premature and wasteful.
If for example the market stays flat for the next 2 years, and then plunges to despair, you will have conserved 2 yrs of investment money, only to see it drop a great deal, while you have also cut yourself off from SS yearly growth for the 2 yrs.

I've always kept the idea of taking SS early if the markets really tanked so that I'd avoid draining my savings. I got this idea a few years ago from a long term member on here

But I think I would wait to React to a market collapse, rather than preemptively do it.
Reason being in the preemptive act, one has to hope investment returns are good->great going forward, and not pretty flat to even down a few percentage, for the preemptive claiming SS to work out beneficially.

In my React to a market collapse, I'd first use my cash to go a year or more, before claiming SS, so I don't jump the gun like some folks might have in March, thinking this is the end of the market. Part of this is that I'm slow to react rather than brilliant
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is online now   Reply With Quote
Old 08-23-2020, 09:52 AM   #73
Recycles dryer sheets
latexman's Avatar
 
Join Date: Mar 2014
Location: Apex
Posts: 462
Quote:
Originally Posted by RobLJ View Post
So much for planning.
"Everybody has a plan, until they get punched in the mouth." - Mike Tyson
latexman is offline   Reply With Quote
Old 08-23-2020, 10:19 AM   #74
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 Sunset View Post
It seems the SORR danger/worry caused you to take SS early, which seems (IMHO) premature and wasteful.
If for example the market stays flat for the next 2 years, and then plunges to despair, you will have conserved 2 yrs of investment money, only to see it drop a great deal, while you have also cut yourself off from SS yearly growth for the 2 yrs.

I've always kept the idea of taking SS early if the markets really tanked so that I'd avoid draining my savings. I got this idea a few years ago from a long term member on here

But I think I would wait to React to a market collapse, rather than preemptively do it.
Reason being in the preemptive act, one has to hope investment returns are good->great going forward, and not pretty flat to even down a few percentage, for the preemptive claiming SS to work out beneficially.

In my React to a market collapse, I'd first use my cash to go a year or more, before claiming SS, so I don't jump the gun like some folks might have in March, thinking this is the end of the market. Part of this is that I'm slow to react rather than brilliant
+1 while I haven't yet started SS because I want more room for Roth conversions, once I was 62 it was comforting that if the SHTF that I could start SS at anytime.
__________________
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 08-23-2020, 10:37 AM   #75
Recycles dryer sheets
 
Join Date: Mar 2012
Location: Atlanta
Posts: 88
While I have no pension of consequence (won't pay electric bill), I have been able to live very comfortably on about a 3.5% withdrawal rate from my IRA. This allows me to consider my social Security as a longevity insurance similar to several others on this forum. If I need additional funds for a new roof or major repair as has happened several times over recent years, I simply augment my emergency funds with an additional withdrawal from my IRA knowing I can safely do that with my SS as a reserve cash resource. I'm now 67 and well past my FRA. I keep at least a year of cash equivalent so I have plenty of time to react in case of a market decline which would make me want to start my SS. With no additional COLA increases, I figure my SS nut at 70 would be right at $40K which exceeds my spending today by a decent margin. I probably need to increase my spending but I prefer experiences to things and that's pretty difficult in today's environment. I supported my mother for almost 20 years as she did not plan for retirement. It's not a pretty picture when you outlive your money.
5Miler is offline   Reply With Quote
Old 08-23-2020, 11:21 AM   #76
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 Sunset View Post
It seems the SORR danger/worry caused you to take SS early, which seems (IMHO) premature and wasteful.
If for example the market stays flat for the next 2 years, and then plunges to despair, you will have conserved 2 yrs of investment money, only to see it drop a great deal, while you have also cut yourself off from SS yearly growth for the 2 yrs.

I've always kept the idea of taking SS early if the markets really tanked so that I'd avoid draining my savings. I got this idea a few years ago from a long term member on here

But I think I would wait to React to a market collapse, rather than preemptively do it.
Reason being in the preemptive act, one has to hope investment returns are good->great going forward, and not pretty flat to even down a few percentage, for the preemptive claiming SS to work out beneficially.

In my React to a market collapse, I'd first use my cash to go a year or more, before claiming SS, so I don't jump the gun like some folks might have in March, thinking this is the end of the market. Part of this is that I'm slow to react rather than brilliant
I was thinking along those same lines while taking a short hike after I posted. I'll probably stick with my plan to react to a down market if needed.
RunningBum is offline   Reply With Quote
Old 08-23-2020, 01:14 PM   #77
Thinks s/he gets paid by the post
 
Join Date: Sep 2006
Posts: 1,359
Quote:
Originally Posted by Old Microbiologist View Post
It would be a disaster to the world's economy and explains why so many countries are stepping away from using American dollars.
Can you provide a source for that? I was not aware that many countries were "stepping away from using American dollars."
JustCurious is offline   Reply With Quote
Old 08-23-2020, 01:39 PM   #78
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 11,436
Quote:
Originally Posted by FireCat View Post
Me age 58 government Pension w/cola capped at 3% so no SS or prospect of any of DW’s or survivor benefits.
This implies a GPO situation.

A number of us here are in a similar situation and found the best remedy is for the SS person to begin at 62. Otherwise, if the SS person (DW in your case) predeceases you while delaying, neither of you will have or will ever collect a penny.

GPO creates an awkward situation for married couples where one is GPO impacted and the other SS qualified. The SS person desires to provide some financial protection to his/her spouse but the spouse cannot collect either a spousal or survival benefit. So collecting SS early and investing that income seems like the best partial mitigation of a challenging situation.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 08-23-2020, 01:58 PM   #79
Thinks s/he gets paid by the post
 
Join Date: Apr 2008
Posts: 1,267
Quote:
Originally Posted by Out of Steam View Post
On the great Social Security question, I plan to split the difference and take it at 65. I will reevaluate when I get there.
That's when my DW took it three years ago. She opted for 65 because at the time (1) we had a mortgage of $2,300/mo that was 7-8 years away from being paid off, (2) my modest pension wasn't enough to cover monthly expenses (it wasn't enough for the mortgage + monthly property taxes obligation), (3) a good portion of our net worth was still tied up in our house, and we didn't know when we might sell it and move, and (4) she always planned to take it as soon as she could, and she just retired a few months prior.

I'm the younger of the two of us, and I don't turn 62 until next Spring. I could easily wait until 70, but I can see myself opting to start at 65. I have some bad family history with regards to health, although some of it was self-inflicted. But my dad lived to 56, his father to 59 and mother to 63, my mother to 71, her mother to 65 and father to 93. I'm hoping some of the longevity genes from my maternal grandfather skipped a generation.
statsman is online now   Reply With Quote
Old 08-23-2020, 07:17 PM   #80
Recycles dryer sheets
 
Join Date: Oct 2007
Posts: 341
I am 64, DW is 59, my wages were higher of the two,

I figure, I will collect $ 3200/month starting at age 70,

DW will start collecting her SS of $ 1050/month at age 62 & when she turns FRA at 66 she will start spousal benefits of $ 1600/month.
rkser 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
Taking Early Social Security 1fuzzball FIRE and Money 20 03-02-2014 09:31 PM
Taking Social Security at 62 - Point to Ponder freebird5825 FIRE and Money 63 06-16-2013 09:26 PM
Taking Social Security early vs. not LeavingOhio FIRE and Money 268 06-05-2013 09:17 PM
When to start taking Social Security davemcmullen FIRE and Money 74 10-14-2008 08:23 AM
SS benefits, delay taking Social Security, Scott Burns article landover FIRE and Money 11 11-29-2005 06:58 PM

» Quick Links

 
All times are GMT -6. The time now is 01:37 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.