What About Retiring At 62...?

[sevargnhoj]

Timely for me too.

I'm 61 and my wife is 59, both retired PE teachers with pensions and healthcare included (all those years of low pay finally paying off).

We're having a great time "doing whatever we feel like doing" from day to day.

No debt, but a high school senior to put through college.

A couple of 401k s waiting, a decent savings account which we dip into to supplement our pensions and cover replacement/repair expenses.

I give my wife the monthly accounting (red/black) and gently encourage her to consider whether she really needs (fill in the blank) and I only look at the guitar sales as porn.

I have "the one" and a couple of supplemental guitars, so I'm good.

We try to cut back on our eating out through laziness, which can be a large monthly expense. We're doing OK.

Three of my 4 grandparents were long-lived 104, 95 and 90. Dad made 86 in spite of 60+ years of unfiltered Camels and bourbon. Mom made 83 (a rare cancer).

At my last physical my Dr. said, "You're 61 going on 40.", so there's that to consider. I live to play (mtn biking, kayaking, tennis with my wife, you name it, we play it) and don't plan to stop until my body can't take it anymore.

I did a cursory comparison of SS start dates and the break even point was about 78.

It's a roll of the dice.

[RP]

Originally Posted by sevargnhoj

...We're having a great time "doing whatever we feel like doing" from day to day....

IMO that's undoubtedly the best thing about retirement....

[seannx]

Originally Posted by DCCougar

I don't get this "70" figure. At age 66 you get full social security! Of course, yes, if you keep working after 66, your "full social security" will increase. But I believe you definitely want to start taking SS at 66 or else you just lose those payments.

Whether you take SS early is (partly) a matter of whether you like your job, and whether you're ready to suddenly have no reason that you have to get out of bed after working full time for 40 years (can be rather a shock for some).

Rokdog gave a good summary of the situation, suggesting taking early SS was probably the way to go. But when you retire at 62 and take your lower SS, don't forget you're turning down several more years of income from your job. Of course, you've got to work for it, but still....

I took SS at 66, then kept working 3 days a week until 70. I liked that extra money - to buy guitars, of course! My job was OK, and mentally stimulating - as a paralegal in a small law office mostly researching and drafting legal briefs involving civil rights violations. I was glad to leave it all behind at 70 though!

If I had waited until age 70, my monthly benefit would have increased 25%. That's what I was referring to. When I did the math, it showed I wouldn't get enough more to justify waiting, given my circumstances. Like you, I chose to take SS at 66 - my full retirement age. I'm still working (self employed), which I enjoy, but much fewer hours, and my living costs are low. And I've added to my guitar and equipment collection, too. Maybe if someone was still making enough income to have to pay income tax on their social security income, and expected to live well into their 80's or 90's, it could make sense to wait until 70. I have no plans to fully retire, as I like what I do, have a large inventory fully paid for, clients who want my services, and one of my sons works with me.

[Mr. Jelly]

I have several months to go to achieve my FRA at 66. I or we plan to file and suspend my SS and I will get half of my wives SS until I reach 70 yo. She of coarse will be getting her full SS amount. We'll take what we need from my IRA when needed. At 8% a year from SS you can't beat it.

If everything works out of coarse. There's been a shift at my part time gig and the next couple of months don't look pleasing.

[ahorsewithnonam]

Originally Posted by Mr. Jelly

I have several months to go to achieve my FRA at 66. I or we plan to file and suspend my SS and I will get half of my wives SS until I reach 70 yo. She of coarse will be getting her full SS amount. We'll take what we need from my IRA when needed. At 8% a year from SS you can't beat it.

If everything works out of coarse. There's been a shift at my part time gig and the next couple of months don't look pleasing.

SS eliminated the file and suspend option in 2017

[JonWint]

Originally Posted by ahorsewithnonam

SS eliminated the file and suspend option in 2017

Still able to file "restricted application" if you're old enough. My wife just did it last week.

"In some cases to get the most out of your Social Security benefits, you will need to use something called a restricted application. New Social Security rules signed into law on Nov. 2, 2015, have changed the right to file a restricted application for those born on or after January 2, 1954."

She'll receive 50% of my benefit and let hers increase until her age 70 when she will make a standard application for a 32% higher benefit. A sweet deal.

[1neeto]

I’m quite far from “retirement age”, but I do want to retire...preferably much sooner than 62.

I will collect SS at 62 and one days old. I’ve been contributing to SSI since I was 16, and I’m not going to play the “what if I wait until certain age and I’ll get more” game. Nothing is certain in this life, I could feel like a tank at 62, decide to wait until 70, and die at 63 years old. I don’t even think there’ll be a social security fund by the time I turn 62.

[Mr. Jelly]

Originally Posted by ahorsewithnonam

SS eliminated the file and suspend option in 2017

Not if you were born in 1952, 1953 and possibly 1954. All others you are correct

[ahorsewithnonam]

Social Security ended file and suspend by ruling that if workers at full retirement age suspend their benefits to earn higher benefits in the future, other related benefits such as spousal benefits will also be suspended. In other words, there's no point in filing and suspending, because both benefits will stop.
Life After 'File and Suspend' - AARP
AARP › social-security › info-2016 › soc...

[Mr. Jelly]

Originally Posted by ahorsewithnonam

Social Security ended file and suspend by ruling that if workers at full retirement age suspend their benefits to earn higher benefits in the future, other related benefits such as spousal benefits will also be suspended. In other words, there's no point in filing and suspending, because both benefits will stop.
Life After 'File and Suspend' - AARP
AARP › social-security › info-2016 › soc...

Age comes into play. The new rules say that deemed filing doesn't apply to you if you were born on Jan. 1, 1954, or earlier). You can still do a restricted application for just spousal benefits and delay your own retirement benefits. But if you were born after Jan. 1, 1954, you can't — filing for one type of benefit is deemed filing for both...….. From AARP web page

[Tone Gopher]

Originally Posted by Kerbie

FWIW, to determine whether any of your Social Security income is taxable to the IRS, take one-half of your SS payout and add in your other income, including tax-exempt interest. If you're single, $25,000 is the limit before part of it will be taxable. For married couples filing jointly, the upper limit is $32,000.

Thanks, all, for this discussion.

I am retired, under FRA, but not yet drawing SS.

I am fortunate enough to be asked to do part time consulting work for which I am well paid.

Just to clarify the above quoted text: If one exceeds the calculated limit, is the first $25000/$32000 still tax exempt? Ie, is the income that is above and beyond that limit, the only part that is taxed?

Regards,

George

P.S. My health insurance, dental, and vision needs are covered by my retirement package.

[DCCougar]

Originally Posted by seannx

If I had waited until age 70, my monthly benefit would have increased 25%.

Is that the SS estimate based on you continuing to pay into SS as a percentage of your full salary?

I could be wrong - I haven't really studied this as much as some of you guys - but AFAIK, if you take SS at 66 and keep working (and paying into SS), your monthly benefit will go up the following year anyway! Your benefit amount goes up every year you work past 66, even though you're collecting SS. (I guess some rules are different depending on your birth year?)

Originally Posted by seannx

Like you, I chose to take SS at 66 - my full retirement age. I'm still working (self employed)...

If you continue to pay into SS, your monthly benefit should continue to rise. (Of course, it takes the SSA quite a while to do the math and paperwork.)

Originally Posted by seannx

And I've added to my guitar and equipment collection, too.

Well, that's the important thing.

Originally Posted by seannx

Maybe if.... it could make sense to wait until 70.

I don't know that it ever makes sense to keep working and wait till 70 to take SS, as I've mentioned above. AFAIK, you can take SS at 66 and keep working till 70 (without penalty), and your SS monthly benefit will go up every year since you've continued to pay into the SS pool.

[DCCougar]

Originally Posted by rokdog49

...People who wait until they are 66 or 70 are also missing 4 or eight years of monthly benefits they could be receiving. Yes, it is true that each year you wait after 62 you accrue 8% interest, BUT...it will take you a number of years of living past 66 or seventy to make up for not taking your money at 62. Remember that's a check you will be getting every month. Four years at let's say $1500/ month SS benefit is $72,000. How long will you have to live after age 66 to make up the 72k you didn't get, 12, that's how long.

I just worked this out for my wife's situation. She was a professor with a pretty good salary, so she paid A LOT into SS over the years. She's going to wait until she's 66 to take SS, and she'll only have to live till 69 or 70 to make up for the benefits she didn't get because she didn't take SS earlier. So it depends!

[RP]

Originally Posted by DCCougar

...So it depends!

Exactly. The rules are the rules, but everybody's situation is different. Deciding when to apply for SS is like buying insurance. One has to make an educated (or uneducated) guess as to how long he or she will live and acquire benefits. I went with the "bird in the hand" philosophy and started drawing benefits at 62. At 68 I've lived longer than my father who never really got to enjoy a healthy retirement life - he died from lung cancer. Do I wish that I had waited? Of course, but I didn't at the time; and I can easily live with my decision....

[DCCougar]

Originally Posted by RP

...The rules are the rules....

And apparently they are a bit different depending on your birth year. Early boomers have it different than later boomers, I think.