SS Strategy Metric

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Sagenick48
Posts: 339
Joined: Sat Nov 02, 2013 8:22 am

Re: SS Strategy Metric

Post by Sagenick48 » Sat Apr 19, 2014 7:25 pm

I remember reading a synopsis of a study once that showed that 3 yr old children and monkeys had an intuitive ability to chose the best probable way of getting a desired toy.

Maybe the reason that the majority of people choose to collect social security earlier rather than later is because they are factoring in multiple personal and macro factors not considered by normal analysis. Personal health factors for lower income people would lead them to take SS early. Macro factors, such as the possibility of means testing SS would lead higher income folks to take early, otherwise they may never see a dime of what they have paid in.

My point is don't discount the collective wisdom of the common folk.

I like to say that 536 people in Washington are pretty arrogant if they think they can outsmart 300 million other people.
The market goes up, the market goes down.

Topic Author
rkhusky
Posts: 7814
Joined: Thu Aug 18, 2011 8:09 pm

Re: SS Strategy Metric

Post by rkhusky » Sat Apr 19, 2014 7:37 pm

Cut-Throat wrote:
Ron wrote:While my wife/me don't expect to live until age 100, we planned our retirement as if we would.

Part of that plan also included claiming our respective SS benefits at age 70. The simple fact is we don't worry about getting our SS tax/contribution back. Money is for the living, not the dead and I'm sure we won't be pondering our decision in the afterlife saying that we should have taken SS earlier.

- Ron
Ron,

I am a big proponent of the delay to age 70 for S.S. ..... I have heard that the 'Smart Money' Delays the Larger earning person in the marriage to age 70 and the other takes theirs at age 62. Part of the reason being that you can only collect 1 SS, if one person dies. Did you consider this? What was your reasoning for delaying both to age 70?
If both spouses live for a long time and a few other factors, you can receive more from SS by both delaying until 70.

User avatar
Cut-Throat
Posts: 2011
Joined: Sun Oct 17, 2010 9:46 am

Re: SS Strategy Metric

Post by Cut-Throat » Sat Apr 19, 2014 8:00 pm

rkhusky wrote: If both spouses live for a long time and a few other factors, you can receive more from SS by both delaying until 70.
Well, that is certainly a no-brainer. That is akin to saying when the roulette wheel lands on red, always bet on red.

But in the case of a higher earning spouse that is 8 years older than the other spouse, the safer bet would be to have the lower earning spouse take it at age 62, and the older higher earning spouse to take it at age 70.

Ron
Posts: 6571
Joined: Fri Feb 23, 2007 7:46 pm

Re: SS Strategy Metric

Post by Ron » Sat Apr 19, 2014 11:17 pm

Cut-Throat wrote: Ron,

I am a big proponent of the delay to age 70 for S.S. ..... I have heard that the 'Smart Money' Delays the Larger earning person in the marriage to age 70 and the other takes theirs at age 62. Part of the reason being that you can only collect 1 SS, if one person dies. Did you consider this? What was your reasoning for delaying both to age 70?
While we are both delaying to age 70 for our indivudial benefit, my wife has already submitted a restricted application against my FRA SS benefit for 50% of that amount. She turns FRA next month and will start receiving that 50% in June, and each month for the next 48 months until she turns 70. I did the file/suspend application in January when I reached FRA.

The reason I stated age 70 for our indivudial benefit is that it actually is our own benefit, not a spousal (e.g. restricted application) benefit or claiming as a widow. She did not take it at age 62 since she was still employed (retired at age 64) but more importantly that we were not yet FRA age. That would have meant a permanent reduction in benefits if filing at an earlier age. FYI, we are only four months apart in age.

- Ron

Topic Author
rkhusky
Posts: 7814
Joined: Thu Aug 18, 2011 8:09 pm

Re: SS Strategy Metric

Post by rkhusky » Sun Apr 20, 2014 6:55 am

Cut-Throat wrote:
rkhusky wrote: If both spouses live for a long time and a few other factors, you can receive more from SS by both delaying until 70.
Well, that is certainly a no-brainer. That is akin to saying when the roulette wheel lands on red, always bet on red.

But in the case of a higher earning spouse that is 8 years older than the other spouse, the safer bet would be to have the lower earning spouse take it at age 62, and the older higher earning spouse to take it at age 70.
I don't think it is so cut and dried. Depends on current health and family longevity, the expected portfolio return, the need for the SS benefits, the desire to do Roth conversions, and perhaps some other things. I'm not saying it is a bad strategy. In fact, we may end up using that for our situation.

User avatar
Cut-Throat
Posts: 2011
Joined: Sun Oct 17, 2010 9:46 am

Re: SS Strategy Metric

Post by Cut-Throat » Sun Apr 20, 2014 7:28 am

Ron wrote:While we are both delaying to age 70 for our indivudial benefit, my wife has already submitted a restricted application against my FRA SS benefit for 50% of that amount. She turns FRA next month and will start receiving that 50% in June, and each month for the next 48 months until she turns 70. I did the file/suspend application in January when I reached FRA.

The reason I stated age 70 for our indivudial benefit is that it actually is our own benefit, not a spousal (e.g. restricted application) benefit or claiming as a widow. She did not take it at age 62 since she was still employed (retired at age 64) but more importantly that we were not yet FRA age. That would have meant a permanent reduction in benefits if filing at an earlier age. FYI, we are only four months apart in age.

- Ron
OK, that makes perfect sense !

Post Reply