Social Security at 70

[Music Lover]

For all the folks taking SS at 62 and taking a haircut on what they would get at FRA or 70. That is a good thing, puts less burden on the SS fund, perhaps increasing it's longevity. Just sayin'. Thanks folks we that are waiting till 70 really appreciate you sacrifice.

Unfortunately, some of those waiting until 70 won't even make it there.

There is a yearly blow that dough thread and there recently was a die with zero thread. Not everyone feels the need to maximize every single penny so that they're ahead at some point in their 80's.

 

[Out of Steam]

I'm retired and past 62; planning to wait to collect until at least 65.

While I have reason to expect above-average longevity as of now, I don't feel strongly about waiting until after age 65. Per SSA, the percentage reduction is 5/9 of 1% per month for the first 36 months (to age 65) and 5/12 of 1% for each additional month (between 65 and FRA). So the loss in benefits per month is reduced between 65 and FRA.

If I can wait after age 65 without impact to our standard of living I will, but am not willing to make sacrifices for it. If I had to guess, my collection date will be the end of my 5 year payout on a small retirement annuity shortly after I turn 66.

 

[ShokWaveRider]

Unfortunately, some of those waiting until 70 won't even make it there.

That is even better for the SS fund then isn't it?

 

[Jakob]

SS at 62, 66.10, and 70

According to a quick Google search, slightly less than 1/3 of people start collecting at 62. About 9% of women and 6% of men wait till 70. On the anecdotal side, I do think that many who start at 62 need the money and have either lost a job and can't find another one or have had their bodies beaten up by physically demanding jobs they can't do anymore.



I do worry about the impact of future changes, especially those affecting taxation of SS and "stealth taxes" like IRMAA. It's one of the reasons I finally started taking it at 69. The tax situation is likely to get worse instead of better.

Athena, Hmm, I didn’t mention in-laws? several other considerations are that my personal investment strategizes are planned if I live to 95, of course best layed plans…, and that most people will be more active in their 60s vs 70s…

 

[Winemaker]

Unfortunately, some of those waiting until 70 won't even make it there.

There is a yearly blow that dough thread and there recently was a die with zero thread. Not everyone feels the need to maximize every single penny so that they're ahead at some point in their 80's.

As an retired engineer, supervisor, real estate investor, grandpa, husband, wine maker, traveler, hiker, and general seeker of fun, I try to maximize everything, including my monies, and my life.

 

[ncbill]

According to a quick Google search, slightly less than 1/3 of people start collecting at 62. About 9% of women and 6% of men wait till 70. On the anecdotal side, I do think that many who start at 62 need the money and have either lost a job and can't find another one or have had their bodies beaten up by physically demanding jobs they can't do anymore.

I do worry about the impact of future changes, especially those affecting taxation of SS and "stealth taxes" like IRMAA. It's one of the reasons I finally started taking it at 69. The tax situation is likely to get worse instead of better.

Yep, my aunt was the former (department outsourced at the beginning of the Great Recession, no success finding another job) & my father-in-law the latter (very physical blue-collar job, but which enabled him to claim a COLA pension in his early 50s)

Ironically father-in-law made it to the breakeven point (versus taken at age 70) but with a subsidized (from work) Medicare supplement plus gold-plated portable LTC insurance policies (also from work) for him & his wife really has no need for the extra monthly income.

 

[youbet]

Think she meant that the monthly payments are the same, whether one is in regular housing or skilled nursing care.
Both types of living situations have had an average of 3% yearly increases.

This isn't always true anymore. At the several places we've been visiting, there is a single, highly discounted (vs standard NH's) monthly fee for being in the skilled nursing section. It's the same for everyone. But, your monthly fee for regular housing depends on the apartment you're occupying. So, if you're paying a high regular housing fee due to occupying a 2 bed +den with balcony and water view apartment, you might actually spend less per month to be in full nursing care. If you're living in a studio, you might pay a bit more.

Seems fair. Otherwise two people both in skilled nursing care might be paying significantly different rates despite receiving the same care and accommodations.

 

[youbet]

According to a quick Google search, slightly less than 1/3 of people start collecting at 62. About 9% of women and 6% of men wait till 70. On the anecdotal side, I do think that many who start at 62 need the money and have either lost a job and can't find another one or have had their bodies beaten up by physically demanding jobs they can't do anymore.

Bold mine.

I fully agree. Many folks sadly need to start SS early due to financial need. Of course, those people aren't part of this conversation which is aimed at people who have a choice. If you have to take SS at 62 to survive, then you take it. No decisions. No discussion. No roll of the die.

 

[NW-Bound]

Perfectly healthy a 62 and considering waiting until 70. I decided to take it at 62. Next week I'm having major cancer surgery. I was probably brilliant. Why don't I feel it.

I wish you a successful surgery and a full recovery.

I had a health scare at 55, right after deciding to quit work. Was not sure if I would even make it to 62 to claim anything.

Still had my luck, as I am still here, and now waiting to claim SS at 70. Maybe I should not wait, but I want to do more Roth conversion first.

My wife already claimed hers at 62.

 

[youbet]

So much of retirement planning would be so much easier if we knew how long we are going to be here ....

And also........

1. What inflation would be.

2. What investment earnings would be.

3. What taxes would be.

4. What your impossible-to-plan expenses would be.

5. Etc.

And, yes, agree that how long you'll live is certainly a big factor. Overall, it's much more of a crap shoot than most folks here like to admit. All the talk of spreadsheets, planning to the 6th decimal point, detailed (to the extreme) tracking of expenses, etc., just makes me smile.

I just pushed the boat off the bank and headed downstream not trying to fight the current. Go with the flow. FIRE'd 16 years. Lots of challenges. Lots of uncontrollable variables. Lots of surprises. But, so far, so good.

It appears I'm financially ahead for having taken SS at 62 and benefited from investing that income in the market for 8 excellent years. And that extra chunk of nest egg provides some extra security for DW since she is disallowed from collecting any of my SS nor receives any of her own.

Every case is unique.

 

[athena53]

That is even better for the SS fund then isn't it?

I've wondered about the impact of all the extra deaths from COVID on the solvency of SS, particularly since the elderly were hit disproportionately hard.

Over the years I've seen a couple of idiotic memes on FB hinting darkly that the money collected from people who didn't live long enough to collect SS goes into some dark hole in the gubmint's pockets.

 

[NotCreativeName]

I have learned so much from this thread and it's broadened my view. It truly is a crapshoot for those who have the funds to wait and seem to be in good health. I am 62 now and looking to raise the basis in my brokerage account so I will have the funds (or most of them). Then I'll try to do some Roth conversions as long as I can. Of course, the market and health are variables that may change when I start SS.

Before I started following this thread I was looking at maxing ACA until 65, then SS at 65 and Roth conversions up to 12%.

I didn't realize how much $$ would be freed up by doing capital gains harvesting. And how SS at 70 could be viewed as a long term annuity.

So thanks to everyone who has contributed to this thread.

 

[Jakob]

Maximizing…

As an retired engineer, supervisor, real estate investor, grandpa, husband, wine maker, traveler, hiker, and general seeker of fun, I try to maximize everything, including my monies, and my life.

As an Occupational Therapist, landlord, investor, musician (traditional Appalachian and roots music), grandpa, husband, stone carver, hiker, and armchair philosopher, maximizing life can be interpreted many ways? Yes sir, I believe you are right.

 

[NW-Bound]

I've wondered about the impact of all the extra deaths from COVID on the solvency of SS, particularly since the elderly were hit disproportionately hard.

Over the years I've seen a couple of idiotic memes on FB hinting darkly that the money collected from people who didn't live long enough to collect SS goes into some dark hole in the gubmint's pockets.

It was surely dumb. The money has always been in gummint's pocket, and they can do as they wish.

At any time, the rule can be changed, such as requiring you to be 70 to be eligible. No, make it 80. That will teach the dumb people who think it's their money.

What do the people think SS money is? It's not like their 401k or IRA!

 

[jim584672]

If you die before 70 you won't be around to be upset about it. If you take it at 62 and you live to 100 you will be around to live in poverty, so that sucks.

 

[Dtail]

It was surely dumb. The money has always been in gummint's pocket, and they can do as they wish.

At any time, the rule can be changed, such as requiring you to be 70 to be eligible. No, make it 80. That will teach the dumb people who think it's their money.

What do the people think SS money is? It's not like their 401k or IRA!

Yup. If we had no SS at all, I would not have been able to retire early.

 

[Calico]

If you die before 70 you won't be around to be upset about it. If you take it at 62 and you live to 100 you will be around to live in poverty, so that sucks.

+100.

 

[youbet]

If you die before 70 you won't be around to be upset about it. If you take it at 62 and you live to 100 you will be around to live in poverty, so that sucks.

If you're cutting it so close that the difference between SS at 62 + 4% of the extra FIRE portfolio value due to early SS and waiting for higher SS at 70, to keep you out of poverty, that sounds like you're cutting it pretty close.

IMHO, there really won't be much of a difference for most folks as to whether they started SS at 62 and prudently invested the money for 8 years or whether they waited until 70. Each case has different risks and rewards and the final result is not knowable in advance.

 

[Fermion]

If you die before 70 you won't be around to be upset about it. If you take it at 62 and you live to 100 you will be around to live in poverty, so that sucks.

You still get to vote past 80 right? Just vote in more money...there will be a lot of old people with nothing else to do.

 

[MRG]

When I modeled our finances before jumping 10 years ago SS seemed like a far away thing that might happen. DW has hers and I'm 65 still not started. We're not doing too badly, we have enough cash until my FRA next summer. Thinking there's a MYGA maturing then with another 18 months of expenses, maybe then? I'd like to maximize mine as I have longevity in my family and I am supposed to get near the maximum. Maybe I'll hold off till 70? DW has been silent on my decision.

 

[Sunset]

I have learned so much from this thread and it's broadened my view. It truly is a crapshoot for those who have the funds to wait and seem to be in good health. I am 62 now and looking to raise the basis in my brokerage account so I will have the funds (or most of them). Then I'll try to do some Roth conversions as long as I can. Of course, the market and health are variables that may change when I start SS.

Before I started following this thread I was looking at maxing ACA until 65, then SS at 65 and Roth conversions up to 12%.

I didn't realize how much $$ would be freed up by doing capital gains harvesting. And how SS at 70 could be viewed as a long term annuity.

So thanks to everyone who has contributed to this thread.

I always thought an ACA subsidy is incredibly valuable and most folks would rather get the subsidy than do LTCG harvesting or Roth Conversions

 

[Sunset]

And also........

1. What inflation would be.

2. What investment earnings would be.

3. What taxes would be.

4. What your impossible-to-plan expenses would be.

5. Etc.

And, yes, agree that how long you'll live is certainly a big factor. Overall, it's much more of a crap shoot than most folks here like to admit. All the talk of spreadsheets, planning to the 6th decimal point, detailed (to the extreme) tracking of expenses, etc., just makes me smile.

I just pushed the boat off the bank and headed downstream not trying to fight the current. Go with the flow. FIRE'd 16 years. Lots of challenges. Lots of uncontrollable variables. Lots of surprises. But, so far, so good.

It appears I'm financially ahead for having taken SS at 62 and benefited from investing that income in the market for 8 excellent years. And that extra chunk of nest egg provides some extra security for DW since she is disallowed from collecting any of my SS nor receives any of her own.

Every case is unique.

Yes lots of factors, and with a time machine, I think many folks would go back and take at 62 to invest in what was a FANTASTIC time in the stock market.

Should the market fall a LOT, then I'll join you in collecting SS, to preserve my investments. Until then I'll wait as the 8% plus inflation increase makes SS almost as good as an I-bond

 

[Dtail]

Yes lots of factors, and with a time machine, I think many folks would go back and take at 62 to invest in what was a FANTASTIC time in the stock market.

Should the market fall a LOT, then I'll join you in collecting SS, to preserve my investments. Until then I'll wait as the 8% plus inflation increase makes SS almost as good as an I-bond

So it is almost like saying that if one believes the market will fall a bunch, then SS at 62, but also if one feels that the market returns will be fairly high, then also take it at 62 to invest.

 

[jim584672]

If you're cutting it so close that the difference between SS at 62 + 4% of the extra FIRE portfolio value due to early SS and waiting for higher SS at 70, to keep you out of poverty, that sounds like you're cutting it pretty close.

IMHO, there really won't be much of a difference for most folks as to whether they started SS at 62 and prudently invested the money for 8 years or whether they waited until 70. Each case has different risks and rewards and the final result is not knowable in advance.

Not cutting it close. But SS is a rare COLA annuity and at 70 it is much higher than 62. My pending non-COLA pension should cover the bulk of expenses if inflation can calm down.

 

[NotCreativeName]

I always thought an ACA subsidy is incredibly valuable and most folks would rather get the subsidy than do LTCG harvesting or Roth Conversions

This is how I figured it out - please let me know if you don't think this is a good approach.

TLDR: I'm trading off about $6K in ACA credits for $60K LTCG. Given my expected tax rate in the future, it seems to make sense.

I used IRSCalculators.com and modeled keeping LTCG below the threshold that would make SSDI taxable and lose max ACA credit. Under that scenario I have $56K cash available which under the calculator says I "keep" 100%. if I convert $60K I have $148K cash available and I "keep" 98.57%. In the future I would expect my rate to go up, so it seems like doing it now is wise.