Would Like Some Opinions on When to Take Social Security

erkevin

erkevin

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A discussion on when I should take social security…..because I have no idea. I turn 62 at the end of 2025. Here are the relevant facts:
  • We don’t need the money. Our pensions (non-COLA) cover 100+% of our expenses and our CD/bond ladder adds a considerable amount to our discretionary spending without touching our nest egg ($1.8M). We actually are still putting a little away every month. We have no debt.
  • Wife’s expected longevity should be 90+ years. The plan with her is to wait until 70 to take SS.
  • My expected longevity is less than age 80. Mother died at 42 and father at 78. I expect to make it to about my SS break-even point of age 79ish (62 vs 67) according to actuary tables and life-expectancy calculators.
  • We don’t have any plans to greatly increase our spending (just bought a house, just bought a car) but we are in the go go phase of retirement and having that monthly $1700 could be fun. More go go; we travel a lot.
  • We will have an increase in spending going forward, particularly health insurance and whatever inflation continues to bring. Our health insurance is expected to jump about $600/month in 2026. Medicare in 2029 will then free up $500-$800/month
  • I expect a bit of a haircut to our CD/bond ladder income going forward as most of these 5%+ products will not be renewable at the same rates.

Kind of feel like the decision is a toss-up. Would love some other opinions. Thanks.
 
Use opensocialsecurity.com for guidance, especially for couples. If you earned more than your wife she will get your benefit if you pass first, so it may be that you take hers early. That website should cover that situation.
 
Our benefits will be very similar; I had the larger salary but she worked more years.
 
Other considerations: How much of your nest egg is pre-tax? Do you have any need/desire to do Roth conversions? Does your pension go away when you die?
 
While we both intend to wait until age 70 to take SS - as DH is the higher earner we are prioritizing his taking SS at age 70 to maximize benefits for the surviving spouse. If there is some type of black swan, loss of DH's pension or some such thing, I would be the one to trigger SS first.

Also we are using the headroom (such as it is) for Roth conversions.
 
Most of the $1.5m is post tax; about $300k additional in Roth and Trad IRAs. Have done some conversions, but don't plan on any going forward. Yes, my pension dies with me.
 
erkevin said:
Most of the $1.5m is post tax; about $300k in Roth and Trad IRAs. Have done some conversions, but don't plan on any going forward. Yes, my pension dies with me.
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I think you are sitting in a pretty sweet position where it doesn't matter too much.
 
I haven't looked at the numbers, but you have non-inflation adjusted pensions, and yours has no survivor benefit. (Does hers?) AT PRESENT, these cover your living expenses.

Seems to me that you may want to maximize the inflation-adjusted pension with some survivor benefits that SS represents. I think one of you at 62 and one of you at 70 would probably be best.
 
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Out-to-Lunch said:
I haven't looked at the numbers, but you have a non-inflation adjusted pensions, and yours has no survivor benefit. (Does hers?) AT PRESENT, these cover your living expenses.

Seems to me that you may want to maximize the inflation-adjusted pension with some survivor benefits that SS represents. I think one of you at 62 and one of you at 70 would probably be best.
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This is where I come out and it's what we did as a couple. She wanted her SS early and I took mine at 70 to maximize her survivor benefit.

Then again, since you don't need the money (though it would be nice curing the go-go years) you could take it now!

Hard to make a "mistake" in this situation IMHO.

By the way, I don't put a lot of stock in longevity estimates. On one end, there is the wayward bus that could take you out early and on the other end some folks just get lucky and have a very long life span even though their parents died young. My grandfather died at 51 but his son (my dad) lived to 82. His mom only lived to 78. I simply wouldn't put too much stock into parents ages - especially since health care has dramatically changed in subsequent years.
 
IMO it's not about the money per se. No matter how you slice it, the break even is about 83, plus or minus.

DW and took it at 62. Like you, we didn't need the money but it gave us an extra $50K per year during our go-go years, reduced our IRA withdrawals and there's a possibility of a haircut in about 5 years or so. Yes, if you wait you'll have more money in your old age but what's a few extra bucks when you're 88 years old and frail? I will turn 73 this year and as noted in other threads, health situations have throttled my spending back, at least for now.

As always, only YOU can decide what's best for you.
 
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How much of that Nest Egg is tax-deferred money?
You should be Roth converting some of that prior to age 70. Delaying SS gives you more headroom...
 
If you have the funds to cover expenses from 62 to 70 and you don't care about leaving an estate to your heirs, taking SS at 70 gives you more money to spend each year starting at age 62 until you are gone from this world. You can find the math on the Bogleheads site.


And some opinions....

This is an alternative some may want to consider. YMMV.
 
Chuckanut said:
If you have the funds to cover expenses from 62 to 70 and you don't care about leaving an estate to your heirs, taking SS at 70 gives you more money to spend each year starting at age 62 until you are gone from this world. You can find the math on the Bogleheads site.


And some opinions....

This is an alternative some may want to consider. YMMV.
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The part about "don't care about leaving an estate to your heirs" is totally incorrect.

I delayed SS to age 70 and have tons of $$$ for my heirs. And it's growing every year now with excess retirement income, a part of which is due to my way higher than average SS income...
 
You pretty much can't screw up the financial situation you outlined. Either early or late is going to work. Congrats on the planning.

I'm 66 and still deferring. My personal bias is to prioritize being bulletproof in later years. Other people want to see the money in their early "go-go" years. Like you, the difference will only show up in the size of my estate. I can/will spend the same in either scenario. You won't know which choice was mathematically optimal until you and the missus have corked it.

I will say that I personally like betting on outliving the mortality table predictions. Sort of like betting on the home team. Something seems a little wrong with claiming early, which is the same thing as betting I kick it before my actuarial table expiration date.
 
TheWizard said:
The part about "don't care about leaving an estate to your heirs" is totally incorrect.

I delayed SS to age 70 and have tons of $$$ for my heirs. And it's growing every year now with excess retirement income, a part of which is due to my way higher than average SS income...
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Sorry, I didn't realize everybody has the same investment experiences you do.
 
Koolau said:
"By the way, I don't put a lot of stock in longevity estimates. On one end, there is the wayward bus that could take you out early and on the other end some folks just get lucky and have a very long life span even though their parents died young. My grandfather died at 51 but his son (my dad) lived to 82. His mom only lived to 78. I simply wouldn't put too much stock into parents ages - especially since health care has dramatically changed in subsequent years."
Click to expand...

Just as a brief echo here, the DW came down this morning to my office crying. One of our hiking friends (I think a year younger than me), traveled to Thailand a month ago with her husband, experienced what they originally thought was a stomach virus, and found out it was liver cancer. She died this morning.
So longevity estimates are good in the average and no good for you in particular, unless you are average (we are all above average, like in Lake Woebegon).

My view has kind of been to maximize now while we are in the late 50's/60's and then see what happens.
I had two greatgrandfathers live past 95 and all four grandparents make it to 90. But my habits are bad. DW has a family history of early death but is a health nut (I assume she will outlive me since she is 4 years younger) and act accordingly.

But don't assume you will make it to 95. You should hedge.
Should we have passed up blowing 10k on the Scotland hike in June for our 40th, since we might make it to 95 and not spend as much as we are blowing this year? It's a tough question. It's dishonest, since I'm 97% sure we could afford it, even if we live to 95, but you get the point. I assume we will spend less, except upon health care in our 80's. We won't be hiking the Great Glen Way for dang sure, at least.
 
On topic, I just took SS, to start in February, at FWA. We'll see what we do on DW. If the portfolio holds up, we'll probably wait until 70, but who knows?
Sorry for being semi-offtopic above.
 
If you're more interested in having more fun money now, take SS at 62. If you're more concerned about not having enough in later years, take SS at 70. IOW, what's your goal? That helps drive the decision.
 
TickTock said:
If you're more interested in having more fun money now, take SS at 62. If you're more concerned about not having enough in later years, take SS at 70. IOW, what's your goal? That helps drive the decision.
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What about the strategy noted in post #14 above where, assuming you have some decent savings, you spend the "fun money now" from your savings with the knowledge that the higher SS benefit at 70 will compensate for having spent more aggressively from your savings between 62 and 70?
 
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