You should take SS at 62

[timo2]

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 ?

+1

plus it would be a shock to start getting 8% on my investments, so we are going to spend that first.

 

[Midpack]

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

All true, people tend to spend less very late in life (e.g. last 10 years) because of physical/mental limitations. Only caveat, and it can be a big $ one, assisted living/nursing and/or end of life medical costs can lead to staggering costs in the last few years. Only my data point, but DW's Mom and my parents spent less and less as they got older, but their living costs at least tripled for the last 2-3 years...

 

[explanade]

Isn't the breakeven point for taking it at 70 instead of 62 something like the mid 80s?

 

[pb4uski]

why is he a quack?.....

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........

He is a quack because it is quite apparent to anyone knowledgeable on the subject of SS that the optimal choice is quite situational, so to make a blanket statement that you should take it early even if you don't need the money is foolish. There are numerous situations, like mine, where our family is better off waiting because of joint mortality and the fact that DW's benefits are less than half of mine since she was a SAHM.

Inheritance is not high on my list either, but leaving money to our kids is ahead of leaving money to the federal government by suboptimizing our social security. Besides, with the genetics in my family, there is a good chance that I may live long and SS is "cheap" longevity insurance given there are few good inflation-adjusted payout annuities out on the market.

I'm sorry for your loss but I never suggested dialing back on lifestyle for our heirs... you read that into it... we can pretty much spend what we want to but even though we don't need the money, it would still be foolish of us to take SS at 62 given joint mortailty and our genetic longevity.

 

[Midpack]

Isn't the breakeven point for taking it at 70 instead of 62 something like the mid 80s?

It varies some depending on individual circumstances, but most studies/articles seem to point to early 80's as an average breakeven. It can vary from late 70's to late 80's.

It's important to not confuse average longevity with SS breakeven. About half will live longer than average longevity, but everyone is money ahead on SS when/if they reach their individual SS breakeven age.

One of hundreds What Is Social Security's Full Retirement Age?

 

[Big_Hitter]

"quack" is probably fair due to the lack of financial rigor in that article

 

[marko]

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...
.

Having seen inheritors of large sums and trust funders up close and personal, I can say that it is most often not a pretty picture over the long haul.

You'd assume that those of multigenerational wealth would be better prepared for such windfalls, but oftentimes even they fail at the game.

 

[pb4uski]

It varies some depending on individual circumstances, but most studies/articles seem to point to early 80's as an average breakeven. It can vary from late 70's to late 80's. ....

But to be fair, this graphic assumes that the time value of money is zero. With the time value of money, the BEPs slide to the right and how far they slide depends on the assumed interest rate.

 

[LARS]

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.

IMHO you have a very healthy attitude toward providing for your children. Set them on the right path (debt-free) and the rest is generally up to them.

 

[Independent]

They latest life expectancy for males that I could find is 76.4 years in the US, for women it 81.2 years.

I don't know where you are looking. This table gives the remaining life expectancy of a 62 year old man as 19.8 years. For a 62 year old woman, 22.6 years. That's 82 and 84. Actuarial Life Table

But, that table includes people living in hospices on their 62nd birthdays. Most people who post here are in a lower mortality group and should plan on a longer life span. If we use the 2012 Individual Annuitant Mortality Table, we find that about half the 62 year old males will be alive at 87. Life Experience Committee | American Academy of Actuaries

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.

This is an excellent reason to start early. If the link had said "If you are in poor health, or believe you have genes that predict a short life, start at 62", virtually everyone here would agree.

 

[haha]

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

Quibbles, quibbles. I think you are as bad as I am.

My new mantra will be "whatever!"

 

[Independent]

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.

a) When I tried to do the math, the taxes were pretty much a wash.

b) Congratulations on giving it away while you're alive. I think this is a fine reason to start early. Although theoretically you don't need to take SS to make the gifts, it's a nice way of explaining the gift to the kids.
Note that, unless you've go $10 million, the $14k is the limit on reporting. You can give your kids as much as you like without incurring gift taxes.

 

[marko]

To quote the venerated wit Mike Tyson "I won't know whether to be ecstatic or ludicrous" if I make it to 78 or 80. (probably ludicrous)

My view is that [-]by the time I'd reach[/-] if I'm lucky enough to reach my break even, my expense profile will be considerably lower or at least shifted to things less valued.

I'd rather have the extra cash now.

1) less $$ I have to withdraw from my portfolio
2) my portfolio would/should grow at least as well as SS (if not better)
3) get in before DC changes the rules. (How sad would it be to hold off for a better result only to be subjected to means testing!)

 

[Big_Hitter]

Quibbles, quibbles. I think you are as bad as I am.

My new mantra will be "whatever!"

well in all fairness it used to be a big deal...100 years ago when infant mortality rates were high

 

[explanade]

What would be the break even for taking it at 66 vs. 70?

 

[H2ODude]

Quibbles, quibbles. I think you are as bad as I am.

My new mantra will be "whatever!"

I got a chuckle from the mantra! We've been dealing with a nightmare MIL who for last 5 months has been in hospitals (3), assisted living (2), rehabs (3) and a hospice where she was given 2-4 days max around March 10. Got kicked out 4 weeks later! DW and I have two mantras: Oh Well! and from a song title: "The Road goes on Forever and the Party Never Ends!" While it's costing us and BIL a bunch of money; we're a lot more about wanting to be done with all the drama (and she's a real PIA). Whatever!

 

[Independent]

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 ?

I'm not sure what you mean by "get 8% from delaying SS".
Your SS monthly benefit will be higher in the future if you do not take any benefit today. This increase is not an interest rate, and shouldn't be confused with one.

 

[pb4uski]

What would be the break even for taking it at 66 vs. 70?

About 81 1/2 according the the graph in Post#30, but that is assuming 0% interest. With some (real) interest it would be a bit later.

 

[Big_Hitter]

I'm not sure what you mean by "get 8% from delaying SS".

15/14 or 14/13 or 13/12, etc - about an 8% increase each year for delaying


although you have to calculate the loss of the missed payments


rocket surgery...

 

[Independent]

What would be the break even for taking it at 66 vs. 70?

It depends on your assumed interest rate.

 

[pb4uski]

It is a straight 8% a year (or portion thereof, not compounded). So if your FRA is 66 then your age 70 benefit would be 132% of your FRA. If your FRA is 67 and you start at age 70 then 124%.

 

[Independent]

15/14 or 14/13 or 13/12, etc - about an 8% increase each year for delaying


although you have to calculate the loss of the missed payments
.

Yes. My concern was that the poster wasn't including your second point.

 

[shotgunner]

Here is another thought, especially for us single males. How many of us have a financial plan with 100% success to age 95 even though we only have a 20% chance of living that long from age 65?

I am 58 but with each passing year the more I worry about running out of time (especially healthy quality time) rather than running out of money.

 

[pb4uski]

Here is another thought, especially for us single males. How many of us have a financial plan with 100% success to age 95 even though we only have a 20% chance of living that long from age 65?

I am 58 but with each passing year the more I worry about running out of time (especially healthy quality time) rather than running out of money.

For singles, in theory it doesn't matter. If it were me and I was single and had enough for 100% success, I would still wait as it is cheap longevity insurance to protect me if I did live long or if the financial markets were unkind.

However, if you add in unfavorable genetic history or existing health issues that impact long term mortality then taking early is a better option.

 

[explanade]

So with MRD at 70, assuming most of it is from ROTH, better to wait or take SS early?