Why people take SS at 62

[ERD50]

Is that really only the case where the surviving spouse would be relying on getting the benefit of the deceased spouse? That is, if the two spouses had relatively equal benefits then I'm not sure it really means as much to delay taking benefits for one spouse.

Yes, good point - I think you are correct. In my case, looks like DW benefit will be a little more than half of mine, so it is a partial factor.

-ERD50

 

[ziggy29]

I'm still over 15 years from it but right now the main reason I plan to take it at 62 is because I think it is very unlikely that any future SS "reforms" will impact people already collecting it.

 

[73ss454]

The 8% thing from 66 to 70 is fine but I think the percentage may be higher that you will die during that period.

 

[bssc]

(I can't believe it wasn't until I read this thread today that I remembered I could have started taking SS yesterday, my 62nd birthday!)

Happy Belated 62nd birthday (are you sure you aren't faking it for the benefits?)

 

[Rustward]

I'm still over 15 years from it but right now the main reason I plan to take it at 62 is because I think it is very unlikely that any future SS "reforms" will impact people already collecting it.

I completely disagree.

Consider two taxpayers, John, and Paul, born on the same minute of the same day. They have identical earnings and SS contribution records and identical family situations.

John takes his SS early at 62. Paul is waiting 'till 70.

When they are 65, Congress makes a change in benefit determination.

Do you really think John would be grandfathered and exempt from the change just because he is already collecting benefits?

That is just not consistent with how SS has worked.

 

[teejayevans]

The 8% thing from 66 to 70 is fine but I think the percentage may be higher that you will die during that period.

Nope, the % of deaths from 66-70 runs about 1.5%, for 75-84 it's about 6%.
Of course if you are not in good health...averages don't matter.
TJ

 

[LeavingOhio]

1. doesn't matter, by taking SS @ 70, you can spend more now knowing you'll have larger SS payments to supplement income later.
2. same as above, you don't wait until 70 to up your income, you just are income leveling, earlier from your pocket, later from US govt.
3. who knows, but I doubt it, if they use means testing, you'll have less at 70 because you have been spending it.
4. can you beat 8%, guaranteed?
TJ

Good point about being able to spend more from retirement until getting SS at 70, and I'm sure many would do that (I might even do that when getting very close to 70). Knowing myself though, I would be concerned that the estimated payout at age 70 would be much smaller than estimated, so I likely would not spend as much between retirement and age 70 as your situation might actually allow.

No one can guarantee 8% though I have done better than that on average over the life of my investing (this includes re-invested dividends). In my later years though, I do plan to make my portfolio a bit more conservative, so beating 8% is no given. I do like the idea though of spending money sent to me by the government and allowing my own money that I have more control over grow. I'm definitely not anti-government, but who knows what will need to be done to Social Security to save it.

 

[meierlde]

I would expect now that the go on spouses benefit and then file for yours trick is well known for that loophole to be closed. Partly by saying you can apply once for one and only one benefit on whichever record you choose. So that if you apply for a spouses benefit it is permanent and your own benefit goes bye bye.

 

[73ss454]

Nope, the % of deaths from 66-70 runs about 1.5%, for 75-84 it's about 6%.
Of course if you are not in good health...averages don't matter.
TJ

OK but many more will die between 62 and 66 also which will raise the total percentage before 70. It's all a crap shoot I guess. One thing is that if you die before 70 and don't collect you won't know it.

 

[NW-Bound]

Here's a man whose thought I share.

For me, if I die early, I don't see how I would really care about economic break even. What am I gonna do - sit in my casket and calculate how much money I hypothetically left on the table?

Would we not be doing it laying down? Is there enough head room to sit? Oh, yes, open casket...

But, but, but what would people at my wake think, seeing me sitting there with my HP financial calculator? Call me a scrooge, probably.

 

[Lsbcal]

I thought I'd wait until 66 but then came the 2008 crash. It felt uncomfortable taking out higher then 4% of the portfolio each year. Even though one could argue that you will have more by waiting, you have to decide if you will feel alright spending in your 60's at the higher rate.

So at 64 I took SS. Now we can easily keep the spending in check. This coupled with refinancing and our son graduating for college makes things look a lot nicer.

I'd rather spend in my 60's and cut back a bit in my late 80's, if I even get that far. And then there are those FIRECalc lines that go up and to the right -- lots of them.

 

[haha]

And then there are those FIRECalc lines that go up and to the right -- lots of them.

What I wonder is how long it will take for us to wake up to the evidence that the world from which the FireCalc database was abstracted is long gone, likely forever?

Not that there wil not be strong markets, but IMO they will reward thinking carefully rather than just trying to set our sails to catch prevailing fair winds

Ha

 

[REWahoo]

What I wonder is how long it will take for us to wake up to the evidence that the world from which the FireCalc database was abstracted is long gone, likely forever?

Since "The Oracle of Omaha" title is taken, should we call you "The Swami of Seattle"?

 

[Dawg52]

Since "The Oracle of Omaha" title is taken, should we call you "The Swami of Seattle"?

How about 'old wise one'.

 

[ERD50]

What I wonder is how long it will take for us to wake up to the evidence that the world from which the FireCalc database was abstracted is long gone, likely forever? ...

Ha

zzzzzzz, zzzzzzzzzz, Huh? What? Someone call?

Well, it's one reason I'm not comfortable with that 4% "SWR" and 95% success rate for 30 years. Clearly, the future 'worst case' could be worse than past 'worse cases'. Records were made to be broken.

And even though FIRECALC may report on about 101 data series, I tend to look at that as maybe a dozen or two economic cycles? Not really so much data when you look at it that way. For all we know, that may be like having a daily temperature for the first 101 days of the year, and thinking that is representative of the rest of the year.

I still think FIRECALC is a great, great tool. I can't think of any better way to back-test some ideas. But it is what it is, and the future is unknown.

I don't know what else to do other than throw a little fudge factor on top of it all. Gotta draw the line somewhere, or I'd work till I die.

-ERD50

 

[Lsbcal]

What I wonder is how long it will take for us to wake up to the evidence that the world from which the FireCalc database was abstracted is long gone, likely forever?

Not that there wil not be strong markets, but IMO they will reward thinking carefully rather than just trying to set our sails to catch prevailing fair winds

Ha

Gone forever? We seem to currently be in a stealth bull market:

It always pays to be a bit optimistic. We shouldn't underestimate human ingenuity.

 

[73ss454]

Well, since we have no idea what the future brings, we can only base the future on the past. I'm good with it and will use Firecalc while it's still around.

 

[GrayHare]

Like annuities, SS is tied to average life expectancy. IMO that makes the path to max benefits simple for most singles and working couples: if you expect to live longer than average, delay starting SS, otherwise start it ASAP.

 

[gauss]

Like annuities, SS is tied to average life expectancy. IMO that makes the path to max benefits simple for most singles and working couples: if you expect to live longer than average, delay starting SS, otherwise start it ASAP.

Actually, commercial annuities are based on average life expectancy of those who buy annuities -- not the population as a whole like Social Security.

As such, I am not aware of anywhere in the US where an actuarially fair annuity could be purchased (outside of delaying Social Security).

 

[haha]

Gone forever? We seem to currently be in a stealth bull market: <graph snipped>

It always pays to be a bit optimistic. We shouldn't underestimate human ingenuity.

I need to clarify. Economic security is built on business and economic progress and sound policies. Bull markets, come, bull markets go, but it is cash flows of businesses that determine long term sustainable draw from securities. That, and of course real interest rates. How long since the prevalent real interest rate from the fixed 40% of a portfolio would support a real 1.6% of total portfolion draw? I don't know if you were on the board in 2006-2007. Lot's of bulls then too, and for the same reason-momentum.

As usual, we must pay our money and take our tickets. We can't expect that we would all see it the same way. And the human ingenuity thing is a red herring. I believe in human ingenuity, but it the world is different, and much of that ingenuity may help Asian economies more than Western ones

And we must not underestimate the ability of government to throw wrenches in the works.

Ha

 

[teejayevans]

Not that there wil not be strong markets, but IMO they will reward thinking carefully rather than just trying to set our sails to catch prevailing fair winds

Ha

We've heard this before, almost every FA is singing that tune. I'll stick to what has been working for the past 100 years.
TJ

 

[Marita40]

Single woman here who is quite security conscious, and a worrier. The women in my family tree live a long time, in some cases well into their 90s. Given good health and no major changes to the system, I'll definitely wait until 70--15 years in the future. Oh, by the way, I plan to work until then, too.

 

[Semiretired2008]

I'm still over 15 years from it but right now the main reason I plan to take it at 62 is because I think it is very unlikely that any future SS "reforms" will impact people already collecting it.

The current discussion afoot is not to impact anyone over 50 or 55. I have that covered, but my DW does not. I still use 75% for me and 70% for her in my calcs just to be sure...

I believe the biggest change they are going to make to SS is changing the inflation index used for inflation.

 

[reubenray]

Our initial plan was for me to work until I was 67 and the DW would be 62 and we would both retire at the same time. But my health changed and this is pushing me to retire at 62 instead. If I can find a non-stressful job that I enjoy then I will keep working. I started working in construction in 1975 and was in the supervisory positions for the past 23 years.

 

[easysurfer]

This discussion is very insightful. I'm still several years away of being SS eligible. Though I did register with SSA to get my estimated statements online. I'm going to wait until about 60 or so, then take an inventory of my health so see which way to go.

The 62 vs 72 question is like the opposite of the immidiate annuity question.

Annuity: If I die too early, I'll never recover much of the premium I put in

SS: If take SS at 62 and I live too long past 70, then I'll be having smaller payments for the rest of my life