You should take SS at 62

[shotgunner]

Whether you need it or not, but especially if you don't need it. So says the author of "Smart Couples Finish Rich - 9 Steps to Creating a Rich Future for You and Your Partner."

He says what I have thought all along guided by my late parents experience. That is we will never be in better position to really enjoy money than we are at ages 62-66 going forward.

http://finance.yahoo.com/news/why-it-pays-to-get-reduced-social-security-benefits-185927965.html

 

[mathjak107]

but you can always draw more out early on from your portfolio with the knowledge you can refill later on with a check almost 2x the size.

in fact you can spend more early on delaying because you do not need to keep as much powder dry later on as dependency on market and interest rate isk is diminished.

while there are many reasons for taking it at 62 that would be last on my list or in fact not even on my list .

 

[shotgunner]

but you can always draw more out early on from your portfolio with the knowledge you can refill later on with a check almost 2x the size.

in fact you can spend more early on delaying because you do not need to keep as much powder dry later on as dependency on market and interest rate isk is diminished.

while there are many reasons for taking it at 62 that would be last on my list or in fact not even on my list .

Provided you live long enough, neither of my parents did.

Another factor is what you want for your heirs. My portfolio is 100% transferable to my daughter, my SS is 100% not transferable to her.

My mother passed at 63 from cancer. My father at 79 from complications related to dementia. He took SS at 62. At ages 62-65 he traveled a lot, all over the country for weeks at a time each year and trips to Europe. At 75 he was showing signs of dementia, by 77 additional money would not have increased his enjoyment of life. The future is a crap shoot.

 

[gauss]

Average life expectancy for adults in the US is around 83 years if memory serves correctly. That means many folks live to longer than this age. If you are in good health, and have enough financial resources to be interested in this forum, I would suspect that you may be in the latter case.

Delaying SS is the cheapest inflation-adjusted annuity that you could ever buy and an excellent hedge against longevity risk.

If were interesting in giving gifts to children, I would do it while I was alive and then optimize everything else for my own case.

-gauss

 

[shotgunner]

Average life expectancy for adults in the US is around 83 years if memory serves correctly. That means many folks live to longer than this age. If you are in good health, and have enough financial resources to be interested in this forum, I would suspect that you may be in the latter case.

Delaying SS is the cheapest inflation-adjusted annuity that you could ever buy and an excellent hedge against longevity risk.

If were interesting in giving gifts to children, I would do it while I was alive and then optimize everything else for my own case.

-gauss

They latest life expectancy for males that I could find is 76.4 years in the US, for women it 81.2 years. FWIW I am a single male. In the previous two generations of my family only 3 males out of 6 lived beyond this age. None in good health, two with severe dementia and one losing a leg to circulation problems. I believe in my case the author's point is valid, odds are I can do more with money and enjoy life more between the ages of 62 - 66 than I will in future past age 66.

Dementia and Parkinson's in the previous two generations of my family seems to be prevalent.

 

[target2019]

They latest life expectancy for males that I could find is 76.4 years in the US, for women it 81.2 years. FWIW I am a single male. In the previous two generations of my family only 3 males out of 6 lived beyond this age. None in good health, two with severe dementia and one losing a leg to circulation problems. I believe in my case the author's point is valid, odds are I can do more with money and enjoy life more between the ages of 62 - 66 than I will in future past age 66.

Dementia and Parkinson's in the previous two generations of my family seems to be prevalent.

I've read commentary which supports your views as a single person. Since I am married, I need to take into account the greater future payments which spouse will receive. On longevity, she has me beat by a mile.

 

[gerntz]

Provided you live long enough, ...... The future is a crap shoot.

That's always the rub, isn't it?

It's really each's individual case with being single & "short-gevity" family history favoring 62, but marriage, particularly with younger spouse, & long longevity favoring 70.

 

[Texas Proud]

Here is my take on what he said.... and it is not what you probably think...

He said 'if you do not NEED it, then take it early'.... but, from his context of spending it all as EXTRA money, you still would be taking out the same amount of money as you would if you did not take it early...


IOW, say you were going to live on $80K.... and could get $20K in SS.... his 'plan' is to spend $100K when you are young... not your original $80K... he said... take extra vacation, go first class, take a bigger suite on cruise (IIRC).... so, you are not taking it to take less money out of your portfolio, but to enhance your lifestyle in your early 60s....


To me, that is not what most people want to do... as it does not maximize family value....

 

[donheff]

DW turned 62 this year and she would have taken SS except that she continues to get ~$30K in earned income from her firm. She is not working but on a sort of retainer to remain associated. Under SS rules most of her monthly payment would be withheld until she reaches 66 and then she would get it back in the form of higher payments. We figured she may as well just wait and get the higher amounts. One thing we didn't calculate is what would happen if she filed now and died early (e.g. at 66). We assumed she would just lose the withheld amounts but does anyone know if we are mistaken about that? I.e., would the withheld amounts be paid to her heirs since she filed early?

 

[H2ODude]

The SS issue is just like any of the other financial modeling decisions: it all depends on what happens in the future. None of us can know that, but you can judge your likely life expectancy. If your lifestyle and genes tend towards longevity and you can wait, doing so is likely the best option. OTOH, if they don't favor you it's likely a better bet to go early with the SS. Beyond that, unless you have peculiar needs and desires I don't see how one can make logical arguments one way or the other.

 

[nate2953]

Look into filing and declaring a special wage payment. SS *should* only suspend her benefit due to actual work. If she is performing absolutely no work or services for the firm, and they are simply paying her to be available, they can declare that a special wage payment and your DW would be eligible for her payments.


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[eroscott]

We are planning on taking SS at 62.

a) large Trad IRAs that will require min distro at 70.5 with added in SS a lot will be taken in taxes

b) SS is not the amount of money that would change our lifestyle so we would just plan on giving it to our kids (siblings) as charitable gifts (14.5K limit) or to charities that have affected our lives.

 

[pb4uski]

“If you don’t need the money, take it early,” advises Bach. His reasoning is “at 62, 63, 64 – you’re in the best shape of your life…there’s so many things people in their 60’s can do to enjoy that money so if you don’t need it, I suggest taking it early.”

What a quack. Perhaps he meant to say, if you don't need the money and don't care about family wealth or your heirs, then take it early. No matter what it still just comes down to a bet on mortality.

 

[RetireBy90]

So there are couple ways I look at when to take SS. One way, which will provide the largest $$ over the years; or which will meet my plan needs best.


I will have enough to meet my needs if DW goes before I do. If I go before she does, then my pension will stop and she will have enough to pay all the bills but if I wait till 70 for SS then she can take my higher SS and have a bit more cushion above basic needs. I guess what I'm saying is that if I will end up with less total draw from SS by waiting till 70, then the $$ that I forgo is like an insurance policy for the wife's peace of mind.


Many different situations and many answers to the question of when to take SS.

 

[Midpack]

Whether you need it or not, but especially if you don't need it. So says the author of "Smart Couples Finish Rich - 9 Steps to Creating a Rich Future for You and Your Partner."

He says what I have thought all along guided by my late parents experience. That is we will never be in better position to really enjoy money than we are at ages 62-66 going forward.

http://finance.yahoo.com/news/why-it-pays-to-get-reduced-social-security-benefits-185927965.html

Where does he say "whether you need it or not?"

What he says in your linked article is “If you don’t need the money, take it early,” advises Bach. His reasoning is “at 62, 63, 64 – you’re in the best shape of your life…there’s so many things people in their 60’s can do to enjoy that money so if you don’t need it, I suggest taking it early.”

And if your projected longevity is below average (based on your family history), it may well be to your advantage to take it early. But for those of us who expect to live beyond the SS breakeven age, waiting until age 70 is still preferred.

Seems the OP has taken a little license with the article based on his/her own circumstances. There have been countless articles showing why, if possible, it's better to wait as long as possible to take Soc Sec for most retirees.

 

[Big_Hitter]

anyone else bothered by the lack of numbers in that short article?


also, remember that life expectancy depends on current age, so saying that "males live to x" doesn't really mean anything


"a male aged y is expected to live an additional x years" is the correct way to think about it

 

[bclover]

What a quack. Perhaps he meant to say, if you don't need the money and don't care about family wealth or your heirs, then take it early. No matter what it still just comes down to a bet on mortality.

why is he a quack?

I agree with him.

First of all I hate this American concept of Inheritance. let's see, I work hard all my life, give my kids every advantage and then I save and scrimp..what to leave it to my children when I'm dead?? Oh yeah that's a wonderful way to live life...

lol, my kids will graduate debt free from college, they are 21 and 23 and so far they have been to Paris, disneyworld (almost annually), lisbon, Jersey shore (annually), countless plays in NYC, Washington dc and numerous other local cities. My youngest will go to law school debt free (if he makes the grades) and most likely they will both inherit property. Sorry if they can't make it after those advantages, I am not going to feel guilty.

So no, I have absolutely no plans on leaving them a couple of million dollars. I plan on spending it and enjoying my senior years.

Now I am a widow, my husband died at 55 from cancer without ever enjoying a day of retirement. Yes, we took family vacations but basically the dreams we had of our senior lives died

And once again, this is a good way to live life?? IMO, that is not living basically what we do here in this country is we survive until we get old then we drop dead. so sad.

 

[Which Roger]

So there are couple ways I look at when to take SS. One way, which will provide the largest $$ over the years; or which will meet my plan needs best.

A third is which will minimize one's chances of dying broke.

 

[Big_Hitter]

SS benefits are reduced from SSNRA using an old definition of actuarial equivalence - the old 1/15th, 1/30th rule (if your SSNRA is 65 anyway)


that used to be actuarially equivalent to some interest rate and mortality table - I suspect that interest rates are much lower now than they were when the 1/15, 1/30 rule was derived - mortality has improved significantly however, but the biggest driver in the reduction factor is the interest rate

 

[jim584672]

This runs against what I was thinking. Exhaust personal funds to 70 then get the higher SS, which is a form of longevity insurance with a COLA. Personal health problems would be the reason to take it early.

 

[RetireBy90]

anyone else bothered by the lack of numbers in that short article?


also, remember that life expectancy depends on current age, so saying that "males live to x" doesn't really mean anything


"a male aged y is expected to live an additional x years" is the correct way to think about it

All my male ancestors that I know anything about (dad, paternal uncle, paternal GF) all drank them selves to the grave, so I don't know anything about that 1/2 of genetics, maternal side all lived to 90's and that was 20+ years ago, but then that was all female except one male. Not sure what that means or how the longevity of a female ancestor will affect my (male) longevity.

you have to have a plan that will reach some target age or plan to have excess in case you miss your appointment with DA Man and have to reschedule. However, any actuaries estimates only apply to the pool. I wonder how many actually die within say 5 years of that magic number for a man of X age. Clearly I'm not average. Am I going to my appointment at 70, 80, 90, 100 ? so since there is a 30 year window where do you plan for? me I'm planning for 107.

 

[bclover]

anyone else bothered by the lack of numbers in that short article?


also, remember that life expectancy depends on current age, so saying that "males live to x" doesn't really mean anything


"a male aged y is expected to live an additional x years" is the correct way to think about it

but it's not only about when you die. I'm 55 and already I have arthritis in my feet, I have osteoarthritis and bad knees. A very high probability that I will have to have both of them replaced.

So it's also about as you get older you might not be able to do all those glorious things you think you'll do.

At 70 will I really be able to skip around Europe like I want too? probably not. I'll definitely have a better chance at 62.

So it's not only about when you die, it's also about how you want to live

 

[timo2]

Here is my take on what he said.... and it is not what you probably think...

IOW, say you were going to live on $80K.... and could get $20K in SS.... his 'plan' is to spend $100K when you are young... not your original $80K... he said... take extra vacation, go first class, take a bigger suite on cruise (IIRC).... so, you are not taking it to take less money out of your portfolio, but to enhance your lifestyle in your early 60s....


To me, that is not what most people want to do... as it does not maximize family value....

Correct. If you want to pass money on to someone, don't do that. In my case, DW and I have no heirs, so what you described is exactly what we plan on doing, with one difference...we are putting my SS off until 70 just for the increased survivor benefit, as my pension gets cut by 50% when I die.

These types of articles do serve a purpose in inspiring people to ponder the issue, I guess. And everyone's situation is so different, these people that write this kind of stuff could write a different article every day and still not be through all of the possibilities. Easy money for them, if you like to do that sort of thing.

 

[Big_Hitter]

So it's not only about when you die, it's also about how you want to live

agreed

 

[RetireBy90]

but it's not only about when you die. I'm 55 and already I have arthritis in my feet, I have osteoarthritis and bad knees. A very high probability that I will have to have both of them replaced.

So it's also about as you get older you might not be able to do all those glorious things you think you'll do.

At 70 will I really be able to skip around Europe like I want too? probably not. I'll definitely have a better chance at 62.

So it's not only about when you die, it's also about how you want to live

so if I take SS at 62 and spend it, is that different than taking a larger cut from retirement savings at 62 and then taking the SS at 66 or 70?

This was my initial thought but I'm not sure if I think this is a reasonable alternative or not.

If I could get 8% from both delaying SS and from my investments, then the next step would be to compare the risk of each. The SS 8% is "without risk" while the returns on my investments are "at risk", so take the 8% without risk. Right ?