Another reason to claim Social Security at 62

But this is an 8 year period from age 62 to age 70. The poster would like to set up a ladder to provide inflation adjusted cash flows for that 8 year period.

A conventional 8-year ladder with bonds maturing each yer for 8 years woud probably be retty close, but an 8-year TIPS ladder would be spot on. Also see tipsladder.com.

For example, if you were turning 62 and wanted $36,000 a year of inflation adjusted income for 8 years you could invest $302,026 and be guaranteed of $36,000 a year of inflation adjusted income for 8 years.

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Very nice. Back then i didn't know anything about TIPS, also wasn't about to fund the whole thing at once.
What i ended doing was adding 150k of i-bonds over 2001-2006, 2021-2022 (60k). All this done ad-hoc. Currently in the middle of 62-70, haven't taken SS, but can see these i-bonds filling the gap. Wish there were a calculator i can use to do this more precisely.
 
your post is missing a key point of the analysis that should be done. As I and others explained in prior posts, folks that defer SS should spend down fixed income, not stocks, while waiting to claim.

(Of course there are a few folks that holds so little fixed income that they cannot make the trade)
:Raises hand: Basically no fixed income here.

So I'm back to investing whatever part of those SS checks I don't spend hedonistically :)
 
That's sad, but I'm guessing he wasn't actually in good health. People don't have massive heart attacks unless there is something seriously wrong, even if they don't know it. Maybe he had a poor diet, or high blood pressure, or both.
Or neither. People with good diets and normal blood pressure keel over from heart attacks too.

Pardon continuing a sidetrack, but I couldn't resist on this one...
 
So, call Social Security and all the major insurance companies, and tell them that their actuarial tables are wrong, and you have the correct numbers.
Actuarially the gamble starts when a man reaches 62 since his life expectancy is 81.03, not much over the break even point.
 
All the math and analysis in the world can't prove when it's best to take ss if end of life is unknown. And I really don't care what the actuarial tables say. And I don't really care when my break even point is.

It makes more sense to me to take ss at an age when I am best able to enjoy it. I took ss at 65. The fun I had with 4 years of ss up to now is worth more to me than the extra dollars I would receive later if I had waited to age 70 to take ss.
 
It is sad some folks have nothing better to do than read the obits.o_O
Why do you find that sad or are you just saying it as an insult? Having lived in the same community for most of my life I know more and more of those who pass or know the family. That allows me to give or send my condolences or put the service on my schedule. It takes but a couple of minutes to scan them as part of reading local news each day. As you get older you go to more funerals than weddings.
 
Keep in mind there is a risk. Had you done that in the eight years leading up to 1974-75, well….. You were out of luck, up the creek without a paddle, etc. It was 1990 before the market recovered its losses in real terms.
I'll bite, where are you getting this? Your overall point of returns needing to be considered along with risk certainly stands, but the odds IMO are well in my favor overall.
 
no. kind of a PITA todo
SSA already does that. It is how they calculate your average indexed monthly earnings (AIME), which is then used to calculate your Primary Insurance Amount (PIA).
 
SSA already does that. It is how they calculate your average indexed monthly earnings (AIME), which is then used to calculate your Primary Insurance Amount (PIA).
True. I did a spreadsheet with all the yearly inflation multipliers when I turned 60 and figured out what my AIME and PIA using the bend points would be at 66. But my statement that I had already received more than my employers and myself had contributed was a raw, non-inflation number.
 
Very nice. Back then i didn't know anything about TIPS, also wasn't about to fund the whole thing at once.
What i ended doing was adding 150k of i-bonds over 2001-2006, 2021-2022 (60k). All this done ad-hoc. Currently in the middle of 62-70, haven't taken SS, but can see these i-bonds filling the gap. Wish there were a calculator i can use to do this more precisely.
To do what more precisely?
 
Actuarially the gamble starts when a man reaches 62 since his life expectancy is 81.03, not much over the break even point.
No, its actually about 5 years longer... to 86, well past the breakeven point. See SoA Longevity Calculator at https://www.longevityillustrator.org/

A 65-yo male non-smoker in average health retiring at 62 is likely to live 24 years... to 86.

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Why do you find that sad or are you just saying it as an insult? Having lived in the same community for most of my life I know more and more of those who pass or know the family. That allows me to give or send my condolences or put the service on my schedule. It takes but a couple of minutes to scan them as part of reading local news each day. As you get older you go to more funerals than weddings.
I was sad when I found my father's obituary on the internet a year after he died and nobody told me. What made it worse was that I was not listed in it.
 
No, its actually about 5 years longer... to 86, well past the breakeven point. See SoA Longevity Calculator at https://www.longevityillustrator.org/

A 65-yo male non-smoker in average health retiring at 62 is likely to live 24 years... to 86.

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No, its actually about 5 years longer... to 86, well past the breakeven point. See SoA Longevity Calculator at https://www.longevityillustrator.org/

A 65-yo male non-smoker in average health retiring at 62 is likely to live 24 years... to 86.

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Not trying to argue, the 81 number came from the Social Security website. Actuarial Life Table
 
All the math and analysis in the world can't prove when it's best to take ss if end of life is unknown. And I really don't care what the actuarial tables say. And I don't really care when my break even point is.

It makes more sense to me to take ss at an age when I am best able to enjoy it. I took ss at 65. The fun I had with 4 years of ss up to now is worth more to me than the extra dollars I would receive later if I had waited to age 70 to take ss.
What is your opinion of the strategy others here have suggested, where you could have instead taken the "extra dollars" from your savings (or a TIPS ladder, etc., derived from savings) and deferred SS to a later age? Was taking SS at 65 a sort of compromise between taking early at 62 and taking later, while avoiding the complication of creating an "extra dollars" stream?
 
Interesting table from the SS. If you are male, 1 out of 5 will pass away by age 61 - never collecting a SS benefit.
 
I'll bite, where are you getting this? Your overall point of returns needing to be considered along with risk certainly stands, but the odds IMO are well in my favor overall.

However a 73% loss requires a 270% gain before you return to the black. After 32-months the market had only touched bottom. It would take another nine years to breakeven again in real-terms – a milestone passed in 1983.
United States did not see the same level in real terms until August 1993, over twenty years after the 1973–74 crash began.

I remember that as a wet behind the ears kid just out of college. Keep in mind along with the crash we had brutal double digit inflation. for several years then high single digit inflation after that. Thus the long breakeven time. Not fun unless you loaded up on T-bills at up to 16% or so.
 
Thanks. But - and maybe this is just my ignorance of economics - that doesn't necessarily or even probably mean that X amount invested before that recession took 15-20 yrs to regroup.

Still though, an isolated and extreme example that was due to a highly unique confluence of circumstances highly unlikely to happen again in my lifetime (he said knocking on wood).
 
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A 65-yo male non-smoker in average health retiring at 62 is likely to live 24 years... to 86.
Trying to understand the chart in post #437 and your comments. Is "likely" defined as 50/50?
 
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Yes, 50% is average longevity...1/2 die earlier and 1/2 die later.
That doesn't sound "likely." It sounds more like even odds.

For example, if you flip a honest coin and call heads, is it "likely" you'll be right? No. The odds are even, by definition, that it could be heads or it could be tails. "Likely" implies there is a statistical advantage.

I'm just suggesting you edit out the word "likely" from your comments in post #437.
 
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I think the broader point is that isolated examples are that; no more, no less. Similarly, general population statistics are just that; no more, no less. So you can play it however you feel best: I know a lot of people who passed ahead of time and so it feels logical to cash in earlier, or the stats tell me I have time, so odds are I can cash in later. All other things being equal of course. It's all a semi-educated guess.
 
What is your opinion of the strategy others here have suggested, where you could have instead taken the "extra dollars" from your savings (or a TIPS ladder, etc., derived from savings) and deferred SS to a later age? Was taking SS at 65 a sort of compromise between taking early at 62 and taking later, while avoiding the complication of creating an "extra dollars" stream?
I could have taken more $ from my savings to live on, while deferring SS to a later age. I started living on cash when I retired at 58 and I probably had enough in cash to last me without SS until I was 70. But here are my reasons that I started taking SS at 65.

1. Lots of threads here and elsewhere suggesting taking SS at 62 or taking at 70. I tried to figure out what age would be best for us, but never came to a solid conclusion. 65 was an age that was a balance between the 62 and 70.

2. I didn't want to pay for Medicare out of pocket. So I enrolled in SS when I signed up for Medicare when I turned 65. Medicare premiums come out of my SS income.

3. I didn't want to withdraw any $ from retirement accounts. Still don't want to and I haven't withdrawn any $ from my IRAs that were converted from my 401k.
3a. I put as much $ as I could in my 401k during my working years, and I'm having a hard time mentally getting to the point where I begin withdrawing. I don't want to see the balance go down.
3b. And I also want the retirement account balance to be as high as possible to maximum the income from it.
3c. Plus I don't want my income taxes going up - withdrawing from IRAs would raise my income taxes.
 
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