Regrets for taking SS at 62 or waiting?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
User avatar
TomatoTomahto
Posts: 7539
Joined: Mon Apr 11, 2011 1:48 pm

Re: Regrets for taking SS at 62 or waiting?

Post by TomatoTomahto » Fri Nov 24, 2017 1:08 pm

I “took” SS at 62, in large part because of sscritic’s sage advice. Two of my kids were young, unmarried, and in HS, with an old father, and thus were eligible for benefits. That swung the decision.

We expect that DW will wait until 70.

mac808
Posts: 472
Joined: Mon Sep 19, 2011 8:45 pm

Re: Regrets for taking SS at 62 or waiting?

Post by mac808 » Fri Nov 24, 2017 1:13 pm

mptfan wrote:
Fri Nov 24, 2017 9:16 am
Nicolas wrote:
Thu Nov 23, 2017 3:58 pm
Wow, so far no one has any regrets either way, how can this be :confused
Because the people who died while waiting to take it later are unable to respond.
Similarly, those who took it early but have since advanced beyond the actuarial break-even point might be less prone to post simply due to old age. Not everyone has the digital robustness of Taylor Larimore.
Last edited by mac808 on Fri Nov 24, 2017 1:13 pm, edited 1 time in total.

ResearchMed
Posts: 7080
Joined: Fri Dec 26, 2008 11:25 pm

Re: Regrets for taking SS at 62 or waiting?

Post by ResearchMed » Fri Nov 24, 2017 1:13 pm

TomatoTomahto wrote:
Fri Nov 24, 2017 1:08 pm
I “took” SS at 62, in large part because of sscritic’s sage advice. Two of my kids were young, unmarried, and in HS, with an old father, and thus were eligible for benefits. That swung the decision.

We expect that DW will wait until 70.
You raise an interesting point that hasn't been mentioned much... IF there might also be dependent benefits... that could tilt the balance about "when to start SS".

Question: IF you had wanted to, could you (or someone else similarly situated) suspend SS once any children aged out of benefits, and let your own benefits accumulate again until you reached age 70 (if you weren't already, of course)?
(Not relevant to us, but might be for some others...)

RM
This signature is a placebo. You are in the control group.

reggiesimpson
Posts: 1608
Joined: Mon Dec 19, 2011 12:47 pm

Re: Regrets for taking SS at 62 or waiting?

Post by reggiesimpson » Fri Nov 24, 2017 1:31 pm

Took it at 62 because:

My best friend died at 65.
A very close friend is now dying of pancreatic cancer at 64.
My favorite M.D. died recently of cancer at 63.
My lunch partner had an unexpected near fatal heart attack. He is 65.
My gym rat buddy suffered an acute appendicitis at 63.

Before someone makes a wise crack about being around me as unhealthy i quit working at 62 because i didnt want to work anymore and i was fully aware of my mortality. All of these deaths and "warnings" occurred after i retired and reinforced that decision to quit early. As the old song goes " Enjoy yourself its later than you think"

User avatar
Mlm
Posts: 264
Joined: Sat Apr 09, 2016 6:00 pm

Re: Regrets for taking SS at 62 or waiting?

Post by Mlm » Fri Nov 24, 2017 1:43 pm

Age = almost 63. I've decided to hold off until at least 65 when Medicare kicks in. I can live off of my taxable dividends and cash until FRA and well beyond. By managing income I have been able to receive free health insurance and other nontaxable benefits while watching my SS and investments grow for the past two years. When I turn 65 I may also qualify for a property tax reduction if my income remains low.

With all the benefits the government is throwing at me it wouldn't be a wise decision to increase my income at this time.

Should future subsidies be eliminated I retain the option to reassess.

User avatar
cinghiale
Posts: 1142
Joined: Wed Oct 17, 2007 4:37 pm

Re: Regrets for taking SS at 62 or waiting?

Post by cinghiale » Fri Nov 24, 2017 2:05 pm

flyingaway stated,
The money in a Roth account grows tax free (spending the taxable account), while the money growth in a taxable account (directly spending tIRA) may be taxed.
I’m confused here, as a Roth is being compared to... what? A taxable account (as in, non-retirement) or a traditional IRA? There’s a little of both in your reply. If you are talking about a tIRA, you are correct. But there’s still a trade-off when it comes to taxation. Roth converting is a taxable event. It will cost the same as a withdrawal from a tIRA in any given year. The Roth can then grow tax free and will not be taxed when funds are withdrawn, as the taxes have been prepaid.
"We don't see things as they are; we see them as we are." Anais Nin | | "Sometimes the first duty of intelligent men is the restatement of the obvious." George Orwell

mouses
Posts: 3645
Joined: Sat Oct 24, 2015 12:24 am

Re: Regrets for taking SS at 62 or waiting?

Post by mouses » Fri Nov 24, 2017 2:14 pm

flyingaway wrote:
Fri Nov 24, 2017 1:05 pm
mouses wrote:
Fri Nov 24, 2017 7:32 am
retire57 wrote:
Thu Nov 23, 2017 10:52 am
The current SS discussion has made me curious. Can we hear from those of you who are collecting SS and whether you feel, for your situation, that you made the right decision to claim early or wait?
When I crunched numbers and found that I would be better off taking SS early until I made it to 78, it was no question. My Dad's family was lucky if they lived into their early sixties. My Mom;s makes it to their early 80s. So for years I have had that $1500 a month rolling in. Imagine how annoyed I'd be if I had delayed and found myself dead without ever having collected a nickle.
I am curious how could you be annoyed if you were dead?
There appears to be no sense of humor in Bogleland today.

User avatar
tadamsmar
Posts: 7753
Joined: Mon May 07, 2007 12:33 pm

Re: Regrets for taking SS at 62 or waiting?

Post by tadamsmar » Fri Nov 24, 2017 2:56 pm

My wife took ss early. I was sort of against it, but it was her business. I had a surprise opportunity to sell a farm later on favorable terms. I regret not knowing that she could suspend ss. We are too young to know if it would have paid off, but I think it was a good strategy for us to invest in ss at that time.

neilpilot
Posts: 1821
Joined: Fri Dec 04, 2015 1:46 pm
Location: Memphis area

Re: Regrets for taking SS at 62 or waiting?

Post by neilpilot » Fri Nov 24, 2017 2:58 pm

tadamsmar wrote:
Fri Nov 24, 2017 2:56 pm
My wife took ss early. I was sort of against it, but it was her business. I had a surprise opportunity to sell a farm later on favorable terms. I regret not knowing that she could suspend ss. We are too young to know if it would have paid off, but I think it was a good strategy for us to invest in ss at that time.
Please explain "I think it was a good strategy for us to invest in ss at that time.". My ss "investment" was via forced payroll deduction, so it involved no strategy on my part.

User avatar
tadamsmar
Posts: 7753
Joined: Mon May 07, 2007 12:33 pm

Re: Regrets for taking SS at 62 or waiting?

Post by tadamsmar » Fri Nov 24, 2017 3:43 pm

neilpilot wrote:
Fri Nov 24, 2017 2:58 pm
tadamsmar wrote:
Fri Nov 24, 2017 2:56 pm
My wife took ss early. I was sort of against it, but it was her business. I had a surprise opportunity to sell a farm later on favorable terms. I regret not knowing that she could suspend ss. We are too young to know if it would have paid off, but I think it was a good strategy for us to invest in ss at that time.
Please explain "I think it was a good strategy for us to invest in ss at that time.". My ss "investment" was via forced payroll deduction, so it involved no strategy on my part.
Delaying ss is equivalent to investing in an inflation adjusted annuity.

User avatar
flamesabers
Posts: 1738
Joined: Fri Mar 03, 2017 12:05 pm
Location: Rochester, MN

Re: Regrets for taking SS at 62 or waiting?

Post by flamesabers » Fri Nov 24, 2017 5:17 pm

reggiesimpson wrote:
Fri Nov 24, 2017 1:31 pm
Took it at 62 because:

My best friend died at 65.
A very close friend is now dying of pancreatic cancer at 64.
My favorite M.D. died recently of cancer at 63.
My lunch partner had an unexpected near fatal heart attack. He is 65.
My gym rat buddy suffered an acute appendicitis at 63.
My father died at 65 and never collected a penny from SS. He was still working (died on the job actually), so he probably figured he didn't need to start taking SS while working. As far as I'm aware, few if anyone here has started to take SS while working full-time. I think he loved his job and wanted to keep working for as long as his health allowed him to. Unfortunately, his health failed him much sooner then anyone expected. If he was still alive, he probably would have waited until age 70 before taking SS payments.

I certainly can understand the fear of dying while leaving money on the table so to speak. For me I think it depends on my employment status. If I'm still working full-time in my sixties, I'll hold off on SS. If I'm retired by 62, I'll probably take SS if only to avoid missing out on collecting some of the benefits.

ColoRetiredGirl
Posts: 122
Joined: Mon Nov 13, 2017 11:40 pm
Location: Colorado

Re: Regrets for taking SS at 62 or waiting?

Post by ColoRetiredGirl » Fri Nov 24, 2017 5:46 pm

VictoriaF wrote:
Thu Nov 23, 2017 8:55 pm
I am delaying. "No regrets" is an understatement. I consider it one of the most prudent financial decisions I have made.

Note that the period from early retirement to the commencement of the Social Security is an excellent opportunity for making Roth conversions.

If I die before the age of 70, you will hear from me.

Victoria
+1 :sharebeer . Roth conversions first then SS at 70.

GridironGems
Posts: 146
Joined: Mon Aug 14, 2017 8:50 pm

Re: Regrets for taking SS at 62 or waiting?

Post by GridironGems » Fri Nov 24, 2017 5:54 pm

ColoRetiredGirl wrote:
Fri Nov 24, 2017 5:46 pm
VictoriaF wrote:
Thu Nov 23, 2017 8:55 pm
I am delaying. "No regrets" is an understatement. I consider it one of the most prudent financial decisions I have made.

Note that the period from early retirement to the commencement of the Social Security is an excellent opportunity for making Roth conversions.

If I die before the age of 70, you will hear from me.

Victoria
+1 :sharebeer . Roth conversions first then SS at 70.
Could you guys explain this Roth conversions? Why do you need to convert them and why do that first then collect social security?

book lover
Posts: 141
Joined: Thu Aug 23, 2012 4:01 pm

Re: Regrets for taking SS at 62 or waiting?

Post by book lover » Fri Nov 24, 2017 5:56 pm

This discussion as well as previous ones have provided many useful ideas. I continue to go back and forth between taking at 62 or waiting to take at FRA. My mother and father did not live a long life which pulls me towards 62 , however, I realize those numbers do not necessarily mean that I will not live a long life, just part of the data set. One comment made regarding if you had enough then wanting to maximize the total amount you received from the government may not make that much sense seemed to ring true for me. It certainly is one of those subjects that depend on how you want to frame it and if want to take it early at 62 you can justify it one way and vice versa for FRA and waiting to age 70 depending on the assumptions that you want to make but the problem is you really will never know if you are correct until you pass the age of the break even point and if you don't then you made the correct decision.

delamer
Posts: 5827
Joined: Tue Feb 08, 2011 6:13 pm

Re: Regrets for taking SS at 62 or waiting?

Post by delamer » Fri Nov 24, 2017 6:21 pm

GridironGems wrote:
Fri Nov 24, 2017 5:54 pm
ColoRetiredGirl wrote:
Fri Nov 24, 2017 5:46 pm
VictoriaF wrote:
Thu Nov 23, 2017 8:55 pm
I am delaying. "No regrets" is an understatement. I consider it one of the most prudent financial decisions I have made.

Note that the period from early retirement to the commencement of the Social Security is an excellent opportunity for making Roth conversions.

If I die before the age of 70, you will hear from me.

Victoria
+1 :sharebeer . Roth conversions first then SS at 70.
Could you guys explain this Roth conversions? Why do you need to convert them and why do that first then collect social security?
https://www.bogleheads.org/wiki/Roth_IRA_conversion

sport
Posts: 7185
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: Regrets for taking SS at 62 or waiting?

Post by sport » Fri Nov 24, 2017 6:32 pm

I took SS at 62, thirteen years ago. DW has a teacher's pension that eliminates any spousal benefit or survivor benefit from my SS. Since SS is supposed to be actuarially neutral, and since women live longer than men, it seemed that there was no advantage to waiting. Depending on my longevity, our future economic situation, and any changes in the SS laws, my decision could work out as advantageous, or not. There is no way to tell at this point. Meanwhile, I have collected about $250,000.

User avatar
Lancelot
Posts: 216
Joined: Thu Jul 05, 2007 9:09 pm
Location: Philippines

Re: Regrets for taking SS at 62 or waiting?

Post by Lancelot » Fri Nov 24, 2017 10:20 pm

tadamsmar wrote:
Fri Nov 24, 2017 3:43 pm
Delaying ss is equivalent to investing in an inflation adjusted annuity.
I agree and equate delaying SS as an investment :)
No Where for Very Long...

HIinvestor
Posts: 1619
Joined: Tue Apr 08, 2014 3:23 am

Re: Regrets for taking SS at 62 or waiting?

Post by HIinvestor » Fri Nov 24, 2017 10:50 pm

My folks are 88 and nearly 93, but I was diagnosed with a progressive chronic illness when I was 40. Currently, we have no need for SS and would just invest it. We get a pension from H’s employer that more than covers our expenses (including significant travel).

H is significantly older than I—when he dies, the pension will decrease 45%. At that point, I will have to assess whether all expenses can still be met out of current income and whether there will be adjustments such as means testing to SS. If means testing is ever implemented, I expect I won’t receive any SS, which suggests I ought to collect before being barred.

If I predecease H, his pension will increase 10% but he won’t be entitled to any SS benefits flowing from me.

I realize this doesn’t answer your question directly but shows some of the factors being weighed.

mouses
Posts: 3645
Joined: Sat Oct 24, 2015 12:24 am

Re: Regrets for taking SS at 62 or waiting?

Post by mouses » Sat Nov 25, 2017 6:46 am

GridironGems wrote:
Fri Nov 24, 2017 5:54 pm
ColoRetiredGirl wrote:
Fri Nov 24, 2017 5:46 pm
VictoriaF wrote:
Thu Nov 23, 2017 8:55 pm
I am delaying. "No regrets" is an understatement. I consider it one of the most prudent financial decisions I have made.

Note that the period from early retirement to the commencement of the Social Security is an excellent opportunity for making Roth conversions.

If I die before the age of 70, you will hear from me.

Victoria
+1 :sharebeer . Roth conversions first then SS at 70.
Could you guys explain this Roth conversions? Why do you need to convert them and why do that first then collect social security?
Moving money from Traditional IRAs to Roths puts the money in a place where it and its earnings are tax free, but doing so means one pays taxes on the money withdrawn from the Traditional IRAs, to the extent that that is taxable. Ideally one does conversions to Roths when in a low tax bracket so less tax is paid on the Traditional IRA withdrawals. After retirement and before SS kicks in, many people are in a surprisingly low tax bracket. I wish I'd thought of that sooner, as I did conversions in fewer years than I could have.

User avatar
BigFoot48
Posts: 2578
Joined: Tue Feb 20, 2007 10:47 am
Location: Arizona

Re: Regrets for taking SS at 62 or waiting?

Post by BigFoot48 » Sat Nov 25, 2017 8:40 am

cheese_breath wrote:
Thu Nov 23, 2017 5:26 pm
No regrets. DW and I both took ours at 62 and used it for living expenses instead of pulling money from our investments during some of the worst times to do that.
Our situation may have been similar. After retiring and living solely off of our investments for 8 years we decided to both take at 62 in 2010 after the 2008 crash took a bite out of our portfolio. I decided giving some relief to the withdrawals might be a good idea. (Our 40/60 portfolio is currently at an all-time high, which amazes me.)

I have advised friends to defer to 70 and do other SS strategies, but in our situation it would have made no difference in our living standards to any life expectancy and thus, I have no regrets.
Retired | Two-time in top-10 in Bogleheads S&P500 contest; 12-time loser

erictiger
Posts: 7
Joined: Fri Apr 07, 2017 7:02 pm

Re: Regrets for taking SS at 62 or waiting?

Post by erictiger » Sat Nov 25, 2017 3:33 pm

I just checked my SS benefit and here are the numbers:
At full retirement age (67): $2,681 a month
At age 70: $3,482 a month
At early retirement age (62): $1,739 a month

1739/2681=64.86%. Why I have 35% reduction at age 62, instead of 30% reduction.

Eric

The Wizard
Posts: 12162
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: Regrets for taking SS at 62 or waiting?

Post by The Wizard » Sat Nov 25, 2017 3:44 pm

erictiger wrote:
Sat Nov 25, 2017 3:33 pm
I just checked my SS benefit and here are the numbers:
At full retirement age (67): $2,681 a month
At age 70: $3,482 a month
At early retirement age (62): $1,739 a month

1739/2681=64.86%. Why I have 35% reduction at age 62, instead of 30% reduction.

Eric
Because your FRA is 67, not 66...
Attempted new signature...

User avatar
Mlm
Posts: 264
Joined: Sat Apr 09, 2016 6:00 pm

Re: Regrets for taking SS at 62 or waiting?

Post by Mlm » Sat Nov 25, 2017 3:49 pm

erictiger wrote:
Sat Nov 25, 2017 3:33 pm
I just checked my SS benefit and here are the numbers:
At full retirement age (67): $2,681 a month
At age 70: $3,482 a month
At early retirement age (62): $1,739 a month

1739/2681=64.86%. Why I have 35% reduction at age 62, instead of 30% reduction.

Eric
According to SS it should be 30% https://www.ssa.gov/OACT/quickcalc/earlyretire.html
Could it be that you won't have 35 years of earnings at 62?

erictiger
Posts: 7
Joined: Fri Apr 07, 2017 7:02 pm

Re: Regrets for taking SS at 62 or waiting?

Post by erictiger » Sat Nov 25, 2017 4:54 pm

Mlm, you are correct that I don't have 35 years of earnings.

Thanks,

Eric

User avatar
badbreath
Posts: 909
Joined: Mon Jul 18, 2016 7:50 pm

Re: Regrets for taking SS at 62 or waiting?

Post by badbreath » Sat Nov 25, 2017 7:51 pm

I am not there yet but my plan was start doing Roth conversion at 60 when I retire. Look at where we are at 62 but know I cannot make many conversions at that point and have a large IRAs/401k. Look again at 67, maybe have done enough to have reasonable RMDs. If not keep on doing conversions to 70.
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx

User avatar
cheese_breath
Posts: 7832
Joined: Wed Sep 14, 2011 7:08 pm

Re: Regrets for taking SS at 62 or waiting?

Post by cheese_breath » Sat Nov 25, 2017 8:14 pm

BigFoot48 wrote:
Sat Nov 25, 2017 8:40 am
cheese_breath wrote:
Thu Nov 23, 2017 5:26 pm
No regrets. DW and I both took ours at 62 and used it for living expenses instead of pulling money from our investments during some of the worst times to do that.
Our situation may have been similar. After retiring and living solely off of our investments for 8 years we decided to both take at 62 in 2010 after the 2008 crash took a bite out of our portfolio. I decided giving some relief to the withdrawals might be a good idea. (Our 40/60 portfolio is currently at an all-time high, which amazes me.) ....
Yep, similar. I retired in 1997 and lived off savings and a couple small pensions until 2003. Then I turned 62 is 2003, DW in 2008.
The surest way to know the future is when it becomes the past.

technovelist
Posts: 2917
Joined: Wed Dec 30, 2009 9:02 pm
Contact:

Re: Regrets for taking SS at 62 or waiting?

Post by technovelist » Sat Nov 25, 2017 8:16 pm

I took it at 62 because I was unemployed.

Then I got a job, which resulted in having it automatically suspended due to "excess earnings" for three of the next 4 years.

However, the effect of that suspension was that I effectively took it at 65 (my FRA is 66).

It is true that if I die early, my wife will lose her benefit and just get mine, but we have term life insurance to mitigate that eventuality for the next 17 years. If I survive the term of insurance, then our remaining assets should be sufficient for her to buy an annuity that will replace the lost benefit, or at least most of it.

To go back to the original question, I don't regret my decision to take it at 62.
In theory, theory and practice are identical. In practice, they often differ.

User avatar
fishandgolf
Posts: 358
Joined: Fri Nov 25, 2016 2:50 pm

Re: Regrets for taking SS at 62 or waiting?

Post by fishandgolf » Sat Nov 25, 2017 8:27 pm

My wife and I discussed this at length; neither of us have tickets for the longevity bus..........so I took it at 62; would have taken it at 56 when I retired if it would have been offered.

The thing about delaying.......I do like the fact that the benefits increase 8% each year until 70. However, if SS would offer.....or would have offered a lump sum payout....or even a partial lump sum payout......I would have delayed. With the present system....it just isn't enough of an incentive (at least for us) to have delayed :sharebeer

User avatar
tennisplyr
Posts: 1755
Joined: Tue Jan 28, 2014 1:53 pm
Location: Sarasota, FL

Re: Regrets for taking SS at 62 or waiting?

Post by tennisplyr » Sun Nov 26, 2017 8:57 am

dbr wrote:
Fri Nov 24, 2017 9:32 am
tennisplyr wrote:
Fri Nov 24, 2017 9:26 am
Took it @62 with no regrets! We figured a bird in the hand is worth 2 in the bush.
You took SS early because you worried that the benefit would cease to exist or be significantly reduced for those waiting to a later date?
No, because I'd rather get something now than wait for some larger amount some years in the future for which I may not be alive for. Generally, I believe in living for today.
Those who move forward with a happy spirit will find that things always work out.

User avatar
Info_Hound
Posts: 281
Joined: Wed Mar 23, 2011 9:47 am
Location: Fort Collins, Colorado

Re: Regrets for taking SS at 62 or waiting?

Post by Info_Hound » Sun Nov 26, 2017 11:50 am

ColoRetiredGirl wrote:
Fri Nov 24, 2017 5:46 pm
VictoriaF wrote:
Thu Nov 23, 2017 8:55 pm
I am delaying. "No regrets" is an understatement. I consider it one of the most prudent financial decisions I have made.

Note that the period from early retirement to the commencement of the Social Security is an excellent opportunity for making Roth conversions.

If I die before the age of 70, you will hear from me.

Victoria
+1 :sharebeer . Roth conversions first then SS at 70.
+3 Yup, I'm in this camp also. Been doing ROTH conversions for a few years now. I have reached FRA but will wait until I finish making ROTH conversions, spouse passed years ago. I consider the additional SS increase a bit of a reward for practicing my patience. :mrgreen:

retire57
Posts: 376
Joined: Fri Oct 28, 2016 3:03 pm

Re: Regrets for taking SS at 62 or waiting?

Post by retire57 » Sun Nov 26, 2017 5:32 pm

OP here. Thanks to all for your thoughtful responses.

MathWizard
Posts: 2961
Joined: Tue Jul 26, 2011 1:35 pm

Re: Regrets for taking SS at 62 or waiting?

Post by MathWizard » Sun Nov 26, 2017 9:29 pm

erictiger wrote:
Sat Nov 25, 2017 3:33 pm
I just checked my SS benefit and here are the numbers:
At full retirement age (67): $2,681 a month
At age 70: $3,482 a month
At early retirement age (62): $1,739 a month

1739/2681=64.86%. Why I have 35% reduction at age 62, instead of 30% reduction.

Eric
Because retirement at 62 assumes that you keep earning your current salary (adjusted for inflation) and quit working at 62, and
hence have 0 income past then.

Retirement at 67 assumes that you keep earning your current salary adjusted for inflation through age 67, and 0 income thereafter.

Likely your income current income is better (after wage inflation adjustment) than some of your past years, so the extra 5 years of your current income
improves your AIME.

From

Code: Select all

https://www.ssa.gov/policy/docs/rsnotes/rsn2008-05.html
:

Statement Assumptions

As noted above, benefits are estimated using the PIA formula for the year the Statement is sent. When computing the AIME that is used in the PIA formula, current-year and all future preretirement earnings are assumed to be equal to observed earnings in the latest full year. For example, if the worker earned $40,000 last year, it is assumed he or she nominally earns $40,000 in the current year and will continue to nominally earn $40,000 in all future years until the relevant retirement age.

User avatar
munemaker
Posts: 3408
Joined: Sat Jan 18, 2014 6:14 pm

Re: Regrets for taking SS at 62 or waiting?

Post by munemaker » Sun Nov 26, 2017 9:37 pm

flyingaway wrote:
Fri Nov 24, 2017 1:05 pm

One reason for delaying is: It is much more undesirable when you are old and poor than rich and dead.
I really like how you phrased that!

Bacchus01
Posts: 1815
Joined: Mon Dec 24, 2012 9:35 pm

Re: Regrets for taking SS at 62 or waiting?

Post by Bacchus01 » Sun Nov 26, 2017 11:19 pm

Mlm wrote:
Sat Nov 25, 2017 3:49 pm
erictiger wrote:
Sat Nov 25, 2017 3:33 pm
I just checked my SS benefit and here are the numbers:
At full retirement age (67): $2,681 a month
At age 70: $3,482 a month
At early retirement age (62): $1,739 a month

1739/2681=64.86%. Why I have 35% reduction at age 62, instead of 30% reduction.

Eric
How does the 35 work? Can’t remember. I believe I’ll hit 35 years at age 49 having earned income at age 14. Is that right? Or is there a minimum threshold for a year to count?

According to SS it should be 30% https://www.ssa.gov/OACT/quickcalc/earlyretire.html
Could it be that you won't have 35 years of earnings at 62?

CurlyDave
Posts: 685
Joined: Thu Jul 28, 2016 11:37 am

Re: Regrets for taking SS at 62 or waiting?

Post by CurlyDave » Mon Nov 27, 2017 2:30 am

I retired at 61 and took SS at the earliest possible time, late 2007. No regrets at all.

1. SS income allowed us to withdraw less from our portfolio. Started withdrawals in 2016. Portfolio was mostly in QQQ with some SPY, and some individual stocks. We have spent uncle's money while our own grew. What is not to like about that? Portfolio keeps hitting all time highs.

2. Actual returns on our portfolio over the last 10 years have been north of 12% CAGR. Actual inflation has been under 2% over those same 10 years. Plug those numbers into excel and it becomes apparent that I would never reach a break even age, even if immortality were discovered tomorrow.

3. Read Mike Piper's book on Social Security Made Simple. He does this same break even calculation on page 76, but only takes it to returns of 5% over inflation. It still makes the break even ages look a lot worse than the SS people tell us.

4. The SS trust fund is going to run out of money in the early 2030s. SS is going to have to change. Better the devil I know than the devil I don't.

5. I am just independent enough to feel a lot better with money in my account than in uncle's account and him promising to send it to me.

The Wizard
Posts: 12162
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: Regrets for taking SS at 62 or waiting?

Post by The Wizard » Mon Nov 27, 2017 5:00 am

MathWizard wrote:
Sun Nov 26, 2017 9:29 pm

...Statement Assumptions

As noted above, benefits are estimated using the PIA formula for the year the Statement is sent. When computing the AIME that is used in the PIA formula, current-year and all future preretirement earnings are assumed to be equal to observed earnings in the latest full year. For example, if the worker earned $40,000 last year, it is assumed he or she nominally earns $40,000 in the current year and will continue to nominally earn $40,000 in all future years until the relevant retirement age.
That's the simplistic way of looking at it.

The accurate way of looking at it involves 35 high earning years. Once you have those 35 years on the books, you're all set and future years don't matter.
In my case, I was All Set with SS at age 58. Any earned income I have in the twelve years following that won't affect my age 70 benefit...
Attempted new signature...

nura
Posts: 122
Joined: Mon Jun 27, 2016 11:24 am

Re: Regrets for taking SS at 62 or waiting?

Post by nura » Mon Nov 27, 2017 5:23 am

TheTimeLord wrote:
Thu Nov 23, 2017 10:54 am
Probably won't get a lot of responses from people who waited then died early.That could skew the results you receive.
Don't let surviour bias in response skew your decision.

Independent
Posts: 551
Joined: Tue Sep 22, 2009 1:09 pm

Re: Regrets for taking SS at 62 or waiting?

Post by Independent » Mon Nov 27, 2017 9:26 am

The Wizard wrote:
Mon Nov 27, 2017 5:00 am
MathWizard wrote:
Sun Nov 26, 2017 9:29 pm

...Statement Assumptions

As noted above, benefits are estimated using the PIA formula for the year the Statement is sent. When computing the AIME that is used in the PIA formula, current-year and all future preretirement earnings are assumed to be equal to observed earnings in the latest full year. For example, if the worker earned $40,000 last year, it is assumed he or she nominally earns $40,000 in the current year and will continue to nominally earn $40,000 in all future years until the relevant retirement age.
That's the simplistic way of looking at it.

The accurate way of looking at it involves 35 high earning years. Once you have those 35 years on the books, you're all set and future years don't matter.
In my case, I was All Set with SS at age 58. Any earned income I have in the twelve years following that won't affect my age 70 benefit...
I'm not sure what you're saying here. SS uses the highest 35 years of indexed earnings. Higher earnings years after age 58 can replace lower earnings years prior to 58. That will increase your benefit (though, for most people who post here, not by much).

I suppose the exception would be for people who have had maximum earnings for all of the 35 years. In that case, indexing makes it hard to beat earlier years, but I believe it could still knock out the earliest (before indexing was automatic).

The Wizard
Posts: 12162
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: Regrets for taking SS at 62 or waiting?

Post by The Wizard » Mon Nov 27, 2017 10:02 am

Independent wrote:
Mon Nov 27, 2017 9:26 am
The Wizard wrote:
Mon Nov 27, 2017 5:00 am
MathWizard wrote:
Sun Nov 26, 2017 9:29 pm

...Statement Assumptions

As noted above, benefits are estimated using the PIA formula for the year the Statement is sent. When computing the AIME that is used in the PIA formula, current-year and all future preretirement earnings are assumed to be equal to observed earnings in the latest full year. For example, if the worker earned $40,000 last year, it is assumed he or she nominally earns $40,000 in the current year and will continue to nominally earn $40,000 in all future years until the relevant retirement age.
That's the simplistic way of looking at it.

The accurate way of looking at it involves 35 high earning years. Once you have those 35 years on the books, you're all set and future years don't matter.
In my case, I was All Set with SS at age 58. Any earned income I have in the twelve years following that won't affect my age 70 benefit...
I'm not sure what you're saying here. SS uses the highest 35 years of indexed earnings. Higher earnings years after age 58 can replace lower earnings years prior to 58. That will increase your benefit (though, for most people who post here, not by much).

I suppose the exception would be for people who have had maximum earnings for all of the 35 years. In that case, indexing makes it hard to beat earlier years, but I believe it could still knock out the earliest (before indexing was automatic).
Exactly correct.
So if you were unemployed for six months one year, then then working a 36th year at full pay will replace that low-ball.
But working another year at $80,000 to replace an earlier indexed year of $70,000 won't make much difference in your benefit...
Attempted new signature...

reggiesimpson
Posts: 1608
Joined: Mon Dec 19, 2011 12:47 pm

Re: Regrets for taking SS at 62 or waiting?

Post by reggiesimpson » Sun Dec 03, 2017 2:06 pm

flamesabers wrote:
Fri Nov 24, 2017 5:17 pm
reggiesimpson wrote:
Fri Nov 24, 2017 1:31 pm
Took it at 62 because:

My best friend died at 65.
A very close friend is now dying of pancreatic cancer at 64.
My favorite M.D. died recently of cancer at 63.
My lunch partner had an unexpected near fatal heart attack. He is 65.
My gym rat buddy suffered an acute appendicitis at 63.
My father died at 65 and never collected a penny from SS. He was still working (died on the job actually), so he probably figured he didn't need to start taking SS while working. As far as I'm aware, few if anyone here has started to take SS while working full-time. I think he loved his job and wanted to keep working for as long as his health allowed him to. Unfortunately, his health failed him much sooner then anyone expected. If he was still alive, he probably would have waited until age 70 before taking SS payments.

I certainly can understand the fear of dying while leaving money on the table so to speak. For me I think it depends on my employment status. If I'm still working full-time in my sixties, I'll hold off on SS. If I'm retired by 62, I'll probably take SS if only to avoid missing out on collecting some of the benefits.
For me it was not just the fear of an early death. I wanted to 'own my own time" so to speak. That's why I relish every day.

RetiredCSProf
Posts: 150
Joined: Tue Feb 28, 2017 4:59 pm

Re: Regrets for taking SS at 62 or waiting?

Post by RetiredCSProf » Sun Dec 03, 2017 3:13 pm

I started SS at age 65 and have no regrets. I had planned to wait until at least 66 and possibly, to age 70 to start SS, but I was laid off my job at age 64 and forced to retire. My pension was inadequate to cover my household expenses; in particular, my medical insurance premiums were sky-high until I could start on Medicare. I was faced with the choice of withdrawing from my 403B, starting SS, or both. I'm single and have one child, who was in high school when I retired, and that was the deciding factor for starting SS at age 65.

During the first two years that I was on SS, my son drew a monthly social security check as my dependent. This may seem like a short-sighted choice, but when I ran out the numbers, the crossover point (taking SS at age 65 vs 70) was in my mid-90's (not accounting for inflation).

Another factor for me is that I live in California, where I pay 9.3% state income tax on my pension and on withdrawals from tax-deferred retirement accounts, but no state income tax on SS.

Shallowpockets
Posts: 645
Joined: Fri Nov 20, 2015 10:26 am

Re: Regrets for taking SS at 62 or waiting?

Post by Shallowpockets » Mon Dec 04, 2017 8:56 am

I started SS at 66. The halfway point between 62 and 70. Retired at 65.
I thought it was a good compromise on the when to take it question.
I think the question of when is tied to whether or not you are working. How many are there that retire at 62 and wait verses those that work all the way through until 70?

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: Regrets for taking SS at 62 or waiting?

Post by dbr » Mon Dec 04, 2017 9:27 am

Shallowpockets wrote:
Mon Dec 04, 2017 8:56 am
I started SS at 66. The halfway point between 62 and 70. Retired at 65.
I thought it was a good compromise on the when to take it question.
I think the question of when is tied to whether or not you are working. How many are there that retire at 62 and wait verses those that work all the way through until 70?
I suspect not a lot, but that was what we did. The outcome seems to be good. The opportunity to increase the amount of inflation indexed annuitized income appears to be unique and valuable. But we both retired before 62. The real secret is to save effectively relative to your needs. That kind of overwhelms everything else, if you can do it.

smitcat
Posts: 1768
Joined: Mon Nov 07, 2016 10:51 am

Re: Regrets for taking SS at 62 or waiting?

Post by smitcat » Mon Dec 04, 2017 9:37 am

Shallowpockets wrote:
Mon Dec 04, 2017 8:56 am
I started SS at 66. The halfway point between 62 and 70. Retired at 65.
I thought it was a good compromise on the when to take it question.
I think the question of when is tied to whether or not you are working. How many are there that retire at 62 and wait verses those that work all the way through until 70?
Based upon the savings/income stats of non working folks at various ages the vast majority of folks have no option but to take SS early.
Most people have no other reasonable source of income when they are not working at 62 so they need to take SS.
All the rest of the potential options/benefits pale in value if you have no means with which to wait.

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: Regrets for taking SS at 62 or waiting?

Post by dbr » Mon Dec 04, 2017 9:41 am

smitcat wrote:
Mon Dec 04, 2017 9:37 am
Shallowpockets wrote:
Mon Dec 04, 2017 8:56 am
I started SS at 66. The halfway point between 62 and 70. Retired at 65.
I thought it was a good compromise on the when to take it question.
I think the question of when is tied to whether or not you are working. How many are there that retire at 62 and wait verses those that work all the way through until 70?
Based upon the savings/income stats of non working folks at various ages the vast majority of folks have no option but to take SS early.
Most people have no other reasonable source of income when they are not working at 62 so they need to take SS.
All the rest of the potential options/benefits pale in value if you have no means with which to wait.
That is exactly right and probably tends to bias the picture one gets when considering a small number of people who can delay and for whom it makes sense to delay. I probably know far more people who took SS when they retired at whatever age than I know who delayed on purpose. Both groups are way larger than the tiny number of people who actually work to age 70. A number of people I know who took SS at 62 were unemployed long before that due to disabilities.

Mr.BB
Posts: 551
Joined: Sun May 08, 2016 10:10 am

Re: Regrets for taking SS at 62 or waiting?

Post by Mr.BB » Mon Dec 04, 2017 9:55 am

TheTimeLord wrote:
Thu Nov 23, 2017 10:54 am
Probably won't get a lot of responses from people who waited then died early.That could skew the results you receive.
LOL +1
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

Mr.BB
Posts: 551
Joined: Sun May 08, 2016 10:10 am

Re: Regrets for taking SS at 62 or waiting?

Post by Mr.BB » Mon Dec 04, 2017 9:55 am

TheTimeLord wrote:
Thu Nov 23, 2017 10:54 am
Probably won't get a lot of responses from people who waited then died early.That could skew the results you receive.
LOL +1
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

CnC
Posts: 537
Joined: Thu May 11, 2017 12:41 pm

Re: Regrets for taking SS at 62 or waiting?

Post by CnC » Mon Dec 04, 2017 10:02 am

TheTimeLord wrote:
Thu Nov 23, 2017 10:54 am
Probably won't get a lot of responses from people who waited then died early.That could skew the results you receive.

Well my dad took it at 62 and is extreamly happy.


2 of my coworkers had plenty of money yet worked untill 66+ and died within 2 years of retirement I can ask them but, I assume they would rather have retired at 62 so they could have had a life after retirement.

jpdion
Posts: 91
Joined: Thu Feb 13, 2014 12:52 pm

Re: Regrets for taking SS at 62 or waiting?

Post by jpdion » Mon Dec 04, 2017 10:24 am

Technically I (we) are delaying taking our SS benefits. I'm 65 (FRA 66) retired in 2015, DW is 62 (FRA 66 + 3 mo.) retiring this month. Thinking is to ride the bull ( 2 plus years in cash, 50/50 AA) with my smallish pension until the big correction, then take my SS, and wait for DW to at least get to FRA to take her SS. Taking a flexible approach - Firecalc runs indicate 90 percent+ probability of success, so I think the differences are at the outside margin for us.
Last edited by jpdion on Mon Dec 04, 2017 10:27 am, edited 1 time in total.

JW-Retired
Posts: 6884
Joined: Sun Dec 16, 2007 12:25 pm

Re: Regrets for taking SS at 62 or waiting?

Post by JW-Retired » Mon Dec 04, 2017 10:26 am

62 or waiting?

I'm very happy I waited to 70. It's so calming to know that when I'm gone, dear wife will get the maximum $42k/year (colaed and very tax favored) SS benefit instead of a measly $24k/year. How could we do otherwise?

Living in California, I also really like maximizing that lightly taxed SS income. Don't even need to die to enjoy that! :beer
JW
Retired at Last

Post Reply