Don’t need social security

[Joylush]

+1 (Bolded emphasis mine)

I am 74, and waited until age 70 to claim my full SS. I am very happy to be getting those bigger deposits in my checking account each month, even though I don't "need" them. But who knows what will happen next? If I get dementia or need 24/7 care for some other reason, I want to be able to afford the "nice caregiver" rather than some abusive jerk who is cheaper.

Life is an adventure and I am not taking any more chances with my old age finances than I have to. I'm ready so bring it on!

As you said, Life Throws Curves, YOU don’t know that you’ll never need it. But I do know that I will never need it so that’s the perspective I was looking for. I’m more of the mindset, Life Throws Curves, you don’t know how long you will live.

 

[RunningBum]

When I hear that someone died younger than 62, I always think, "Darn, they never got a penny of their Social Security."

I always think, "Darn, they died early, what a shame."

I hope that if I die before 62, or 70, that no one I know thinks about me not collecting any SS. If they do, I hope I didn't have them in my will.

 

[Joylush]

I always think, "Darn, they died early, what a shame."

I hope that if I die before 62, or 70, that no one I know thinks about me not collecting any SS. If they do, I hope I didn't have them in my will.

That thought wouldn’t offend me at all. In fact I wish more people were better versed in how the system works. It might eventually lead to allowing people to have more options.

 

[Sunset]

Another way: If don't need it before death, what is (future) value at death?

Death age 92, real return rate with least difference in outcome 5.560%:

......

I WISH I could get a 5.56 plus inflation return on my money every year....... I'd be so rich I could donate my SS

When I hear that someone died younger than 62, I always think, "Darn, they never got a penny of their Social Security."

.....

Ha ha I think well, they contributed to SS and all us living folk get the benefit from them...

 

[foxfirev5]

+1 (Bolded emphasis mine)

I am 74, and waited until age 70 to claim my full SS. I am very happy to be getting those bigger deposits in my checking account each month, even though I don't "need" them. But who knows what will happen next? If I get dementia or need 24/7 care for some other reason, I want to be able to afford the "nice caregiver" rather than some abusive jerk who is cheaper.

Life is an adventure and I am not taking any more chances with my old age finances than I have to. I'm ready so bring it on!

I wish I knew that more money would buy me better care. Not so sure with those I see around me. Mega bucks now mean less in today's market. It's a good time to hope you raised your children well.

 

[momoftwo]

We're in a relatively small subgroup of retirees. We have an adult disabled child who began receiving SSI at age 18.
When I began collecting SS at age 63, she became eligible for DAC benefits on my earning record.
It about doubled her monthly benefit and enables her to fund supported housing in a small private home with 3 others.
She also became eligible for Medicare after 2 years (if I recall correctly).

So for our family, claiming early was the right answer.

 

[RetMD21]

I don't care what people do but I found it helpful to use the calculator at https://opensocialsecurity.com/

 

[Spock]

I did a somewhat unique spreadsheet where I compared draw SS at 65 (medicare=no ACA limits) vs. draw at 70 but focusing on the tax aspects. The idea was to see what the tax torpedo looked like. "It's not how much you earn, it's what you keep".

I put in the 20-30 steps to calculate the % of SS that is taxable and jiggled the IRA/401K withdrawals to max out the 10% and then the 12% tax bracket. Just adding up the total SS+IRA withdrawal - TAX = total net income over 25 years there was very little difference between start at 65 vs. 70. By "very little" I mean it was a surprising 0.2% difference... dead even with the slop in the forecast.

The big difference was when I then took the total net income received and added the IRA balance remaining. The start SS at 65 came out 16% ahead of draw at 70... almost 350K.

This perspective was very surprising to me. Surprising enough that I'll have to go back and double check that I didn't compare the wrong to lines in the different sheets.

Anyway. Tools like opensocialsecurity focus on which starting age results in the higher income. I haven't seen any tools that factor in the taxable SS + IRA withdrawals to see what the net income AND remaining savings balances are over time.

 

[Sunset]

I did a somewhat unique spreadsheet where I compared draw SS at 65 (medicare=no ACA limits) vs. draw at 70 but focusing on the tax aspects. The idea was to see what the tax torpedo looked like. "It's not how much you earn, it's what you keep".

I put in the 20-30 steps to calculate the % of SS that is taxable and jiggled the IRA/401K withdrawals to max out the 10% and then the 12% tax bracket. Just adding up the total SS+IRA withdrawal - TAX = total net income over 25 years there was very little difference between start at 65 vs. 70. By "very little" I mean it was a surprising 0.2% difference... dead even with the slop in the forecast.

The big difference was when I then took the total net income received and added the IRA balance remaining. The start SS at 65 came out 16% ahead of draw at 70... almost 350K.

This perspective was very surprising to me. Surprising enough that I'll have to go back and double check that I didn't compare the wrong to lines in the different sheets.

Anyway. Tools like opensocialsecurity focus on which starting age results in the higher income. I haven't seen any tools that factor in the taxable SS + IRA withdrawals to see what the net income AND remaining savings balances are over time.

Please do go back and check, and if you find early with big IRA is better than later with Roth Conversions, put in fake numbers and post it

 

[Fermion]

Does the higher SS you get at 70 mean you are taxed more than if you had taken it at 62?

Well, I mean if you had to draw down on after tax money while waiting until age 70.

 

[Surewhitey]

On paper and depending on our MAGI when we hang it up, planning on 65 or later to maximize ACA. Or if one is planning on an early exit, maybe sooner. We're going good for now @ 52&58...

 

[pb4uski]

Does the higher SS you get at 70 mean you are taxed more than if you had taken it at 62?

Well, I mean if you had to draw down on after tax money while waiting until age 70.

I don't think so. In both cases only 85% at most is taxes and then at your marginal tax bracket. If this higher benefit pushes you into a higher tax bracket then perhaps, but not generally.... depends on circumstances.

 

[Fermion]

I don't think so. In both cases only 85% at most is taxes and then at your marginal tax bracket. If this higher benefit pushes you into a higher tax bracket then perhaps, but not generally.... depends on circumstances.

I guess what I was getting at is if you spread the money out over the 8 years before age 70, then even though it will be a lower amount at 70 than if you had waited, you not only had 8 years of income from SS but you spread out the tax hit, potentially qualifying you for a lower rate. You would need to account for that in your estimate of a break even point.

 

[pb4uski]

I think that might be overthinking it. I'll just use opensocialsecurity.com

 

[jollystomper]

I guess what I was getting at is if you spread the money out over the 8 years before age 70, then even though it will be a lower amount at 70 than if you had waited, you not only had 8 years of income from SS but you spread out the tax hit, potentially qualifying you for a lower rate. You would need to account for that in your estimate of a break even point.

This might be a case of "don't let the tax tail wag the dog" .

 

[RunningBum]

I guess what I was getting at is if you spread the money out over the 8 years before age 70, then even though it will be a lower amount at 70 than if you had waited, you not only had 8 years of income from SS but you spread out the tax hit, potentially qualifying you for a lower rate. You would need to account for that in your estimate of a break even point.

But what if you fill those 8 years with Roth conversions?

 

[rkser]

Following

 

[marko]

"Take the money and run" has been a phrase that has served me well over my lifetime.

Took it at 62. Break even is about 82 years old. You never know what your health or congress might do.

 

[JDARNELL]

Isn’t it that peoples spending decreases as they get older? If you have traded some of your risk away (ie LTC insurance) I would think people would get more enjoyment out of having the money early. Assumption is living expenses are taken care of. DW has started saying why are we leaving such a big chunk for the kids. From my view I want to make sure they have their basic lifetime needs met but I think she is right.

 

[rkser]

I am 66 1/2 yrs old & DW is 5 yrs younger.

Our plan is to follow Opensocialsecurity.com, which has me drawing SSA at 70 & DW at age 62.

I have got different opinions about this, but wonder if DW can add the spousal benefits of $200 when I file for mine

 

[MissMolly]

I am 66 1/2 yrs old & DW is 5 yrs younger.

Our plan is to follow Opensocialsecurity.com, which has me drawing SSA at 70 & DW at age 62.

I have got different opinions about this, but wonder if DW can add the spousal benefits of $200 when I file for mine

If your wife files at 62 she will never be eligible for the full 50% of your PIA when you file. However, she would be eligible for a reduced amount (due to filing early). If that reduced amount is greater than her own benefit, then once you file she can then switch over to the spousal amount.

 

[Spock]

This might be a case of "don't let the tax tail wag the dog" .

A fair number of members here move money from 1 institution to another to earn an additional 0.5% interest.
Careful tax bracket management earns me a one time 10%-12% return (no compounding unless tax free Roth withdrawals are part of the math) in the 0% bracket and a 22% one-time return vs. just letting the chips fall where they may.

 

[NW-Bound]

We are at the same age. My wife's SS is less so it makes sense for her to claim at 62, while I wait till 70.

I don't like bonds and never hold much, so look at a delayed SS as a bond to feel better about a more "balanced AA".

 

[youbet]

I guess what I was getting at is if you spread the money out over the 8 years before age 70, then even though it will be a lower amount at 70 than if you had waited, you not only had 8 years of income from SS but you spread out the tax hit, potentially qualifying you for a lower rate. You would need to account for that in your estimate of a break even point.

Yes, your assumption is generally correct. At break-even, starting at 62 would have spread the income over 8 more years than starting at 70. But gosh, there would be endless details about each person's situation that could impact whether there is an actual tax savings or not.

 

[DrRoy]

I don't need it either, but I look at it as longevity insurance.