I am happily aware of the snowblower effect. I personally was responsible for 5+ past zero snow winters. LOL
OT: When to take Social Security
- Thread starter RULoyal
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I am happily aware of the snowblower effect. I personally was responsible for 5+ past zero snow winters. LOL
congrats. you answered your own question. Maximizing "lifetime" benefits is always the easy answer. It doesn't come close to addressing the the other considerations.
I created my own scaled scenario spreadsheet for me and my wife. Woopdie damn doo we started losing a tad of cash after 80. At 85 I think we lost $100 K (over 18 years lol). (not adjusted for how I could have personally invested the cash). I started mine 3 years ago at 62 and just started my wife's this month (at 62).
Congrats and enjoy the fruits of your labor.
One book that I can recommend to you all (except old guys, who may fall asleep reading it and never wake up) is Wade D. Pfau’s “Retirement Planning Guidebook,” Chapter Six on SS is 36 pages long. Page 179 in the paperback edition begins his consideration of delaying claiming SS benefits until age 70 by comparing the decision to an inflation protected annuity. I found his argument to be compelling.
My parents are 92 and 96 and that affected my decision as well.
In addition, we have the resources to not have to claim SS before age 70.
Another facet is to consider the decision's impact on your spouse. My wife is a few years younger and taught school for decades. Her SS PIA is considerably lower than mine. My deferral decision will benefit her if she survives me.
Laurence Kotlikoff has written quite a few books on SS ("Get What's Yours"), which are comprehensive and straightforward.
Getting professional advice on this important decision is a great idea. I bounce stuff off of my much smarter brother who has completed the CFP course work as well as his Harvard MBA.
My parents are 92 and 96 and that affected my decision as well.
In addition, we have the resources to not have to claim SS before age 70.
Another facet is to consider the decision's impact on your spouse. My wife is a few years younger and taught school for decades. Her SS PIA is considerably lower than mine. My deferral decision will benefit her if she survives me.
Laurence Kotlikoff has written quite a few books on SS ("Get What's Yours"), which are comprehensive and straightforward.
Getting professional advice on this important decision is a great idea. I bounce stuff off of my much smarter brother who has completed the CFP course work as well as his Harvard MBA.
It’s great to analyze but because one’s parents live to 90’s means you have a chance to survive longer. Average life expectancy now 76-78 for males… 83 for women . You should do what you think best. In this day and age we have better care and treatments but you’ll know when the time is right . My wife retired at 50 … me at 65…our life traveling , grandkids and just having a good life matters more than hoping we live to 100. Most of us will not.
I know relatives who started collecting a reduced amount at 62, lived to advanced age, and outlived their savings. I’ve also known people who waited to collect, died ”young”, and collected little.
If you’re healthy today it’s only a guess as to when you’ll pass away. Start collecting when it feels right to you.
If you’re healthy today it’s only a guess as to when you’ll pass away. Start collecting when it feels right to you.
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Retired & began receiving SS bennies at 62 as did my wife. Were in good health. Been receiving bennies for 19 yrs. Works for us.
My thinking is if you don't need the SS income to sustain your lifestyle, then wait. Get the higher SS payments when you do take it even if you're not collecting it for a ton of years.
Has anyone in this thread put out numbers on what they get ? Or would have gotten based on age stuff?
Then why not just take it and bank it ? If you’re getting 1K a month for 5 years that’s 60k stocked away . Not a bad spot to be in for various reasons. Why would you rink that is bad ?
By waiting one would get an extra 3.6K or so, and catch up to the 60K in 17 years or so. In 11 years it would be 40K catch up, when one was 78yo. Again, that would be if one had plenty of income to be comfortable without SS. Maybe not wait until 67 if you know your death age, which is about 79, but every year delayed would help a little.
That's my thought process, especially if you put all of that $ in an S & P 500 fund - now assuming 7 % annual returns (average) until 79 (17 years), what would be the corrected catch-up age?
So assuming you don't need the money, and can bank all or most of it, what would be the advantage of waiting to collect past 62 ?
And the amount invested is after tax. And if there is no tax there is no decision to make, you take it because you need it.
Right, but if you don't need it, and there's no corrected catch up age (and assuming you invested it w/normal returns), what would be the advantages of waiting?
That assumes there is no catchup age. Remember there is a COLA with social security.
All I know is it has worked for us going on 9 years. Still at ( or above ) the level of yearly income calculated back at age 62-63 for our mid to late 70’s. My concerns today are not how much we have but making sure (if my wife outlives me ) she is financially ok. Owning home outright, no carry over charges on credit cards, and the realization she knows what she needs to do in order to live a good life. Could be the opposite but hoping not. Do the work and you can figure it out.Don’t angst over it. We all can enjoy a life post work. RETIREMENT ain’t bad.
Thx Bob
I think about retirement every day
I’d probably be a lot more productive if I didn’t dream about it and stayed off the message boards lol
Not sure how old you are but what we dream about is trying to stay healthy, travel ,see our grandchildren and do what we want to do.
Early 40s
I’ve been thinking about retirement the day I turned 18 and opened up a Roth IRA
Second generation Italian - American who came from very humble means, and saw his grandparents and parents work and scrap for everything they had to give us a better life
Knowing a ton of people who are retired, and seeing the kind of life, they live in the amount of stress, they don’t have, it’s something I think about daily
Cost of living adjustment (COLA) is a yearly percentage tacked on to your monthly check. It is not a guarantee. There have been years where COLA was zero percentage. But this year will bring one of the largest boosts ever (8.7%). The average is around 3.2% per year.
The amount you collect is based on your lifetime work contributions and when you decide to start taking the payment. From that moment on, the payment doesn't increase (but COLA will make it larger a little bit each year).
From age 62 through 70 your payment would increase for each month you are eligible but don't claim. That comes out to about 8% a year.
There is no "one size fits all" answer for social security because eligible people have different factors that goes into an answer:
Do you need the money immediately? Then taking it early probably is your answer. But the higher your retirement income the more you move into having social security taxed. And when your retirement income gets really high, that tax could eat up to 80% of your monthly social security payment. That's why it is not necessarily a "no brainer" to take the money as soon as possible.
And if the plan is take the payment and "invest it" somewhere, you still might have taxes due on the money the investment makes.
Also, some states tax Social Security payments including residents of: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah and Vermont
It's not what's printed on the check, it's how much money that actually represents in your pocket which is at the heart of the "early vs. later" social security collection.
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Everyone Leona saying they want to wait to make sure their spouse is ok if they outlive you. Don’t you guys all have life insurance for that?
From: https://www.ssa.gov/policy/docs/issuepapers/ip2015-02.html
Table 1.Taxable portions of income for Social Security beneficiaries, by income tax filing status and modified AGI
| Line | Modified AGI (nominal $) | Taxable portion of income |
|---|---|---|
| Single | ||
| 1 | Less than 25,000 | None |
| 2 | 25,000–34,000 | Lesser of—
|
| 3 | More than 34,000 | Lesser of—
|
| Married, filing jointly | ||
| 4 | Less than 32,000 | None |
| 5 | 32,000–44,000 | Lesser of—
|
| 6 | More than 44,000 | Lesser of—
|
I wanted to continue working so at 62 my salary would have required me to pay back what I received.
I retired at 65 took it started a side gig and kept my income under the earnings limit. In 2024 I turn 66 and 8 months so there will be no limit and I have added several additional clients.
I enjoy my flexible side gig because it's not like work. I only take clients I like, and I only do what I want.
Gotcha
Assuming you didn't pick up a side gig, would you have started collecting right at 62?
My wife has enough guaranteed retirement income to make me never let her behind me when I am near stairs.
No because I loved my previous job and did not want to retire at 62.
I always planned to take it the day I retired because I was only going to retire when I was financially secure.
Of course and after I die her new boyfriend will also be happy she had that policy on me - lol
I might be wrong but I don't think anyone pays an 80% tax rate on SS unless by "really high income" you are talking millions of dollars. The percentage of your SS benefit that is taxable varies on your income and I do see 85% as the max - perhaps that is what you are referring to?
Just saw your table and as I mentioned - it talks about the portion of your benefit that is taxable, not the rate at which it is taxed.
The one parameter in all of this is health.
you can crunch all the numbers you want to find the perfect financial solution, or so you think to maximize worth.
Yet no one can crunch the numbers and say how long yer gonna live
Life is like a football game they all end after 4 quarters unless yer lucky enough to get overtime.
0-20 1st, 21-40 2nd, 41-60 3rd, 61-80 4th, 81-100 overtime 00:00 game over
I remember my grandmother saying when she was 92 that all her friends were dead.
Who here can tell me how long they are gonna live?
Take Retirement at the earliest age you can and go enjoy life cuz sometime in the 4th quarter health is gonna catch up to you.
you can crunch all the numbers you want to find the perfect financial solution, or so you think to maximize worth.
Yet no one can crunch the numbers and say how long yer gonna live
Life is like a football game they all end after 4 quarters unless yer lucky enough to get overtime.
0-20 1st, 21-40 2nd, 41-60 3rd, 61-80 4th, 81-100 overtime 00:00 game over
I remember my grandmother saying when she was 92 that all her friends were dead.
Who here can tell me how long they are gonna live?
Take Retirement at the earliest age you can and go enjoy life cuz sometime in the 4th quarter health is gonna catch up to you.
It seems most break even points are about 80 years old so if I live to 90 it's really that extra benefit over those last 10 years. Just spit balling, if the extra is $10/year - I don't think it changes my life a whole lot.
Also, we haven't talked about changes they are going to need to make to SS in order for it to remain solvent. We know they won't increase benefits - more likely reduce them.
Actually, last year was the big COLA increase that was effective 1/1/23. The increase for 1/1/24 is smaller, something like 3.5%.
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