Laurence Kotlikoff - Maximize my SS.com

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ERD50 said:
Is that really the case? I think there is one poster saying that to delay is a 'no-brainer' (I don't agree), and I think for the most part people are saying it isn't that straight forward for either decision, and are trying to clarify the decision points.
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Check out the earlier pages of this thread alone for starters.
 
daylatedollarshort; said:
I find it odd that taking SS at 62 seems to draw a lot of negative comments here and posts implying financial imprudence,
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Originally Posted by ERD50 View Post
Is that really the case? I think there is one poster saying that to delay is a 'no-brainer' (I don't agree), and I think for the most part people are saying it isn't that straight forward for either decision, and are trying to clarify the decision points.
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daylatedollarshort said:
Check out the earlier pages of this thread alone for starters.
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:confused:

I went through the first 50, and the only posts I saw that I might describe as negative were from the one poster that used the 'no-brainer' comment, and I already mentioned that one.

'A lot of negative comments'? I still don't see it. Perhaps you are being overly-sensitive in reacting to posts that express a view somewhat different from yours? I dunno, I can't really explain it w/o maybe a link to the specific posts you take issue with. But I've already spent enough time re-reading this thread.

Which, by the way is a very valuable thread, IMO. I was leaning to delay to 70 based on previous threads, but this helped me understand everything better, and I feel I'm better armed with the info I need to re-evaluate the decision each year from 62 to 70. A lot of good information here.

-ERD50
 
There is a lot of great information hear. Keep it coming. This seems to be the most popular subject on this site. When to claim SS:confused:

Seems like the best response is that we all should look at this monthly as we approach age '62' and go from there. I don't see how anyone can make a blunt statement being around 60 Years old or less and state they will wait till 70. Many changing life events will happen to all of us over the next 8+ years that can alter our plans. Best to all and good health and fortune.


Sent from my iPhone using Early Retirement Forum
 
ERD50 said:
... I'll guess that the compression is because these runs are sensitive to the failures, and that is generally a market declining (in buying power) right after retiring. And that is the scenario that favors taking SS early (as some of the forum members here did in the last down-turn)...
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This raised another question.

Between both SS @ 62 vs. both SS @ 70, I saw that delaying both SS would allow me to spend 3.5% more than early SS, if both of us live to 100. This 3.5% is not as high as I thought, but how about the average portfolio value in each case?

So, I look at the two cases above again by using their respective 100% success spending levels.

In both cases, using their individual spending levels, the minimum portfolio value is 0, by definition. Their average values differ by a mere 2%, with the delayed SS being better. By average, FIRECalc means the average of the 105 possible 40-yr periods of the past.

What about the best cases for each SS stragegy? In both strategies, with the most favorable market returns in the past, I would be securely in the decamillionaire rank when I get to be a centenarian (in today's dollars no less), and the two SS strategies differ by only 5%. And this case, the early SS would make me slightly richer!
 
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ERD50 said:
'A lot of negative comments'? I still don't see it. Perhaps you are being overly-sensitive in reacting to posts that express a view somewhat different from yours? I dunno, I can't really explain it w/o maybe a link to the specific posts you take issue with. But I've already spent enough time re-reading this thread.
-ERD50
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My view early on in this thread was "I think that is why there is no single correct answer to the SS question for every household. We all have different priorities and goals to maximize. "

In this thread and others I have noticed terms like waiting is a "no brainer", "collect SS at 62 so they can get screwed", "No need for any stupid 'break even analysis'", "a lot of folks cannot resist the 'early money' ", taking SS at 62 is a non-optimum decision by people who can't afford to be efficient, no quantitative case for taking SS at 62, where else can you buy an annuity for 8% (one sided claims because it does not consider the downside - the income lost if one dies prior to the crossover point), etc.
 
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daylatedollarshort said:
My view early on in this thread was "I think that is why there is no single correct answer to the SS question for every household. We all have different priorities and goals to maximize. "

In this thread and others I have noticed terms like waiting is a "no brainer", "collect SS at 62 so they can get screwed", "No need for any stupid 'break even analysis'", "a lot of folks cannot resist the 'early money' ", taking SS at 62 is a non-optimum decision by people who can't afford to be efficient, no quantitative case for taking SS at 62, where else can you buy an annuity for 8% (one sided claims because it does not consider the downside - the income lost if one dies prior to the crossover point), etc.
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Well, it's not just this thread. If you spend any time reading most Financial Experts opinion, you will see the same thing. The overriding reason that most people take S.S. at age 62 is that they simply need the money. And if you need the money, no one is going to criticize you.

The 'smart move' according to the overwhelming majority of financial experts is to delay to age 70.
 
daylatedollarshort said:
My view early on in this thread was "I think that is why there is no single correct answer to the SS question for every household. We all have different priorities and goals to maximize. "

In this thread and others I have noticed terms like waiting is a "no brainer", "collect SS at 62 so they can get screwed", "No need for any stupid 'break even analysis'", "a lot of folks cannot resist the 'early money' ", taking SS at 62 is a non-optimum decision by people who can't afford to be efficient, no quantitative case for taking SS at 62, where else can you buy an annuity for 8% (one sided claims because it does not consider the downside - the income lost if one dies prior to the crossover point), etc.
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Well, I'm investing way too much effort in this, but...

Since you put "screwed" in quotes, I searched the thread and only you used the term.

The 'stupid break even' analysis was by the same poster who made the 'no-brainer' comment, so just a bit more of the same. However, I pretty much agree that a break even analysis isn't what is important to most people - we are looking at it as insurance, it's just different. Using the word 'stupid' might be a little harsh, but he's just trying to make a point, nothing worth getting worked up about, IMO. And again, it is case dependent - if you know you and spouse can expect an unusually short LE, then a break even analysis probably makes sense. Most of just don't have that info.

'taking SS at 62 is a non-optimum decision by people who can't afford to be efficient' - That's not the quote, and I think you are putting that out of context as well.

'where else can you buy an annuity for 8%' (one sided claims because it does not consider the downside - the income lost if one dies prior to the crossover point), it's not one-sided, you have to buy it - that's the downside, right there in black and white. And it is a very astute question, worthy of serious consideration, IMO.

"a lot of folks cannot resist the 'early money' " Isn't that true?

Go ahead and point out the flaws in anyone's comments on delaying, that's how we learn. But I think you are off-base to simply paint them as 'negative'. From what I've seen, those looking to delay seem to fully understand the downsides, and feel the longevity insurance is worth it. I don't see dogmatic responses from them (with the possible exception of the one I have mentioned. One.).

Some of the discussions supporting taking it early do appear to be twisted though (we showed you can take that cruise and delay SS, and do just fine). But that doesn't make it wrong, or a bad idea for that person. But they ought to understand whether their thoughts are straight or not. At least that's what I'm trying to gather to help me make that decision.

-ERD50
 
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I see it both ways. Not long ago at all, I saw a thread where someone said as part of their plan they were taking their SS at 70. One reply said "as you are single, I see no point in deferring SS until 70. Why not 62?" No explanation or support for taking it at 62, just that they should be doing it. The OP was even talking about doing Roth conversions to 70, and taking SS early inhibits that. This isn't the only thread where I've seen taking 62 stated with no rationale, just one I happened to remember and knew how to find. There was another thread I recall where someone told another poster not to be greedy about holding out for the larger deferred amount.


I think you just aren't tuned into both sides. It's like how most every college football fan thinks ESPN is biased against their team, because they pay close attention to any criticism of their team, but not others.
 
Actually I did use 'no brainer' in post 69.... but it was in reference to someone who was 17.5 years younger than her future husband...


I would like someone on the take it at 62 to show how that is a no brainer...


I did not look to see if it was used by anybody else for any reason...


Just sayin since there is a discussion on if post are negative....
 
daylatedollarshort said:
I posted this thread and others. The screwed comments were in the "others":

http://www.early-retirement.org/forums/f28/you-should-take-ss-at-62-a-77196-19.html
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Long thread, was this the quote?

http://www.early-retirement.org/forums/f28/you-should-take-ss-at-62-a-77196-2.html#post1594288

Finally and I think this is important but often overlooked. The elderly are victims of financial scams. If some con man, financial adviser, insurance salesman, or Annie Nicole Smith screws me out my life savings at age 85 (clearly I hope for the Anne Nicole Smith in this situation)
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-ERD50
 
Cut-Throat said:
Well, it's not just this thread. If you spend any time reading most Financial Experts opinion, you will see the same thing. The overriding reason that most people take S.S. at age 62 is that they simply need the money. And if you need the money, no one is going to criticize you.

The 'smart move' according to the overwhelming majority of financial experts is to delay to age 70.
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That is my point. The "smart move" articles often do not consider a complete analysis with breakeven points, taxes, potential program SS or tax changes, individual mortality factors, income diversification, income smoothing, potential means testing, etc. I think some of the FA articles are biased in favor of keeping people working until 70 due to vested interests on the parts of the authors or their publication owners.

I am sure there are many households where 70 is the optimal claiming age. I just wouldn't base that decision on ubiquitous advertorial advice or put down others who, after a careful analysis of their own household finances, come to a different conclusion. There are many smart people here have valid reasons for their own claiming age choices.
 
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Ah, I just thought of another twist as I was reminded by some posters that an advantage of drawing SS early is that you have more money to spend early in retirement. I tend to agree with that, as I have seen with my own eyes that as a geezer/geezerette ages, he/she tends to care less about travel, fancy cars, exotic restaurants, hence spends less.

So, I returned to FIRECalc and reran my own situation but with Bernicke's spending model selected. And here's the results with both of us drawing SS @ 62 or both at 70, and dropping dead at 100.

What'd ya know? The SS @ 70 still wins, but by an "astounding" 0.5% increase in spending level! Due to the Bernicke's model, either one would result in an increase of 50% of initial spending over the flat spending model, and that's more impressive.

So, do it at 62, or do it at 70. It does not seem to make a lot of difference.
 
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daylatedollarshort said:
The quote was exactly what I put in my post. It is at post #377 in the link.
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OK, but your link didn't take me to post #377, just to the start of the thread. I've found you can right-click the post # (says 'permalink' when I hover over it), and copy/paste that link to get to a specific post.

Isn't #377 posts in to the thread going a long way to try to make your point that there are 'lots of' negative posts?

I'm not even sure that comment was made seriously (you left the smiley-face out of your quote). Honestly, have you considered you might be just a wee bit sensitive on this, and reading negativity into some of these posts?

-ERD50
 
ERD50 said:
OK, but your link didn't take me to post #377, just to the start of the thread. I've found you can right-click the post # (says 'permalink' when I hover over it), and copy/paste that link to get to a specific post.

Isn't #377 posts in to the thread going a long way to try to make your point that there are 'lots of' negative posts?

I'm not even sure that comment was made seriously (you left the smiley-face out of your quote). Honestly, have you considered you might be just a wee bit sensitive on this, and reading negativity into some of these posts?

-ERD50
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I'll consider the possibility I'm a wee bit too sensitive on this if you consider the possibility I'm not and you might be doing just a wee bit of mansplaining. :)
 
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daylatedollarshort said:
My view early on in this thread was "I think that is why there is no single correct answer to the SS question for every household. We all have different priorities and goals to maximize. "

In this thread and others I have noticed terms like waiting is a "no brainer", "collect SS at 62 so they can get screwed", "No need for any stupid 'break even analysis'", "a lot of folks cannot resist the 'early money' ", taking SS at 62 is a non-optimum decision by people who can't afford to be efficient, no quantitative case for taking SS at 62, where else can you buy an annuity for 8% (one sided claims because it does not consider the downside - the income lost if one dies prior to the crossover point), etc.
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To me, it seems that taking SS at 62 limits your choices based on a change in situation in the future. In my case, DW died unexpectedly just before I turned 60. With that information, I had the option to collect SS on her account until I turn 70. That is an additional 13k per year that I collect that tilts the equation to waiting to 70. Had she died when I was 63 and I had already started my SS at 62, I would no longer have the choice. The additional 13k per year would not be a consideration.
 
ERD50 - Having read most of the SS threads here over the past several years, it is obvious to me that the majority of posters tend to advocate waiting to 70, many quite stubbornly. I actually have always in the past been fairly neutral on this decision for me (DH took at 62 as we had 2 minor children) and figured I didn't have to think too much about it until I was 62 (which when I joined here seemed a long way away). Now that it is less than a year away I've been thinking about it more.

I had actually been leaning toward taking at 62 (or thereafter) if the market was down 20% or more, otherwise taking spousal at 66 and deferring mine to age 70 (in our case, DH and I have very similar benefit amounts, mine slightly higher). But, lately I've been leaning more to taking earlier.

But, I do get the feeling frankly than many here aren't just in favor of 70 but act sort of like anyone who doesn't wait is either poverty stricken or kinda stupid. I just think it is more complex than that.
 
Buy the book from Amazon titled "Get Whats Yours" way before you think you are ready to sign up for SSN. Honest.
 
Katsmeow said:
ERD50 - Having read most of the SS threads here over the past several years, it is obvious to me that the majority of posters tend to advocate waiting to 70, many quite stubbornly. I actually have always in the past been fairly neutral on this decision for me ...

... But, lately I've been leaning more to taking earlier. ...

But, I do get the feeling frankly than many here aren't just in favor of 70 but act sort of like anyone who doesn't wait is either poverty stricken or kinda stupid. I just think it is more complex than that.
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Well, I guess each person's perceptions can be different. I just don't get that perception from these threads. As I've said, one poster who did a fantastic job of pointing out the logic of 'you can spend it now, knowing you will get more in the future', does, IMO, come across rather heavy-handed. And I think he would make his case better by not calling it a 'no brainer', as that doesn't account for conditions and needs/wants outside the scenario he presents. But I really don't think that is the same as calling someone 'stupid', (but it is close)! I guess I can roll with that one. I really think that all he meant was that it was a 'no-brainer' that you could spend it early if you take it late - and the math backs that up (but ignores things that might be important to others, like leaving money to heirs).

On a parallel side note - this is why I have always been so vocal on the dancing, happy feet comments about someone doing a pre-pay of the mortgage. If a pre-pay is so great, it infers holding a mortgage must be stupid and sad. I think people should be aware of the message they are sending, and I made the same comment early on about the 'no-brainer' comment regarding delaying SS.

daylatedollarshort said:
I'll consider the possibility I'm a wee bit too sensitive on this if you consider the possibility I'm not and you might be doing just a wee bit of mansplaining. :)
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Hmmmmm..... Well, I'm going to cut you some slack here, since you included the smiley face. But I never really am sure what the smiley face means under a context such as this. Does it mean 'just funnin' with ya', or does it mean ' hah! I really got you with that one, and I'm grinning from ear-to-ear with superiority!'?

I had to google 'mansplaining', and it meant as I feared. But to be clear, if there was any seriousness in that comment, I find it highly offensive. And if it was a joke, I think it was a tasteless one. I don't talk down to someone because of their gender, and it is insulting to even suggest it. It also makes you sound weak, as if you can't be wrong, it must be someone else acting snobbishly.

Either way, this back and forth has gone on far too long. I'm out, and will stick to trying to learn something about the facts/logistics of SS strategies, and ignore whatever some people think other people are trying to say about the 'wise-ness' of their decision, outside of the facts.

-ERD50
 
Again a SS thread to death.....

See the ball.....hit the ball......

Too much thinking......

I plan to take SS at 62.....am I wrong? Damned if know. Ask me when I get to 80 (22 years from now).

Was moving to the UK at this point in my life the smartest thing I could do? (money waste etc)......Yep. Because it was the best thing for ME.
 
But, I do get the feeling frankly than many here aren't just in favor of 70 but act sort of like anyone who doesn't wait is either poverty stricken or kinda stupid. I just think it is more complex than that.
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I do not get that impression but I can see where it might come across. It is not simple, I agree. It is a strategy that was not discussed much in the past and the advantages that apply to some people are worth bringing to general attention. Until I got close to 62, I knew nothing about it. Until I ran our numbers, I had no clue. There are pros and cons. People should examine their individual situations if they want to make a rational decision, but if someone wants to shoot from the hip, I am OK with that. You have to go with your gut.

I plan to wait until 70 for my own reasons and I am pretty sure that 70 is the best for us. Our situation is fairly simple and most of retirement income for some time will be SS. YMMV.
1) I am married, so to maximize benefits to the survivor,
2) because we don't really need it right now,
3) my health is still good and my family has good longevity, and
4) I want to convert most of my IRA to Roth before I start to take SS (to avoid the Tax Torpedo for the surviving spouse).

If our situation changes (for example, my health turns bad), I would talk with DW about me taking SS right away but I could get by without in order for 1) above. (She has already started to receive benefits under file-and-suspend.)

If I were never married, I might have taken it early or alternately, postponed it until 70 to avoid the Tax Torpedo for myself. I would run the numbers first. I suspect there would be no advantage, so I would take it early. There are plenty of singles in my age group, so early could make sense for them as well.

My younger sister (married) took hers ASAP. She encouraged me to do the same, but my situation is a little different from hers and we have different preferences as well. No biggie. :)
 
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I see where some people get upset when others do not agree with them...


'How could so and so make that decision when I have laid it out with simple math that it is wrong....' and then the other side say 'what you did not take into consideration is blah blah blah'.....

The truth of the matter is BOTH are right.... and I think that most people here acknowledge that fact...

So if someone is talking in absolutes, let it go....


Just for fun... I am absolutely sure that waiting to 70 is easily the best for my situation... DW is 10 years younger and has no SS of her own... nobody can come up with a formula that would show anything different... but as always, life can change and make my plans worthless... DW's first husband died in his 40s... kinda takes all discussion out of what to do....
 
Bikerdude said:
Not to continue to:horse: but this article summarizes my thoughts. Others I know will disagree, however there is a link in the article to a study with some good charts.:)

There is no ‘right’ answer on when to claim Social Security - MarketWatch
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Then he goes from making sense to falling down the "conventionalism" rabbit hole and making a lot less sense:
So I needed to calculate a break-even age — the age at which total Social Security payments from claiming at age 66 and age 70 would be the same.
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The correct question: "Which will be of greater utility to my wife and I: The higher monthly inflation-adjusted check that we can't outlive, or the increased amount we'll keep in our portfolio if I take SS before age 70?" That would be an interesting examination, and worthy of the (electronic) ink.
 
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