Let me guess. You are in the middle, which is the only one that you make sound like a smart decision, with negative bias against the ends.
Wrong guess. We are very, very far in the "don't need the money" camp. We took it at 62...Let me guess. You are in the middle, which is the only one that you make sound like a smart decision, with negative bias against the ends.
Would you care to explain how the middle maximizes their benefit? It can, but you probably won't know that until you die. If delaying to age 70 gives me "extra fun money" over taking at other ages, isn't that the same as maximizing my benefit?
I agree most are in the middle, but the reasons I've observed are:
- Lined up with actual retirement date, traditionally age 65
- Waiting until done with ACA subsidies, the year after turning 65
- FRA, under the (questionable) notion that it must be best, otherwise why does it have that designation?
- Deferred SS until they needed the benefit, and that fell sometime before 70.
- Compromise between taking at 62 and taking at 70, getting some of the benefits of each (but also some of the shortfalls of each)
Not everyone taking at 62 are desperate. Plenty here do. Valid reasons I've seen are:
- Poor health or family history
- Believe they will likely get a good enough return on their money left invested that it will get them the best result at any age of death
- Concerned about future cut backs in benefits and want to get what they can before that happens
There are other (IMO) flawed reasons but I won't get into those.
I'm still planning to wait until age 70, because:
- Good health and family history
- Longevity insurance. If I die early I won't run have out of money. If I live longer I have more money each month to keep me living comfortably. If I don't need that, it's more money for gifting to heirs or charity, and yes, extra fun money.
- ACA subsidies made waiting until at least past 65 a no-brainer for me
- Years 65-70 will be used for very cheap Roth conversions and/or tIRA withdrawals
Just last week I did an analysis of how I'm going to fund my living expenses after I turn 65, which is the end of this year. Options are some combination of taking SS, using Roth, selling taxable equity funds (with large cap gains), and withdrawing from tIRA. I was prepared to start SS if that looked best, but most of it will be funded by zero or low tax rate tIRA withdrawals, and the rest from Roth or selling MFs.
I've ignored the spousal situations because they don't apply to me so I haven't studied them, but aren't they often putting one spouse on the early end and the other the late end, to maximize their benefits?
Yep. that was my key reason to wait until 70. DW will get my SS when I pass.
Not waiting due to health and other reasons. I think she (and the pool boy) will be fine if I go first/soon...
+1 My benefit was much higher than DW's because she was a SAHM and I was a high earner.
Ditto! I’m waiting for 70 to file!
While I also felt it was better earlier while earning on "un-pulled" funds, 8% real (after inflation?) is too much IMO.
It is not about 8 years. The "race" is over the course of the remaining life expectancy. Say, if the life expectancy is 85, the span is 22 years (85-63 = 22). Since 2000, the annual return of SPY is about 8% and QQQ is a little over 10%.
Well, some folks have $$$ in their taxable and Roth accounts in their early 60s, but in my case, not so much back then.
As regards IRMAA, I think it makes since to manage your finances, when possible, to stay in the same IRMAA tier every year, no big fluctuations due to improperly computed Roth conversions or property sales.
Even with an income in the upper six figures, flying private in a rent-a-jet (see separate thread) likely wouldn't be feasible.As regards IRMAA, I think it makes since to manage your finances, when possible, to stay in the same IRMAA tier every year, no big fluctuations due to improperly computed Roth conversions or property sales.
That being said, my personal preference would be to be in the highest IRMAA tier forever, meaning AGI over $500k per year, filing single.
But sadly, that's not gonna happen for me...
I agree. The difference is not much, but it is more of a psychological take. Many financial "experts" show us how to save tax dollars with "optimal" retirement plan. But, what difference would be if one leaves $1 M vs $1.5 M (due to tax saving) when he leaves the world? Zero. His children don't really care because it is just inheritance and they didn't earn it.
When it comes to retirement financial planning, I think that there is a broad "optimal" range.
Inflation is a scare tactic. If you own stocks, you should not worry about the inflation at all. When inflation is high, housing prices and company values get higher, so will your stock values.
There were SEVERAL in my HS class of 125 grads that did not make it to age 62.The first word in "personal finance" is personal - everyone will make the choice that is right for them. My wife and I both have about the same benefit amount coming in and my Father died at 70, my mother at 80, my older brother at 60. I'll be taking it at 62 - if I make it
If you don't need it and invest it, or replace your portfolio withdrawals @ 6% growth...
