pb4uski
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I guess I should have been more precise and asked "Where has anyone here suggested otherwise?"
Not true. But it's worthwhile to have the breakeven correct while evaluating the other considerations to arrive at your best claiming age option.No, I caught it the first time. I had "on these boards" twice in my reply. It's the breakeven analyses being presented as if they were stand-alone, without other considerations as to when to take SS, that prompted my first post.
An omission, rather than a statement otherwise.
If you're referring to this thread, I agree. In the first post you said: "Yes, I realize there are many very good reasons to take SS before age 70. But a breakeven age of 86 isn’t one of them…" I was being more general.Not true.
But it's worthwhile to have the breakeven correct while evaluating the other considerations to arrive at your best claiming age option.
the break even point as far as SS goes has nothing to do with how you'd invest the money. it simple means those that took it, at say, 62, got a lot more (but smaller ants) payments than thos who took it at 65,66,67,68,69 or 70..For ex, at 70 , they already have ,96 payments they've already gotten if took at 62..so definitely, t age 70, the one who took it at 62 wins .I used to hear the break even point was 83..I believe it may have changed, purely mathematically, at age 85 or so. it's arithmetic. nothing to do with investments.I’m sure he’s wrong, but he keeps telling everyone else the SS breakeven age is 86, where everything I read suggests it’s 81 plus/minus depending on details. He took SS early, as most of my peers did, and unfortunately almost all of them are financially illiterate. I am not trying to embarrass him, or make others regret taking SS early - I just wish I could get him to stop giving others bad information. Now that he’s done it several times, I plan to privately ask him for a source of his breakeven claim, not hopeful but we’ll see.
The only way it could be 86 would be a set of highly unlikely circumstances, such as taking SS early and investing it all in a portfolio with well above average returns - that’s risky at best. I seriously doubt many people take SS early and invest it. And if you can afford to invest it, no reason you couldn’t invest the money starting at any age thru 70.
Yes, I realize there are many very good reasons to take SS before age 70. But a breakeven age of 86 isn’t one of them…
Well, that's the thing. If you can't afford to invest your SS benefit, that means you need the SS for living expenses. And that means that you cannot afford to defer until you hit 70.Few if any of my peers could afford, much less invest well, their SS benefits.
I think the breakeven analysis for SS is a fallacy. Everyone’s situation is different and there is one variable that can blow up the analysis- date you will die. We took ours at 64, after we let go of our final consulting and part time gigs. Between my pensions and our SS we don’t need to pull much out of our IRA’s. Also, no state tax on SS where we live. Ou big goal; leave a legacy for our kids.I’m sure he’s wrong, but he keeps telling everyone else the SS breakeven age is 86, where everything I read suggests it’s 81 plus/minus depending on details. He took SS early, as most of my peers did, and unfortunately almost all of them are financially illiterate. I am not trying to embarrass him, or make others regret taking SS early - I just wish I could get him to stop giving others bad information. Now that he’s done it several times, I plan to privately ask him for a source of his breakeven claim, not hopeful but we’ll see.
The only way it could be 86 would be a set of highly unlikely circumstances, such as taking SS early and investing it all in a portfolio with well above average returns - that’s risky at best. I seriously doubt many people take SS early and invest it. And if you can afford to invest it, no reason you couldn’t invest the money starting at any age thru 70.
Yes, I realize there are many very good reasons to take SS before age 70. But a breakeven age of 86 isn’t one of them…
the break even point as far as SS goes has nothing to do with how you'd invest the money. it simple means those that took it, at say, 62, got a lot more (but smaller ants) payments than thos who took it at 65,66,67,68,69 or 70..For ex, at 70 , they already have ,96 payments they've already gotten if took at 62..so definitely, t age 70, the one who took it at 62 wins .I used to hear the break even point was 83..I believe it may have changed, purely mathematically, at age 85 or so. it's arithmetic. nothing to do with investments.
While none of us know for sure, many of us can make an educated guess and base our SS claiming age on that. That will pan out for most, though not all. My parents lived well into their 90’s, so odds those in the same (family longevity) cohort as me can benefit by waiting to age 70. If everyone in your family died of heart disease in their 50’s, that cohort might be wise to claim SS at 62. Saying nobody knows so just take it at 62 is burying one’s head in the sand. I’m done with this thread…You just need to know how long you will live. Then its simple math.![]()
My wife and I delayed until 70. I would certainly suggest for any couple with one of the spouses with a known medical condition that could limit longevity to have the lower earning spouse collect early. Beyond the benefit of 8% annual increases in income are a larger base for COLA increases, a larger base for tax free status, in the early non SS years take IRA draws at 10-12% marginal tax rates and avoid or delay the Social Security "Tax Torpedo" - the ramping of taxable benefit from 15-85%. With the larger SS income from 70-72, I expect to pay little tax and then jump over the 'torpedo' once RMDs start at 73. I believe a lot of people that collect early walk right into 40% + marginal tax rates as their taxable SS income ramps to 85% taxable. Anyone collecting early needs to understand how the taxes work. Take a look at the SS tax calculation worksheet in TurboTax - its complicated. I calculate the breakeven to be young 80s taking into account the items above. From an actuarial standpoint - SS did a pretty good job keeping the decision 'neutral'.I’m sure he’s wrong, but he keeps telling everyone else the SS breakeven age is 86, where everything I read suggests it’s 81 plus/minus depending on details. He took SS early, as most of my peers did, and unfortunately almost all of them are financially illiterate. I am not trying to embarrass him, or make others regret taking SS early - I just wish I could get him to stop giving others bad information. Now that he’s done it several times, I plan to privately ask him for a source of his breakeven claim, not hopeful but we’ll see.
The only way it could be 86 would be a set of highly unlikely circumstances, such as taking SS early and investing it all in a portfolio with well above average returns - that’s risky at best. I seriously doubt many people take SS early and invest it. And if you can afford to invest it, no reason you couldn’t invest the money starting at any age thru 70.
Yes, I realize there are many very good reasons to take SS before age 70. But a breakeven age of 86 isn’t one of them…
Investment returns are a legitimate factor, because if you delay SS then you are presumably using savings of some sort for living expenses so you earn less interest and dividends from your retirement savings.the break even point as far as SS goes has nothing to do with how you'd invest the money. it simple means those that took it, at say, 62, got a lot more (but smaller ants) payments than thos who took it at 65,66,67,68,69 or 70..For ex, at 70 , they already have ,96 payments they've already gotten if took at 62..so definitely, t age 70, the one who took it at 62 wins .I used to hear the break even point was 83..I believe it may have changed, purely mathematically, at age 85 or so. it's arithmetic. nothing to do with investments.
+1 I rely on the SOA Longevity Illustrator and the Northwestern Mutual Lifespan Calculator. Both of those suggest that we will live into our early 90s, well beyond the point where delaying SS makes sense, even with the time value of money included.While none of us know for sure, many of us can make an educated guess and base our SS claiming age on that. That will pan out for most, though not all. My parents lived well into their 90’s, so odds those in the same (family longevity) cohort as me can benefit by waiting to age 70. If everyone in your family died of heart disease in their 50’s, that cohort might be wise to claim SS at 62. Saying nobody knows so just take it at 62 is burying one’s head in the sand. I’m done with this thread…
Taking SS early does not necessarily mean you're doing the best to leave a good legacy for your kids. If you're going to spend the same amount no matter when you take SS, then every month you life past the breakeven means you're amassing more each month with the larger SS benefit you got by delaying.I think the breakeven analysis for SS is a fallacy. Everyone’s situation is different and there is one variable that can blow up the analysis- date you will die. We took ours at 64, after we let go of our final consulting and part time gigs. Between my pensions and our SS we don’t need to pull much out of our IRA’s. Also, no state tax on SS where we live. Ou big goal; leave a legacy for our kids.
Doesn't it totally depend on how long you live?
I plan to take it early and invest it. The breakeven age is around 85 at 7% Look at page 12
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Not totally. A combination of how long you live and the opportunity cost of money since the cash flows are different.Doesn't it totally depend on how long you live?