Why am I struggling? - Social Security Question

[Dtail]

Discount grocery stores?

I am waiting for the I only spend a dollar a day on groceries comment.

 

[skyking1]

I have run opensocialsecurity.org and it tells me to collect at 70 and my wife at 62. This is so she gets the higher check after I die.
But this leaves out the idea that we want to maximize Roth Conversions.
If we have to add in her SS, that will reduce the amount we can Roth Convert and stay in a lower ta bracket. So I question whether it might be better to delay her SS until 70 so we can keep maximizing Roth Conversions in a low tax bracket.
Someone needs to develop a calculator that will compare taking SS or not, taking vs delaying SS, Doing Roths in 12% and 22% brackets, Doing Roth Conversions or not and RMDs. And output taxable and non taxable networth.
Creating some way to get an answer.

We are in that same boat there
We are delaying the DW's SS until we get most of the conversions done. I don't think a calculator is needed.
Our goals are most survivor cash tax-free, and delaying the SS gets that done.
I am assuming that we will never have the gift of the 12% bracket again, and I have not found anyone who would contradict that statement.

 

[daylatedollarshort]

Save $3K? That's more than my entire grocery expense for a year. lol

Okay, so the article said "families" could save: "Grocery Outlet, WinCo, Walmart, FoodsCo, Foodmaxx, and Target were the price winners—where many families could save $1,350 to more than $3,000 per year. [Sams's and Costco were covered in a separate article]."
The article on warehouse stores stated their prices tended to be 33% cheaper than supermarkets like Safeway.

Previous thread on this topic with additional excerpts here - https://www.early-retirement.org/fo...budget-but-we-cant-110143-10.html#post2639185

 

[flpanhandle]

I chose to take mine at 62 after seeing my brother in law receive one check before death from cancer. He would have received two but he passed away three hours before midnight on the last day of the month. No regrets.

 

[Midpack]

I think the overall improvement in longevity is not because people are living longer, it is because younger people are not dying as early as in the past. Witness the recent change in longevity rates because of the opioid crisis.

+1. People are not dying as young due to tobacco and/or cardiovascular, but there hasn't been evidence older people are living longer.

In high-income countries, life expectancy at age 60 years has increased in recent decades. Falling tobacco use (for men only) and cardiovascular disease mortality (for both men and women) are the main factors contributing to this rise. In high-income countries, avoidable male mortality has fallen since 1980 because of decreases in avoidable cardiovascular deaths. For men in Latin America, the Caribbean, Europe, and central Asia, and for women in all regions, avoidable mortality has changed little or increased since 1980. As yet, no evidence exists that the rate of improvement in older age mortality (60 years and older) is slowing down or that older age deaths are being compressed into a narrow age band as they approach a hypothesised upper limit to longevity.

https://pubmed.ncbi.nlm.nih.gov/25468166/

 

[OldShooter]

... I'll be honest, I like the idea of drawing less from our Nest egg each year and taking SS earlier accomplishes that. ...r

FWIW, we took SS at 62 for just this reason: To leave more money in our IRAs, expecting growth there. So far, so good, I think, though there is no way to really analyze such a decision unless one has a good crystal ball. Our decision was more gut than analytical.

 

[Retiredmajor]

I appreciate everyone's input and advice on this matter. I DO think I'm over thinking it. My wife is likely to outlive me and that is a consideration for waiting, however, she is urging me to take SS at age 65. Based on all our financials, she says she's not worried. I'll sleep on it!

 

[Dtail]

As mentioned in other threads, I will wait at least until 66 y.o. due to management of MAGI for ACA purposes, plus lump sum pension at 65.

 

[Throwdownmyaceinthehole]

I'll chime in from a different viewpoint. Like most on here, I've been very frugal my whole life and had a hard time blowing that dough (RobbieB) thanks! But once we started getting our SS check (we took one at 64 and letting the other grow) I've been able to loosen up on being so fretty about spending. We had the savings, so no worries on meeting our expenses as we had no debt. But I seem to have a clear mental distinction between withdrawing our hard saved funds and that big ole SS check that comes each month. We do a happy dance every third Weds, its like free money and I check Robbie B's posts to see how I can blow it each month. We've got one SS growing, so that's insurance for us. But each month, every month, we get play money. It's mental freedom, just like having no debt.

 

[teejayevans]

Run your tax program, do a couple of what ifs.

 

[Dtail]

I'll chime in from a different viewpoint. Like most on here, I've been very frugal my whole life and had a hard time blowing that dough (RobbieB) thanks! But once we started getting our SS check (we took one at 64 and letting the other grow) I've been able to loosen up on being so fretty about spending. We had the savings, so no worries on meeting our expenses as we had no debt. But I seem to have a clear mental distinction between withdrawing our hard saved funds and that big ole SS check that comes each month. We do a happy dance every third Weds, its like free money and I check Robbie B's posts to see how I can blow it each month. We've got one SS growing, so that's insurance for us. But each month, every month, we get play money. It's mental freedom, just like having no debt.

Yes that's the viewpoint when it truly is extra monies and that is great.
The conceptual SS discussions more surround having the same overall spending whether taking SS at any point in time.

 

[Dogman]

My Struggle! In comparison to Gumby and RetiredMajor!
Wife was a teacher in California. What a joke! She worked as a nurse until she was 40.
SS discounted her work history from the time she was 18 until 40 and only gave her 940.00 then discounted this amount by about $540.00 to less than $400.00 on her social security. Because of WEP and because she worked as a teacher for 11 years she also cannot receive the surivors benefit or spousal benefit plus her pension for working for a school system. My suggest to any of your children do not work for a school system that does not take out SS!
Now if I wait it does benefit my SS but my wife will be left out in the cold when I die!
With the situation of the country regarding migration and with political system in power, I would suggest you take SS NOW. The threat of "means testing" and reduced benefits are ever more present! Who do you think they will discount first the young and healthy or the old and worthless (to them)!
Take you SS now or define your risk of reduced or means testing!

 

[Gumby]

My Struggle! In comparison to Gumby and RetiredMajor!
Wife was a teacher in California. What a joke! She worked as a nurse until she was 40.
SS discounted her work history from the time she was 18 until 40 and only gave her 940.00 then discounted this amount by about $540.00 to less than $400.00 on her social security. Because of WEP and because she worked as a teacher for 11 years she also cannot receive the surivors benefit or spousal benefit plus her pension for working for a school system. My suggest to any of your children do not work for a school system that does not take out SS!
Now if I wait it does benefit my SS but my wife will be left out in the cold when I die!
With the situation of the country regarding migration and with political system in power, I would suggest you take SS NOW. The threat of "means testing" and reduced benefits are ever more present! Who do you think they will discount first the young and healthy or the old and worthless (to them)!
Take you SS now or define your risk of reduced or means testing!

A small nit, if I may:

The WEP is what discounts her own social security, and I find it actually makes some sense, given that social security by design pays a higher percentage to low income earners. So if you have small earnings from a job subject to social security and larger earnings from a job not-subject to social security (teaching), you get a higher percentage on the social security covered earnings than you would if all your earnings were subject to social security.

The GPO is what prevents her from getting a spousal benefit or a survivor benefit. And for that I see no justification. If my wife were a trust fund baby and never worked or paid into social security, she would get my full benefit upon my demise - sort of an insurance policy that I paid for through my social security contributions. So the guy next door and I could pay the same into social security for our working lives, but his wife gets a survivor benefit because she never worked at all and mine doesn't, because she worked as a teacher. As far as I'm concerned, that's unfair to ME, since I paid the same insurance premium as him.

P.S. - I'd leave migration out of this discussion, as it is irrelevant to these issues (and likely will get the thread closed).

 

[Time2]

Run your tax program, do a couple of what ifs.

Not sure if you are responding to the OP (me), but my desire is to limit taxes (maximize nest egg?) now and later when I have two SS checks and RMDs.
The has to be by delaying SS and maximizing Roth Conversion while in staying in a tax bracket yet to be known. And the time period for this is from now until I'm 70, 5 years, 72 RMDs, wife is 70, 8 years, and 10 years.

It may be as simple as doing my RMDs up to 22% and forget about it. Or is 12% better.

 

[pb4uski]

I'll chime in from a different viewpoint. Like most on here, I've been very frugal my whole life and had a hard time blowing that dough (RobbieB) thanks! But once we started getting our SS check (we took one at 64 and letting the other grow) I've been able to loosen up on being so fretty about spending. We had the savings, so no worries on meeting our expenses as we had no debt. But I seem to have a clear mental distinction between withdrawing our hard saved funds and that big ole SS check that comes each month. We do a happy dance every third Weds, its like free money and I check Robbie B's posts to see how I can blow it each month. We've got one SS growing, so that's insurance for us. But each month, every month, we get play money. It's mental freedom, just like having no debt.

Sounds a bit like playing with your zipper to me. I can understand the psychological attraction but at the end of the day money is fungible and if you have enough then you have enough and whether you spend from savings or have SS coming in isn't going to make a difference.

 

[SJ1_]

I'm soon to be 65 and will sign up for Medicare next month. I'm deciding when to take Social Security. I will either do it when I sign up for Medicare or wait until my FRA of 66 and 4 months.



EVERY retirement calculator I use (Firecalc + 3 others) and our Financial Advisor tell me that either way, we are financially fine and, at some point, are splitting hairs. A simple spread sheet tells me that the difference between taking SS at 65 versus 66 is $38,000 over 30 years. I'll be honest, I like the idea of drawing less from our Nest egg each year and taking SS earlier accomplishes that.



Plus, I'm hearing that SS may get a fairly large COLA increase in 2022 in the vicinity of 5 to 6%. Of course that makes all my numbers look better, but also makes me feel better about taking SS at age 65.


Why am I struggling with this? It seems that I'm letting it become an emotional issue when it's just math!



All advice is welcome! Major

I was the same Its a major change in your life. All those years you put in then one day it over. Was hard for me and a lot of people retirement is great

 

[RunningBum]

But I seem to have a clear mental distinction between withdrawing our hard saved funds and that big ole SS check that comes each month.

It's interesting to hear differing philosophies on financial matters. My thought is that I worked hard to build up my savings and I want to enjoy (spend) it, not just let it sit there.

 

[FI_RElater]

Not sure if you are responding to the OP (me), but my desire is to limit taxes (maximize nest egg?) now and later when I have two SS checks and RMDs.
The has to be by delaying SS and maximizing Roth Conversion while in staying in a tax bracket yet to be known. And the time period for this is from now until I'm 70, 5 years, 72 RMDs, wife is 70, 8 years, and 10 years.

It may be as simple as doing my RMDs up to 22% and forget about it. Or is 12% better.

I've mentioned in other threads that up to the top of the 12% bracket is a no-brainer...it then depends on how many years until you start the first (or second) SS and how long before RMD's begin. I also think that leaving enough in the 401k/IRA to be able to fill the lower bracket of 0%/12% in the future (at least until a reasonable expectation of "first to pass", say somewhere around 75-80...(yeah folks, be realistic))
I have a harder time going beyond the 12% since the percentage isn't large (22% vs 25% for not converting) but the loss of flexibility is more concerning. And if we both do live a long time, it'll be more a "first world problem" having "too much" money that we pay taxes beyond the 22% level.


for us, not yet starting SS but eligible for the first (my ever so slightly lower PIA) but having a pension and decent (couple mil) taxable and tax-Deferred money , there's no way that we stay below the 22% bracket so any money at only 12% is a win . Once the first rollover is converted to Roth, then I'll move the 401k into the IRA which then can be pulled from easily to supplement any needs, with taxable funds being used to prevent climbing into higher brackets... or converting some if it makes sense (same bracket or lower) since any surviving spouse would be at either the same bracket (loss of one SS and some of the pension) or at a higher bracket...so those converted funds allow for their spending, when needed, without climbing into a further higher bracket.
(for me, this year and next should allow for the first rollover to be fully converted... and I'm looking at starting SS at just before 67 (after FRA) so as to keep monies in the taxable account for whoever is the survivor.)

ETA: no kids (except "fur babies")... anything would go per our trust to siblings and theirs

 

[pb4uski]

It's interesting to hear differing philosophies on financial matters. My thought is that I worked hard to build up my savings and I want to enjoy (spend) it, not just let it sit there.

I was talking with a recently retired friend today and she mentioned that she was living off of savings because she doesn't have a pension... and she said that while it was a bit disconcerting that she kept reminding herself that she saved that money for her retirement and that is what she is doing... I told her that was they right attitude... she save it to spend it, not hoard it.

 

[street]

I think the overall improvement in longevity is not because people are living longer, it is because younger people are not dying as early as in the past. Witness the recent change in longevity rates because of the opioid crisis.

I think you are spot on!

 

[RobbieB]

Sounds a bit like playing with your zipper to me. I can understand the psychological attraction but at the end of the day money is fungible and if you have enough then you have enough and whether you spend from savings or have SS coming in isn't going to make a difference.

Yeah. Kinda weird though eh? The way the mind works.

Spending your own dough...nah, I'll just save it for when I really need it.

Spending SS dough coming in every month - Manna from heaven!

 

[Out of Steam]

The tables are also tilted in favor of waiting for couples, since the chance that one out of two will live longer than average is greater than any one person beating the odds. So it often ends up that the one with the larger benefit should wait until 70 since that benefit will continue for the lifetime of the longer lived.

Conventional wisdom for married couples seems to be for one spouse to take at 62, and the other to delay. My wife's benefit is slightly larger than mine, but we decided to wait until we are both 62 next year and then calculate who should file first.

 

[Out of Steam]

I'm soon to be 65 and will sign up for Medicare next month. I'm deciding when to take Social Security. I will either do it when I sign up for Medicare or wait until my FRA of 66 and 4 months.

Having waited until you're 65, you've already passed by the largest benefit reductions for filing early. You're in the same range as I (or possibly my wife) expect to be, filing between turning 65 and FRA.

 

[pb4uski]

Yeah. Kinda weird though eh? The way the mind works.

Spending your own dough...nah, I'll just save it for when I really need it.

Spending SS dough coming in every month - Manna from heaven!

Yeah, humans can sometimes be a bit silly.

 

[Koolau]

For most of us here, deciding on when to take SS is just one more in a relatively long list of 1st world problems. I'm thankful for such "problems." YMMV