Starting SS

[pugmom]

I have been lurking and reading about "when to take SS" for many years here.
I think I get both arguments about waiting or not waiting. While there are
definitely some clear indications, such as

- I need it to live on NOW
- My family history of early deaths indicate NOW
- If one spouse dies other one will need to maximize SS

etc., there is otherwise a fair amount of just personal preference.

It seems to me, and many have said, that SS should be looked at kind of like
an annuity. They have tried to figure out how much you will get based on
how much you earned and how long you may/will live.

DH will turn 67 in May, and I just turned 65 last September. I did opt to
start SS, but the question is about DH. He will get over $3000 per month.
Neither of us plan to work, and our health is okay, if you don't count
DH's pacemaker and (excised) melanoma.

He wants to go ahead and start, even if we have to put some away as now
"after tax" investments. We are not trying to manage our income for any
certain tax bracket or anything.

If he does start SS, we will probably be making about $85-90K between our
current level of WDs and SS. We could, of course, cut back on our IRA
WDs, but we can see mandated WDs coming soon anyway.

Is there any other major "gotcha" that we should consider before pulling
the trigger?

NOTE: I have purposely avoided mentioning world events, inflation, etc., not
because they are not important but because no one knows what will happen.

 

[Winemaker]

The "Tax Torpedo" is the only thing that comes to mind. One extra dollar over the cliff turns your marginal tax rate up to 49.5%. Many threads on the forum here discussing it.

 

[Ian S]

He will get over $3000 per month.
Neither of us plan to work, and our health is okay, if you don't count
DH's pacemaker and (excised) melanoma.

Not sure you can really ignore your husband's pacemaker and excised melanoma when considering his longevity. I'd seriously consider taking the SS now.

 

[RunningBum]

The "Tax Torpedo" is the only thing that comes to mind. One extra dollar over the cliff turns your marginal tax rate up to 49.5%. Many threads on the forum here discussing it.

That's not a cliff. That $1 would be taxed at 49.5%. A cliff is like how the ACA subsidy used to work, where the extra dollar over 400% FPL costs you thousands of dollars in subsidy.

 

[pugmom]

Thanks.. I will review the "tax torpedo" posts... Remember we are basically planning that he will file soon.

 

[SevenUp]

Open Social Security: Free, Open-Source Social Security Calculator and Taxation of Social Security benefits - Bogleheads might be worth your time if you haven't already....

 

[TriumphTR3fan]

Not sure you can really ignore your husband's pacemaker and excised melanoma when considering his longevity. I'd seriously consider taking the SS now.

I have an ICD & a excised malignant melanoma. If the pacemaker maintains good heart health & the melanoma is excised completely he should have a “normal” life span. It depends on when both interventions occurred. In this case what’s the worst that could happen? Living a long life without emough retirement income.

 

[pugmom]

The pacemaker works great and he has NO restrictions. The melanoma we simply have to hope is really gone, but other than a hole on his scalp it does not affect him at all.

 

[pugmom]

After looking at the 2022-23 tax tables it appears we have a lot of room before hitting the end of the 24% bracket.. that is not too bad.

 

[SevenUp]

After looking at the 2022-23 tax tables it appears we have a lot of room before hitting the end of the 24% bracket.. that is not too bad.

By the time you reach that end, NIIT and IRMAA will come into play.

 

[TriumphTR3fan]

The pacemaker works great and he has NO restrictions. The melanoma we simply have to hope is really gone, but other than a hole on his scalp it does not affect him at all.

That’s great to hear.

 

[cyber888]

Neither of us plan to work, and our health is okay, if you don't count
DH's pacemaker and (excised) melanoma.
=[/B]

NOTE: I have purposely avoided mentioning world events, inflation, etc., not
because they are not important but because no one knows what will happen.

Pacemaker and melanoma - I would seriously take those into account as a health risks, to take SS earlier.

 

[Exchme]

The age for claiming the smaller benefit is a bet on the age of the first to pass, the larger benefit is a bet on the age of the last to pass away.

Sounds like you have plenty of other money, so I think he should wait. As you say, SS is an inflation protected annuity; that is otherwise impossible to fully replicate in the market.

 

[ShokWaveRider]

I have a pacemaker (My second Actually), ! don't even notice it. No issues. I applied for SS to start in February this year.

 

[fh2000]

You can do a simple spreadsheet, as we have for my DW, to compare the SS benefits between taking at 67, and 70. Then, calculate the accumulated total each year to find the break ever age. You might find it is not worth waiting until 70 in his case.

 

[RetireBy90]

Two comments, my buddy is 91 this year and has pacemaker for years, and also melanoma that gets checked every 6 months. Of course, he is slowing down and feeling effects of age but conditions are well controlled.
Second, concerns other than how much SS I can get are surviving spouse finances (I’ll wait to take SS so DW has more income if needed); IRMAA jumps to next level for both of you with even just $1 over a bracket. We are paying $170 per month for each or $340 for part B due to some unexpected income at end of 2020. Finally, my taking SS will about end my Roth conversions. Something to consider.
I’ll wait to give me peace of mind even though I know today (at 67) or waiting another year or 2 won’t change our finances in any material way. If you get comfort of peace by waiting another year that is priceless in my opinion. Today or next year doesn’t look to change your financial outlook.

 

[Winemaker]

My BIL is 86yo and has AFIB and he gets pieces of skin off the top of his head removed because of melanoma, yearly. Don't considered it life threatening, but has to always wear a hat when he takes his 26 footer out on Lake Erie to fish. Yeah, 86yo, fishing on boat with his DW for walleye and steelhead.

 

[Foghorn Leghorn]

retirement strategy would be oh so much easier if we knew how long we were going to live

 

[Sunset]

....

If he does start SS, we will probably be making about $85-90K between our
current level of WDs and SS. We could, of course, cut back on our IRA
WDs, but we can see mandated WDs coming soon anyway.



....

It seems to me, you could be doing some Roth conversions right now at low tax rates, and maybe are but just don't mention them

I would say you husbands health is not perfect, so chances are even a normal life will not be a longer than expected life, and he should take SS now. He has already delayed some, so the SS he will get is good sized.

Be sure they don't back-date the SS application, you have to state the start date as they often backdate thinking people want the "bonus" check, and don't realize it cuts off 6 months of delayed credits.

 

[pugmom]

Thanks again for all replies! DH did submit his application today, so we will proceed. Life is short, as many here point out. FWIW we plan to do some major vacations that have been put off for 40 years!