when should you take social security article

[veremchuka]

here's a good article about the decisions involved re when to take ss. there's a good link in it showing what % you lose or gain by taking ss before or after your retirement date. it covers years from 1924 to 1960 and later. makes me wonder if i should delay by 1 year.

When Should You Take Social Security?

 

[GregLee]

... makes me wonder if i should delay by 1 year.

Well, I don't know, but what seems to me to be missing from the referenced discussion is the interest value of the early payments, in case you start SS earlier rather than later. I had to make a version of this decision when I applied for SS last May, when I could either retire retroactively starting November 2009 (but still full retirement age at 67), or prospectively starting August 2010 at 68, or still later. Visions of what the extra $15000 in retroactive SS payments invested might bring in my head, I choose to retire earlier. But I really don't know whether that was best.

 

[chinaco]

DW and I are planning the 62/70 approach. Of course, it all depends on what happens.. new information later could lead to different decisions.

 

[Midpack]

Indeed, it's a good article, thanks. There is no question I should wait until age 70 (unless I'm hit by a bus, there is little chance I won't live past the breakeven ages) - but the uncertain future of SS is what gnaws at me. I'll be "disappointed" if I wait and they suddenly make a change. Everyone says those our age have nothing to worry about, I'm not that confident, the recent radical change to the buyback for example (which I was planning to take advantage of).

But again, an article worth reading for many...thanks.

 

[W2R]

It does seem to confirm that a single woman in my position should take benefits later, if possible.

A quick note about life expectancy: At birth, our average life expectancy is about 78 years (about 75 for men and 81 for women), according to the National Center for Health Statistics.

However, if you are lucky enough to reach age 65, your average life expectancy rises to 82 for men and 85 for women.

break-even ages are as follows:
62 (early) vs. 66 (NRA): Break-even age is between 76 and 77.
62 (early) vs. 70 (late): Break-even age is between 78 and 79.

My plan thus far has been to wait until 66, unless I chicken out. From the numbers above, it looks like I should wait until 70 instead of 66. I am undecided about that. It would sure be nice to see a deposit in the bank every month.

After age 65, it looks like I would have to actually pay Medicare every month instead of just getting a lower SS check to pay for it, for a net loss instead of a net gain from SS/Medicare combined. What a drag.

 

[racy]

I did an analysis of the various combinations of these choices: I take SS at 62 vs 66, my wife takes SS at 62 vs 66 and either taking a fixed immediate annuity or an inflation adjusted one. I wanted to see what the value of my retirement portfolio was over time with these various combinations. The best result was for us both to take SS at 62 and choose the fixed immediate annuity assuming both of us had average life spans. However, if we reach several years beyond normal life expectancy the best choice would for me take SS at 66, she at 62 and stick with the fixed annuity. Now, if she makes it to around 100 then we should choose me taking SS at 66, her at 62 and take an inflation adjusted annuity.

 

[fern]

2nd Thoughts

I plan to wait until full retirement age (66 and 10 mths for me) but I've decided not to wait until 70, despite the larger payout. What's missing from this discussion is the fact that most people will want to be able to enjoy that extra money when they receive it, and if i have to wait til age 70, who knows what my health will be like or if i'll have the energy to do all that travel i want to do.

I think full retirement age is a happy medium to increase your SS benefits at a time when you'll more likely be able to enjoy the $$.

 

[braumeister]

I'm in the "waiting until 70" group.
Longevity genes in the family, good health now, and no need to draw it earlier.

I may change my mind between now and then, but I have an unreasonable fear of running out of money in my extreme old age.

 

[Arnie]

I'm in the "waiting until 70" group.
Longevity genes in the family, good health now, and no need to draw it earlier.

I may change my mind between now and then, but I have an unreasonable fear of running out of money in my extreme old age.

I think that is a reasonable fear and a reasonable plan.

 

[Independent]

Like GL says, the chart seems to be missing the impact of investment returns, I'd expect a financial planner to think about that.

Another miss is the possibility that deferring SS amounts to buying longevity insurance (similar to any life annuity). Most people who post here really don't care because they can self insure the possibility of a long life, but I expect this is important for many Americans.

 

[veremchuka]

i calculated the break even point a few years ago of 62 vs 66 and it was over 17 years. it seemed reasonable to take it at 62 rather than gamble on making it to 79+ and then gaining from thereon. the extra 5% at 63 vs 62 is what piqued my curiosity. I have to see where the break even point is for that 1 year of waiting vs the extra 5%, i'm thinking it'll still be out in that later 70 area.

 

[73ss454]

I'll be turning 62 in April and my original plan was to take SS when DW turns 62 in Dec of 2012. During the last market down turn the plan changed to take it at 62. Now that the market is back I'm thinking of going back to my original plan. But if the market dumps out again I'll be looking to get my check. Since no male in my family has ever lived to the age of 70 waiting doesn't seem like a great plan. Maybe for DW but not for me. (heh)

 

[W2R]

I'll be turning 62 in April and my original plan was to take SS when DW turns 62 in Dec of 2012. During the last market down turn the plan changed to take it at 62. Now that the market is back I'm thinking of going back to my original plan. But if the market dumps out again I'll be looking to get my check. Since no male in my family has ever lived to the age of 70 waiting doesn't seem like a great plan. Maybe for DW but not for me. (heh)

Given that family history, I say go for it! I think you should take it at 62 and enjoy the extra income.

 

[Arnie]

I'll be turning 62 in April and my original plan was to take SS when DW turns 62 in Dec of 2012. During the last market down turn the plan changed to take it at 62. Now that the market is back I'm thinking of going back to my original plan. But if the market dumps out again I'll be looking to get my check. Since no male in my family has ever lived to the age of 70 waiting doesn't seem like a great plan. Maybe for DW but not for me. (heh)

Have you considered how life-long survivor benefits for DW will be impacted by your decision?

 

[73ss454]

Yup, read the last sentence of my post.

 

[East Texas]

I seem to be confusing myself on the survivorship issue.

If the wife takes SS at age 62 and the husband takes SS at 66 and husband passes away, does the wife get his full SS as a survivor or is the amount reduced because she took early distribution on her SS?

To confuse it even more. Wife passes before husband begins collecting his SS. Can he do survivorship on her monies and then shift to his record when he turns 66?

 

[Arnie]

Yup, read the last sentence of my post.

Yes, saw that and I assumed you meant maybe it would be okay for DW to wait until 70 to file. I think there is potential for higher survivor benefits for a lower earning spouse if the higher earner delays even if they expect a short life. If this is what you meant, sorry.

 

[Arnie]

I seem to be confusing myself

This is all very easy to be confused about.

 

[East Texas]

This is all very easy to be confused about.

I shall patiently wait for one of the Social Security Gurus to assuage my confusion.

 

[teejayevans]

SS (especially if you wait until 70) makes good longevity insurance.
TJ

 

[RockyMtn]

Interesting article. It does however fail to take into account what other income you might have coming in from various investments, part time w**k, IRA minimum withdrawls, etc.

Not taking these things into consideration could vault you into a higher income bracket with the SS payments creating some significant unintended tax consequenses.

 

[rescueme]

If the wife takes SS at age 62 and the husband takes SS at 66 and husband passes away, does the wife get his full SS as a survivor or is the amount reduced because she took early distribution on her SS?

Spousal benefits are reduced for those who file before their own FRA.

SS article on this:

http://www.ssa.gov/survivorplan/survivorchartred.htm

BTW, that's one of the reason that my DW will claim at her FRA and I'm delaying till age 70 (for her benefit).

Of course, I do get SS income when I'm 66.5 years of age - at the time my wife turns her FRA age of 66, which will be 50% of her then benefit till I turn 70, 3.5 years later.

In addition to this "solution" we're also using it to draw down our tax-deferred holdings, which will become "excess RMD's" (e.g. RMD's beyond what we need for living expenses) at age 70.5

There are a lot of things to consider concerning what is best for claiming SS, both in a total income measurement, along with trying to plan for your spouse (if you wish ).

The one thing neither of us has a problem with is getting "paid back" for what we paid in SS tax over the years. If we're alive, our plan will maximize our total income. If not, no problem. Money is for the living, not the dead...

 

[67walkon]

It is a tough decision. I'm currently planning on waiting until 70 because my wife is 5 years younger and in excellent shape. We have a long term payout on something we sold that will pay us until I'm 69 and she is 64; she can take her SS at 62 because there is no reason not to. However, if we can get by without mine, she may have another 30 to 35 years of getting the bigger number, so it is worth it.

Of course, I reserve the right to change my mind when get to 65 or 66 or whatever and want to have a little extra pocket money to play with!

 

[Alan]

I also plan on waiting until 70 to maximize survivor benefits for DW, who will start her SS at 62.

Not only do women live longer, DW is a year younger, plus she keeps telling me she'll arrange an accident for me if I end up an old fart like my Dad.

 

[Texas Proud]

I plan to wait until full retirement age (66 and 10 mths for me) but I've decided not to wait until 70, despite the larger payout. What's missing from this discussion is the fact that most people will want to be able to enjoy that extra money when they receive it, and if i have to wait til age 70, who knows what my health will be like or if i'll have the energy to do all that travel i want to do.

I think full retirement age is a happy medium to increase your SS benefits at a time when you'll more likely be able to enjoy the $$.

Or... you can just spend other money you have knowing that you will be getting a larger check in a few years...

If you die before the checks... you enjoyed yourself... if you live... then the checks start coming... I do not have to be constrained by thinking of only a yearly budget... I can do a multi-year budget....