Bottom line... if you only live until 85 it doesn't matter much ... do whatever you want.
To me, two kinds of people take SS at 62: Those who are desperate for income and those who don't need it at all and view it as fun money.
If one is to believe in these stats and that there would be some reduced SS payment after 2037, would this not play into the decision of arguing an earlier distribution as opposed to waiting until 70?
.... So it appears now the forecast calls for SS to be fully funded thru 2037 which says I should count on my bennies, at least until I hit 72. If one is to believe in these stats and that there would be some reduced SS payment after 2037, would this not play into the decision of arguing an earlier distribution as opposed to waiting until 70? ...
No haircut | Haircut | |
Optimal solution | 100.0% | 100.0% |
Both now | 97.8% | 98.9% |
Both 65 | 99.0% | 99.7% |
Both at FRA | 98.7% | 96.3% |
Me 70/DW FRA | 99.2% | 99.2% |
For us when to take SS is pretty small potatoes in our retirement success compared to optimizing all our expenses. We took pensions at 55 and will take SS at 62. With optimized expenses, SS and pensions cover most of our retirement expenses, all the basics and a good chunk of discretionary, and we can let the portfolio grow and save it for LTC, money for the kids or extra discretionary items. Plus with factoring in the possibility of benefit cuts in the future, that makes taking it now more valuable to us.
Currently FI at 55, I previously ran my RE income projections very conservatively planning on zero $ just in case the SS well went dry. So it appears now the forecast calls for SS to be fully funded thru 2037 which says I should count on my bennies, at least until I hit 72. If one is to believe in these stats and that there would be some reduced SS payment after 2037, would this not play into the decision of arguing an earlier distribution as opposed to waiting until 70? In my case, this will be "fun money", but why not take as much as you can which you are due? How does the fun money crowd look at this "dilemma"?
I'm taking and running method. I have no idea how long I will be breathing in air."Take the money and run" has been a motto that has served me well in many instances throughout my life.
....
Anyway, count me in on the "take the money and run" camp. I turn 62 in 2032, and I'm planning on filing then. My reasoning is that, if I'm already on SS and they make changes, I'm more likely to be grandfathered in. But for those not on it, and especially those years away from collecting, they're going to be the ones that get screwed.
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Is it 2037 now? I swear, I can't keep up. For years I had been hearing 2034, but then just this past year, the news articles were suddenly preaching 2035 (and trumping it up like that was a bad thing, rather than the fact that it got moved out a year). Kinda makes me wonder if the problem won't fix itself, more or less, by the time we actually get there?....
... Under the intermediate assumptions, the projected hypothetical combined OASI and DI Trust Fund asset reserves become depleted and unable to pay scheduled benefits in full on a timely basis in 2035. At the time of depletion of these combined reserves, continuing income to the combined trust funds would be sufficient to pay 80 percent of scheduled benefits. The OASI Trust Fund reserves are projected to become depleted in 2034, at which time OASI income would be sufficient to pay 77 percent of OASI scheduled benefits. DI Trust Fund asset reserves are projected to become depleted in 2052, at which time continuing income to the DI Trust Fund would be sufficient to pay 91 percent of DI scheduled benefits. ...
https://www.ssa.gov/OACT/TR/2019/tr2019.pdf
For us when to take SS is pretty small potatoes in our retirement success compared to optimizing all our expenses. We took pensions at 55 and will take SS at 62. With optimized expenses, SS and pensions cover most of our retirement expenses, all the basics and a good chunk of discretionary, and we can let the portfolio grow and save it for LTC, money for the kids or extra discretionary items. Plus with factoring in the possibility of benefit cuts in the future, that makes taking it now more valuable to us.
I don't see how pension and taxes makes a huge difference to the analysis... I presume that with SS and pension that 85% of SS will be taxed whether you take it at 62 or at 70.
+1
I have heard that 85% called the 'Success Tax'.
Me too! I'm single and debt-free including mortgage. Thank God, I was able to retire comfortably at age 55 with a company pension, 401k and health insurance. I took SS at age 62 and my nest egg continues to grow.
Back when 50% SS income was first subject to federal income tax, the arbitrary income thresholds put in the 1983 law were considered to be wealthy. However, those arbitrary income thresholds were never indexed for inflation, not even when 85% of SS income subject to tax law was enacted in 1993. Because of decades of inflation, today middle class seniors pay that SS tax [but that wasn't the original intent.]
There is some potential legislation floating out there which would raise the non taxable SS to 50S/100MFJ k.
At a minimum I will wait until 66 y.o., as I am managing MAGI for the ACA subsidy, plus receiving a lump sum pension at 65.
Then I will play it year by year. I don't see much room for Roth conversions between 66 and 72, so my way of potentially reducing the tax torpedo might have to come from partially spending down the TIRA.