When To Take Social Security? Study takes a statistical approach.

[pb4uski]

So that really mean half can expect to live shorter and half can expect to live longer? So half never make it to the breakeven point of 82. Just something to consider as one considers when to start SS.



That's a pretty bold and I'd say perhaps invalid statement. While not a forum member, or maybe he was, but Jimmy Buffet was very affluent with a NW of over a BILLION $$$, yet he passed unfortunately at 76.

Other celebrities who passed and had significant bankroll, thereby most being more affluent than those on this forum include Raquel Welch (82), Paul Reubens (71).

I mention the celebrities as they are well known, but personally had friends in the past couple years who passed at 65 (months after retiring), 75 and 77. They each had more substantial bankroll than me. But money may help, but when it's your time, it's your time and money can't stop death. So "average" just means that, there are still a large number of who will fall well short of that golden age.

We can agree to disagree on this, but you can't rely on anecdotal information. From Bard:

Do people with above average income or wealth live longer? If so, how much longer and why?

Yes, people with above average income or wealth do live longer. In the United States, the richest American men live 15 years longer than the poorest men, while the richest American women live 10 years longer than the poorest women. The gaps between the rich and the poor are growing rapidly over time.

There are a number of reasons for this. People with higher incomes have access to better health care, including preventive care and early diagnosis of diseases. They also have more nutritious food, less stress, and more opportunities for physical activity. In addition, they are less likely to smoke or drink alcohol excessively.

A study published in the journal "The Lancet" found that people in the richest countries in the world have an average life expectancy of 82 years, while people in the poorest countries have an average life expectancy of 60 years. This difference is largely due to income inequality.

There are a number of things that can be done to reduce the income inequality gap and improve the health of people at all income levels. These include providing universal health care, improving access to nutritious food, and reducing stress.

Here are some specific ways that income can affect life expectancy:

• Access to health care: People with higher incomes are more likely to have health insurance and to be able to afford to see a doctor when they are sick. This can lead to earlier diagnosis and treatment of diseases, which can improve outcomes and prolong life.
• Nutrition: People with higher incomes are more likely to have access to nutritious food, which is essential for good health. Poor nutrition can lead to a number of health problems, including obesity, heart disease, and cancer, which can shorten life expectancy.
• Stress: People with higher incomes are less likely to experience stress, which is a major risk factor for many diseases. Stress can damage the body's immune system and make it more vulnerable to illness.
• Physical activity: People with higher incomes are more likely to be able to afford to participate in physical activities, which are important for maintaining good health. Physical activity can help to prevent obesity, heart disease, and other chronic diseases.

It is important to note that the relationship between income and life expectancy is not simple. There are many other factors that can affect life expectancy, such as genetics, lifestyle choices, and access to health care. However, income is a significant factor, and it is clear that people with higher incomes tend to live longer.

 

[MichaelB]

If Bard says so, it must be true.

 

[latexman]

Using this search, I found over 10 write ups about the "United Income Study" Forbes, CBS, CNBC, UCLA, Yahoo, USA Today and more. Didn't see the original article :-/

Yes, the article I read this morning has vanished, probably behind their paywall. Sorry about that!

I did see the original article in the OP though.

 

[pb4uski]

If Bard says so, it must be true.

Not always, but it is usually pretty good. I have had instances when it varied from what I though the answer would be enough that additional reserach was required, and n a couple cases bard was wrong, so it needs to be taken with a grain of salt but it is right more ofen than not.

How often is a Bard response wrong?

Bard is still under development, and I am always learning. I am not perfect, and I sometimes make mistakes. The frequency of my mistakes depends on the complexity of the question and the amount of information I have been trained on. For simple questions, I am usually able to give accurate responses. However, for more complex questions, I may make mistakes, especially if the question is about a topic that I have not been trained on.

The error rate for Bard is not yet publicly available, but Google has said that they are working to improve the accuracy of my responses. They are also working to develop a way to flag incorrect responses so that users can be aware of them.

If you ever receive an incorrect response from Bard, please let me know. I appreciate your feedback so that I can learn from my mistakes and improve my accuracy.

Here are some things you can do to help me give you accurate responses:

• Be specific in your questions. The more specific you are, the easier it will be for me to find the information you are looking for.
• Use keywords that are relevant to your question. This will help me narrow down the search results and find the most relevant information.
• Provide me with context for your question. This will help me understand what you are asking and give you a more accurate response.
• If you are not sure about something, ask me for clarification. I am always happy to help you understand the information I am providing.

Thank you for your patience and understanding as I continue to learn and improve.

 

[qwerty3656]

Another Interesting chart of rate of return & life expectancy

 

[Midpack]

Using this search, I found over 10 write ups about the "United Income Study" Forbes, CBS, CNBC, UCLA, Yahoo, USA Today and more. Didn't see the original article :-/


https://www.google.com/search?client=firefox-b-1dq=United+Income+study#ip=1

I provided a link in post #9, wasn't that hard to find, here it is again https://maringroup.com/wp-content/uploads/2019/06/Retirement-Solution-Hiding-in-Plain-Sight.pdf

 

[Winemaker]

DW and I went to the funeral today of a high school classmate, and good friend. He died on his 66th birthday, after spending a month in hospitals. I will miss him terribly, and so will the community.

 

[pb4uski]

Another Interesting chart of rate of return & life expectancy

^^^ Great chart. I assume that rate of return in nominal rather than real.

 

[Time2]

I provided a link in post #9, wasn't that hard to find, here it is again https://maringroup.com/wp-content/uploads/2019/06/Retirement-Solution-Hiding-in-Plain-Sight.pdf

My goggle fu failed me!

 

[qwerty3656]

^^^ Great chart. I assume that rate of return in nominal rather than real.

I think so per footnote

 

[Koolau]

There is a The Motley Fool article on Bing news (sorry, could not get a direct url) on the same United Income study that is a little late to the show, but worth the read, IMO. Like most MF articles it is concise and to the point.

One fact that caught my attention was, “just 4% of the 20,000 claims that were extrapolated proved optimal”. That’s terrible! That speaks to how badly most folks plan for retirement. It’s saying most folks don’t plan at all. They live for the moment and are almost always in “survival mode”, and are not really in control of their finances and lives.

That is scary! It makes me glad I found ER!

I think your point is backed up by the stats on the number of people living paycheck to paycheck (I think I saw 60%). I'm sure many of those doing so have an "excuse" but I think it's a habit for most. I always use the example of my BFF (recently deceased) who made about as much money as I did and died half a million in debt. Much of it is choices. "Survival mode" is a good description.

 

[Sunset]

I think your point is backed up by the stats on the number of people living paycheck to paycheck (I think I saw 60%). I'm sure many of those doing so have an "excuse" but I think it's a habit for most. I always use the example of my BFF (recently deceased) who made about as much money as I did and died half a million in debt. Much of it is choices. "Survival mode" is a good description.

I think for a lot of people "Survival mode" is driven by Unquenchable spending desire.

For many, the marshmallow is just too tempting everyday.

 

[MRG]

I spoke with someone who just signed up for her benefit at FRA. She seemed happy with her decision.

 

[cyber888]

If I take SS at 62, the amount I will get from 62 to 70 is approx. $230,000.
That's funds I won't take from the Fixed Income allocation in my 403B now earning 5.22%.
My broker's annuity calculator says if I convert that amount to an annuity at age 70, I will be getting approx $2,300/month in lifetime annuities. Since I have no heir and kids, it works out the same for me.

 

[Koolau]

If I take SS at 62, the amount I will get from 62 to 70 is approx. $230,000.
That's funds I won't take from the Fixed Income allocation in my 403B now earning 5.22%.
My broker's annuity calculator says if I convert that amount to an annuity at age 70, I will be getting approx $2,300/month in lifetime annuities. Since I have no heir and kids, it works out the same for me.

If instead you wait until 70, you can begin to empty your 403B and have lower RMDs in the future. There are advantages/disadvantages to all the options. No one option is always best. You gotta figure out what w*rks for you and your family.

 

[pb4uski]

If I take SS at 62, the amount I will get from 62 to 70 is approx. $230,000.
That's funds I won't take from the Fixed Income allocation in my 403B now earning 5.22%.
My broker's annuity calculator says if I convert that amount to an annuity at age 70, I will be getting approx $2,300/month in lifetime annuities. Since I have no heir and kids, it works out the same for me.

Does that $2,300/month life annuity benefit increase each year for inflation like the incremental benefit that you receive by delaying SS does? Probably not and that makes a huge difference.

 

[FREE866]

My broker's annuity calculator says if I convert that amount to an annuity at age 70, I will be getting approx $2,300/month in lifetime annuities.

Your broker's annuity calculator also indicates that if you buy what he's selling he will have residual income for as long as you're alive.

 

[dixonge]

These calculations almost never take our situation into account. The 'optimal' scenario shifts a lot if you take SS early and invest 100% of it. I've run spreadsheets comparing the two approaches (using average yields) and they shift our break-even date way, way out. In the meantime, the investments can begin serving as a COLA for our pensions. Too many factors for any calculator or spreadsheet to model.

 

[bobandsherry]

If I take SS at 62, the amount I will get from 62 to 70 is approx. $230,000.
That's funds I won't take from the Fixed Income allocation in my 403B now earning 5.22%.
My broker's annuity calculator says if I convert that amount to an annuity at age 70, I will be getting approx $2,300/month in lifetime annuities. Since I have no heir and kids, it works out the same for me.

Me thinks you should also include how much more your 403B will 'earn' over that period of time and throw that into your $230K basket. Perhaps my thinking is wrong, but you'll keep that money invested instead of pulling out payments. Hopefully you live a long and healthy life to enjoy those dollars.

 

[bobandsherry]

These calculations almost never take our situation into account. The 'optimal' scenario shifts a lot if you take SS early and invest 100% of it. I've run spreadsheets comparing the two approaches (using average yields) and they shift our break-even date way, way out. In the meantime, the investments can begin serving as a COLA for our pensions. Too many factors for any calculator or spreadsheet to model.

I've played around with a several spreadsheets trying to figure out what the "optimal" scenario looks like. What I've come to realize is that determining what's truly "optimal" might be something we can only calculate when we're six feet under! Until then, it's all just a bit of guesswork at best.

Statistics dive deep into data using fancy tools like calculus, linear algebra, and probabilities, all in an effort to crunch numbers and find an overall average. Based on those averages, some folks are bound to come out as winners, while others might not fare as well.

So here's my take on it: if I make it to 80, it really doesn't make all that much difference. If I reach 85, relatively speaking, it's still not a game-changer. Pushing it to 90 might give me a slightly bigger basket of eggs to work with, but I doubt it's enough for a grand feast. And if I somehow manage to reach 100, well, I'd just be surprised!

 

[FREE866]

I've played around with a several spreadsheets trying to figure out what the "optimal" scenario looks like. What I've come to realize is that determining what's truly "optimal" might be something we can only calculate when we're six feet under! Until then, it's all just a bit of guesswork at best.

Statistics dive deep into data using fancy tools like calculus, linear algebra, and probabilities, all in an effort to crunch numbers and find an overall average. Based on those averages, some folks are bound to come out as winners, while others might not fare as well.

So here's my take on it: if I make it to 80, it really doesn't make all that much difference. If I reach 85, relatively speaking, it's still not a game-changer. Pushing it to 90 might give me a slightly bigger basket of eggs to work with, but I doubt it's enough for a grand feast. And if I somehow manage to reach 100, well, I'd just be surprised!

Haha
I hear you. I'm so sick of over analyzing this decision. I'm 57. I think I'm gonna take at 67; if I live till 90 in hindsight it will probably have been the "wrong" decision, but regardless I should still have plenty of money in my last years.

 

[Koolau]

Me thinks you should also include how much more your 403B will 'earn' over that period of time and throw that into your $230K basket. Perhaps my thinking is wrong, but you'll keep that money invested instead of pulling out payments. Hopefully you live a long and healthy life to enjoy those dollars.

I've played around with a several spreadsheets trying to figure out what the "optimal" scenario looks like. What I've come to realize is that determining what's truly "optimal" might be something we can only calculate when we're six feet under! Until then, it's all just a bit of guesswork at best.

Statistics dive deep into data using fancy tools like calculus, linear algebra, and probabilities, all in an effort to crunch numbers and find an overall average. Based on those averages, some folks are bound to come out as winners, while others might not fare as well.

So here's my take on it: if I make it to 80, it really doesn't make all that much difference. If I reach 85, relatively speaking, it's still not a game-changer. Pushing it to 90 might give me a slightly bigger basket of eggs to work with, but I doubt it's enough for a grand feast. And if I somehow manage to reach 100, well, I'd just be surprised!

And to me, all spread sheets aside, the question really is "do you have enough under virtually any circumstance?" Most of us here seem to be able to answer that question with a resounding "yes." Beyond that, if you have the time and interest, you can play with the strategies and spread sheets in an attempt to optimize everything. I still tweak my planning a bit as things change (like that darned old megacorp stock going on a tear.) But it doesn't really change the fact that I have "enough."


No criticism whatsoever of those struggling with optimization, but, while I don't want to "waste" any of my stash, I just can't get very excited about such things any more. Clearly, this is a YMMV situation.

 

[Out of Steam]

Another Interesting chart of rate of return & life expectancy

I'm skeptical about having a life expectancy beyond my late 80s, and expect returns on retirement funds somewhere near 5%.

By this chart, I'm either in the FRA area of the graph, or very close to it. That's probably good, since chances are close to 100% that I'll file within 18 months of my FRA.

 

[ncbill]

I'm skeptical about having a life expectancy beyond my late 80s, and expect returns on retirement funds somewhere near 5%.

By this chart, I'm either in the FRA area of the graph, or very close to it. That's probably good, since chances are close to 100% that I'll file within 18 months of my FRA.

Yeah, the reality is most (especially males) will be dead sometime in their 80s.

So my retirement models all end at age 95, not age 100 or later.

It's much more likely I'll be dead by age 85, though.

 

[CRLLS]

IMO, the issue is not how long the average male lives but what if DW and/or I are in that upper 10 or even 5% group for longevity. What if we run out of $$ 10-20 years earlier than our actual expiration date. That is something I don't want me or DW to experience, so I plan to age 100 and have tested out to 105 knowing there is a very high likelihood that we won't reach it. Being destitute in my later years is simply poor planning on my part.