Stats on When People Take Social Security

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flyingaway
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Re: Stats on When People Take Social Security

Post by flyingaway » Mon Jan 15, 2018 9:59 pm

For a couple, it is usually recommended the lower one takes social security at 62. That is a good percentage already.

Just don't say that all others are dumb when you are in a different shoe.

flyingaway
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Re: Stats on When People Take Social Security

Post by flyingaway » Mon Jan 15, 2018 10:01 pm

TravelforFun wrote:
Mon Jan 15, 2018 3:52 pm
TomatoTomahto wrote:
Mon Jan 15, 2018 10:53 am
And then there are some, admittedly few, who took SS at 62 because they had young children who would get benefits, and a spouse who would wait until age 70.

Not everyone filing at 62 “doesn’t get it.”

🍅 🍅
This is our situation. Wife will file for benefits at 62 this year and that would allow me to file for spousal while I wait until 70. All kinds of different strategies.

TravelforFun
I don't know if the spousal benefits are still available.

North Texas Cajun
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Re: Stats on When People Take Social Security

Post by North Texas Cajun » Mon Jan 15, 2018 10:02 pm

DrGoogle2017 wrote:
Mon Jan 15, 2018 9:29 pm
I believe delaying SS will help with longevity, market, and inflation risk. The 4th one is spending. All risks for outliving your retirement money. 3 out of 4 is not bad hedge.
Yes there is possibility of reduced SS in the future, but I don’t think those who take it at 62 will be spared either. If anything, I think they will come out worse.
I think you could be mistaken in assuming that those who take SS at age 62 will come out worse if SS is reduced. Doesn’t it depend on when SS is reduced and on how much SS is reduced for that person?
Last edited by North Texas Cajun on Mon Jan 15, 2018 11:23 pm, edited 1 time in total.

North Texas Cajun
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Re: Stats on When People Take Social Security

Post by North Texas Cajun » Mon Jan 15, 2018 10:26 pm

dbr wrote:
Mon Jan 15, 2018 10:05 am
Yes, if you are unemployed at 62 it is very likely you need the SS then. The people I know that for sure elected SS earlier than 70 did not have a choice in any practical sense.
Please know that there are some of us who:

1. Have a sizeable nest egg;
2. Have a much higher level of financial training and experience than almost all the population;

Yet
3. Still elected to take SS at 62.

Please consider the possibility that some of us may have a very different assessment of our life expectancy than you might have of yours. Furthermore, some of us may not agree with the conventional thinking about how much SS will be available to all retirees in the future.

What I’m asking is that you not assume that everyone who takes SS early does so because they need the money or because they are financially illiterate.

North Texas Cajun
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Re: Stats on When People Take Social Security

Post by North Texas Cajun » Mon Jan 15, 2018 10:52 pm

Kalo wrote:
Mon Jan 15, 2018 2:31 pm

I just think that fear of the program not being there, and/or the idea that one can beat the game with stock market returns, is misguided.

Kalo
Is it really “fear of the program not being there”? Perhaps it is:

“Fear that the program will not be there in the amount that was promised”

Or

“Fear that the program will be there but not for me”

ColoradoRick
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Re: Stats on When People Take Social Security

Post by ColoradoRick » Mon Jan 15, 2018 11:51 pm

North Texas Cajun wrote:
Mon Jan 15, 2018 10:26 pm
dbr wrote:
Mon Jan 15, 2018 10:05 am
Yes, if you are unemployed at 62 it is very likely you need the SS then. The people I know that for sure elected SS earlier than 70 did not have a choice in any practical sense.
Please know that there are some of us who:

1. Have a sizeable nest egg;
2. Have a much higher level of financial training and experience than almost all the population;

Yet
3. Still elected to take SS at 62.

Please consider the possibility that some of us may have a very different assessment of our life expectancy than you might have of yours. Furthermore, some of us may not agree with the conventional thinking about how much SS will be available to all retirees in the future.

What I’m asking is that you not assume that everyone who takes SS early does so because they need the money or because they are financially illiterate.

+1 to North Texas Cajun
I loved my job for 39 years but hated the last 4 at MegaCorp as Millenial bosses suggested things that hadn't worked 6x before and us experienced guys were being "negative." Took SS so I could let my IRA grow and luckily the returns have worked for me. If it is a straight $/cents computation, I get it, but retiring 4 years early and letting my IRA grow, knowing full well I was giving up 8%/year prior to FRA worked for me. What price can you put on 4 years of freedom if you are not happy? Glad with my choice though not for all, particularly if you are happy at work.

DrGoogle2017
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Re: Stats on When People Take Social Security

Post by DrGoogle2017 » Tue Jan 16, 2018 2:03 am

North Texas Cajun wrote:
Mon Jan 15, 2018 10:02 pm
DrGoogle2017 wrote:
Mon Jan 15, 2018 9:29 pm
I believe delaying SS will help with longevity, market, and inflation risk. The 4th one is spending. All risks for outliving your retirement money. 3 out of 4 is not bad hedge.
Yes there is possibility of reduced SS in the future, but I don’t think those who take it at 62 will be spared either. If anything, I think they will come out worse.
I think you could be mistaken in assuming that those who take SS at age 62 will come out worse if SS is reduced. Doesn’t it depend on when SS is reduced and on how much SS is reduced for that person?
I think it will reduce across the board, somehow I don’t see it as fair if the guy who takes it at 62 will have bigger SS than the guy who delays and takes it at 64. Doesn’t make sense.

KATNYC
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Re: Stats on When People Take Social Security

Post by KATNYC » Tue Jan 16, 2018 4:28 am

My dad is waiting until 70. He won't ever retire though so it will be like getting a raise.
We have family members who lived to 96, 102 and 105.

North Texas Cajun
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Re: Stats on When People Take Social Security

Post by North Texas Cajun » Tue Jan 16, 2018 4:34 am

DrGoogle2017 wrote:
Tue Jan 16, 2018 2:03 am
North Texas Cajun wrote:
Mon Jan 15, 2018 10:02 pm
DrGoogle2017 wrote:
Mon Jan 15, 2018 9:29 pm
I believe delaying SS will help with longevity, market, and inflation risk. The 4th one is spending. All risks for outliving your retirement money. 3 out of 4 is not bad hedge.
Yes there is possibility of reduced SS in the future, but I don’t think those who take it at 62 will be spared either. If anything, I think they will come out worse.
I think you could be mistaken in assuming that those who take SS at age 62 will come out worse if SS is reduced. Doesn’t it depend on when SS is reduced and on how much SS is reduced for that person?
I think it will reduce
across the board, somehow I don’t see it as fair if the guy who takes it at 62 will have bigger SS than the guy who delays and takes it at 64. Doesn’t make sense.
I don’t think SS will be reduced across the board, nor do I think SS will be reduced based on the age benefits began (beyond the 8% per year). I have been instructed by the moderators not to discuss political actions about how SS might be reduced, so I cannot explain what I mean.

chipperd
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Re: Stats on When People Take Social Security

Post by chipperd » Tue Jan 16, 2018 6:04 am

I take a "bird in the hand" view on social security. Not that I don't trust others with "my" money, but if I don't need the additional income that waiting past 62 would dictate, why wait? As S. Miller once said, take the money and run.

MikeG62
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Re: Stats on When People Take Social Security

Post by MikeG62 » Tue Jan 16, 2018 8:37 am

I view it as longevity insurance.

No plans to begin taking it until I turn 70.
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dm200
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Re: Stats on When People Take Social Security

Post by dm200 » Tue Jan 16, 2018 9:05 am

I don’t think SS will be reduced across the board, nor do I think SS will be reduced based on the age benefits began (beyond the 8% per year). I have been instructed by the moderators not to discuss political actions about how SS might be reduced, so I cannot explain what I mean.
I agree.

dbr
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Re: Stats on When People Take Social Security

Post by dbr » Tue Jan 16, 2018 9:17 am

North Texas Cajun wrote:
Mon Jan 15, 2018 10:26 pm
dbr wrote:
Mon Jan 15, 2018 10:05 am
Yes, if you are unemployed at 62 it is very likely you need the SS then. The people I know that for sure elected SS earlier than 70 did not have a choice in any practical sense.
Please know that there are some of us who:

1. Have a sizeable nest egg;
2. Have a much higher level of financial training and experience than almost all the population;

Yet
3. Still elected to take SS at 62.

Please consider the possibility that some of us may have a very different assessment of our life expectancy than you might have of yours. Furthermore, some of us may not agree with the conventional thinking about how much SS will be available to all retirees in the future.

What I’m asking is that you not assume that everyone who takes SS early does so because they need the money or because they are financially illiterate.
No one is assuming anything about any individual in particular. Any person is entitled to do as they please with a decision like this, and perfectly good reasons exist for choosing one way or another. Assessment of life expectancy is certainly one. Needing the money is another. Worrying about the future of SS payments is a third, at least.

jlcnuke
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Re: Stats on When People Take Social Security

Post by jlcnuke » Tue Jan 16, 2018 9:30 am

As a person with a chronic medical condition (and thus lower than average life expectancy), I'll be taking SS at age 62 unless something changes between now and then.

The Wizard
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Re: Stats on When People Take Social Security

Post by The Wizard » Tue Jan 16, 2018 9:41 am

North Texas Cajun wrote:
Mon Jan 15, 2018 7:55 pm

...There is a reason for taking SS before 70 which is related to “the system will be broke by then”. IMO, people who use this related reason are not rationalizing. Unfortunately, the moderators have decided that this related reason cannot be discussed at Bogleheads.
You may have that a bit backwards.
Under current law, the SS retirement system is projected to have higher cash outflow than inflow around 2034, I believe.
So if no changes before then, recipients will receive less than 100% of their entitled benefit. There's no fundamental confusion about that.

The part we can't discuss are the various legislative fixes that Congress could make to the system in coming years to extend its financial viability...
Attempted new signature...

North Texas Cajun
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Re: Stats on When People Take Social Security

Post by North Texas Cajun » Tue Jan 16, 2018 9:57 am

The Wizard wrote:
Tue Jan 16, 2018 9:41 am
North Texas Cajun wrote:
Mon Jan 15, 2018 7:55 pm

...There is a reason for taking SS before 70 which is related to “the system will be broke by then”. IMO, people who use this related reason are not rationalizing. Unfortunately, the moderators have decided that this related reason cannot be discussed at Bogleheads.
You may have that a bit backwards.
Under current law, the SS retirement system is projected to have higher cash outflow than inflow around 2034, I believe.
So if no changes before then, recipients will receive less than 100% of their entitled benefit. There's no fundamental confusion about that.

The part we can't discuss are the various legislative fixes that Congress could make to the system in coming years to extend its financial viability...
No, I’m pretty sure that is not correct. SS has been cash flow negative since 2010.

What I think you are confusing is cash flow vs “funds” available in the SS Trust Fund. There is no cash in that trust fund, and there never has been.

Here’s an Feb-2016 explanation from Obama’s Office of Management and Budget:

From page 385 of the Analytical Perspectives section of President Obama’s FY2017 budget, prepared on February 9, 2016 by Obama’s Office of Management and Budget:

“When trust fund holdings are redeemed to fund the payment of benefits, the Department of the Treasury finances the expenditure in the same way as any other Federal expenditure—by using current receipts if the unified budget is in surplus or by borrowing from the public if it is in deficit. Therefore, the existence of large trust fund balances, while representing a legal claim on the Treasury, does not, by itself, determine the Government’s ability to pay benefits.”

https://www.govinfo.gov/features/featur ... get-FY2017

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Mlm
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Re: Stats on When People Take Social Security

Post by Mlm » Tue Jan 16, 2018 9:57 am

I'm a retired single female,61. I am holding off taking SS until 65 or maybe FRA 66.2

It's not because I am female and might live longer
It' not because I am in great health
It's not because there is family longevity

The reason I am waiting is becausee of health insurance. With such a low income I can get free health insurance through the ACA. If I collected SS my insurance would cost me around $400 per month and my SS would be at least $600 per month lower.

As long as the market is giving me good returns, SS is increasing each year and I can get low cost insurance I'll wait.

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dm200
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Re: Stats on When People Take Social Security

Post by dm200 » Tue Jan 16, 2018 10:02 am

Mlm wrote:
Tue Jan 16, 2018 9:57 am
I'm a retired single female,61. I am holding off taking SS until 65 or maybe FRA 66.2
It's not because I am female and might live longer
It' not because I am in great health
It's not because there is family longevity
The reason I am waiting is becausee of health insurance. With such a low income I can get free health insurance through the ACA. If I collected SS my insurance would cost me around $400 per month and my SS would be at least $600 per month lower.
As long as the market is giving me good returns, SS is increasing each year and I can get low cost insurance I'll wait.
Good point.

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Re: Stats on When People Take Social Security

Post by basspond » Tue Jan 16, 2018 11:15 am

Leesbro63 wrote:
Mon Jan 15, 2018 9:45 am
... I was truly shocked at the financial illiteracy that I saw.
How can you say because someone doesn't do what you are doing they are illiterate? We should be stating facts on here and not implying our own biases. There are many reasons people take SS when they do. Many people were not taught personal finances. We are taught mandated course, math, science, reading, writing, etc but our education system has failed us in giving us sound financial education. Even though SS seems like a hedge against longevity, if you consider NetPresentValue that hedge is trimmed.

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Re: Stats on When People Take Social Security

Post by marcopolo » Tue Jan 16, 2018 2:19 pm

North Texas Cajun wrote:
Tue Jan 16, 2018 9:57 am

No, I’m pretty sure that is not correct. SS has been cash flow negative since 2010.

What I think you are confusing is cash flow vs “funds” available in the SS Trust Fund. There is no cash in that trust fund, and there never has been.
I think strictly speaking there is "no cash" in the trust fund. But, to say there is no "funds" available is a bit of a stretch as well. I believe the amount of the "trust fund" is actually included in the national debt. It is really no different than the money owed to someone who holds US Treasury bond. There is no cash sitting around to repay that bond holder either. The ability of the US government to repay the bond holder rests on future taxing and borrowing capacity of the US government. The same is true for repaying the SS "trust fund" what it is owed.

You are correct that we are already cash flow negative currently, and we will exhaust the amount owed to SS some time in the early 2030's unless changes are made to the program. I agree with you that changes are not likely to be acre board. In my own planning, I assume there will be more aggressive means testing than already exists today.
Once in a while you get shown the light, in the strangest of places if you look at it right.

Youngblood
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Re: Stats on When People Take Social Security

Post by Youngblood » Tue Jan 16, 2018 2:25 pm

DrGoogle2017 wrote:
Tue Jan 16, 2018 2:03 am
North Texas Cajun wrote:
Mon Jan 15, 2018 10:02 pm
DrGoogle2017 wrote:
Mon Jan 15, 2018 9:29 pm
I believe delaying SS will help with longevity, market, and inflation risk. The 4th one is spending. All risks for outliving your retirement money. 3 out of 4 is not bad hedge.
Yes there is possibility of reduced SS in the future, but I don’t think those who take it at 62 will be spared either. If anything, I think they will come out worse.
I think you could be mistaken in assuming that those who take SS at age 62 will come out worse if SS is reduced. Doesn’t it depend on when SS is reduced and on how much SS is reduced for that person?
I think it will reduce across the board, somehow I don’t see it as fair if the guy who takes it at 62 will have bigger SS than the guy who delays and takes it at 64. Doesn’t make sense.
For those of us who have chosen to take SS benefits early at 62 (as I have), those dollars are invested and certainly cannot be reduced. If future benefits across the board are, it will take even longer than the 77-78 estimated to break even.
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TG2
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Re: Stats on When People Take Social Security

Post by TG2 » Tue Jan 16, 2018 3:17 pm

basspond wrote:
Tue Jan 16, 2018 11:15 am
Leesbro63 wrote:
Mon Jan 15, 2018 9:45 am
... I was truly shocked at the financial illiteracy that I saw.
How can you say because someone doesn't do what you are doing they are illiterate? We should be stating facts on here and not implying our own biases. There are many reasons people take SS when they do.


Agreed. There are many reasons to claim Social Security at various ages. It is very dependent on individual circumstances as to which is best for any individual person. Rule changes took away any incentive for me to delay, so I will almost certainly claim either at or shortly after turning 62. And I would hardly describe myself as financially illiterate.

North Texas Cajun
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Re: Stats on When People Take Social Security

Post by North Texas Cajun » Tue Jan 16, 2018 3:28 pm

marcopolo wrote:
Tue Jan 16, 2018 2:19 pm
North Texas Cajun wrote:
Tue Jan 16, 2018 9:57 am

No, I’m pretty sure that is not correct. SS has been cash flow negative since 2010.

What I think you are confusing is cash flow vs “funds” available in the SS Trust Fund. There is no cash in that trust fund, and there never has been.
I think strictly speaking there is "no cash" in the trust fund. But, to say there is no "funds" available is a bit of a stretch as well. I believe the amount of the "trust fund" is actually included in the national debt.
It is not a stretch to me. It is very simple: as Obama’s OMB explaned, if the unified budget is in deficit, the only way to pay all SS benefits is to increase the national debt. SS is no different from any other government program - except that its growth is about to explode.

To me, “the U.S. has the ability to increase the national debt” is not the same thing as “funds are available for SS through 2034”.
marcopolo wrote:
Tue Jan 16, 2018 2:19 pm
It is really no different than the money owed to someone who holds US Treasury bond. There is no cash sitting around to repay that bond holder either. The ability of the US government to repay the bond holder rests on future taxing and borrowing capacity of the US government. The same is true for repaying the SS "trust fund" what it is owed.
I agree completely. Except for the big difference between SS’s trust fund and the public’s US Treasury bonds: the latter have a fixed date for repayment. Congress cannot change that. But they can change the date that SS redeems its special purpose securities by altering SS benefits.
marcopolo wrote:
Tue Jan 16, 2018 2:19 pm
You are correct that we are already cash flow negative currently, and we will exhaust the amount owed to SS some time in the early 2030's unless changes are made to the program. I agree with you that changes are not likely to be acre board. In my own planning, I assume there will be more aggressive means testing than already exists today.
I have been told by the Boglehead moderators that we are not allowed to discuss means testing.

marcopolo
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Re: Stats on When People Take Social Security

Post by marcopolo » Tue Jan 16, 2018 3:41 pm

North Texas Cajun wrote:
Tue Jan 16, 2018 3:28 pm
....the only way to pay all SS benefits is to increase the national debt.
I pretty much agree with just about everything you said, with the possible exception of the statement quoted above.
My understanding is that the amount owed to the SS trust fund is already included in the current debt figure. So, paying it would not require increasing the debt, but rolling over the current amount. Of course as we continue to run large deficits, the debt will continue to grow, but the growth is not due to the SS trust fund.
Once in a while you get shown the light, in the strangest of places if you look at it right.

North Texas Cajun
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Re: Stats on When People Take Social Security

Post by North Texas Cajun » Tue Jan 16, 2018 4:27 pm

marcopolo wrote:
Tue Jan 16, 2018 3:41 pm
North Texas Cajun wrote:
Tue Jan 16, 2018 3:28 pm
....the only way to pay all SS benefits is to increase the national debt.
I pretty much agree with just about everything you said, with the possible exception of the statement quoted above.
My understanding is that the amount owed to the SS trust fund is already included in the current debt figure. So, paying it would not require increasing the debt, but rolling over the current amount. Of course as we continue to run large deficits, the debt will continue to grow, but the growth is not due to the SS trust fund.
OK. Let’s be more clear. The federal government only pays out cash interest payments for publicly held debt. The special purpose securities in the SS Trust Fund only require accounting entries for meeting the interest requirement.

Increases in interest rates will significantly burden the federal government for all the debt held by the public. The cash flow burden increases. So when SS trust fund debt is rolled over to publicly held debt, the cash interest expense of the federal government increases.

Future social security cash flow requirements will not be changed by that rollover. Those requirements would not be changed one bit if Congress suddenly ordered the special purpose securities to be dumped in the toilet. In other words, the Trust Fund debt is not real debt. It has, by itself, no maturity date and no cash interest requirement.

Let me try this another way:

The SS Trust Fund is meaningless because its existence changes nothing. The cash flow requirements for the U.S. government are the same whether that Trust Fund exists or not.

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dm200
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Re: Stats on When People Take Social Security

Post by dm200 » Tue Jan 16, 2018 4:49 pm

I have been told by the Boglehead moderators that we are not allowed to discuss means testing.
As best I understand "the rules" here we certainly can discuss what is in effect today and what is in the law (stautes).

There already is (and always has been, to some degree) "means testing" built into the SS Retirement system. Not necessarily in order of importance:

1. Those with higher incomes have more of their SS Retirement subject to Income Tax
2. The SS Retirement system pays out a bigger amount in relation to employee/employer SS tax paid to those with the lowest incomes.
3. The very related to SS Retirement Medicare system charges more to those with higher income for Medicare Part B and Part D

As tax laws change, there will be some changes (not clear in which direction) in the effects of current means testing of the SS retirement system.
Perhaps there are others...

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Re: Stats on When People Take Social Security

Post by fatcharlie » Tue Jan 16, 2018 4:59 pm

itstoomuch wrote:
Mon Jan 15, 2018 12:08 pm
Article this past week somewhere,
Whether one takes early or late SS, the money received is nearly the same, IF one lives to the actuarial age. If you live longer than that you are ahead with delayed SS. If you live less than, you are better off taking early SS.

One of my favorite pass-times on Sunday, is to read the obituaries. :annoyed :oops: :?
Also, the thing is, poor people are generally the ones who die early and vice versa. So maybe everyone is acting rationally.

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Re: Stats on When People Take Social Security

Post by marcopolo » Tue Jan 16, 2018 5:00 pm

North Texas Cajun wrote:
Tue Jan 16, 2018 4:27 pm
marcopolo wrote:
Tue Jan 16, 2018 3:41 pm
North Texas Cajun wrote:
Tue Jan 16, 2018 3:28 pm
....the only way to pay all SS benefits is to increase the national debt.
I pretty much agree with just about everything you said, with the possible exception of the statement quoted above.
My understanding is that the amount owed to the SS trust fund is already included in the current debt figure. So, paying it would not require increasing the debt, but rolling over the current amount. Of course as we continue to run large deficits, the debt will continue to grow, but the growth is not due to the SS trust fund.
OK. Let’s be more clear. The federal government only pays out cash interest payments for publicly held debt. The special purpose securities in the SS Trust Fund only require accounting entries for meeting the interest requirement.

Increases in interest rates will significantly burden the federal government for all the debt held by the public. The cash flow burden increases. So when SS trust fund debt is rolled over to publicly held debt, the cash interest expense of the federal government increases.

Future social security cash flow requirements will not be changed by that rollover. Those requirements would not be changed one bit if Congress suddenly ordered the special purpose securities to be dumped in the toilet. In other words, the Trust Fund debt is not real debt. It has, by itself, no maturity date and no cash interest requirement.

Let me try this another way:

The SS Trust Fund is meaningless because its existence changes nothing. The cash flow requirements for the U.S. government are the same whether that Trust Fund exists or not.
Just because the interest is not paid out in cash does not mean the interest is not there, or that the debt is meaningless. My Series EE bond does not pay me interest until some time in the distant future when i might redeem it. But, the interest is accrued , and I kind of feel like it is a real debt owed to me. When people (rightfully) express concern about the $20T debt the US is carrying, that includes all the Social Security debt, and i believe, the accrued interests as well. If you are arguing that it is meaningless because the Congress could decide any day to not honor that debt. I agree with you on that. If they decide to do that, it would have the effect of lowering the debt by several trillion dollars, and we would not be accruing interest on it anymore. But, how is that different than other any US bond. The US government could decide to not honor that debt at any time as well. I recall that being discussed somewhat seriously not too long ago.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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dm200
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Re: Stats on When People Take Social Security

Post by dm200 » Tue Jan 16, 2018 5:12 pm

Also, the thing is, poor people are generally the ones who die early and vice versa. So maybe everyone is acting rationally.
Good point ...

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Re: Stats on When People Take Social Security

Post by itstoomuch » Tue Jan 16, 2018 5:21 pm

dm200 wrote:
Tue Jan 16, 2018 5:12 pm
Also, the thing is, poor people are generally the ones who die early and vice versa. So maybe everyone is acting rationally.
Good point ...
"Generally" I like that term. My BP a few minutes ago was from 185/80 to 140/70. Normal fluctuations. :annoyed
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

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dm200
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Re: Stats on When People Take Social Security

Post by dm200 » Tue Jan 16, 2018 5:33 pm

If the most recent trends continue that US Life expectancy go down, then I suppose that may be "good" for the financial health of the SS retirement system. :confused

https://www.usatoday.com/story/news/201 ... 970283001/

hoops777
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Re: Stats on When People Take Social Security

Post by hoops777 » Tue Jan 16, 2018 5:38 pm

What I do not understand is why they allow file and suspend.They are running out of money but they choose to give free money to probably mostly wealthier people who use it for play money.
K.I.S.S........so easy to say so difficult to do.

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Re: Stats on When People Take Social Security

Post by KSActuary » Tue Jan 16, 2018 5:41 pm

The reasoning behind taking SS early or late is a personal one and should be made after careful consideration of health and family medical problems. First step is to get a thorough physical.

Many take SS early because they can make another $17,000 before any deduction and most of their SS is tax free, or mostly tax free.

Chip
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Re: Stats on When People Take Social Security

Post by Chip » Tue Jan 16, 2018 5:43 pm

hoops777 wrote:
Tue Jan 16, 2018 5:38 pm
What I do not understand is why they allow file and suspend.They are running out of money but they choose to give free money to probably mostly wealthier people who use it for play money.
File and suspend isn't allowed anymore. It went away on 4/30/16.

The Wizard
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Re: Stats on When People Take Social Security

Post by The Wizard » Tue Jan 16, 2018 5:44 pm

hoops777 wrote:
Tue Jan 16, 2018 5:38 pm
What I do not understand is why they allow file and suspend.They are running out of money but they choose to give free money to probably mostly wealthier people who use it for play money.
People such as myself, yes.
That's why the law got changed to force deemed filing for everyone after a transition period...
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neilpilot
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Re: Stats on When People Take Social Security

Post by neilpilot » Tue Jan 16, 2018 5:44 pm

hoops777 wrote:
Tue Jan 16, 2018 5:38 pm
What I do not understand is why they allow file and suspend.They are running out of money but they choose to give free money to probably mostly wealthier people who use it for play money.
File and Suspend went away May 1st 2016. You maybe thinking of restricting your application to spousal benefits, which is still available but being phased out.

North Texas Cajun
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Re: Stats on When People Take Social Security

Post by North Texas Cajun » Tue Jan 16, 2018 6:12 pm

marcopolo wrote:
Tue Jan 16, 2018 5:00 pm
North Texas Cajun wrote:
Tue Jan 16, 2018 4:27 pm
marcopolo wrote:
Tue Jan 16, 2018 3:41 pm
North Texas Cajun wrote:
Tue Jan 16, 2018 3:28 pm
....the only way to pay all SS benefits is to increase the national debt.
I pretty much agree with just about everything you said, with the possible exception of the statement quoted above.
My understanding is that the amount owed to the SS trust fund is already included in the current debt figure. So, paying it would not require increasing the debt, but rolling over the current amount. Of course as we continue to run large deficits, the debt will continue to grow, but the growth is not due to the SS trust fund.
OK. Let’s be more clear. The federal government only pays out cash interest payments for publicly held debt. The special purpose securities in the SS Trust Fund only require accounting entries for meeting the interest requirement.

Increases in interest rates will significantly burden the federal government for all the debt held by the public. The cash flow burden increases. So when SS trust fund debt is rolled over to publicly held debt, the cash interest expense of the federal government increases.

Future social security cash flow requirements will not be changed by that rollover. Those requirements would not be changed one bit if Congress suddenly ordered the special purpose securities to be dumped in the toilet. In other words, the Trust Fund debt is not real debt. It has, by itself, no maturity date and no cash interest requirement.

Let me try this another way:

The SS Trust Fund is meaningless because its existence changes nothing. The cash flow requirements for the U.S. government are the same whether that Trust Fund exists or not.
Just because the interest is not paid out in cash does not mean the interest is not there, or that the debt is meaningless. My Series EE bond does not pay me interest until some time in the distant future when i might redeem it. But, the interest is accrued , and I kind of feel like it is a real debt owed to me. When people (rightfully) express concern about the $20T debt the US is carrying, that includes all the Social Security debt, and i believe, the accrued interests as well. If you are arguing that it is meaningless because the Congress could decide any day to not honor that debt. I agree with you on that. If they decide to do that, it would have the effect of lowering the debt by several trillion dollars, and we would not be accruing interest on it anymore. But, how is that different than other any US bond. The US government could decide to not honor that debt at any time as well. I recall that being discussed somewhat seriously not too long ago.
The accrued interest is meaningless because it represents no real obligation for the federal government. SS benefits are goong to be paid in full or they are going to be paid in a reduced amount. The cash for those payments will come from debt issued to the public or from additional taxes. The Trust Find doesn’t change that.

Again, if the trust fund didn’t exist nothing would change.

1. If Trust fund exists, SS sends securities to Treasury and Treasury pays SS benefits from tax receipts or from issuing debt to the public.

2. If Trust fund doesn’t exist, Treasury pays SS benefits from tax receipts or from issuing debt to the public.

The funding for SS benefits is the same in either case: either tax receipts or debt to the public. The Trust Fund is meaningless.

In either case, Congress faces a huge shortfall.

You could argue that Congress has a legal obligation to fully fund SS as long as the Trust Fund has securities. But that is not true. Congress can change SS benefit levels up or down at any time. They have done so in the past.

hoops777
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Re: Stats on When People Take Social Security

Post by hoops777 » Tue Jan 16, 2018 6:59 pm

neilpilot wrote:
Tue Jan 16, 2018 5:44 pm
hoops777 wrote:
Tue Jan 16, 2018 5:38 pm
What I do not understand is why they allow file and suspend.They are running out of money but they choose to give free money to probably mostly wealthier people who use it for play money.
File and Suspend went away May 1st 2016. You maybe thinking of restricting your application to spousal benefits, which is still available but being phased out.
Yes I meant the restricted app for spousal benefits which we just applied for a couple months ago.Even though we are taking advantage of it and it will actually help us out some,I am glad they are phasing it out.
K.I.S.S........so easy to say so difficult to do.

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Re: Stats on When People Take Social Security

Post by Big Dog » Tue Jan 16, 2018 7:29 pm

If you live to the average life expectancy for someone your age, you will receive about the same amount in lifetime benefits no matter whether you choose to start receiving benefits at age 62, full retirement age, age 70 or any age in between." In other words, the system is designed so that for those who live average-length lives, it will wash in terms of total benefits received no matter when you start collecting. After all, if you delay starting to collect from ages 67 to 70, you will miss out on three years' worth of payments (albeit smaller ones) -- that's 36 payments.
While that it technically true, it is also wrong, by definition. The SSA uses unisex tables, so the "average-length" life of a generally healthy female will outlive the the unisex actuarial table. Conversely, the single male at 62... And of course, that quote ignores couples, one of which when healthy, has a really good chance to hit 90+ -- far outliving the actuarial discount.

Pfau's new book does a great job essplain' all of this in the first couple of chapters.

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Re: Stats on When People Take Social Security

Post by The Wizard » Tue Jan 16, 2018 8:46 pm

hoops777 wrote:
Tue Jan 16, 2018 6:59 pm

Yes I meant the restricted app for spousal benefits which we just applied for a couple months ago.Even though we are taking advantage of it and it will actually help us out some,I am glad they are phasing it out.
That's what I'm taking also, but Divorced Spouse.
And I'm not glad they are phasing it out, FWIM...
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Re: Stats on When People Take Social Security

Post by gerntz » Tue Jan 16, 2018 8:59 pm

I'll start taking SS in a few months when I reach 70. Looking back, I think that was only the best idea if we have a stock market huge crash before I die. Otherwise, taking it at 62 would have kept our taxes down over my life & thus netted us ahead.

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Re: Stats on When People Take Social Security

Post by CurlyDave » Tue Jan 16, 2018 10:27 pm

Leesbro63 wrote:
Mon Jan 15, 2018 9:45 am
I recently ran across a post on social media about when to take SS...Even though I've been around the personal finance block for a long time, I was truly shocked at the financial illiteracy that I saw. (Granted, it was just a single sample). Are we truly that small a percentage of the population?
I have been around the personal financial block a few times myself, and I am shocked by the knee-jerk reaction "wait as long as possible".

I made up a spreadsheet similar to the one on page 76 in Mike Piper's book Social Security Made Simple and got results which were very similar to his, except that I carried the return above inflation out to 8 or 9%, which I felt was more in line with what I could expect from stocks. With those returns, there is no break-even age. One is always better off to claim at 62. Even at only 5% above inflation as a return, the break even age is 90.

Now you can question whether this is a reasonable assumption on return, but the fact is that I retired in 2007. Instead of withdrawing living expenses from my 2008-2009 deflated portfolio, I lived on Uncle's money while preserving my capital and watching it grow quite nicely after the 2009 recovery.

Was I lucky? Absolutely yes, but my own portfolio has many advantages SS does not. It is inheritable, SS ends the day I die and they may even want the last check back. Last year I was in an accident and needed a new car unexpectedly. With assets in my portfolio, that was not a big deal. Try that trick living on SS with your portfolio depleted by 8 years of withdrawals.

Who knows what the future will bring, but I feel a lot better prepared to deal with it with my own money in my own account. And, the amount I have is a direct result of taking SS early instead of living on my portfolio.

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Re: Stats on When People Take Social Security

Post by itstoomuch » Tue Jan 16, 2018 10:54 pm

I have the same problem with deferred annuities.
Moshe Milesvky advocates taking Income from GLWB annuities early.
We just don't need this income at this time and rather pass the annuity remainder to heirs plus get another Income stepup to Market Value or 5% guaranteed increase. Taking annuity income just increases our taxes with the additional problem of assuming investment risk for the received funds.
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

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Lancelot
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Re: Stats on When People Take Social Security

Post by Lancelot » Wed Jan 17, 2018 1:21 am

neilpilot wrote:
Mon Jan 15, 2018 12:13 pm
itstoomuch wrote:
Mon Jan 15, 2018 12:08 pm
Article this past week somewhere,
Whether one takes early or late SS, the money received is nearly the same, IF one lives to the actuarial age. If you live longer than that you are ahead with delayed SS. If you live less than, you are better off taking early SS.

One of my favorite pass-times on Sunday, is to read the obituaries. :annoyed :oops: :?
This has been discussed many times on earlier threads. If you are a single male, you maybe correct although the SSA actuarial tables are a bit obsolete. If you are a single female, you are somewhat shortchanged by early SS since the tables SSA uses are unisex and females, on average, live longer. If you are married and the higher earner, you are definitely incorrect assuming the higher survivor benefit is of value to you.

When I say you are (in)correct, maybe I should say that the article is (in)correct. Many articles written on this subject are woefully remiss in disregarding the advantage of delay to boost the survivor benefit.
I agree, for the entire cohort, taking SS early or delay is a wash because it was designed that way. But on an individual basis, when to begin benefits is a different matter. I will delay to age 66, then re-evaluated annually.
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Bacchus01
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Re: Stats on When People Take Social Security

Post by Bacchus01 » Wed Jan 17, 2018 8:16 am

While I’ve read the reasoning on here many times, I’ve never believed that delaying was a core Boglehead philosophy. It may make good sense for a lot of people, but I don’t put it the same group as LBYM, stay the course or low cost index funds. When did delaying SS make you a BH?

Bacchus01
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Re: Stats on When People Take Social Security

Post by Bacchus01 » Wed Jan 17, 2018 8:25 am

dm200 wrote:
Tue Jan 16, 2018 5:33 pm
If the most recent trends continue that US Life expectancy go down, then I suppose that may be "good" for the financial health of the SS retirement system. :confused

https://www.usatoday.com/story/news/201 ... 970283001/
Those tables are largely irrelevant to what SSA uses

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Re: Stats on When People Take Social Security

Post by The Wizard » Wed Jan 17, 2018 8:37 am

Bacchus01 wrote:
Wed Jan 17, 2018 8:16 am
While I’ve read the reasoning on here many times, I’ve never believed that delaying was a core Boglehead philosophy. It may make good sense for a lot of people, but I don’t put it the same group as LBYM, stay the course or low cost index funds. When did delaying SS make you a BH?
I would say it's a less central BH tenet.
But for people in good health with large tax deferred accounts, and possibly large taxable accounts as well, it makes good financial sense to delay SS while spending down and Roth converting. This is a very familiar recommendation here...
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4nursebee
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Re: Stats on When People Take Social Security

Post by 4nursebee » Wed Jan 17, 2018 9:23 am

So here is my question for the discussion:

How much do people take out over their lifetimes based upon when they take social security? This data seems harder to find doing an internet search.
4nursebee

kd2008
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Re: Stats on When People Take Social Security

Post by kd2008 » Wed Jan 17, 2018 9:30 am

4nursebee wrote:
Wed Jan 17, 2018 9:23 am
So here is my question for the discussion:

How much do people take out over their lifetimes based upon when they take social security? This data seems harder to find doing an internet search.
http://www.politifact.com/truth-o-meter ... d-what-yo/

Not a dataset but ballpark numbers for your question.

wrongfunds
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Re: Stats on When People Take Social Security

Post by wrongfunds » Wed Jan 17, 2018 10:07 am

Wow, that is pretty eye opening but I don't think we will be getting any comments on it because it is contrary to the pre-concieved notion of how social security and medicare financials work.

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