When to take Social Security

[Texas Proud]

Re: When to take SS

from the article.....

"Actuarially speaking, a person who lives exactly as predicted should receive substantially the same cumulative amount of benefits regardless of the choice. Regardless of the statistics, a retiree’s expectations of his own longevity will drive the decision."




From what I can tell on this....

If you are single, and do not have much of a cushion.... take it..

If you are single and have a good cushion... well... from this article take it..

If you are married... ahhh, the rub... does your spouse qualify for his or hear own SS... how many years between the two of you... if she is a few years younger and does not have a lot of earnings (low SS).. then it can be better to hold off until 70 KNOWING that you will more than likely die prior to break even, but also knowing that your wife will continue to get this higher rate during HER lifetime..

so, are you willing to give something up today for your wife when you pass on

 

[mathjak107]

Re: When to take SS

That's OK. When you die your nest egg will be bigger if you took Social Security early and your heirs will be able to enjoy your nest egg while they are healthy

when i ran the numbers as long as either my wife or i made it to 81 taking it later gave us the biggest pile at the end.

 

[Cut-Throat]

Re: When to take SS

when i ran the numbers as long as either my wife or i made it to 81 taking it later gave us the biggest pile at the end.

Having the biggest pile does not interest me. Delaying to age 70 will allow me to spend more in my 60's than taking the SS at age 62.

 

[chinaco]

Re: When to take SS

Having the biggest pile does not interest me. Delaying to age 70 will allow me to spend more in my 60's than taking the SS at age 62.

My sentiment (hope) exactly. Although... I am still analyzing. Your personal tax situation may make a difference also. Taking SS earlier may just push you into a higher tax bracket... or at least... that is what I am trying to figure out.

 

[Bikerdude]

Re: When to take SS

Retirement at 62: Is Receiving Social Security Early Worth It?

"It is more likely, however, that many individuals will optimistically estimate their own life expectancy as somewhat greater than the statistical averages."



I think there is a lot of this going on in the SS calculation made by many of us.

 

[chinaco]

Re: When to take SS

Retirement at 62: Is Receiving Social Security Early Worth It?

"It is more likely, however, that many individuals will optimistically estimate their own life expectancy as somewhat greater than the statistical averages."



I think there is a lot of this going on in the SS calculation made by many of us.

Me too. The best one can attempt to judge Mortality (for self) is using parents/siblings as models plus ones current state of health. From there a range should be used for realistic best and worst case plus a mid. When I say worst case (I mean the longest life expectancy not that we want to die ).

When working with fuzzy concepts using a simple range and basic judgment is very helpful. Complex probabilities models might help some but are not likely to be much more accurate.

And all of that means nothing if you get killed in an accident.

In the end there is a bit of a leap of faith.

 

[REWahoo]

Re: When to take SS

The best one can attempt to judge Mortality (for self) is using parents/siblings as models plus ones current state of health. From there a range should be used for realistic best and worst case plus a mid.

Easier said than done.

Example:

Parents - lived to age 90 & 92

Siblings - One was recently diagnosed with lung cancer at 75 and maybe has another year
- The second died at age 71 in an auto accident (suspected cause: stroke)
- The third was recently diagnosed with kidney disease at age 70 and faces a very uncertain future

As the youngest sibling (age 60) in relatively good health, just how the heck do I use that information to judge life expectancy?

Guess I'll stick with the only reliable method I'm aware of: "so far, so good".

 

[chinaco]

Re: When to take SS

Easier said than done.

...

True enough. But thinking through a few what if scenarios never hurts. If often yield insight that may help you adjust the final decision.

 

[mathjak107]

Re: When to take SS

Having the biggest pile does not interest me. Delaying to age 70 will allow me to spend more in my 60's than taking the SS at age 62.

im with you, im in favor of taking it later and enjoying more each month while i can, the heck with the bigger pile... the above was only an fyi that no matter how i ran the numbers for taking it early if at least 1 of us made it to 81 then the bigger pile went along with taking it later too if you dont increase the monthly withdrawl..

 

[Spanky]

Re: When to take SS

Having the biggest pile does not interest me. Delaying to age 70 will allow me to spend more in my 60's than taking the SS at age 62.

Can you clarify this? Delaying to age 70 means that you you have less to spend before age 70.

 

[chinaco]

Re: When to take SS

Can you clarify this? Delaying to age 70 means that you you have less to spend before age 70.

I think he means spend more portfolio earlier and rely on the extra SS later (Larger COLA Annuity)... provides till you die.

There are multiple variables to consider... part of it is how much money you have (nest egg), your specific tax liability, and expected life span.

 

[Mwsinron]

Re: When to take SS

So by going that route someone would be putting their faith in the gov that they would not reduce SS by then or come up with some other way to screw you. I guess its all about what you believe will happen

 

[mathjak107]

Re: When to take SS

you will be spending more of your portfolio early on when your younger and healthier because your payments later on will be 30% higher and will re-fill the extra bucks you depleted from 62 to 70 .

kind of an out of the box way of looking at taking ss later. most think only in terms of breaking even or dying early , but another way is to think about it as an annuity that will kick in at 70 bolstering your income by 30% plus colas . if you just pay for it with some of your nest egg at 62.

 

[aenlighten]

Re: When to take SS

There are many facets to this, but I focus on three. If you are working, you should delay it until normal retirement. If you are not working, there are two relevant discount rates. Early retirement uses a 4% real discount rate and late retirement a 2% real discount rate. If you can do better than 4% real, you should take it early. If you can't but can do better than 2% real, take a normal retirement. If you can't manage that, you are in worse shape than you image. Finally, there is life expectancy which at 65 is 85 and increases by one month each year. If you don't expect to live until then, you should definitely take it earlier. If you expect to live to then, you should be indifferent to the choice. If you expect to live much longer, you may want to delay it, but I am skeptical most people over 85 will be in a position to enjoy it. When you hear about breakevens in the 70s or early 80s, they are making the assumption they continue to work until they start to collect it, or they are not properly discounting the cash flows.

 

[youbet]

Re: When to take SS

From what I can tell on this....

If you are single, and do not have much of a cushion.... take it..

If you are single and have a good cushion... well... from this article take it..

If you are married... ahhh, the rub... does your spouse qualify for his or hear own SS... how many years between the two of you... if she is a few years younger and does not have a lot of earnings (low SS).. then it can be better to hold off until 70 KNOWING that you will more than likely die prior to break even, but also knowing that your wife will continue to get this higher rate during HER lifetime..

so, are you willing to give something up today for your wife when you pass on

Texas Proud.......

Right on! The issue of a spouse collecting your higher benefit if you delay is key since providing an ongoing income for a surviving spouse is an important part of retirement planning......

If I was in the situation where my spouse's SS income, and projected SS benefits, were low and she would therefore collect my higher SS benefits gained though delaying, I would delay. That's not the case for us. She can't collect my SS. So, I'm still trying to determine what to do.

Also, I'll point out that it isn't just a single/married issue. Some people will not qualify for their spouses SS due to govt pension offset provisions and therefore to the SS earning spouse, all the calculations are as if he/she were single.

 

[Mwsinron]

Re: When to take SS

you will be spending more of your portfolio early on when your younger and healthier because your payments later on will be 30% higher and will re-fill the extra bucks you depleted from 62 to 70 .

kind of an out of the box way of looking at taking ss later. most think only in terms of breaking even or dying early , but another way is to think about it as an annuity that will kick in at 70 bolstering your income by 30% plus colas . if you just pay for it with some of your nest egg at 62.

It seems to me you keep assuming SS will be kept at its present rate. What happens if they do means testing? We already know SS cannot keep going at its present rate and changes will have to happen.

 

[aenlighten]

Re: When to take SS

Kash did a really nice summary of SS projections, in his April 23rd posting (you have to scroll down), http://streetlightblog.blogspot.com/2007_04_01_archive.html SS does 3 projections, a worst, expected, and best case. If you examine for yourself their assumptions, you will quickly come to the conclusion the worst case is unbelievable, the expected case is quite pessimistic, and the best case there is no problem at all. A more realistic estimate is we are somewhere between a problem and no problem and it is too early to be worrying about one. SS a problem? Maybe, maybe not.

 

[mathjak107]

Re: When to take SS

id rather plan based on what is and what the trend has been then to try to come up with a " what if plan" and speculate about things that may or may not ever come to pass.

my tax planning follows the same strategy. for 20 years taxes have been dropping. the income brackets move higher by 3% every year. within a few years 100k will be in the 15% bracket. i wouldnt figure higher taxes in the future in my plans. could taxes rise? sure they could but i have no reason to assume that in my planning

 

[Mwsinron]

Re: When to take SS

Guess its just the pessimist in me . Its nice to get a read on how others view the situation.

 

[Alex]

Re: When to take SS

Personally, I will take a look at the numbers when the time comes. I am age 44 now, and that means I am at least 18 years away from making any decisions about SS benefits. In my experience, 18 years is a long time and things have a way of changing, sometimes dramatically. We'll see......

 

[mathjak107]

Re: When to take SS

since 80 million voting retiring baby boomers carry a huge political clout i feel the baby boomers are safe from any drastic changes. at 44 all bets are off for you my friend! ha ha ha

 

[haha]

Re: When to take SS

It seems to me you keep assuming SS will be kept at its present rate. What happens if they do means testing? We already know SS cannot keep going at its present rate and changes will have to happen.

People tend to think about SS and Medicare from the view point of an accountant given a fixed structure of revenues and outflows. An economist would realize that there is no reason other than historical why these two are supported solely by payroll taxes. Continuing to think in this artificially constrained way pushes us toward desperate and dumb decisions, like increasing low quality immigration just to get more bodies hopefully paying payroll tax. Of course what comes in with taxes goes out and then some in increased hospital, school, police and correctional spending. And the population winds up poorer on a per capita basis, and were all costs in, possibly on an absolute basis too.

The power to pay for SS and Medicare can come from the entire economy. The tax base has been shifted many times; it can be shifted again. These programs should like many other social programs be funded by general tax revenues, not just payroll taxes. And general tax revenues depend on the tax regime and the performance of the economy. This would also allow us to capture some of the payroll tax being lost by outsourcing.

In a modern economy bodies are not worth a heck of a lot. We need to tax the real revenue generator- the entire economy.

Ha

 

[mathjak107]

Re: When to take SS

never forget all these programs are brought to you by the same people who control the printing presses.

 

[Spanky]

Re: When to take SS

never forget all these programs are brought to you by the same people who control the printing presses.

Therefore, we should thrust or have complete confidence in them to do the right thing.

 

[chinaco]

Re: When to take SS

.... Continuing to think in this artificially constrained way pushes us toward desperate and dumb decisions, like increasing low quality immigration just to get more bodies hopefully paying payroll tax. Of course what comes in with taxes goes out and then some in increased hospital, school, police and correctional spending. And the population winds up poorer on a per capita basis, and were all costs in, possibly on an absolute basis too.

...

In a modern economy bodies are not worth a heck of a lot. We need to tax the real revenue generator- the entire economy.

In a country that has transformed from primarily manufacturing dependent and more of a dependence on service... what would you think the critical ingredient to be?

When boomers are retired, there will be a gap at all levels for workers. The highly paid professional to the the ditch digger.

You are correct... health care is expensive. And there needs to be reform. Plus some of those changes need to be a system that encourages consumerism (wise consumer decision regarding health care rather than treating it like water.. a bit of an exaggeration).

Health care can be turned into a non-issue if the majority of the immigrants are younger/healthier people. It will be the boomers that are creating the major health care expenses. Not to mention that in the health care industry low wage people will be needed to do the grunt work. Some immigrant is likely to be changing your diaper in the nursing home!!! and improving their life in the process.

We need a workforce to continue to have a vibrant and growing economy... at all levels of the economic food chain. One thing that is often considered as a threat in the US is the importation of educated labor. We need to continue to import smart minds (because we do not graduate enough Americans to meet the need). We also need backs to do the lifiting (low level labor). Mostly immigrants have a good work ethic. Their children (next generation) will strive to improve themselves just as previous generations have done.