Would it be better to take Social Security at 62?

[evilanne]

The IRS Life Expectancy Tables go out to 120 now...so I'm just approaching middle age.

Here is an article with the 10 Best Life Expectancy Calculators https://www.newretirement.com/retirement/longevity-trends-and-life-expectancy-calculators/
Here's another one that I found interesting https://exrx.net/Calculators/HealthAge

Since I expect to live for at least 30-40 years, I don't plan on taking it until 70 unless my situation changes significantly. It is adjusted annually for inflation

When I started work I started contributing to my retirement plan because I didn't expect SS to be there when I reached retirement. Interesting article addressing crisis in early 1980's https://www.brookings.edu/articles/the-crisis-last-time-social-security-reform/ The deal in 1982-83 increased full retirement age from 65 to 66-67 years old for those born in 1943 or after. They also made up to 50% of SS benefits taxable (this was increased to 85% in 1993) The Federal Government's Retirement System changed in 1987, which placed government employees into Social Security System, expanding the pool contributing and

At age 70, SS is expected to be at point of insolvency with about a 24% reduction in payments (without major changes or a large number of beneficiaries dying off sooner than expected), which would be equivalent of taking SS at FRA for me if that actually happens. I believe taxes will increase in the future and doing conversions to Roth is a great idea. They keep extending the age for RMDs so I will have more time to do so. From 70-75 I can use the SS to pay the taxes (which is a limiting factor right now in how much I can convert comfortably).

Happy Trails!

 

[pb4uski]

I use the Society of Actuaries life expectancy calculator. It does bont individual and joint life longevity calculations.

 

[Chuckanut]

Since I expect to live for at least 30-40 years, I don't plan on taking it until 70 unless my situation changes significantly. It is adjusted annually for inflation


Happy Trails!

+1

If a person is in doubt on when to take SS, one advantage of delaying SS is the easy ability to change your mind anywhere between 62 and 70. It’s not a binary choice only between 62 and 70. If one hits age 63 and 7 months and decides that SS is necessary just call up the SS office and get them to start it. You can do that anytime between 62 and 70.

IIRC, once a person starts SS at any age there is only a six month window to return the payments and turn off SS.

We all have different things to consider. YMMV.

 

[latexman]

IIRC, once a person starts SS at any age there is only a six month window to return the payments and turn off SS.

I thought you had a year.

 

[pb4uski]

You can suspend receiving benefits anytime and once they are suspended you again receive delayed retirement credits as if you never received benefits (but not for the period the you were receiving benefits).

... 1. Suspend your Social Security benefit

You can suspend your Social Security benefit if you meet both of the following two conditions:

• You took benefits before full retirement age.
• You have reached full retirement age but not yet 70 years old.

If those conditions apply, you can suspend your benefits and earn delayed retirement credits for each month that they’re suspended. For each month between full retirement age and age 70, your benefit increases by 0.666 percent, or an 8 percent annual rate. That’s on top of any cost-of-living adjustment (COLA) increase, too. So you may be able to drastically improve your payout even when it’s late in the game.

If you suspend your benefits, they’ll stop the month after you make the request, and you’ll be able to restart your benefits at any time at whatever the new payout would be. When you reach age 70, however, your benefits will automatically restart at the then-current payout amount.

Importantly, to suspend your benefit, you do not need to repay any payout you’ve already taken. While suspending your benefit affects those claiming benefits on your record such as a spouse or minor child, it won’t affect an ex-spouse claiming benefits on your record.

2. Withdraw your Social Security benefit

You can withdraw your Social Security benefit if you meet the following conditions:

• You started receiving benefits less than 12 months ago.
• You have not filed for a withdrawal of benefits before.

If those conditions apply, you may withdraw your benefit and it will be as if you had never filed for Social Security. You may then refile for benefits at a later date. Your potential benefit will increase as prescribed by the program, up to 8 percent annually once you hit full retirement age.

Unlike the first option, you can withdraw your benefits at any age so long as you meet the conditions above. If you withdraw your benefits, you’ll have to repay any money you’ve already received, including any Social Security payouts as well as payments the program made for you such as for Medicare, taxes and payments made to a spouse or children on your account.

To withdraw your benefits, you must make the request in writing. After Social Security has approved the application, you have up to 60 days to reverse the decision to file. ...

 

[Chuckanut]

You can suspend receiving benefits anytime and once they are suspended you again receive delayed retirement credits as if you never received benefits (but not for the period the you were receiving benefits).

Thanks for clearing that up.

I was behind the times.

 

[mathjak107]

you can suspend early benefits at fra or later ….

we used to be able to pay it back at any point and start over but that was killed off . now we can kill it the first year or from fra on .

but you don’t start over . it just picks up again from where it stopped .

when we were allowed to pay it back and restart from the beginning, that was an amazing deal .

if your social security was taxed along the way , when you paid it back you could take a reduction in income by the same amount .

many times that resulted in a negative income number for the year .

typically there is nothing you could have done with that negative income

some smart people figured out you could do roth conversions with it and get free conversions done .

so it was killed off

 

[rayvt]

+1
If a person is in doubt on when to take SS, one advantage of delaying SS is the easy ability to change your mind anywhere between 62 and 70.

But by the time the doctor tells you at 65 that you have X months lo live, it is too late. If your FRA is 66, your break-even age is 80.5.

 

[Koolau]

But by the time the doctor tells you at 65 that you have X months lo live, it is too late. If your FRA is 66, your break-even age is 80.5.

Since I started at 70, it appears I have some serious living yet to break even. Now that I've made the decision, I choose not to worry too much about it. When I die, DW steps up to my larger (way larger than her) SS monthly payment. That's the main reason I waited. YMMV

 

[Chuckanut]

But by the time the doctor tells you at 65 that you have X months lo live, it is too late. If your FRA is 66, your break-even age is 80.5.

I would say "If the doctor tells you at 65......." It's hardly certain. Like many things regarding finance, there are variables and we take our chances. I am well past 65, so I guess playing the odds worked well for me. Each person can decide on their own. There's more than one road to Rome.

 

[RunningBum]

But by the time the doctor tells you at 65 that you have X months lo live, it is too late. If your FRA is 66, your break-even age is 80.5.

If the doctor tells you that you have X months to live, I doubt you'll spend much time regretting 3 years of missed SS. I would have other priorities with my remaining time.

 

[finnski1]

If the doctor tells you that you have X months to live, I doubt you'll spend much time regretting 3 years of missed SS. I would have other priorities with my remaining time.

Exactly. Not a good reason at all to make a decision on.

 

[pb4uski]

But by the time the doctor tells you at 65 that you have X months lo live, it is too late. If your FRA is 66, your break-even age is 80.5.

But that is rare. Besides, if the doctor tells you at 65 that you have X months to live is your first thought really going to be... oh, boy, I'm glad (or wish) that I started SS at 62!

 

[TickTock]

But by the time the doctor tells you at 65 that you have X months lo live, it is too late. If your FRA is 66, your break-even age is 80.5.

And I totally agree with you, if the goal is to maximize SS benefits. But how do you make a decision? I guess do your best to estimate your most likely to die date and proceed accordingly. So the doc telling you at 65 that you have X months to live could still wreck that goal.

For me, the goal is to avoid outliving my money. So if possible, delay until 70 and if needed/warranted, take earlier. If I die at 63, well, that means more money left for DW and after second-to-die, to the estate.

 

[Koolau]

And I totally agree with you, if the goal is to maximize SS benefits. But how do you make a decision? I guess do your best to estimate your most likely to die date and proceed accordingly. So the doc telling you at 65 that you have X months to live could still wreck that goal.

For me, the goal is to avoid outliving my money. So if possible, delay until 70 and if needed/warranted, take earlier. If I die at 63, well, that means more money left for DW and after second-to-die, to the estate.

Yeah, not outliving your money is likely the most important consideration - which favors waiting past 62 (until 70 or when you don't have enough to live on without SS - which ever comes first.)

 

[rayvt]

Yeah, not outliving your money is likely the most important consideration - which favors waiting past 62 (until 70 or when you don't have enough to live on without SS - which ever comes first.)

What part of "Financial Independence" is it that you don't retire (early!) without having enough money?

 

[Gumby]

What part of "Financial Independence" is it that you don't retire (early!) without having enough money?

I may be the only one, but I don't understand this question.

 

[MarieIG]

If the doctor tells you that you have X months to live, I doubt you'll spend much time regretting 3 years of missed SS. I would have other priorities with my remaining time.

I would have to agree with this.

 

[ERD50]

Originally Posted by rayvt View Post
What part of "Financial Independence" is it that you don't retire (early!) without having enough money?

I may be the only one, but I don't understand this question.

You are NOT the only one!

Very few of us can be certain we have enough. It's almost always a mixture of probabilities and a leap of faith.

-ERD50

 

[karen1972]

What part of "Financial Independence" is it that you don't retire (early!) without having enough money?

FIRE and when to take SS are so totally different questions.

I retired at 43, now almost 52, I assumed that I had enough and could make adjustments should the worst possible scenario happen; however even in 9 years tax law has changed, RMDs have been delayed, ACA rules of changed, SS became even more underfunded, and when I retired I assumed I'd be single when I hit SS, but now looks like I will be tying the knot..

Life happens, its a moving target, my crystal ball is REALLY fuzzy if I will end up taking SS at 62 or 70, the one thing I do know is I'm not going back to work.

 

[LateToFIRE]

Life happens, its a moving target, my crystal ball is REALLY fuzzy if I will end up taking SS at 62 or 70, the one thing I do know is I'm not going back to work.

+1 favorite quote of the day

 

[Fermion]

FIRE and when to take SS are so totally different questions.

I retired at 43, now almost 52, I assumed that I had enough and could make adjustments should the worst possible scenario happen; however even in 9 years tax law has changed, RMDs have been delayed, ACA rules of changed, SS became even more underfunded, and when I retired I assumed I'd be single when I hit SS, but now looks like I will be tying the knot..

Life happens, its a moving target, my crystal ball is REALLY fuzzy if I will end up taking SS at 62 or 70, the one thing I do know is I'm not going back to work.

Pretty much the same as us. We retired at 46, now almost 54 and it has almost been a job keeping track of the changes. I kind of find it fun now to see how I can move things around to get the most benefit from early retirement. It is like clipping coupons for shopping at Uncle Sam.

By the way, congrats on the future marriage!

 

[jazz4cash]

I may be the only one, but I don't understand this question.

I don’t either, but I’m thinking sarcasm?

 

[Gumby]

I don’t either, but I’m thinking sarcasm?

Possibly. It wouldn't be the first time I missed something like that.

 

[Time2]

Yeah, not outliving your money is likely the most important consideration - which favors waiting past 62 (until 70 or when you don't have enough to live on without SS - which ever comes first.)

What part of "Financial Independence" is it that you don't retire (early!) without having enough money?

I ask chatGPT, it wrote several paragraphs, but it concluded with,



"In essence, the responder seems to be emphasizing that the very essence of the FIRE movement is retiring early but doing so only when an individual has achieved financial independence, negating the need to wait until 70 or until Social Security becomes a necessity."


That's better than I would have done!



The complete chatGPT answer,


The response appears to express skepticism or a critical perspective about the idea of waiting past the age of 62 to start receiving Social Security benefits within the context of the FIRE (Financial Independence, Retire Early) movement. Let's break down the key points:

1. Financial Independence:
   
   • The FIRE movement is centered around achieving financial independence, which means having enough savings and investments to support one's desired lifestyle without relying on traditional employment. The idea is to retire early and enjoy financial freedom.
2. Not retiring early without enough money:
   
   • The responder seems to emphasize the essence of financial independence. The question implies that the concept of financial independence inherently means having enough money to retire early. In other words, the notion of financial independence within the FIRE movement is about retiring early only when there are sufficient financial resources to support that early retirement.
3. Questioning the need to wait past 62:
   
   • The response questions the necessity of waiting past the age of 62 to start receiving Social Security benefits. It suggests that, if someone has achieved financial independence, waiting until age 70 to maximize Social Security benefits might not align with the core principles of the FIRE movement. If financial independence has been achieved, there may be less reliance on Social Security as a primary income source.

In essence, the responder seems to be emphasizing that the very essence of the FIRE movement is retiring early but doing so only when an individual has achieved financial independence, negating the need to wait until 70 or until Social Security becomes a necessity.