My Social Security Age evaluation based on my circumstances, your situation is likely different

[Romer]

The one thing I learned and has been emphasized here is that everyone’s situation is different

Most are evaluating taking SS at 62 vs 70. Depending on your needs the answer will vary

My pension, investments and projected expenses make my situation different and I am not saying this is the time to take SS, just looking for what is the right time for me.

I was set on 67 until I ran this evaluation last week. Maybe someone else is in a similar situation and will find this useful, maybe not Age 67-68.5 along with my investments and pension was the sweet spot for me and supported by Open SS

For 2026 (age 65 tax year), I had lowered my Roth Conversions to stay within/close to the 12% Tax Bracket for 2026 to allow us to take the extra tax credit (2026-2028) from the recent Congressional bill.

Every year I revaluate when to take SS. This year I evaluated taking it in Jan 2027 at age 65.5 compared to 67. I did also look at 68, 69 and 70 to be sure.

I decided to look at the following scenario

• Take SS at 65.5+ (65 and 7 mo) (Jan 2027), essentially comparing 65.5 to 67 augmenting my pension and investments
• Switch DW to spousal which will more than double her SS. She started hers at 63
• Keep within the 12% Tax Bracket
• Slow down Roth Conversions around SS payouts and keeping within 12% tax rate

Results:

• The Roth Conversions complete in 2033 (72nd BD) ahead of any RMDs vs 2028
• Looking at SS alone;
  • With SS Haircut (19%) and no Haircut (Table is total payout)
    • The best case (no haircut) waiting for 67 is it provides a better total payout by $61K at age 86 (dec 2047)
  • • 
• Delaying from Jan 2027 to June 28 (age 67) would require an additional $87K over the next 18 months to offset delaying SS
• Withdrawal Rate to augment pension and Social Security. Compared to 6% w/o taking SS.
  • 2% until Roth Conv Complete (2027-2033)
  • 1% once complete, increases close to 1.9% if SS gets a haircut. This is all from a Roth, so tax free (2032 till on the wrong side of the grass)
• Family members that lived the longest on both sides were 87-92. Several died from cancer younger than I am.
• The disadvantage is the Survivor benefit should I go first is reduced. If that was a key factor, I would reconsider going to 70. That is not a driver in making sure she would be financially well off after I am gone

I reran this on Open Security comparing it to the Optimum plan Open Social Security: Free, Open-Source Social Security Calculator

The result provided the graph and bold text
The present value of the strategy you selected is $927,486, as compared to a present value of $946,357 from the recommended strategy, a difference of -$18,870 (-2%)
$18K to me is in the margin of error, especially if you consider my investments.

The truth is I could afford to wait on SS. The increase between 65.5 to 70 in SS yearly income in 2031 would be $18K higher (Including spousal) waiting until age 70. It would take an extra $260K from my investments to offset the delay though.

I have 5 years of retirement spending driving my future yearly expense projections including a wedge based on last 5 years (2 HVACs, Car, Family Trip, Roof Replacemeent Deductible, Bathroom Remodel, Carpet, Concrete work, etc) costs. I also have a significant yearly Travel allotment. Not really an issue if I exceed the expenses based on all (except property) Roth Tax Free investments and low withdrawal rate

Again, I am not recommending age 65.5 as the right time to take Social Security. Based on my situation and personal perspective, it looks like the right time for me.

 

[COcheesehead]

We all need to run our own analysis. Everyone’s situation is different.

 

[old medic]

We all need to run our own analysis. Everyone’s situation is different.

And re-evaluate at least annually. Not just SS but overall plan. Things happen, good and bad, and in our case BAD actually had a silver lining of good. So far our SS/retirement finish line has moved about 7 times, with both DW's still pending.

 

[freedomatlast]

Without knowing when you and your spouse are going to die, it's all a crapshoot.

 

[Steelpony]

Without knowing when you and your spouse are going to die, it's all a crapshoot.

Our simple plan was to run SS up to the household max at the time or when absolutely needed.

When we got within $100 a month of the max that was the time for us, around age 66+.

 

[Surewhitey]

Ours center around ACA, Roth conversions, small pension and then our ages (6 years difference). Definitely a personal situation.

Firstly we need to RE.

 

[Flieger]

I decided to look at the following scenario

• Take SS at 65.5+ (65 and 7 mo) (Jan 2027), essentially comparing 65.5 to 67 augmenting my pension and investments
• Switch DW to spousal which will more than double her SS. She started hers at 63
• Keep within the 12% Tax Bracket
• Slow down Roth Conversions around SS payouts and keeping within 12% tax rate

I think since your Spouse started hers at 63, her spousal is permanently reduced.

Flieger

 

[sengsational]

The principle I use is maximum available spending / bequest, not maximizing SS income. The two are not the same. The rate of return assumptions of the model can easily swing the most advantageous date to start Social Security from 62 to 70 and back. There are a lot of moving parts, and all models are wrong, some more wrong than others. I've started using OWL, a free, open source, linear programming based model that's on GitHub. It uses specific SS and tax rules. Running that might provide another data point for you, Romer. Each model run uses a specific SS claiming age, so you'd need to run a few models to see how that affects the spend. The author and another committer have done some sensitivity analysis runs and summarized the results in the discussion area on the project's GitHub. Those are worth going through for the example couple to help decide how you can do your own sensitivity analysis.

 

[COcheesehead]

I used value of the cashflow vs maximizing the value. Big difference.

 

[Romer]

I think since your Spouse started hers at 63, her spousal is permanently reduced.

Flieger

That is correct. Spousal has two parts. Her benefit was reduced by taking at 63 from 980 (before COLA). The adder for spousal would not have been had I waited until age 67. The Spousal adder was slightly reduced by taking ss at 66.5. It is still a pretty good adder.

 

[Flieger]

That is correct. Spousal has two parts. Her part was reduced by taking at 63. The adder for spousal would not have beeen had I waiteed until age 67. The adder was slightly reduced by taking ss at 66.5. It is still a pretty good adder.

I think her spousal is also reduced by her taking early. I'm going to go back and look again.

Yep.From SSA.GOV(2nd paragraph):

Flieger

 

[Romer]

I think herder is also reduced by her taking early. I'm going to go back and look again.

Flieger

I just updated my post with a table

I found this video helpful as it is confusing with her filing early and then my filing early

 

[jollystomper]

I agree that everyone's situation is different, and that one should review one's situation annually to see if an adjustment is needed.

My current priorities are (a) maximizing the SS survivors benefit, and (b) having income room for Roth conversions. Both are the main reasons I am holding of SS until 70.

But, at this point, that is just two years from now. That might allow only about $40K-$50k of Roth conversions before age 70, if I choose to do them within my tax bracket. My SS when I turn 68 this year will be "only" about $7K less per year than at 70. Next year at 69, it will be "only" $3k less per year. At this point, one can evaluate how much of a difference that will make in one's retirement lifestyle, when one has other sources of income. It can be tempting to be "greedy" and take it now.

 

[Flieger]

I just updated my post with a table

I found this video helpful as it is confusing with her filing early and then my filing early

Yes. He states at the 1:55 "...if the lower earning spouse files AT FRA, they will not receive less than 50% of the higher earners FRA benefit". In fact, he states that the reduction for early claiming is even higher for spousal.

Good video.

Flieger

 

[Flieger]

That is correct. Spousal has two parts. Her benefit was reduced by taking at 63 from 980 (before COLA). The adder for spousal would not have been had I waited until age 67. The Spousal adder was slightly reduced by taking ss at 66.5. It is still a pretty good adder.

View attachment 61663

I still think you are incorrect with this. Her benefit for spousal is reduced based on HER age starting it, not yours.

Flieger

 

[Romer]

I still think you are incorrect with this. Her benefit for spousal is reduced based on HER age starting it, not yours.

Flieger

Thank you for the feedbaack. I will go back and relook

I did also use an online calculator Social Security Spousal Benefit Calculator

it gives you this nice table after you input each persons FRA, when to take it and also an estimated COLA. I used 1.5%

I modified it to see what it would be if I waited until age 67.

 

[Flieger]

Thank you for the feedbaack. I will go back and relook

I did also use an online calculator Social Security Spousal Benefit Calculator

it gives you this nice table after you input each persons FRA, when to take it and also an estimated COLA. I used 1.5%
View attachment 61665


I modified it to see what it would be if I waited until age 67.
View attachment 61666

Did you put it in with the lower earner age at 63? That's when you said she started her SS. From what I read on SSA.GOV, that is (also) what counts.

Flieger

 

[flyingaway]

Unless your budget is tight, when to take social security does not matter very much.

 

[Romer]

Did you put it in with the lower earner age at 63? That's when you said she started her SS. From what I read on SSA.GOV, that is (also) what counts.

Flieger

yes. Look at the post above were I display the online calculator results

It says she starts her benefit at 63

I should mention we are the same age with her BD in May and mine in June

she started her benefit in 2024 and what is in the table is scaled up by Cola. The $780 in that table is exactly what she is getting this year

 

[Flieger]

yes. Look at the post above were I display the online calculator results

It says she starts her benefit at 63

I should mention we are the same age with her BD in May and mine in June

she started her benefit in 2024 and what is in the table is scaled up by Cola. The $780 in that table is exactly what she is getting this year

Ahhh, I missed that. Thanks.

Flieger

 

[Chuckanut]

Since I am not filthy rich, I fear running out of money before I die much more than leaving some SS dollars on the table. I also like to sleep well at night.

Therefore I chose SS at 70.

Also, if you have enough money to fund your retirement until 70 and you don’t care about leaving an estate to your heirs, (two big IFs for many of us), taking SS at 70 gives you more money to spend every year starting at 62.

 

[Romer]

Since I am not filthy rich, I fear running out of money before I die much more than leaving some SS dollars on the table. I also like to sleep well at night.

Therefore I chose SS at 70.

Also, if you have enough money to fund your retirement until 70 and you don’t care about leaving an estate to your heirs, (two big IFs for many of us), taking SS at 70 gives you more money to spend every year starting at 62.

Sounds like the right call for your situation

 

[camfused]

@Romer , the generally accepted SS haircut amount is 23%, not 19%, in case you want to adjust and rerun your numbers.

 

[Romer]

@Romer , the generally accepted SS haircut amount is 23%, not 19%, in case you want to adjust and rerun your numbers.

Thanks,
I have seen 19, 21 and 23% in various places. 23% would be better to have a WC number

I appreciate the feedback

 

[Chuckanut]

@Romer , the generally accepted SS haircut amount is 23%, not 19%, in case you want to adjust and rerun your numbers.

Thanks. That reminds me to add that running FireCalc with the possible SS cuts is also a good idea. I found out that with the cuts I will have to skip my quarterly jet setting long weekends in Paris to eat at:

1. Guy Savoy​

Tasting menu: €680
Michelin stars: 2

Other than that, I will survive.