Social Security at 70

[REWahoo]

Life expectancy was longest – 97.0 years – in the 78634 ZIP code in Hutto, Texas (near Austin)...

Hutto, home of the "Hutto Hippos" (high school mascot).

 

[Alan]

This is funny!
I put in all the information for my BIL, as best as I could, and it gave him a life expectancy of 72. He's currently 76, and I did use his correct birth year.

Not really surprising, since he has a very unhealthy lifestyle, but the fact that the calculator ignored his actual age was amusing.

I have done similar with my father on other calculators in the past. They all had him dead in his early 70's. (Heavy smoker his whole life, underground coal miner for 40 years, very unhealthy lifestyle). He lived to age 84 and died at home from a AAA bursting.

 

[Music Lover]

I have done similar with my father on other calculators in the past. They all had him dead in his early 70's. (Heavy smoker his whole life, underground coal miner for 40 years, very unhealthy lifestyle). He lived to age 84 and died at home from a AAA bursting.

I used to work with a morbidly obese man. He weighed 500+ in his mid 40's when I first met him (he was my supervisor). Even at age 70 he was still well over 400 pounds, although at the time he could barely walk. He retired at 72 and died at 76. I doubt any age calculator would have had him lasting that long.

 

[rothlev]

Dead man walking concept.

I did a tax return that rejected as the taxpayer was deceased according to the IRS. I had the job of calling the client and saying " I figured out why you never got your stimulus money "

It has taken 2 years to get this guy all his money . IRS insisted that social security had marked him deceased, but not so, they had been regularly paying out his social security . The mistake was annoying enough , but the fact the IRS would not correct it was unconscionable.

.

 

[Sunset]

I did a tax return that rejected as the taxpayer was deceased according to the IRS. I had the job of calling the client and saying " I figured out why you never got your stimulus money "

It has taken 2 years to get this guy all his money . IRS insisted that social security had marked him deceased, but not so, they had been regularly paying out his social security . The mistake was annoying enough , but the fact the IRS would not correct it was unconscionable.

.

So he could have collected SS and not done tax returns for the rest of his life, bet the IRS would have corrected his death then.

 

[Out of Steam]

I have done similar with my father on other calculators in the past. They all had him dead in his early 70's. (Heavy smoker his whole life, underground coal miner for 40 years, very unhealthy lifestyle). He lived to age 84 and died at home from a AAA bursting.

My parents both made it to 80 despite similar lifestyle issues. While I'm skeptical about the possibility of extreme longevity, my planning assumes that I will live longer than average.

 

[youbet]

While I'm skeptical about the possibility of extreme longevity, my planning assumes that I will live longer than average.

While knowing some guesstimate of our departure date can be useful, without knowing the statistical characteristics of the distribution around the mean, you really don't know much. For example, if some calculator puts the average age of death for someone with your characteristics at 83, you still don't have much of a grasp of the probability of passing at 83. Is an average age of death at 83 much more likely than 82 or 84? Or do folks with your characteristics die at 82 or 84 almost as often as at the average of 83? Or, as an extreme example, maybe nobody dies at 83. Half die at 82 and half at 84 for an average of 83. But no individual at all dies at 83.

Statistics are fun. Wish I knew more about 'em.......

I'm surprised these calculators don't show you the dispersion of outcomes as well as the average.

 

[harllee]

Wow! I did the calculator ( I used a fake email address) and it said my estimated longevity is 104!!! Good thing I waited until 70 to start my SS. Most of the women in my family live to 90 plus and I am a very healthy 70 year old and live a healthy life style so I guess it is possible.

 

[rothlev]

So he could have collected SS and not done tax returns for the rest of his life, bet the IRS would have corrected his death then.

Except for the fact that he did not receive his stimulus checks, he did not file a tax return, as he was under the filing requirement. I wondered myself what would have happened had he been required to file, and owed money to them.

He was not the only one this happened to, My best guess is IRS was sending out a lot of stimulus checks to deceased people so they started cross checking with social security and marking people off, so no more money ( to the deceased ) would go out. I think in that process there were errors.

 

[Out of Steam]

While knowing some guesstimate of our departure date can be useful, without knowing the statistical characteristics of the distribution around the mean, you really don't know much. For example, if some calculator puts the average age of death for someone with your characteristics at 83, you still don't have much of a grasp of the probability of passing at 83.

In my case, the Social Security Administration predicts my life expectancy to be to 83. My own assumption is about 5 years longer than that.

 

[daylatedollarshort]

I ran some average SS numbers for a couple with similar benefits in opensocialsecurity, factoring in a potential haircut and the mortality tables. The biggest difference I could find from the recommended to other claiming strategies was a lifetime amount of $39K. I have pointed this out before, but since we rehash the same arguments over and over again here it is again - shopping at Grocery Outlet saves the average family $3K a year (per checkbook.org), so over a 30 year retirement $90K ($147K invested at 3%).

I took SS at 62 and shop at Grocery Outlet for my longevity protection.


ETA - Oops - My initial numbers didn't include a future benefit reduction.

 

[almost there]

Agree, I seldom see anyone mentioning taking it at 62 and investing it. Even at a small 3%. Then comparing to taking it at 70. We just assume it will all get spent in the same year taken. Just an observation.

 

[youbet]

Agree, I seldom see anyone mentioning taking it at 62 and investing it. Even at a small 3%. Then comparing to taking it at 70. We just assume it will all get spent in the same year taken. Just an observation.

Actually the idea of taking SS early and investing the money is discussed extensively in all of the many "when to take SS" threads I've been part of over the years. And there has been a ton of 'em!

 

[almost there]

Thanks, must have missed it. Have a link?

 

[pb4uski]

Agree, I seldom see anyone mentioning taking it at 62 and investing it. Even at a small 3%. Then comparing to taking it at 70. We just assume it will all get spent in the same year taken. Just an observation.

You obviously aren't paying attention... there is talk of that all the time and opensocialsecurity.com allows a real discount rate assumption to cover the time value of money.

 

[RunningBum]

I ran some average SS numbers for a couple with similar benefits in opensocialsecurity, factoring in a potential haircut and the mortality tables. The biggest difference I could find from the recommended to other claiming strategies was a lifetime amount of $39K.

That is the NPV, right? If so, you are missing a major point of delaying. What is the difference if I live to be 100? I ran some spreadsheet a few years ago, so the numbers aren't quite current, but the difference between taking at 62 and taking at 70 with 2% inflation and 5% investment return and no benefit cuts gives me a difference of over $600K at age 100. I'm looking for the best deal based on mortality tables, I'm looking for the best longevity insurance.

A 25% cut in 2034 lowers the difference but it's still nearly $350K.

Worst case, dying right before my 70th birthday, I lose out on some $200K but I'm done spending money or being conscious, so what do I care?

 

[daylatedollarshort]

That is the NPV, right? If so, you are missing a major point of delaying. What is the difference if I live to be 100? I ran some spreadsheet a few years ago, so the numbers aren't quite current, but the difference between taking at 62 and taking at 70 with 2% inflation and 5% investment return and no benefit cuts gives me a difference of over $600K at age 100. I'm looking for the best deal based on mortality tables, I'm looking for the best longevity insurance.

A 25% cut in 2034 lowers the difference but it's still nearly $350K.

Worst case, dying right before my 70th birthday, I lose out on some $200K but I'm done spending money or being conscious, so what do I care?

I used opensocialsecurity.com which says they include a default discount rate based on 20 year TIPS.

 

[RunningBum]

I used opensocialsecurity.com which says they include a default discount rate based on 20 year TIPS, as pb4uski noted in the post above your post.

You're still missing the point. Check the mortality table box to change it to "Assumed Age at Death" = 100. I get a present value difference of $305K. The $600K number I posted before was future value.

I'm not saying that taking SS at 70 is worth $305K more than 62. What I'm showing is an indication of the value if I live exceptionally long, which is pertinent to me because I see SS as longevity insurance. That's me. I know others have different priorities.

 

[daylatedollarshort]

You're still missing the point. Check the mortality table box to change it to "Assumed Age at Death" = 100. I get a present value difference of $305K. The $600K number I posted before was future value.

I'm not saying that taking SS at 70 is worth $305K more than 62. What I'm showing is an indication of the value if I live exceptionally long, which is pertinent to me because I see SS as longevity insurance. That's me. I know others have different priorities.

I'm not missing your point nor am I disagreeing with you. You asked if I used NPV and I replied I used the default discount rate in opensocialsecurity. I said in my earlier post those with different circumstances and assumptions will get different results. You are using around 20 years more than the standard mortality tables and a higher earnings on your money. If I changed my mortality to 200 years I would get an enormous difference in claiming ages results.

 

[RunningBum]

I'm not missing your point nor am I disagreeing with you. You asked if I used NPV and I replied I used the default discount rate in opensocialsecurity. I said in my earlier post those with different circumstances and assumptions will get different results. You are using around 20 years more than the standard mortality tables and a higher earnings on your money. If I changed my mortality to 200 years I would get an enormous difference in claiming ages results.

Just a point of clarification, in my last post I used opensocialsecurity and whatever return it defaults to (20 year TIPS, I guess) rather than my spreadsheet's higher return in my previous post.

 

[pb4uski]

You're still missing the point. Check the mortality table box to change it to "Assumed Age at Death" = 100. I get a present value difference of $305K. The $600K number I posted before was future value.

I'm not saying that taking SS at 70 is worth $305K more than 62. What I'm showing is an indication of the value if I live exceptionally long, which is pertinent to me because I see SS as longevity insurance. That's me. I know others have different priorities.

She's not missing the point. WADR, I think looking at it to an attained age of 100 is a silly way to look at it and using mortality tables is preferable, but it is a free country so look at it however you want to.

 

[RunningBum]

She's not missing the point. WADR, I think looking at it to an attained age of 100 is a silly way to look at it and using mortality tables is preferable, but it is a free country so look at it however you want to.

I don't think it's silly at all. How else do you assess the value of longevity insurance? If 100 is absurd, use 90. openss tells me I'd come out $150K ahead. Still worth it to me. And more meaningful to me than the $39K number.

Instead of acknowledging the longevity point, the responses were on assumed investment return rates, so it's not a stretch for me to think my point was missed.

 

[pb4uski]

Whatever

 

[daylatedollarshort]

I don't think it's silly at all. How else do you assess the value of longevity insurance? If 100 is absurd, use 90. openss tells me I'd come out $150K ahead. Still worth it to me. And more meaningful to me than the $39K number.

Instead of acknowledging the longevity point, the responses were on assumed investment return rates, so it's not a stretch for me to think my point was missed.

If you are concerned about running out of money in case you live to be 100, then that plan works for you. But the probability of living that long are less than 1%, so the expected benefit, with life span probability factored in, is much less than $150K. There is a greater than 99% chance you will be dead and not collecting Social Security benefits at age 100.

 

[Sunset]

I ran some average SS numbers for a couple with similar benefits in opensocialsecurity, factoring in a potential haircut and the mortality tables. The biggest difference I could find from the recommended to other claiming strategies was a lifetime amount of $39K. I have pointed this out before, but since we rehash the same arguments over and over again here it is again - shopping at Grocery Outlet saves the average family $3K a year (per checkbook.org), so over a 30 year retirement $90K ($147K invested at 3%).

I took SS at 62 and shop at Grocery Outlet for my longevity protection.

ETA - Oops - My initial numbers didn't include a future benefit reduction.

In retirement, it's normally just 2 or even 1 person. So our grocery bill over 5 years normally averages around $3,300
If I shopped at Grocery Outlet and we ate a little less (which could be a good idea for us), we could eat FREE