# If retire now, take SS at 62

#### fh2000

##### Thinks s/he gets paid by the post
I am 56 now.

Running SS online statement, I see that I will receive \$1700/month if I take it at 62. The assumption is to continue working till 62 for this calculation.

Using the Quick Calculator on SS site, I entered \$110,100 for current year earning since that is maximum earnings covered by SS for 2012. If I choose Jan, 2013 to retire, I will get \$1673 at 62.

Working and contributing to SS for 6 more years, will only increase \$27 per month for me.

Working and contributing to SS for 6 more years, will only increase \$27 per month for me.

You have just discovered what many of the FIREd folks here also learned...and what helped propel them into early retirement. Working X more years does not substantially increase SS.

omni

The one small error in this calculation is that increased SS wage maximum (if met) will increase the SS check above what you calculated. This is because this new higher amount will replace the \$110,000 you used in your calculation.

Is it a big number? It isn't if you are only dropping out of the system a few years early. It could be a significant effect for someone retiring a decade or more before their "normal" retirement age.

The one small error in this calculation is that increased SS wage maximum (if met) will increase the SS check above what you calculated. This is because this new higher amount will replace the \$110,000 you used in your calculation.

Or is it the case that the calculation uses constant 2012 dollars, and that the increase in the wage maximum is a function of inflation? Theoretically, at least.

SS is computed based on your 35 best years of contributions. If you already have or are close to 35 good years you will not change your SS benefits much by working more years.

Also, if your average monthly income (adjusted for inflation) in those best 35 years is over \$4,624 each dollar above that is only worth \$0.15 in the benefit calculations. Averages over \$767 are only worth \$0.32 per dollar.

Best way to increase it is to delay taking SS if you can, if you wait to full retirement age it will go up about 30%, if you wait until 70 it goes up another 8%/year.
TJ

The one small error in this calculation is that increased SS wage maximum (if met) will increase the SS check above what you calculated. This is because this new higher amount will replace the \$110,000 you used in your calculation.

Is it a big number? It isn't if you are only dropping out of the system a few years early. It could be a significant effect for someone retiring a decade or more before their "normal" retirement age.

The maximum numbers for the past few years:
Social Security Wage Limits

2006 \$94,200
2007 \$97,500
2008 \$102,000
2009 \$102,000
2010 \$102,000
2011 \$106,800
2012 \$110,100

You are right. Depending on the number of skipped years, it might be somewhat different.

I see that I will receive \$1700/month if I take it at 62.

The big question that you need to answer is~ "Do I absolutely need this income stream from SS to live on at age 62." If the answer is yes, take the cash. If the answer is no, delay as long as you can stand it.

Oh yea, I assume that you will live a long time. So there's that...

I think the big question is, am I going to keep breathing? It's good to wait if you live long enough.

The big question that you need to answer is~ "Do I absolutely need this income stream from SS to live on at age 62." If the answer is yes, take the cash. If the answer is no, delay as long as you can stand it.

Oh yea, I assume that you will live a long time. So there's that...

I think this horsey hasn't been flogged enough lately. Yes "delay as long as you can stand it" As long as SS really ends up paying what it promises 20-40 years into the future. Consult ye olde crystal ball otherwise well, think otherwise...

ejman said:
I think this horsey hasn't been flogged enough lately. Yes "delay as long as you can stand it" As long as SS really ends up paying what it promises 20-40 years into the future. Consult ye olde crystal ball otherwise well, think otherwise...

+1
And let's see, can I invest that \$1700 a month and grow it better than whatever the powers that be will do to it a nd how much can I get IF they decide if I am worthy of getting any of it when I finally get around to asking for it. Uh uh. Not me...I am taking my \$\$\$ when I can and will invest it if I don't need it.

I think there is some consensus that SS benefits do not increase that much after say 20 or 30 years of work. This is why I guess many FIRE much earlier than age 55 or even 50.

I know SS is indexed for inflation, but is the same index applied for those who choose to start benefits at 62 as those who delay?

I am 56 now.

Running SS online statement, I see that I will receive \$1700/month if I take it at 62. The assumption is to continue working till 62 for this calculation.

Using the Quick Calculator on SS site, I entered \$110,100 for current year earning since that is maximum earnings covered by SS for 2012. If I choose Jan, 2013 to retire, I will get \$1673 at 62.

Working and contributing to SS for 6 more years, will only increase \$27 per month for me.

This makes the calculator think you will earn \$110,000(adjusted up each year) until you take SS. You need to add a zero salary in last year to project your benefit more correctly.

I simply use Excel DCF to get an NPV of each option. The key is what assumption you use for your lifetime end date.

There are also confounding factors for spousal benefits and so on...with a myriad of possibilities.

Changes in the law can really throw a wrench into this. I doubt they'd do away with SS entirely...but for those under 55 I'd be prepared for a haircut...particularly if you're "wealthy".

Replies
55
Views
5K
Replies
15
Views
1K
Replies
35
Views
2K
Replies
329
Views
26K
Replies
6
Views
896