timing SS start

[skyking1]

We are probably pulling the trigger in two years at my 62. Darling Wife is 3.75 years younger. We have no heirs to consider, our money is ours and what is left over goes to our favorite nonprofit orgs.
We purchased a MYGA a few years back with her as the primary. Due to the timing of things, we can start cashing it out at her 60, in about 3.5 years.
It will be ~145K at that time, only the 45K taxable.
I have a strategy in mind: Spend a little bit of the savings to stretch the 20 months between retirement and that MYGA. Lets say 20K, because my medical plan gives me 8 months of bank that acts like a severance medical package.
I will have retiree medical from my union for ~1100 including dental, after that bank expires. It carries on for her after I get medicare and acts as a supplement for me.
My pension will cover our normal expenses less medical at 2021 dollars, net. It is fixed with no COLA.

Do 60 months on the MYGA, net 2300 a month. This reaches to my 68+ and DW's 65.
Then I can take a late SS at 68+, and it equals the MYGA that just expired.
I get an additional small pension that will be around 300 a month net at 65, a handy little COLA.
DW can take her SS at 67 or later, it won't be a thing IMO.
I know that in most every case people say take SS at 62. This plan is intended to maximize her lifetime incomes should she survive me. The 20K is truly a drop in the bucket of our savings, so the risk is in not living long enough to reap any benefit from late SS.
We have more than enough savings to COLA above the fixed pension and SS, and travel and play.

Does that sound like a good strategy, thinking of her as a survivor?

 

[SecondCor521]

Probably. She's younger than you and female, so statistically she's going to outlive you.

I'd try running your situation through https://opensocialsecurity.com/ and see what it says.

 

[skyking1]

Probably. She's younger than you and female, so statistically she's going to outlive you.

I'd try running your situation through https://opensocialsecurity.com/ and see what it says.

Thank you for that link and suggestion.
It had her retiring in 2026 at 62, and then myself at 2030 at 70. I would have not guessed that!
I went back and swapped around our dates, with her taking SS when the annuity plays out. It made only a 5000 difference in total SS over our projected lifetimes, out of nearly a million. I guess that is the new plan

 

[Out-to-Lunch]

I know that in most every case people say take SS at 62.

Very few people say that.

One popular point of view is the one that Open SS revealed to you: Let the lower earner claim early, but have the higher earner wait until 70. This is likely the lowest-cost way to "buy" a COLA'ed annuity.

 

[skyking1]

Thank you, I edited my post above and that will be the new plan, do pretty much what open SS says except take hers a little later after the annuity pays out.

 

[finnski1]

Thank you for that link and suggestion.
It had her retiring in 2026 at 62, and then myself at 2030 at 70. I would have not guessed that!
I went back and swapped around our dates, with her taking SS when the annuity plays out. It made only a 5000 difference in total SS over our projected lifetimes, out of nearly a million. I guess that is the new plan

I don't think that opensocialsecurity says that she"retires at 62 and you retiring at 70." I think it just is saying at what age to take ss. Two very different things.

 

[Alan]

Thank you for that link and suggestion.
It had her retiring in 2026 at 62, and then myself at 2030 at 70. I would have not guessed that!
I went back and swapped around our dates, with her taking SS when the annuity plays out. It made only a 5000 difference in total SS over our projected lifetimes, out of nearly a million. I guess that is the new plan

We are in a similar situation which is why I'm waiting until age 70. When I die she will not get my UK SS, but her own US SS will be boosted to what I was receiving.

 

[skyking1]

Wow Alan that's complicated. We have it relatively simple in comparison.
Now I just need to fight the "one more year" syndrome. I think she's on board with 2 years from now.

 

[Alan]

Wow Alan that's complicated. We have it relatively simple in comparison.
Now I just need to fight the "one more year" syndrome. I think she's on board with 2 years from now.

It is a nice problem to have. All in all we have 8 pensions between us, 2 UK private pensions, 2 UK SS pensions, 2 US private pensions and 2 US SS pensions.

2 UK tax returns, 1 US tax return and 2 FBARs to file each year.

 

[KingMota]

I went to Opensocialsecurity and it is recommending the classic strategy (my PIA is 3,650 and hers is 1,000) of my wife filing 62 yr 3 mo, me waiting until age 70 and then my wife changing over to spousal benefits when I file. Is that still an option? I thought that "strategy" option went away a few years ago for anyone born after ~1955 and that you have to file under your own benefits or your spouse and then cannot change after that.

 

[pjigar]

Start and suspend option went away.

 

[KingMota]

Who would be suspending in the scenario I mentioned? She would file on her own benefits in 2023 (age 62). I would file for my benefits 2027 (age 70) and she would change to spousal benefits after I file 2027. Now the catch, I think, in this scenario her spousal benefits starting 2027 would be reduced, but she would have gotten her own benefits for four years. I would have to do all the math since my benefits are so much higher.

I used to read this site all the time while planning my early retirement several years ago and I do not want to hijack this persons thread.

 

[Boston_Bulldog]

Take Social Security at 62 or 67? The "Best Case" May Surprise You!

I am currently 55 and DW is 57. We are a couple years away from a happy retirement. I just ran some Social Security retirement estimates for both of us and then ran a few simple models of taking the Social Security benefit at ages 62, 63, 64, 65, 66, 67 or 70. The short summary of my findings was that it is either better to take the benefit at age 62 or age 70...but nothing in between. I have often heard "wait until you reach 67", but my calculations do not support this. I have posted the model in a PDF here:

https://pdfhost.io/v/zv9u7qjc6_Social_Security_Modelerxlsx.pdf

Assumptions and Findings

As you know, based on your age, there is a "full benefit" age. For me, my full benefit comes at age 67. If I take the benefit early, e.g., age 62, there is a reduction schedule. Alternatively, if I take the benefit at 70, there is a relatively large increase of 8% a year for every year above full retirement age. The reduction schedule for those born 1960 or after is:

Age Percent of Full Benefit Monthly Benefit
62- 70.00%
63- 75.00%
64- 80.00%
65- 86.67%
66- 93.33%
67- 100.00%
70- 124.00%

The attached PDF shows an assumed full retirement benefit of $2,000 a month. I then show the cumulative earnings for every year, if you take it at 62, 63, 64, etc. I run this through age 100. I added a modest assumed rate of return of 3% on the money (impact of rate of return will be explained later).

My findings are you are better off taking the benefit at age 62 if you are going to live through age 76. If you live to age 77 or higher, you are better off taking the benefit beginning at age 70. THERE IS NO SCENARIO WHERE YOU ARE BETTER OFF TAKING THE BENEFIT AT AGE 63, 64, 65, 66 OR 67.

If you increase the assumed rate of return/interest rate (on SS income received) to a higher rate of return, it makes the age 62 distribution more advantageous into the later years. For instance, if you make the assumed rate of return 7% (vs. 3%), you are better off taking benefit at age 62 vs. 70 until age 82. Again, there is never a scenario that you are better off taking the benefit at age 63, 64, 65, 67.

This also doesn't factor in an early death, which would almost always make the age 62 benefit a better option.

I am sure there have been other discussions on this topic and I am sure I might be missing something in my thinking. If I am wrong in my assumptions, I would appreciate some feedback.

Please review the model and provide feedback.

Thanks!

 

[skyking1]

I do not consider this a hijack. I am absorbing info all over and I think it is helpful to others to further the discussion where it will naturally go.

 

[Bamaman]

Let me just say there is a return on investment equivalent of waiting to start taking social security up to age 70. If someone can possibly wait, their monthly social security payments will be much higher and well worth putting off as long as possible.

But if someone's in poor health, I would tell them to go ahead and take the benefits earlier.

I got caught up in corporate "downsizing" and had to start drawing my social security at age 62. At the time, I didn't know about a substantial inheritance. I would have been better off to draw some of my Rollover IRA and not start SS until age 70. But I'm not complaining.

 

[Alan]

Threads merged

 

[finnski1]

I am currently 55 and DW is 57. We are a couple years away from a happy retirement. I just ran some Social Security retirement estimates for both of us and then ran a few simple models of taking the Social Security benefit at ages 62, 63, 64, 65, 66, 67 or 70. The short summary of my findings was that it is either better to take the benefit at age 62 or age 70...but nothing in between. I have often heard "wait until you reach 67", but my calculations do not support this. I have posted the model in a PDF here:

https://pdfhost.io/v/zv9u7qjc6_Social_Security_Modelerxlsx.pdf

Assumptions and Findings

As you know, based on your age, there is a "full benefit" age. For me, my full benefit comes at age 67. If I take the benefit early, e.g., age 62, there is a reduction schedule. Alternatively, if I take the benefit at 70, there is a relatively large increase of 8% a year for every year above full retirement age. The reduction schedule for those born 1960 or after is:

Age Percent of Full Benefit Monthly Benefit
62- 70.00%
63- 75.00%
64- 80.00%
65- 86.67%
66- 93.33%
67- 100.00%
70- 124.00%

The attached PDF shows an assumed full retirement benefit of $2,000 a month. I then show the cumulative earnings for every year, if you take it at 62, 63, 64, etc. I run this through age 100. I added a modest assumed rate of return of 3% on the money (impact of rate of return will be explained later).

My findings are you are better off taking the benefit at age 62 if you are going to live through age 76. If you live to age 77 or higher, you are better off taking the benefit beginning at age 70. THERE IS NO SCENARIO WHERE YOU ARE BETTER OFF TAKING THE BENEFIT AT AGE 63, 64, 65, 66 OR 67.

If you increase the assumed rate of return/interest rate (on SS income received) to a higher rate of return, it makes the age 62 distribution more advantageous into the later years. For instance, if you make the assumed rate of return 7% (vs. 3%), you are better off taking benefit at age 62 vs. 70 until age 82. Again, there is never a scenario that you are better off taking the benefit at age 63, 64, 65, 67.

This also doesn't factor in an early death, which would almost always make the age 62 benefit a better option.

I am sure there have been other discussions on this topic and I am sure I might be missing something in my thinking. If I am wrong in my assumptions, I would appreciate some feedback.

Please review the model and provide feedback.

Thanks!

Just curious if you have run this for a 0% return? Essentially modeling somebody who takes it and spends it immediately every month to pay their living expenses.

 

[levindb]

Getting the most from SSA is just one measurement...and with a spouse, you have to look at family numbers, not just individual SSA breakeven.

You should also look at where you will be getting your annual spending money while you wait to take SSA benefits. That resource may slowly diminish as you spend those funds. I did not see a column for that in your PDF.

As others have said, health and family genes may be part of your decision.

 

[Midpack]

Who would be suspending in the scenario I mentioned? She would file on her own benefits in 2023 (age 62). I would file for my benefits 2027 (age 70) and she would change to spousal benefits after I file 2027. Now the catch, I think, in this scenario her spousal benefits starting 2027 would be reduced, but she would have gotten her own benefits for four years. I would have to do all the math since my benefits are so much higher.

I used to read this site all the time while planning my early retirement several years ago and I do not want to hijack this persons thread.

That option was eliminated in 2015, there are several articles online about it. Here's just one from SS.

Your full spouse’s benefit could be up to one-half the amount your spouse is entitled to receive at their full retirement age. If you choose to begin receiving spouse’s benefits before you reach full retirement age, your benefit amount will be permanently reduced.

You will receive your full spouse’s benefit amount if you wait until you reach full retirement age to begin receiving benefits. You will also receive the full amount if you are caring for a child entitled to receive benefits on your spouse’s record who is younger than age 16 or disabled.

https://faq.ssa.gov/en-us/Topic/article/KA-02011

And https://www.aarp.org/retirement/social-security/questions-answers/spousal-benefits-until-70.html

I asked the same question a few weeks ago. The first few responses turned out to be incorrect. As a result, DW and I will both begin taking our earned Soc Sec at age 70, her spousal benefit would be less.

https://www.early-retirement.org/forums/f28/dqotd-soc-sec-spousal-benefits-107392.html

 

[Chuckanut]

Then there is this calculation.

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.

https://www.early-retirement.org/forums/f28/laurence-kotlikoff-maximize-my-ss-com-77660.html#post1604411

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.

 

[Boston_Bulldog]

I am currently 55 and DW is 57. We are a couple years away from a happy retirement. I just ran some Social Security retirement estimates for both of us and then ran a few simple models of taking the Social Security benefit at ages 62, 63, 64, 65, 66, 67 or 70. The short summary of my findings was that it is either better to take the benefit at age 62 or age 70...but nothing in between. I have often heard "wait until you reach 67", but my calculations do not support this. I have posted the model in a PDF here:

https://pdfhost.io/v/zv9u7qjc6_Social_Security_Modelerxlsx.pdf

Assumptions and Findings

As you know, based on your age, there is a "full benefit" age. For me, my full benefit comes at age 67. If I take the benefit early, e.g., age 62, there is a reduction schedule. Alternatively, if I take the benefit at 70, there is a relatively large increase of 8% a year for every year above full retirement age. The reduction schedule for those born 1960 or after is:

Age Percent of Full Benefit Monthly Benefit
62- 70.00%
63- 75.00%
64- 80.00%
65- 86.67%
66- 93.33%
67- 100.00%
70- 124.00%

The attached PDF shows an assumed full retirement benefit of $2,000 a month. I then show the cumulative earnings for every year, if you take it at 62, 63, 64, etc. I run this through age 100. I added a modest assumed rate of return of 3% on the money (impact of rate of return will be explained later).

My findings are you are better off taking the benefit at age 62 if you are going to live through age 76. If you live to age 77 or higher, you are better off taking the benefit beginning at age 70. THERE IS NO SCENARIO WHERE YOU ARE BETTER OFF TAKING THE BENEFIT AT AGE 63, 64, 65, 66 OR 67.

If you increase the assumed rate of return/interest rate (on SS income received) to a higher rate of return, it makes the age 62 distribution more advantageous into the later years. For instance, if you make the assumed rate of return 7% (vs. 3%), you are better off taking benefit at age 62 vs. 70 until age 82. Again, there is never a scenario that you are better off taking the benefit at age 63, 64, 65, 67.

This also doesn't factor in an early death, which would almost always make the age 62 benefit a better option.

I am sure there have been other discussions on this topic and I am sure I might be missing something in my thinking. If I am wrong in my assumptions, I would appreciate some feedback.

Please review the model and provide feedback.

Thanks!

As an FYI, I did not hijack this post. I posted this as a SEPARATE post, not knowing about this post and the Mods moved my post embedded into this one...

Mods, while this is a similar topic, not real sure why you made my original post a reply to the OP's post.

 

[Boston_Bulldog]

Just curious if you have run this for a 0% return? Essentially modeling somebody who takes it and spends it immediately every month to pay their living expenses.

Good question. Yes, I modeled rates of return from 0% (spend immediately) to 10% (invest in sexy investments). At a 0% return, age 75 is when an age 70 distribution pays out and starts passing the age 62. Again, there is no scenario, at any rate of return, where age 63-67 distribution makes sense.

Age an 8% return, you have to get to 85 before a age 70 distribution makes sense.

9% return = age 91

10% return = age 100+

The real finding in this is that your decision is EITHER age 62 or age 70 but nothing in between.

 

[skyking1]

As an FYI, I did not hijack this post. I posted this as a SEPARATE post, not knowing about this post and the Mods moved my post embedded into this one...

Mods, while this is a similar topic, not real sure why you made my original post a reply to the OP's post.

It is a common practice on the forums to merge threads that are discussing the same thing.
The more info the merrier. I think it will be wife at 62 and myself at 70 for us.
It gives me something to plan around. I had figured on me at 62, as that is when we want to retire.

 

[street]

^ that is an interesting model to share. I run numbers worked out many different scenarios look at longevity of family and for me/us was to take it at 62. I really don't need more money at 83 years old where my break even numbers worked out. If I live that long we can support any other costs, if expenses increase at that time in life. So, spend that SS now and save more for longer to use if I make it past my break even age. It doesn't work for everyone but for us I couldn't see doing it any other way. We really don't even need SS to live and I would bet most here wouldn't either. Of course I will take it because it is mine and will spend it starting on day one of eligibility.

 

[Boston_Bulldog]

It is a common practice on the forums to merge threads that are discussing the same thing.
The more info the merrier.

Great. Just didn't want to take over the original intent. The more the merrier!