Social Security

[Kerbie]

Originally Posted by Jim Owen

I believe I get there first.

Not by much!

Originally Posted by Jim Owen

On the other hand, there are some folks who keep measuring the windows and floor space in my office and casually asking if the book shelves are my personal furniture. . . .

[spock]

I will be retiring May 2020 at age 67. I was talking to my financial advisor a short while back and told him what I was thinking to gauge his opinion:

1. Despite what many fear, I personally believe SS will still be around for quite a while. Upcoming generations may find themselves paying into something different than what is now in existence, but I believe those currently vested will not see their benefits taken away.

2. Despite riding a favorable economic wave currently, things can change quickly, leading to big hits on financial investments. That having been said, provided one does not need the money, and is in reasonably good health, letting the SS ride until age 70 is about the only guaranteed 8% return on investment I can think of.

3. The break even period for the decision to max out SS benefits vs taking them early is around 82. If you live beyond, you made a good call, if you check out before then, I suppose you didn't but what real difference does it really make if you're dead anyway?

To these observations he replied, "How would you like to come work with us - I could not have stated it any better."

Now, does that make either of us right beyond the shadow of a doubt, certainly not, but it makes sense to me and I am going to pursue this path with the understanding that if circumstances change, I can also change my mind at any time.

By the way, my wife is thinking seriously of taking her SS when she turns 62. So there you have it.

[RP]

Well put, spock....

[Kerbie]

Thanks, spock... sorry I had to edit a little.

I remember my mom's break-even point was 79 years old. So, I have thought about that. We can make educated estimates of our lifespan, but we never know what's around the next corner.

As I said earlier, I understand the 8% increase in payout. It's easy to think that applies equally to the years 62-69, but it doesn't take into account the money we could make on the SS distributions if invested wisely. I think the 8% number assumes we spend the money. In reality, that percentage could be a little less.

[lfoo6952]

Originally Posted by Murphy Slaw

I thought EVERYBODY (in the USA) HAD to sign up for Medicare at age 65 ?

Murphy: everyone must sign up for Medicare Part A at 65 even if you have medical coverage from your employer, otherwise you will be penalized. Part A is no charge.



Kerbie: each family's situation is different. I used this company to determine when it was best to start collecting from a financial perspective: https://www.socialsecurityadvisors.com.

Other factors to consider are your health, wife's health, and diseases your parents or siblings may have had, and your other sources of income.

[FLRon]

My decision to start taking my SS at 62 was an easy one to make because it was made based mostly on my life expectancy. At almost 65 years of age, I have already lived longer than any of the men in my family. All of them succumbed early to heart disease or stroke, and none of them including my older brother ever made it to retirement.

Knowing this and that I wanted to hopefully have a few good years of retirement, I retired at 61 and began drawing SS at 62. Like everyone else, I would have loved to wait until my full retirement age. Given my unique circumstances that wasn’t going to happen.

There is no “one size fits all” formula for collecting your SS benefits. I wish you the best in making this important decision.

[Kerbie]

Thanks, FLRon... I certainly understand your decision. Sounds like the right one.

lfoo6952... thanks for the good comments.

Actually, great comments by all... gives me more to think about.

[Photojeep]

Admittedly I have not read every post but I will add my 2 cents because there could be others in my situation.

I will be retiring in 2023 at age 66. I will begin taking my SS when I'm first able (66.5 yo) in addition to my other retirement income. I work for a college in Nevada and will have been paying into a state-matched retirement fund for 20 years when I reach 2023. This means I fall into the "Windfall provision" which will reduce my SS monthly benefits significantly. Add to that, I hadn't paid very much into SS to begin with so after doing the math on the SS website, I will be getting less than $800 per month.

I did a spreadsheet showing that if I wait until 70 to begin taking SS, it will take me until I reach 80 (13.5 years of retirement) before I make up the difference. I'm not willing to wait that long.

I only bring this up in case anyone else falls into the windfall provision situation.

Best,
PJ

[The Bard Rocks]

My wife retired early, in her early 50's and took SS at 62.

I am the opposite. I took it only upon duress and as late as possible (>70). Reason: philosophical opposition to it. I was finally persuaded to set aside my objections, so after keeping the first 3 months of SS each year to pay the taxes on what I receive, I give the rest away, all to small local organizations where every dollar is used locally. That has given me great pleasure. I never felt I could be generous before.

In our case, neither of us gets enough to make a difference in how we live. Even with zero debt, we could not possibly live on what we get; it would be well below the poverty line. (This makes it easier to take the philosophical high road and not accept it.) Fortunately, I enjoy my work and have no retirement date expected, so we have enough without it.

I also resisted Medicare and signed up a bit late for it, so my premiums are not quite double my wife's. I can state now that this has made a difference in our lives. SS hasn't.

[1neeto]

Is it worth waiting all those years to get full benefit? Will you make the money you would’ve otherwise collected if you started collecting at 62? Are you relatively healthy and see yourself living to your 80’s and beyond? I’ll personally start collecting as soon as I can. By the time I’m 62, there might not be a social security fund.

[guitar george]

Originally Posted by spock

The break even period for the decision to max out SS benefits vs taking them early is around 82. If you live beyond, you made a good call ...

If 82 is the break-even age between taking benefits now or maxing out the SS fund and start taking benefits at 82 I would highly recommend taking some benefits sooner rather than later. 82 is a long time from retirement and not everyone makes it to that age.

Without knowing all the details of a person's financial situation including how much money they have, how much money they need, the effect that drawing funds early would have on income taxes and deductions, etc. it is impossible to say what is best. As others have recommended, getting as much money up front, without losing too much in the future, is usually the way to go.

[Kerbie]

I just calculated my break-even point and it's very close to what I was expecting. If I wait and take the max payout at age 70, I will surpass the total amount paid to me with the early benefit in the 5th month of my 80th year.

Obviously, that does NOT take into account the future value of the distributions if they were invested. It sorta assumes the payouts will be spent. The future value of money would push that break-even point farther out into the future. It looks like the average life expectancy in the US is 78-79 years.

[LyleGorch]

Took mine at 63 when I retired. The check pays for my dogs food bill a month. So essentially, it went to the dogs.

[Kerbie]

Lol... At least it went to a good cause, Lyle!

[Mr. Jelly]

Originally Posted by Kerbie

I just calculated my break-even point and it's very close to what I was expecting. If I wait and take the max payout at age 70, I will surpass the total amount paid to me with the early benefit in the 5th month of my 80th year.

And life expectancy for males is like 76 yo. I'm just saying ……….