Would Like Some Opinions on When to Take Social Security

[Luvtoride]

Erkevin, I would recommend reading Lesson 4 in Christine Benz book “How to Retire”, Entitled “Get the Most out of Social Security “. It’s a conversation with Mary Beth Franklin, one of the foremost authorities on Social Security and it is so clearly written and laid out to help anyone decide on the optimal time and claiming strategy. I learned a lot reading it.

 

[youbet]

Erkevin, I would recommend reading Lesson 4 in Christine Benz book “How to Retire”, Entitled “Get the Most out of Social Security “. It’s a conversation with Mary Beth Franklin, one of the foremost authorities on Social Security and it is so clearly written and laid out to help anyone decide on the optimal time and claiming strategy. I learned a lot reading it.

Thanks for that tip Luvtoride. I'm far past making those decisions for myself but my son, 50, is starting to mumble about ER and has even started asking me some questions! What's worked for me might not be the best for him, so I've been gathering some reading lists for him (at his request) instead of just sitting him down and lecturing him.

 

[Luvtoride]

Thanks for that tip Luvtoride. I'm far past making those decisions for myself but my son, 50, is starting to mumble about ER and has even started asking me some questions! What's worked for me might not be the best for him, so I've been gathering some reading lists for him (at his request) instead of just sitting him down and lecturing him.

Buy him the Christine Benz book. It’s excellent and covers many topics he should be thinking about .

 

[old medic]

Kind of feel like the decision is a toss-up. Would love some other opinions. Thanks.

To use my Dads favorite quote" A bird in the hand... The way I view it, If you don't need the SS money, then take it and invest it. Especially if you are cutting it close on your break-even age. Your DW will have hers there to help replace your pension in that event. I'm getting mine (disability) and DW is quitting as soon as I get on Medicare, Will file for her SS as soon as everything is converted to Roth.

 

[TickTock]

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?

To the extent that strategy produces the same results as claiming at 62, it doesn't matter which way you go.

One possible driver for delaying to 70 is managing MAGI for ACA 62-65 and taxes/Roth conversions 62-70.

 

[TheWizard]

So you’re saying you did like TheWizard?—just spent down your tax-deferred rather than something more complicated like building a TIPS ladder to SS at 70?

A couple of points here:
1) first, you want to be withdrawing $$ from your tax-deferred account one way or another from the start of retirement: living expenses and/or Roth conversions. Leaving tax-deferred to grow until RMD age is usually asking for tax trouble.

2) eight years of SS delay @ $3000/month is almost $300k total. But if you have $1M invested 60% or more in stock funds, then it's quite possible that those investments will grow most years by MORE than the $36k annual withdrawals. That was my true life experience...

 

[Lorenzo]

To the extent that strategy produces the same results as claiming at 62, it doesn't matter which way you go.
. . .

But I think the argument from those who have proposed this strategy is that is does not produce the same results; rather, their math shows how you could "spend more at 62" than you would have if you had claimed SS at 62.

One of the Bogleheads discussions linked to in post # 14 above that I referred to: Delay Social Security to age 70 and Spend more money at 62 - Bogleheads.org

 

[Kabowest]

One of the Bogleheads discussions linked to in post # 14 above that I referred to: Delay Social Security to age 70 and Spend more money at 62 - Bogleheads.org

Although I hope that Cut-Throat from Bogleheads is doing fine and off enjoying fishing, this was one of the last threads he posted in 2012 (last activity looks to be 2014). I have read reviewed this thread a number of times in the past (very interesting read).

 

[Lorenzo]

A couple of points here:
1) first, you want to be withdrawing $$ from your tax-deferred account one way or another from the start of retirement: living expenses and/or Roth conversions. Leaving tax-deferred to grow until RMD age is usually asking for tax trouble.

That certainly makes sense. Also, @engineernerd pointed out to me: "If you have a lot of unrealized capital gains in taxable investment accounts, this could be the ideal time to take advantage of the 0% bracket for capital gains (and qualified dividends)." I would think I would start by withdrawing (upon full retirement, which is probably this year by the way) from appreciated stock I've got in my taxable account--to the top of the 0% cap gains bracket--and THEN start digging away at the tax-deferred account. Does that sound reasonable?

2) eight years of SS delay @ $3000/month is almost $300k total. But if you have $1M invested 60% or more in stock funds, then it's quite possible that those investments will grow most years by MORE than the $36k annual withdrawals. That was my true life experience...

You had fortunate timing--as you say, "quite possible." But for those of us going forward, shouldn't we beware of the often-mentioned "SORR risk early in retirement"? If I understand, this is why I see people advocating a more conservative bond-ish ladder for the 8-year bridge. No?

 

[TickTock]

I went and read that 204-post thread.

As far as I can tell, given the assumptions made, then yes - spending is 6.2% higher for claiming at 62 70.

This ignores: leaving an estate, inflation, possible differences in spousal benefits, and taxes.

I do like the simplicity of the presented scenario. And I didn't see anything in the thread (nor have I come up with anything on my own) that refuted the scenario, given the assumptions. As I understand it broadly - it's taking the SS 'annuity' earlier to provide more lifetime spending, at the cost of leaving a smaller estate.

EDITED: I had it backwards the first time. Thanks to Out-to-Lunch for seeing the error and calling it out.

 

[audreyh1]

Are you sure inflation is not taken into account? If they use today's dollars to do the comparisons then inflation is taken into account.

 

[Out-to-Lunch]

I went and read that 204-post thread.

As far as I can tell, given the assumptions made, then yes - spending is 6.2% higher for claiming at 62.

Wait, didn't you mean "spending is 6.2% higher for claiming at 70"? That is what the premise of that thread was.

 

[TickTock]

:headdesk:

Yes, I had it backwards. Thanks!

I edited the post.

 

[TickTock]

Are you sure inflation is not taken into account? If they use today's dollars to do the comparisons then inflation is taken into account.

From the first post in that thread: Let's assume no inflation for ease of calculations.

 

[TickTock]

There is a "Ticktock" poster on that thread. I am a different person.

 

[dcrambler]

Projecting one’s longevity based on family history seems too risky to me in the context of ongoing medical miracles. My 85 year-old father battled colon cancer this year and won, thanks to modern chemotherapy. He is cancer free, fortunately, but he doesn’t have enough income, partly because he took SS at 62.

We’re both waiting until 70, because we view SS as a unique form of inflation-protected longevity insurance, which we want as much of as possible. YMMV.

This is our approach as well. Depends on your risk tolerance among other things. Our thoughts are to wait until I hit 70 and she hits 65; we will have $80K in today’s $ while we are both alive. Add a small pension and $85,000 per year should be enough to live off of in worst case. Also allows us to spend a bit more aggressively from 60-70 while we have a better chance of being alive and when we should be in better health to travel.

 

[Winemaker]

My employer and I and I paid $284,000 in just the SS portion over the years. My benefit at 70 is ~4800/month and will take 59.16666 months to get it all back and that'll be 2034. And I"m only trying to maximize DW's benefit when I go room temp.

 

[Koolau]

And I"m only trying to maximize DW's benefit when I go room temp.

Yep, my main reason for waiting to age 70 as well.

 

[phil1ben]

Like you we do not require the SS income. I retired at 57 and decided to take SS this year when I turned 65 in February, 2025. Our thoughts were as follows:

1. I would rather have the money now because the SS payments will solely be put towards travel and would rather have it when we are younger than when we are older. The extra few hundred a month is not consequential.
2. We are in the highest tax bracket anyway so the income does not affect our tax rate percentage.
3. I preferred to have my medicare payment/ IRMAA payment deducted from my SS payment.
4. I have never received anything from the government and only paid in. I enjoy the feeling of receiving a payment--even though I know most of it is reimbursement of what I paid in.

I know the bean counters here will disagree with my logic but it works for us. Waiting for my very first SS payment which is due later this month.

 

[mebden]

Like you we do not require the SS income. I retired at 57 and decided to take SS this year when I turned 65 in February, 2025. Our thoughts were as follows:

1. I would rather have the money now because the SS payments will solely be put towards travel and would rather have it when we are younger than when we are older. The extra few hundred a month is not consequential.
2. We are in the highest tax bracket anyway so the income does not affect our tax rate percentage.
3. I preferred to have my medicare payment/ IRMAA payment deducted from my SS payment.
4. I have never received anything from the government and only paid in. I enjoy the feeling of receiving a payment--even though I know most of it is reimbursement of what I paid in.

I know the bean counters here will disagree with my logic but it works for us. Waiting for my very first SS payment which is due later this month.

Phil I agree with you as when I hit 62 I will take whatever I got coming in SSI and I don't care how much difference there is between 62 and 68 full retirement age as I want to use my money I put into the program to pay for most of my bills and try to leave as much of my IRA's intact and if the money I get is to much I'll just throw it into the market also my family's life time is max 72 as my dad was oldest to live to that age out of 4 other brothers and all the rest died before 64.

 

[erkevin]

OP here: Opensocialsecurity suggests that the optimal strategy is for me to take at 62 and the wife to take at 70. Many of you suggested that also. That is going to be my plan going forward.

I appreciate the wisdom and knowledge all of you provided. Thank you.
(I often refer people to this community and state that "this is where you go when you want adult advice and adult answers".

 

[Fermion]

My employer and I and I paid $284,000 in just the SS portion over the years. My benefit at 70 is ~4800/month and will take 59.16666 months to get it all back and that'll be 2034. And I"m only trying to maximize DW's benefit when I go room temp.

It'll take a bit longer than 59 months, considering that $284,000 if invested in the S&P would probably be something over $2 million.

 

[Chuckanut]

I am single, which simplifies things.

For me SS at 70 is my old-age and LTC insurance in one bundle. It also helps me sleep better at night when the market decides to correct itself, or takes a nosedive.

 

[TheWizard]

Like you we do not require the SS income. I retired at 57 and decided to take SS this year when I turned 65 in February, 2025. Our thoughts were as follows:

1. I would rather have the money now because the SS payments will solely be put towards travel and would rather have it when we are younger than when we are older. The extra few hundred a month is not consequential.
2. We are in the highest tax bracket anyway so the income does not affect our tax rate percentage.
3. I preferred to have my medicare payment/ IRMAA payment deducted from my SS payment.
4. I have never received anything from the government and only paid in. I enjoy the feeling of receiving a payment--even though I know most of it is reimbursement of what I paid in.

I know the bean counters here will disagree with my logic but it works for us. Waiting for my very first SS payment which is due later this month.

Highest tax bracket in retirement! Nice!!

Tax rate on taxable income from . . . up to . . .
10% $0 $23,200
12% $23,201 $94,300
22% $94,301 $201,050
24% $201,051 $383,900
32% $383,901 $487,450
35% $487,451 $731,200
37% $731,201 And up

 

[TheWizard]

Phil I agree with you as when I hit 62 I will take whatever I got coming in SSI and I don't care how much difference there is between 62 and 68 full retirement age as I want to use my money I put into the program to pay for most of my bills and try to leave as much of my IRA's intact and if the money I get is to much I'll just throw it into the market also my family's life time is max 72 as my dad was oldest to live to that age out of 4 other brothers and all the rest died before 64.

By leaving your IRAs intact, you're setting up for some possible excitement when RMDs start at age 73 or so.
But sounds like you're not too concerned about that...