timing SS start

[finnski1]

You don't necessarily need to draw SS early in order to spend more in earlier retirement. You may actually be able to spend more in earlier retirement by NOT taking SS early by drawing down more on your investments earlier knowing that you will have a higher SS benefit later by waiting, and you could be money ahead if you are planning to live a long life (I don't think it's a good idea to plan on living a short life)

https://www.early-retirement.org/forums/f28/timing-ss-start-107826-4.html#post2560864

Exactly. See post #20 this thread.

 

[shotgunner]

Exactly. See post #20 this thread.

A couple of you keep repeating see post 20, which is fine. How many people read the caveat at the beginning of it?

"If you don't care about leaving an estate for your heirs, admittedly a big IF, taking SS at 70 gives you more money to spend every year. The example below is for one person. I am not sure how it works out for a couple."

 

[RunningBum]

A couple of you keep repeating see post 20, which is fine. How many people read the caveat at the beginning of it?

"If you don't care about leaving an estate for your heirs, admittedly a big IF, taking SS at 70 gives you more money to spend every year. The example below is for one person. I am not sure how it works out for a couple."

Which part are you referring to? Your heirs, or being a couple?

 

[GenXguy]

Exactly. See post #20 this thread.

Ahhh.... forgot about that one. I agree with it. It's a good example, although I didn't check that math, it looks good.

 

[GenXguy]

A couple of you keep repeating see post 20, which is fine. How many people read the caveat at the beginning of it?

"If you don't care about leaving an estate for your heirs, admittedly a big IF, taking SS at 70 gives you more money to spend every year. The example below is for one person. I am not sure how it works out for a couple."

That's not something I put much thought into at all because I'm single with no kids. But I certainly realize it's something of greater concern to many others, just as spousal benefits and such come into play for many others where it's not something I have to concern myself with these days.

 

[skyking1]

Post 20 covers the math, and it doesn't even address my reasoning in the OP. In my case that annuity plus pension more than covers expenses to allow us to push back the start of SS without any hardship on our part. It serves to minimize the tax burden from the income of the annuity. I don't have to rob any buckets to make it happen.
Let's say I choose to spend 20K a year for fun in that period, and it is 2% of the NW? BFD, I say.

 

[GenXguy]

Post 20 covers the math, and it doesn't even address my reasoning in the OP. In my case that annuity plus pension more than covers expenses to allow us to push back the start of SS without any hardship on our part. It serves to minimize the tax burden from the income of the annuity. I don't have to rob any buckets to make it happen.
Let's say I choose to spend 20K a year for fun in that period, and it is 2% of the NW? BFD, I say.

Well, it sounds like you don't have much "risk", so you should do what you want.

But in reference to the OP, you said, "I know that in most every case people say take SS at 62." I normally hear just the opposite, people are being advised to delay taking SS. And post 20 actually addresses that point pretty clearly from a mathematical perspective.

 

[skyking1]

Before I found this place it is what i heard most often. I am enjoying the different perspectives here.

 

[skipro33]

Average life expectancy for a male in the USA is 78 years old. If that's the break-even point, then would it matter, financially, to take it later rather than sooner? I realize most folks do not consider themselves average, but that's not facing the facts of the matter. It would seem to me that taking it sooner, rather than later, is going to pay off greater than waiting even one year. Do the math; If 100% of men lived to 78, but some percentage less lived to 80, then the majority of those who take it early are ahead of the game. Only those who continue to beat the odds would be 'winners' based on these stats.

 

[skyking1]

it affects the future income for my somewhat younger wife.

 

[RunningBum]

Average life expectancy for a male in the USA is 78 years old. If that's the break-even point, then would it matter, financially, to take it later rather than sooner? I realize most folks do not consider themselves average, but that's not facing the facts of the matter. It would seem to me that taking it sooner, rather than later, is going to pay off greater than waiting even one year. Do the math; If 100% of men lived to 78, but some percentage less lived to 80, then the majority of those who take it early are ahead of the game. Only those who continue to beat the odds would be 'winners' based on these stats.

Average life expectancy from birth does not apply to anyone here. It's your remaining life expectancy at whatever age you are now that matters.

I realize you may be in a different situation, but for me, longevity insurance is far more important than winning the break-even game.

 

[RunningBum]

To much for me on these SS threads. Every time I swear I won't get sucked into another one. Maybe next time I'll remember. I guess they are entertaining, until they aren't.

Good luck to you all on your SS decisions. It probably won't matter much unless you're an outlier. Unless the SS system or my situation changes, I know what I'm doing.

 

[GenXguy]

Average life expectancy for a male in the USA is 78 years old. If that's the break-even point, then would it matter, financially, to take it later rather than sooner? I realize most folks do not consider themselves average, but that's not facing the facts of the matter. It would seem to me that taking it sooner, rather than later, is going to pay off greater than waiting even one year. Do the math; If 100% of men lived to 78, but some percentage less lived to 80, then the majority of those who take it early are ahead of the game. Only those who continue to beat the odds would be 'winners' based on these stats.

 

[medved]

I have typically heard “take it later if you can afford to, as longevity insurance.” As a general matter that makes good sense to me. But I balance that against having lousy genetics, which makes the calculus more complicated. I’m fortunate that I don’t really need the money. But, still, I will have to decide one way or the other.

 

[skyking1]

To much for me on these SS threads. Every time I swear I won't get sucked into another one. Maybe next time I'll remember. I guess they are entertaining, until they aren't.

Good luck to you all on your SS decisions. It probably won't matter much unless you're an outlier. Unless the SS system or my situation changes, I know what I'm doing.

Sorry, I did not mean to pick off a scab. I'll email you guys a bandage.

 

[shotgunner]

Nothing is this thread has changed my mind. Provided you have a choice about when to take it; if you need SS to have a secure retirement it's best to wait until you are at your FRA or 70, if you don't need SS to have a secure retirement take it early unless you love your job and keep working.

This thread has also reminded me their are people who are certain they know things about the future that no one can be certain of.

 

[skyking1]

We do need it, and will be in good shape with it and can wait for the higher $$ at FRA or 70.
I do want to thank everyone for their inputs.

 

[SecondCor521]

Average life expectancy from birth does not apply to anyone here. It's your remaining life expectancy at whatever age you are now that matters.

I realize you may be in a different situation, but for me, longevity insurance is far more important than winning the break-even game.

RB is right. Current life expectancy at birth is just about 76 for men and 80 for women according to the Social Security folks themselves:

https://www.ssa.gov/oact/STATS/table4c6.html

But someone age 62 has already avoided dying at a younger age, so you have to look at a different question: How many years of living does a 62 year old have left?

In the above table, if you scroll down to age 62, you can see that, according to SS at least, the answer is another 20 years for men and another 23 years for women.

I also tend to think that people who are educated and wealthy have a longer life expectancy. I believe I've read this somewhere. It makes sense to me as well. Educated people might know more about health issues and make better healthcare decisions. Wealth helps facilitate making those better decisions and provide for that better health care. Although I don't know how to quantify it.

(Personally I'm single and don't need it, so my plan is to take it at 70 to allow for maximal Roth conversions.)

 

[skyking1]

Plus plus on those Roth conversions, I am such a newb at this I just got into that too. We get 5 years during that annuity payout to do big conversions that still stay under the next tax bracket.

 

[GenXguy]

Nothing is this thread has changed my mind. Provided you have a choice about when to take it; if you need SS to have a secure retirement it's best to wait until you are at your FRA or 70, if you don't need SS to have a secure retirement take it early unless you love your job and keep working.

That is bad advice. I'm not sure you actually read all of the posts in this thread or are just stubborn.

I don't need SS for a secure retirement, but taking it early as you just advised would actually mean I need to work longer to make up the difference in money lost because of lower ACA subsidies, not to mention the effect on break-even, and the effect on taxes for Roth conversions, the exact opposite of what you are saying in regard to working. Whether you love your job is also irrelevant. Just because you don't "need" SS for a secure retirement doesn't mean you should throw money away. People who have more than enough for retirement typically still take the steps needed to maximize their stash within reason.

See post 20 for the math.

https://www.early-retirement.org/forums/f28/timing-ss-start-107826.html#post2559365

Since you don't know when you're going to die, you should plan for the possibility of living a very long life, not playing a statistical game of average expected lifetimes.

 

[Sunset]

We don't need to take it now, and are waiting longer as we view that as the bigger $$$ life long annuity.

I'm SO glad we didn't take yet, as our choices for spending are limited by Covid, and will be for at least 6 more months, possibly another year (example Canada has banned cruise ships for another Year !!)
So there goes our Alaska cruise... and other travels, house buying, etc...

 

[medved]

I have seen some posts on this thread about deferring SS so that you can maximize your ACA subsidy. I have never really focused on that. But I am guessing that interest and dividend income count for ACA purposes, is that right? And do capital gains count too? If so, I guess all that would have to be under some income threshold -- so that you could be eligible for an ACA subsidy? And if you are over the income limit anyway, then whether you add SS income too would not matter for ACA purposes. What is the maximum income for an ACA subsidy? Or is that state by state? I am just trying to figure out whether this will matter for me, or whether I will be over the limit anyway.

 

[SecondCor521]

I have seen some posts on this thread about deferring SS so that you can maximize your ACA subsidy. I have never really focused on that. But I am guessing that interest and dividend income count for ACA purposes, is that right? And do capital gains count too? If so, I guess all that would have to be under some income threshold -- so that you could be eligible for an ACA subsidy? And if you are over the income limit anyway, then whether you add SS income too would not matter for ACA purposes. What is the maximum income for an ACA subsidy? Or is that state by state? I am just trying to figure out whether this will matter for me, or whether I will be over the limit anyway.

It's basically AGI on your tax return plus some things, so yes, interest, dividends, and capital gains all count. As do Roth conversions.

You have to be under 400% of FPL (Federal Poverty Limit) which varies based on your tax family size and where you live, although it's the same for the lower 48 and just different for Alaska and Hawaii. (There is currently a bill in Congress that would extend the subsidies above 400% of FPL.)

 

[target2019]

To much for me on these SS threads. Every time I swear I won't get sucked into another one. Maybe next time I'll remember. I guess they are entertaining, until they aren't.

Good luck to you all on your SS decisions. It probably won't matter much unless you're an outlier. Unless the SS system or my situation changes, I know what I'm doing.

I look at these threads as a knowledge test for myself. I agree that once you've described your own case and planning, there's not much benefit.

 

[GenXguy]

I have seen some posts on this thread about deferring SS so that you can maximize your ACA subsidy. I have never really focused on that. But I am guessing that interest and dividend income count for ACA purposes, is that right? And do capital gains count too? If so, I guess all that would have to be under some income threshold -- so that you could be eligible for an ACA subsidy?

Yes, all those things count. T-IRA and 401K type distributions count also. However, Roth distributions, principal do not.

And if you are over the income limit anyway, then whether you add SS income too would not matter for ACA purposes.

SS income can push you over the cliff or at least cut your subsidies. As I mentioned earlier, it's not just AGI that counts, both taxable AND non-taxable SS income count towards your MAGI for ACA purposes. This is only a concern for me from age 62 until age 65 (Medicare age) based on the current ACA law & Medicare age, so it could change by then. If you're already over the cliff before SS, then you don't have to be concerned about it, but the rules could change extending eligibility.