POLL: If Eligible For Social Security .....

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills

If Eligible For Social Security Based On Your Own Earnings, At What Age Did You Start Collecting?

Eligible but not collecting yet
55
37%
62
34
23%
63
4
3%
64
3
2%
65
11
7%
66
14
10%
67
4
3%
68
1
1%
69
0
No votes
70
21
14%
 
Total votes: 147

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TomatoTomahto
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Re: POLL: If Eligible For Social Security .....

Post by TomatoTomahto » Mon Apr 21, 2014 3:42 pm

rkhusky wrote:
That's interesting. I hadn't thought of that combination as being useful. Will have to look into it.

What was the assumed rate of return and the expected life expectancies?
I ran the software a while ago, but I don't recall that an assumed rate of return was involved. I'll look at the report (my license has expired, so I can't rerun it without paying).

Iirc, I stated a life expectancy of 85 for myself and 100 for my wife.

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TomatoTomahto
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Re: POLL: If Eligible For Social Security .....

Post by TomatoTomahto » Mon Apr 21, 2014 3:47 pm

TomatoTomahto wrote:
Iirc, I stated a life expectancy of 85 for myself and 100 for my wife.
Btw, I picked 85 for myself because in a long-ago dialogue with sscritic, I decided that if I lived to that age, I wouldn't mind if I had "left some money on the table," as I would be so happy to get to see one more reel in the movie of my family's life.

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TomatoTomahto
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Re: POLL: If Eligible For Social Security .....

Post by TomatoTomahto » Mon Apr 21, 2014 4:14 pm

rkhusky,

Apparently I used the following assumptions in running the program:
• Inflation Rate: 2.00%
• Nominal rate of return: 4.00%

The report says:
In forming the present value of all your future benefits for different collection date choices, we do simple discounting for real interest. That is, we don't engage in what's called actuarial discounting. Actuarial discounting takes into account the chances or probabilities of collecting particular benefits in particular future years. But such actuarial discounting, while appropriate for insurance companies, is not appropriate for individual households who can't count on dying at particular ages with the frequencies observed in large samples.

If your maximum age of life isn't very high, taking benefits earlier will likely produce the highest present value. The same is true if you set a higher interest rate under Assumptions. In forming the present value of your future benefits, our tool takes into account the real rate of return (the return after inflation) you can earn on your savings. If you set a higher interest rate, the program may recommend taking some of your benefits early because you are, in effect, telling the program that you can do better getting lower benefits starting right away and investing them yourself.

rkhusky
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Re: POLL: If Eligible For Social Security .....

Post by rkhusky » Mon Apr 21, 2014 5:26 pm

Thanks for the info. It's nice to have a data point to compare against to make sure my calculations make sense.

sscritic
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Re: POLL: If Eligible For Social Security .....

Post by sscritic » Mon Apr 21, 2014 5:28 pm

rkhusky wrote:Thanks for the info. It's nice to have a data point to compare against to make sure my calculations make sense.
What about your info?
How many kids under 18 will you have when you turn 62?

rkhusky
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Re: POLL: If Eligible For Social Security .....

Post by rkhusky » Mon Apr 21, 2014 5:41 pm

sscritic wrote:It was intended as you read it. I know about your kids (from other posts and from the meaning of 44 benefit-months). I don't know about rkhusky's. I assume he does (know that is, not have kids), so he will be able to figure out how many benefit-months his kids (if he has any) will get if he claims at various ages. I am pretty sure that the earlier he claims, the more they will get.
Thanks for the hint. I did not know that children of a retired parent could get benefits just by being under 18. I will look into this further.

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Re: POLL: If Eligible For Social Security .....

Post by sscritic » Mon Apr 21, 2014 5:45 pm

TomatoTomahto's strategy was based in part on the rules for child's benefits:
§ 404.350. Who is entitled to child's benefits?

(a) General. You are entitled to child's benefits on the earnings record of an insured person who is entitled to old-age or disability benefits or who has died if—
(1) You are the insured person's child, based upon a relationship described in §§ 404.355 through 404.359;
(2) You are dependent on the insured, as defined in §§ 404.360 through 404.365;
(3) You apply;
(4) You are unmarried; and
(5) You are under age 18; you are 18 years old or older and have a disability that began before you became 22 years old; or you are 18 years or older and qualify for benefits as a full-time student as described in § 404.367.

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TomatoTomahto
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Re: POLL: If Eligible For Social Security .....

Post by TomatoTomahto » Mon Apr 21, 2014 6:07 pm

I should have red-shirted those kids; would have added to their benefits. :oops:

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Re: POLL: If Eligible For Social Security .....

Post by sscritic » Mon Apr 21, 2014 6:10 pm

TomatoTomahto wrote:I should have red-shirted those kids; would have added to their benefits. :oops:
Your benefit optimizer wasn't very good if it didn't tell you to have them repeat 12th grade. :)

rkhusky
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Re: POLL: If Eligible For Social Security .....

Post by rkhusky » Mon Apr 21, 2014 6:42 pm

sscritic wrote:TomatoTomahto's strategy was based in part on the rules for child's benefits:
§ 404.350. Who is entitled to child's benefits?

(a) General. You are entitled to child's benefits on the earnings record of an insured person who is entitled to old-age or disability benefits or who has died if—
(1) You are the insured person's child, based upon a relationship described in §§ 404.355 through 404.359;
(2) You are dependent on the insured, as defined in §§ 404.360 through 404.365;
(3) You apply;
(4) You are unmarried; and
(5) You are under age 18; you are 18 years old or older and have a disability that began before you became 22 years old; or you are 18 years or older and qualify for benefits as a full-time student as described in § 404.367.
From what I can see, each child can receive 50% of the PIA, until the total for the children reaches the family maximum, the calculation of which I have found. Seems like for 3 or fewer children, each will receive 50%.

sscritic
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Re: POLL: If Eligible For Social Security .....

Post by sscritic » Mon Apr 21, 2014 6:56 pm

Don't forget that you don't want to work. The earnings test applies to every benefit on your record, theirs as well as your own.
Under the annual earnings test, we will reduce your monthly benefits (except disability insurance benefits based on the beneficiary's disability) by the amount of your excess earnings (as described in § 404.434), for each month in a taxable year (calendar year or fiscal year) in which you are under full retirement age (as defined in § 404.409(a)).
...
We will reduce husband's, wife's, and child's insurance benefits payable (or deemed payable—see § 404.420) on the insured individual's earnings record because of the excess earnings of the insured individual.
P.S. The word excess earnings doesn't mean the amount by which you exceed the annual (or monthly if applicable) exempt amount. Excess earnings means the penalty, e.g.,
If you have not yet reached your year of full retirement age, your excess earnings for a taxable year are 50 percent of your earnings (as described in § 404.429) that are above the exempt amount.

rkhusky
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Re: POLL: If Eligible For Social Security .....

Post by rkhusky » Mon Apr 21, 2014 7:13 pm

Thanks for the info. If both parents are retired, does a child receive 50% of both parent's PIA?

sscritic
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Re: POLL: If Eligible For Social Security .....

Post by sscritic » Mon Apr 21, 2014 7:35 pm

rkhusky wrote:Thanks for the info. If both parents are retired, does a child receive 50% of both parent's PIA?
That's dual entitlement, and the quick answer is no. That would be the same as you collecting the full amount of your own benefit plus the full amount of your benefit as a spouse. Ain't gonna happen.
If you are entitled to a child's benefit on more than one person's earnings record, you will ordinarily receive only the benefit payable on the record with the highest primary insurance amount. If your benefit before any reduction would be larger on an earnings record with a lower primary insurance amount and no other person entitled to benefits on any earnings record would receive a smaller benefit as a result of your receiving benefits on the record with the lower primary insurance amount, you will receive benefits on that record.
Example: you and other parent are divorced. Other parent has smaller PIA and one other child, but you have a larger PIA and four other children collecting on your record. Adding the child in question to the other parent does not reduce the benefit of the other parent's other child, but will increase the benefit of the child in question. Child goes to parent with smaller PIA.
Last edited by sscritic on Mon Apr 21, 2014 7:56 pm, edited 1 time in total.

02sbxstr
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Re: POLL: If Eligible For Social Security .....

Post by 02sbxstr » Mon Apr 21, 2014 7:54 pm

Toons wrote:Started at 62 ,enjoying every penny of it :happy
We tapped into SS as soon as possible - I question the strategy of postponing of benefits until later, given the uncertainty of longevity, not to mention the perhaps unsustainablity of current benefits, particularly for those who had the foresight and discipline to save. And don't anyone dare to interpret this as a political comment.

rkhusky
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Re: POLL: If Eligible For Social Security .....

Post by rkhusky » Mon Apr 21, 2014 8:27 pm

sscritic wrote: That's dual entitlement, and the quick answer is no. That would be the same as you collecting the full amount of your own benefit plus the full amount of your benefit as a spouse. Ain't gonna happen.
That's what I guessed. Thanks. Now I just need to update my spreadsheet to see if it matters.

On a hunch I decided to check to see if the child's benefit would be reduced by one of us taking at 62. It appears the opposite is true - the usual reduction for taking early does not occur for the months that one has a child in their care.
Edit: appears that only husband/wife benefits are not reduced, own old-age benefits appear to still be reduced when taking early with a qualified child.

rkhusky
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Re: POLL: If Eligible For Social Security .....

Post by rkhusky » Tue Apr 22, 2014 6:18 pm

Another question came up when I tried to implement the child benefit. It appears that the spouse/child benefit is the smaller of (family maximum minus your PIA divided by the number taking benefits based on your record) and (PIA/2). If one's benefit is reduced by taking before PIA, does that increase the spouse/child benefits? Or does that type of adjustment only occur when a child/spouse has another benefit on their own record that reduces their share of the family maximum?

sscritic
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Re: POLL: If Eligible For Social Security .....

Post by sscritic » Tue Apr 22, 2014 6:42 pm

I am surprised you didn't find your answer in the same place you found the answer you did find. Actually, I think you did find it. The PIA is subtracted first (no matter what the benefit actually is), then the remainder is divided up.
§ 404.404. How reduction for maximum affects insured individual and other persons entitled on his earnings record.

If a reduction of monthly benefits is required under the provisions of § 404.403, the monthly benefit amount of each of the persons entitled to a monthly benefits on the same earnings record (with the exception of the individual entitled to old-age or disability insurance benefits) is proportionately reduced so that the total benefits that can be paid in 1 month (including an amount equal to the primary insurance amount of the old-age or disability insurance beneficiary, when applicable) does not exceed the maximum family benefit (except as provided in § 404.405 where various savings clause provisions are described).
You count the full PIA whether the number holder gets that amount or not. So what do you think happens if the worker has delayed credits?

rkhusky
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Re: POLL: If Eligible For Social Security .....

Post by rkhusky » Tue Apr 22, 2014 7:10 pm

sscritic wrote:So what do you think happens if the worker has delayed credits?
I imagine that it is the same. Thanks for the confirmation.

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Re: POLL: If Eligible For Social Security .....

Post by sscritic » Tue Apr 22, 2014 7:20 pm

rkhusky wrote:
sscritic wrote:So what do you think happens if the worker has delayed credits?
I imagine that it is the same. Thanks for the confirmation.
So here is the strategy to maximize your SS benefits. Wait until 70 to claim, but first have a child right at 69 and another right at 70.

rkhusky
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Re: POLL: If Eligible For Social Security .....

Post by rkhusky » Tue Apr 22, 2014 8:20 pm

And live to 120.

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Re: POLL: If Eligible For Social Security .....

Post by sscritic » Tue Apr 22, 2014 8:35 pm

rkhusky wrote:And live to 120.
Once the kids turn 18 when you are 88, you can relax. It's getting in the 36 kid-years of benefits that is the goal.

I goofed. File and suspend at 66, so you can have your kids at 65 and 66; they will be done when you are 84.
Last edited by sscritic on Tue Apr 22, 2014 8:46 pm, edited 1 time in total.

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JPH
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Re: POLL: If Eligible For Social Security .....

Post by JPH » Tue Apr 22, 2014 8:42 pm

I checked 66 because that's when I started receiving part of my spouse's allowance. I will not begin drawing from my own account until I reach 70.
While the moments do summersaults into eternity | Cling to their coattails and beg them to stay - Townes Van Zandt

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