Why people take SS at 62

[gerntz]

Quote:

Originally Posted by ejman After reading (and participating) in a number of these SS at 62 vs 70 threads I've come to understand that some people are born with the SS at 62 gene, some with SS at 70 gene and a very few misguided souls with an in between gene. Near as I can tell either side is totally impervious to the arguments of the other side and I do not believe that a single soul has been converted. Long live the 62'ers!!!!

LOL. Thanks. You're most likely 100% correct.

[SpencerM]

Sadly, those who are working still and plan to depend to any extent on SS in the future, are setting themselves up for disappointment. It is only a matter of how much disappointment and when.

No matter if at 62 or 70, SS should only be the fourth leg of your three leg retirement stool. The main three being personal investments, pensions, and aggressive debt elimination.

The best time (for the Government) for us to apply for SS payments is to wait until we are dead. The system was designed that way. It was just never designed to be a major part of retirement needs for the bulk of us - only a small safety net.

[Bestwifeever]

Quote:

Originally Posted by SpencerM ... No matter if at 62 or 70, SS should only be the fourth leg of your three leg retirement stool. The main three being personal investments, pensions, [emphasis added] and aggressive debt elimination....

Good luck with that whole pension thing leg.

[W2R]

Quote:

Originally Posted by ejman After reading (and participating) in a number of these SS at 62 vs 70 threads I've come to understand that some people are born with the SS at 62 gene, some with SS at 70 gene and a very few misguided souls with an in between gene. Near as I can tell either side is totally impervious to the arguments of the other side and I do not believe that a single soul has been converted. Long live the 62'ers!!!!

(emphasis mine)

I don't know. When I came to the ER Forum, I would have never considered taking SS at any age under 70. OK, I didn't take it at 62, but now I am thinking of taking it as early as 65.

Whether that is due to the discussions here, or due to some sort of primal greed, I do not know. But anyway, I might be in the process of being converted into one of those misguided souls...

[Mulligan]

Quote:

Originally Posted by W2R (emphasis mine) I don't know. When I came to the ER Forum, I would have never considered taking SS at any age under 70. OK, I didn't take it at 62, but now I am thinking of taking it as early as 65. Whether that is due to the discussions here, or due to some sort of primal greed, I do not know. But anyway, I might be in the process of being converted into one of those misguided souls...

Mr. Bernanke told me to tell you, W2R, to please take it now and inject the money into the economy. He said if you do this and increase your measly 1.9% withdrawal rate, he might not have to intervene in the economy again.

[rescueme]

Quote:

Originally Posted by Bestwifeever Good luck with that whole pension thing leg.

My last two pensions flew away like pixie dust in the wind ...

(1st one because vesting was 10 years and I left after eight).
(2nd one was replaced by a 401(k); I was only there a couple of years so they issued me a check for a few bucks (under ERISA rules at the time) and I rolled it to my TIRA).

At least I don't have to worry about "losing" one later in life (too many other things I can lose at this age )...

[gerrym51]

I plan on retiring at 63 and 1/2. I could make it to 70 without taking SS.

I will take it at 63 and 1/2.

just more comfortable with this and not taking out of my accounts.

assuming my wife and i live no older than 94 calculators say i will have enough money.

I might live to 100. odds are i will not. prudent to bet on 90.

there are other variables besides the extra money per month starting at 70. investment income on money you don't need to withdraw-inflation making future dollars less valuable-less taxes paid early on retirement account because you don't have to remove. all of these make the value difference of future dollars less appealing.

there is a difference but not as great as a direct dollar comparison seems.

[Chuckanut]

Quote:

Originally Posted by Katsmeow I've never bought into the idea that if the government were to somehow reduce or eliminate SS for some people that someone who takes SS at 62 was more likely to keep getting benefits than the person who is the same age who hadn't yet taken benefits. That said, I do think it is possible that benefits will be reduced or possibly means tested out of existence for some people. <snip>

I agree. IF benefits are reduced at some future time, I think it is highly likely they would take into account the age at which people started to get benefits. People who started benefits at the 'normal' retirement age would face no adjustment. People who retired early would most likely face a somewhat bigger % cut. People who retired later than normal would face a somewhat smaller % cut. They need to keep these things actuarially equal.

I think it is more likely we will see an increase in the amount of SS taxed, as well as an increase in tax rates, perhaps even applying the 'payroll' tax to non payroll income. What one hand gives, the other takes away. What else is new?

[W2R]

Quote:

Originally Posted by Mulligan Mr. Bernanke told me to tell you, W2R, to please take it now and inject the money into the economy. He said if you do this and increase your measly 1.9% withdrawal rate, he might not have to intervene in the economy again.

Well, gee, if "Helicopter Ben" requested that, then it is the least I can do.

[foxfirev5]

Quote:

Originally Posted by Chuckanut I agree. IF benefits are reduced at some future time, I think it is highly likely they would take into account the age at which people started to get benefits. People who started benefits at the 'normal' retirement age would face no adjustment. People who retired early would most likely face a somewhat bigger % cut. People who retired later than normal would face a somewhat smaller % cut. They need to keep these things actuarially equal. I think it is more likely we will see an increase in the amount of SS taxed, as well as an increase in tax rates, perhaps even applying the 'payroll' tax to non payroll income. What one hand gives, the other takes away. What else is new?

Your assuming that future benefits would be a fair reflection of the current situation. I don't see that as realistic. If that were the case we could all make rational decisions based on the current situation. What we view as fair today may not be the same tomorrow.

[Cut-Throat]

Quote:

Originally Posted by foxfirev5 Your assuming that future benefits would be a fair reflection of the current situation. I don't see that as realistic. If that were the case we could all make rational decisions based on the current situation. What we view as fair today may not be the same tomorrow.

If you understand politics, that's usually the way it works. It's very realistic based on history. What are you basing your opinion on?

[Mulligan]

Quote:

Originally Posted by Chuckanut I agree. IF benefits are reduced at some future time, I think it is highly likely they would take into account the age at which people started to get benefits. People who started benefits at the 'normal' retirement age would face no adjustment. People who retired early would most likely face a somewhat bigger % cut. People who retired later than normal would face a somewhat smaller % cut. They need to keep these things actuarially equal. I think it is more likely we will see an increase in the amount of SS taxed, as well as an increase in tax rates, perhaps even applying the 'payroll' tax to non payroll income. What one hand gives, the other takes away. What else is new?

My guess aligns with yours. Nobody is probably willing to take the lead in cutting anyones benefits. I wouldn't be surprised if SS tax is tweaked up higher a bit, so the can is kicked further down the road a few years. Assuming that SS tax revenue is for the purpose of SS, they could eliminate this ridiculous temporary tax cut on current SS employee contributions. We have a looming shortage in the fund so we cut the contributions? I don't get it.

[explanade]

How about a poll for which age people planned to take or did take SS?

[Rustward]

Quote:

Originally Posted by Chuckanut I agree. IF benefits are reduced at some future time, I think it is highly likely they would take into account the age at which people started to get benefits. People who started benefits at the 'normal' retirement age would face no adjustment. People who retired early would most likely face a somewhat bigger % cut. People who retired later than normal would face a somewhat smaller % cut. They need to keep these things actuarially equal. I think it is more likely we will see an increase in the amount of SS taxed, as well as an increase in tax rates, perhaps even applying the 'payroll' tax to non payroll income. What one hand gives, the other takes away. What else is new?

+1 and thanks -- this is kind of what I was trying to say in this post http://www.early-retirement.org/foru...ml#post1219805 but it didn't come out as clearly as you were able to explain it.

That said, I believe Congress will try to not reduce the benefits of anyone who is within a few years of being eligible to receive a benefit.

[foxfirev5]

Quote:

Originally Posted by Cut-Throat If you understand politics, that's usually the way it works. It's very realistic based on history. What are you basing your opinion on?

Based on the last 50 + years of living. I'm not trying to to debate any issues its's simply my observations. While I appreciate everyone's opinion on this forum I doubt my strategy will change.

[MasterBlaster]

Quote:

Originally Posted by foxfirev5 Your assuming that future benefits would be a fair reflection of the current situation. I don't see that as realistic. If that were the case we could all make rational decisions based on the current situation. What we view as fair today may not be the same tomorrow.

Imagine the scenario where interest rates have gone through the roof and T-bonds cannot be rolled over at anything except extortionary rates (eg. Greece-style). At that point a budget crisis occurs and all bets are off as to what happens. I suspect that when push comes to shove the results will be anything but fair.

[explanade]

You really think the US will ever be as hapless as Greece? That our economies are in any way comparable?

[SpencerM]

Quote:

Originally Posted by Bestwifeever Good luck with that whole pension thing leg.

Worked for me, but I know there are fewer now. Point is not to depend on any government entitlement program for any significant portion of your retirement. It was not designed to be that, nor should it be.

SM

[eytonxav]

Based on the gov't mortality tables, I assume the NPV of SS is the same whether you take it at 62, FRA, or 70. However, I wonder which of these scenarios actually works out more favorably for the gov't or does it indeed correlate perfectly with the mortality tables?

[rescueme]

Quote:

Originally Posted by DFW_M5 Based on the gov't mortality tables, I assume the NPV of SS is the same whether you take it at 62, FRA, or 70. However, I wonder which of these scenarios actually works out more favorably for the gov't or does it indeed correlate perfectly with the mortality tables?

Well, by the tables currently in use by SSA, they expect some folks to live well beyond the century mark (Male age: 111; Female age: 113):
Actuarial Life Table

I would go with the general assumption that regardless of when you start SS (62, FRA, 70) it might be a "wash" for an indivudial. This can be tested by plugging in the various age/amounts into your retirement income forecast tool of choice.

However, for married folks this "automatic assumption" goes out the window, based upon their ages, SS credits, and desires (such as my waiting till age 70 for the benefit of DW, while at the same time tapping into her benefit when she submits her claim at FRA).

It's truly a mesurement and a decision based upon many factors in a married (or even previously married, at least 10 years) situation.

The government also has to consider the "tails" in the situation. Those who may collect benefits due to their age and the death of one/both parents.

And then there the question of SSD (Social Security Disability - don't confuse the term with SSI which is a completely different program that pays SS to disabled folks who never wo*ked).

Not to be political (sorry), but the "government" dosen't make out one way or another, other than to measure the "health" of the system and look/suggest ways of adjusting inflow/outflows, IMHO.