10 Charts About Retirement Every Retiree Should See (2020)

[Midpack]

Some of you know all this, but a nice summary of 10 charts all in one sitting.

Link https://retirementfieldguide.com/10-charts-about-retirement-every-retiree-should-see/

Some examples below:

 

[kevink]

These are great charts. Thanks for sharing!

 

[martyp]

The first chart, life expectancy, is the starting point for everything.

 

[ImThinkin2019]

These charts give us new information, or at least a slightly different perspective. Very thoughtful post. Thank you!!!

 

[tmm99]

Interesting article. Thank you, Midpack! I like their dynamic spending model. I will definitely look into that.

 

[FANOFJESUS]

Here is the entire report for 2021. It can be viewed or downloaded
https://am.jpmorgan.com/us/en/asset...gfDgMndEO38mzNRzJ2hoC5FEQAvD_BwE&gclsrc=aw.ds

 

[JRon]

Thanks Midpack. Great stuff!

 

[2017ish]

Agree, thanks for the link. I've read the underlying report, but the linked article will be appreciated by DW more than if I had thrown the whole thing at her!

 

[W2R]

That article and charts were very interesting, Midpack, thanks! At first I thought "Oh pooh, I have already planned my retirement and have been retired for 12 years, what do I need with charts" but once I clicked on the link and saw them, I thought they were fascinating.

 

[pacergal]

Very informative, reinforces my thoughts and plan.
Nice to see the charts.
Thank you.

 

[Andre1969]

That 4th chart, the one with the breakeven points for taking SS at 62, 66yrs 8 mos, and 70 was a bit of an eye opener for me. I've run my own numbers through FireCalc, with the scenarios of taking SS at every year between 62-70, and found that it doesn't sway my chance of success very much. It seems like whether you live off investments early on, to get a bigger SS payment later, or take a smaller SS payment earlier, but not have to cash out as much of your investments, seems to come out in the wash.

But that chart opened up my eyes to how small the difference really was. Using the parameters of the chart, it looks like if you take SS at 70, instead of 62, you come out ahead by around 385,000. If you make it to 90. To me, it drives home the point that if you can afford to retire comfortably at a young age, don't stay in the work force longer just to get a bigger SS check.

Of course, I realize that not everyone can afford to do so. If you don't have a lot saved up for retirement, and/or still have a lot of debt, then it's a good idea to keep working a bit longer, for the bigger SS check, if you're able to. For me, waiting another 8 years to get an extra ~$1450 in the SS check isn't worthwhile, but for many, I'm sure it is. As the old saying goes, your mileage may vary.

 

[Bigdawg]

That 4th chart, the one with the breakeven points for taking SS at 62, 66yrs 8 mos, and 70 was a bit of an eye opener for me. I've run my own numbers through FireCalc, with the scenarios of taking SS at every year between 62-70, and found that it doesn't sway my chance of success very much. It seems like whether you live off investments early on, to get a bigger SS payment later, or take a smaller SS payment earlier, but not have to cash out as much of your investments, seems to come out in the wash.

But that chart opened up my eyes to how small the difference really was. Using the parameters of the chart, it looks like if you take SS at 70, instead of 62, you come out ahead by around 385,000. If you make it to 90. To me, it drives home the point that if you can afford to retire comfortably at a young age, don't stay in the work force longer just to get a bigger SS check.

Of course, I realize that not everyone can afford to do so. If you don't have a lot saved up for retirement, and/or still have a lot of debt, then it's a good idea to keep working a bit longer, for the bigger SS check, if you're able to. For me, waiting another 8 years to get an extra ~$1450 in the SS check isn't worthwhile, but for many, I'm sure it is. As the old saying goes, your mileage may vary.

If at age 62, 100 of us guys decide we will all wait and take SS at 70, guess what? 15 of us will never receive even one SS monthly check. That fact and the fact that I don't need the money are 2 reasons why I am leaning toward taling at 62.

 

[scfr]

This is very helpful, thank you.
I need to read up on Dynamic Spending Rules!

 

[oiseux]

Here is the entire report for 2021. It can be viewed or downloaded
https://am.jpmorgan.com/us/en/asset...gfDgMndEO38mzNRzJ2hoC5FEQAvD_BwE&gclsrc=aw.ds

This full updated slide deck is great. All the topics are covered with updated numbers without having to look them up.

 

[beernutzbob]

Here is the entire report for 2021. It can be viewed or downloaded
https://am.jpmorgan.com/us/en/asset...gfDgMndEO38mzNRzJ2hoC5FEQAvD_BwE&gclsrc=aw.ds

This is amazing. Thanks for posting it.

 

[2017ish]

If at age 62, 100 of us guys decide we will all wait and take SS at 70, guess what? 15 of us will never receive even one SS monthly check. That fact and the fact that I don't need the money are 2 reasons why I am leaning toward taling at 62.

Those are two reasons why I am putting it off until 70. ("only 15 will die, and I'm in good health," and "I don't think we'll need the money, but when I deteriorate mentally, it'll be good to have a bigger check coming in."

No way to tell in advance which, if either, of us is "wrong"; key is to look at it, analyze, and do the best SWAG possible for oneself.

 

[Perryinva]

Interestingly, they make a point to point out Medicare costs at age 65 vs age 90 are in 2020 dollars but do not make the same point that SS benefits are all in 2020 dollars. The actual check amount claiming at age 70 is much larger due to the total compounding of COLAs. So correspondingly, lifetime total difference is also quite larger.

 

[Perryinva]

I agree with 2017ish. Your own health, socioeconomic position, family history etc, are all parts of betting on the future and what you want the end results to be.

If you are part of the single, drinking, smoking, overweight, non exercising group, with a family history of heart disease and cancer, then retirement ASAP & filing at 62 is only good, common sense.

While being the polar opposite is no guarantee of a long life, the odds are considerably better, especially for MFJ, and that COLA annuity can’t be beat past age 82. As long as reduction of your portfolio is insignificant while delaying filing, then the spousal survivor benefit will far outweigh the minor income loss if that reduced portfolio. After all, if your portfolio drops from $2M to $1.8M but you have an added $15k/yr income, it makes no real world difference at all. And that doesn’t even consider the extra low tax rate room for tIRA to Roth conversions during that delay period.

Worst case scenario is you drop dead at 71 unexpectedly. Oh well. You didn’t live on any less income or life style while delaying. Once you are dead, you won’t care, but your spouse will appreciate the extra COLA income!

I find it interesting that when anyone states “It doesn’t make much difference, so I will file at 62.”, they ALWAYS chose 62. If it doesn’t make much difference, then by definition it doesn’t matter when you file, so why not chose to delay, in case you DO live longer , in which case there are those benefits listed.

Or the “what good is that higher income when you are 85? What are you going to do with it?” Well what good is a slightly higher portfolio going to do for you at 85? Makes no sense.

The truth is it DOES make a difference to them. They want it now. They feel they have waited long enough and paid in to it long enough. All very valid points. They don’t want to see their portfolio drop.

Me personally? I would much rather see my portfolio drop from ME USING IT, for what I want and the whole reason I saved it, rather than save it to be used for a CCC living facility later on, or leaving it to heirs that will just blow it as all my heirs are idiots, financially. I’ve only been retired 2 years, and spending on anything we want, our portfolio has still grown over $200k since then, even with some withdrawals!! I’m more tired of saving and not using my saved money than I am tired of waiting for my SS! Even pulling out everything it’s made the last 2 years, in order to delay SS another 5 years, I am WAY ahead, income wise of where I had planned to be at this time, before I actually retired.

My after tax income in retirement exceeds any of my after tax income years while working by a good margin, if I file for SS even at 68, and I have far less expenses (except for voluntary travel in fine style).

Though filing at 70 does result in an even higher COLA annuity income, I feel that I will not be able to resist that siren song when my SS checks are exceeding $3700/mo. But we will see when we get there.

 

[Andre1969]

I find it interesting that when anyone states “It doesn’t make much difference, so I will file at 62.”, they ALWAYS chose 62. If it doesn’t make much difference, then by definition it doesn’t matter when you file, so why not chose to delay, in case you DO live longer , in which case there are those benefits listed.

A lot of people like to take SS early, because it gives them some form of stable income, so they have to rely less on their investments. For instance, I'm one of those who has said that in running the FireCalc scenarios, it didn't make much difference if I took SS at 62, 70, or anywhere in between. However, that's based on past data that FireCalc analyzed. It's not the gospel, of how the future is going to play out.

There's also the fear that SS is going to run out of money and reduce benefits, and a common belief that any cuts in SS will come to future recipients, rather than those actually on it. That may or may not be the case, but people might feel "safer" from those cuts if they're already on SS.

And finally, it's basically "return on investment". You paid into SS all those years, so why not start getting something back from it, as soon as possible?

 

[ProspectiveBum]

The most eye-opening statistic for me was that the MEDIAN retirement age is 62. Fully half of all Americans are effectively retired before 62, many due to health issues or downsizing. Another good reason to be FI, whether one wishes to ER or not.

 

[hopefullyoneday]

It would be interesting to see what the SS payout at 62 with a 7% annual compounding return would be worth @90

 

[Perryinva]

In other words, if you don’t need your SS, and just let it grow as an investment? That’s been done, (maybe not 7%, but the numbers would still work) and IIRC it showed that if you delayed till 70, and then put that same amount that age 62 filed became at 70, and compounded it till 90 and then added the extra income from delaying, that delaying was still the greater “ROI”. What I don’t recall is where the break even fell, though it did delay it some.

 

[Perryinva]

@Andre1969: All valid points. I have no horse in the race. If you need it, you need it. It would be stupid to insist delaying is always better. It absolutely is not.

My step sons grandmother is 92. She worked as a secretary until she was 65, then collected her SS. Divorced when the son was 2, & her ex went to prison for 15 years. Drugs. Never remarried. Between her small pension and SS, her income is about $28k/yr. She literally lives on $600 month in FL in her paid off home bought in 1962. Minimal RE taxes & utilities, she is stupid cheap/frugal. Whatever.

She was a huge ultra conservative saver with CDs and savings accounts. Her son (step sons biological father) lived with her from the day DW & he were divorced in 1991, until he ODed on drugs in 2013 at age 52. While she would never have AC in her house (too expensive!!!) in Miami (!), she had no trouble doting on her very troubled loser son, and he drained every cent from her (about $200k according to DW) and he was draining her SS & pension check the day they came in.

We actually had to set up gift cards @ Publix with a no cigarettes, beer or liquour stipulation so they could eat. That only lasted about 10 months before he died.

The house was a shambles, barely livable, plumbing & electric issues, leaking roof etc, etc. We paid to bring the house up to a nice condition and she gave us control of her expenses and income, so all bills are paid and we were paid back in about 5 years.

We have her food delivered, she never drove and lives on the bus line, which she can’t use on her own anymore. She gifts whatever money is not earmarked for living, to her only grandson and insists on paying for his car.

Bottom line, a higher than age 62 SS was of great benefit to her. Any extra saved money would have been wasted, had she filed early. If she had lived off her savings and delayed until 70, she would be much better off, especially if she ever ends up in a CCR facility.

You never know.

 

[Parfumeur]

and .... What is DW

Deutsche Welle or DW is a German ....

 

[Dean56]

@Midpack, thanks for posting. Very good info all in one place.