Stats on When People Take Social Security

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MichaelM
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Re: Stats on When People Take Social Security

Post by MichaelM »

Age 64.3. Retired at 63.5. I’m delaying taking SS for reasons of able to obtain healthcare insurance from ACA and plan to make use of Roth conversions from TIRA account. Also my SS will continue to grow upward. The bull market has helped make my decision. If things change so will I.
vested1
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Re: Stats on When People Take Social Security

Post by vested1 »

kd2008 wrote: Wed Jan 17, 2018 8:30 am
4nursebee wrote: Wed Jan 17, 2018 8:23 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.
I find the article to be flawed for the purposes of this thread because it includes Medicare taxes as compared to what recipients get out of Medicare. According to the article, SS payouts as compared to FICA taxes paid are slightly negative on average. Additionally, the reference to Medicare ignores other aspects like IIRMA, part B and D premiums, and supplemental insurance costs.

The question posed, unless I'm mistaken, was if there are any studies that compare portfolio balances with the withdrawals from retirement savings long term when either filing early or delaying. It would seem that any study structured to answer that question would be skewed by the time period it was looking at.

For instance, my wife and I are currently delaying and should have $110,000 less in our portfolio than what was in there when we started. Instead we have over $110,000 more than when we started because of the tremendous gains since we retired. This is a fortunate aberration from mean, but employing a VPW and taking it one year at a time allows us to reexamine our delay periodically.

The unspoken aspect in this thread is that credits for delaying accrue monthly, not yearly, so every month of delay adds to the increase in benefits. With the unpredictability inherent in knowing one's age when they die, we decided to go with the odds. By having my wife file for her own benefit this year while I file a restricted application simultaneously, we reduce that vaunted "break-even" age that those who advocate filing early often use to prove their point.

SS benefits are income however, not a lump sum, which makes the break-even argument meaningless. In that regard, the amount taken from savings to fund a delay can also be meaningless if you have enough to use that strategy to increase COLA protected income while lowering taxable income in later years. Most States don't tax SS benefits, and federal taxes treat SS benefits more favorably. Longevity insurance for the survivor was the deciding aspect for us.

Delaying works for us, for others it may not. There's no way you can make an informed decision without understanding the rules and plugging in your own numbers. Emotions should have no place in that decision.
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dm200
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Re: Stats on When People Take Social Security

Post by dm200 »

I believe that those with SS Disability "convert" to SS retirement at age 65.
cusetownusa
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Re: Stats on When People Take Social Security

Post by cusetownusa »

MikeG62 wrote: Tue Jan 16, 2018 7:37 am I view it as longevity insurance.

No plans to begin taking it until I turn 70.
This exactly how I look at it. Of course, I am "only" 38 so a lot can change between now and then.
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Re: Stats on When People Take Social Security

Post by dbr »

vested1 wrote: Wed Jan 17, 2018 9:31 am
Delaying works for us, for others it may not. There's no way you can make an informed decision without understanding the rules and plugging in your own numbers. Emotions should have no place in that decision.
Somebody needs to fire up a couple of retirement calculators and enter different scenarios for when payments start and now much and compare sustainable income, end-point wealth, etc. assuming those are what a person actually cares about.

As might be expected Pfau addresses this in an article here: https://www.onefpa.org/journal/Pages/DE ... urity.aspx

Briefly, under the scenario he runs the effect of delaying SS from 62 to70 for an example is that it effectively allows a 4.15% withdrawal rate to behave as if it were a safer 3.95% withdrawal rate. You have to read the article to absorb what is really meant by that comparison. If that is the effect, then I would say that in Pfau's single example the effect is a wash.

I think a different and more convincing argument is that delayed SS is an opportunity to add longevity insurance at a very favorable premium, especially for someone who may have a fixed annuity as part of their income and be at risk to inflation. I do not have numbers on that. I do agree that break-even calculations don't help make the decision.

I have no input on how young people should plan on far off SS as that is political speculation. I would observe that all retirement planning is an exercise is successive approximation as time goes on.
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Re: Stats on When People Take Social Security

Post by vested1 »

dbr wrote: Wed Jan 17, 2018 9:45 am

I have no input on how young people should plan on far off SS as that is political speculation. I would observe that all retirement planning is an exercise is successive approximation as time goes on.
We agree. It's unfortunate that many base this decision, even those who are 62 and older, on their political beliefs. Speculating on the future of SS is a fool's errand.
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dm200
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Re: Stats on When People Take Social Security

Post by dm200 »

vested1 wrote: Wed Jan 17, 2018 9:53 am
dbr wrote: Wed Jan 17, 2018 9:45 am
I have no input on how young people should plan on far off SS as that is political speculation. I would observe that all retirement planning is an exercise is successive approximation as time goes on.
We agree. It's unfortunate that many base this decision, even those who are 62 and older, on their political beliefs. Speculating on the future of SS is a fool's errand.
Just looking at the factual past, I do not believe there have been any actual reductions in SS retirement benefits for those already collecting or eligible. In other words, in the factual past, there was never a change where collecting early was a benefit because of a change, nor a penalty for delaying filing/collecting.

I am in my early 70's, and when younger - the FRA was 65. The change to phase in older FRAs was done well before anyone affected was even near the old or new FRA. At one time, there were (as best I recall) penalites for earned income before age 70, but that age was lowered - providing a benefit to those who continued to earn income.

Even 50+ years ago, folks were doing calculations to avoid the penalty. What some farmers did back then, with soeaht younger wives, between 65 and 70, was to collect SS retirement BUT put the farm income in the wife's name (easy to do back then). The two got the earned income and there was no SS penalty.
The Wizard
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Re: Stats on When People Take Social Security

Post by The Wizard »

dm200 wrote: Wed Jan 17, 2018 10:07 am
vested1 wrote: Wed Jan 17, 2018 9:53 am
dbr wrote: Wed Jan 17, 2018 9:45 am
I have no input on how young people should plan on far off SS as that is political speculation. I would observe that all retirement planning is an exercise is successive approximation as time goes on.
We agree. It's unfortunate that many base this decision, even those who are 62 and older, on their political beliefs. Speculating on the future of SS is a fool's errand.
Just looking at the factual past, I do not believe there have been any actual reductions in SS retirement benefits for those already collecting or eligible...
That depends on how you do the math.
When 50% of SS income suddenly became federally taxable for higher income retirees, that effectively cut their net benefit by some percentage...
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dm200
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Re: Stats on When People Take Social Security

Post by dm200 »

That depends on how you do the math.
When 50% of SS income suddenly became federally taxable for higher income retirees, that effectively cut their net benefit by some percentage...
Sure - that did reduce net benefits. However, it did not affect folks differently on whether they filed earlier or later.
Merionman
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Re: Stats on When People Take Social Security

Post by Merionman »

I am 66 and still working so I have not started to collect social security. I’m guessing it’s worth waiting for as long as possible to start collecting. I hope I can afford to wait til I’m 70 and must start collecting. I know the system is on a course that will bankrupt it but I don’t think Congress will be able to let that happen. The baby boom generation is just now reaching the age when they can start collecting and will revolt at the polls if congress let’s the system die. Then again perhaps that’s why Congress has a gold plated pension plan for themselves. They know they’re destined to be tossed into retirement.
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Re: Stats on When People Take Social Security

Post by itstoomuch »

cusetownusa wrote: Wed Jan 17, 2018 9:42 am
MikeG62 wrote: Tue Jan 16, 2018 7:37 am I view it as longevity insurance.

No plans to begin taking it until I turn 70.
This exactly how I look at it. Of course, I am "only" 38 so a lot can change between now and then.
The title of SS law says it all :D Its Insurance :oops: that the contributor or heir receives Benefits.
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JoeRetire
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Re: Stats on When People Take Social Security

Post by JoeRetire »

vested1 wrote: Wed Jan 17, 2018 9:31 amDelaying works for us, for others it may not. There's no way you can make an informed decision without understanding the rules and plugging in your own numbers. Emotions should have no place in that decision.
Numbers don't always win. "Emotions" always have a place.
Behavioral economics tells us that this is true even in financial decisions.
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dodecahedron
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Re: Stats on When People Take Social Security

Post by dodecahedron »

dm200 wrote: Wed Jan 17, 2018 11:03 am
That depends on how you do the math.
When 50% of SS income suddenly became federally taxable for higher income retirees, that effectively cut their net benefit by some percentage...
Sure - that did reduce net benefits. However, it did not affect folks differently on whether they filed earlier or later.
That is not actually a correct conclusion, dm200. People who filed early (before that law was enacted) had frontloaded a larger share of their lifetime SS benefits into a period when those benefits got more preferential tax treatment. People who waited until after the law changed to file for SS, paid taxes on a higher share of their lifetime benefits than people who filed earlier. The extreme case would be someone who filed at age 62 exactly 8 years before the law changed relative to someone else in his age cohort who filed at 70, the year the law changed.
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dm200
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Re: Stats on When People Take Social Security

Post by dm200 »

dodecahedron wrote: Wed Jan 17, 2018 11:44 am
dm200 wrote: Wed Jan 17, 2018 11:03 am
That depends on how you do the math.
When 50% of SS income suddenly became federally taxable for higher income retirees, that effectively cut their net benefit by some percentage...
Sure - that did reduce net benefits. However, it did not affect folks differently on whether they filed earlier or later.
That is not actually a correct conclusion, dm200. People who filed early (before that law was enacted) had frontloaded a larger share of their lifetime SS benefits into a period when those benefits got more preferential tax treatment. People who waited until after the law changed to file for SS, paid taxes on a higher share of their lifetime benefits than people who filed earlier. The extreme case would be someone who filed at age 62 exactly 8 years before the law changed relative to someone else in his age cohort who filed at 70, the year the law changed.
OK - I suppose a few folks were significantly impacted. I believe, as well, the income beyond SS (including tax exempt) really influenced the taxation issue.
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Re: Stats on When People Take Social Security

Post by DrGoogle2017 »

CurlyDave wrote: Tue Jan 16, 2018 9:27 pm
Leesbro63 wrote: Mon Jan 15, 2018 8:45 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.
If your account is depleted after 8 years then you should take it at 62. But for me taking at 62, I get about $1800 per month, less than $24k per year, that’s about $192k for 8 years. It’s not a huge amount for some portfolio. Plus I will pay tax on that amount. At 15% for about $20k( only 85% is taxed), so I really net about $160k for 8 years. It depend on your account size, some of BHs might net that amount in a month from our investment.
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Re: Stats on When People Take Social Security

Post by CurlyDave »

DrGoogle2017 wrote: Wed Jan 17, 2018 1:16 pm
If your account is depleted after 8 years then you should take it at 62. But for me taking at 62, I get about $1800 per month, less than $24k per year, that’s about $192k for 8 years. It’s not a huge amount for some portfolio. Plus I will pay tax on that amount. At 15% for about $20k( only 85% is taxed), so I really net about $160k for 8 years. It depend on your account size, some of BHs might net that amount in a month from our investment.
What I actually said was "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."

There was never any mention of "depletion".

One of the ways of dealing with SORR risk is to start taking SS when the market goes south. The big point is that every dollar I don't have to take out during a down (deflated) market, is a dollar that will fully participate in the recovery.

I have never actually seen any of the "big names" point out this simple truth, but that does not indicate invalidity.
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Re: Stats on When People Take Social Security

Post by itstoomuch »

curleydave wrote:There was never any mention of "depletion".

One of the ways of dealing with SORR risk is to start taking SS when the market goes south. The big point is that every dollar I don't have to take out during a down (deflated) market, is a dollar that will fully participate in the recovery.

I have never actually seen any of the "big names" point out this simple truth, but that does not indicate invalidity.
This is the second observation on BH I made when new BHer state emphatically that they want to delay SS benefits to age 70.
WHY? Some BH who followed this advice, would have rapidly realized their mistake these past 8 years.
In this 9 year Bull Market, the TSM or similar, beats the delay SS accrual.
YMMV
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Re: Stats on When People Take Social Security

Post by wrongfunds »

One of the best thing about this decision to delay is that it is NOT irrevocable. You get to change your mind anytime. On the other hand, the decision NOT to delay IS irrevocable.
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Re: Stats on When People Take Social Security

Post by neilpilot »

wrongfunds wrote: Thu Jan 18, 2018 9:50 am One of the best thing about this decision to delay is that it is NOT irrevocable. You get to change your mind anytime. On the other hand, the decision NOT to delay IS irrevocable.
Actually, the decision to NOT delay is partially revocable. Once you reach FRA, I believe you can stop Social Security benefits by asking SSA to suspend your benefits. This is called a "voluntary suspension". A friend says he did this last year, with the plan to resume payments at 70, and started accumulating delayed retirement credits.
wrongfunds
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Re: Stats on When People Take Social Security

Post by wrongfunds »

Somebody said that was stopped as of May 1, 2016 ? Or was that completely different thing ??
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Re: Stats on When People Take Social Security

Post by neilpilot »

wrongfunds wrote: Thu Jan 18, 2018 10:19 am Somebody said that was stopped as of May 1, 2016 ? Or was that completely different thing ??
If by "this" you mean my post about a "voluntary suspension", could you be confusing that with "file and suspend". Those are entirely different strategies. Someone please correct me if I'm wrong about this.
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Re: Stats on When People Take Social Security

Post by Always passive »

Leesbro63 wrote: Mon Jan 15, 2018 8:45 am I recently ran across a post on social media about when to take SS. And, of course, the advice was to wait as long as possible, assuming decent health. The people went ballistic! Hundreds and hundreds of comments with every reason in the world to take SS at 62, mostly, and just a few at 66. It became obvious to me just how "in another universe" we Bogleheads are! The whole concept of longevity insurance...very very few people understand it, let alone accept it. So it made me wonder, is there a published set of stats that shows what percentage of people take SS at 62, 66 and 70 (or in between)? 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 took SS at 62 and know all I need to know about the mathematics of SS. But I come from a family where my parents and most recently my brother passed away too young. Although I plan to live until 120, there is a very real possibility that I will die in my 70s, since gens matter. And if that is the case, all the SS mathematics are meaningless.
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Re: Stats on When People Take Social Security

Post by wrongfunds »

Yes, it looks like I am the one who is confused here!
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Re: Stats on When People Take Social Security

Post by itstoomuch »

MikeG62 wrote: Tue Jan 16, 2018 7:37 am I view it as longevity insurance.

No plans to begin taking it until I turn 70.
Then your premium for this "longevity insurance" has been fairly expense against any blend from 100% TSM to something like 70/30 over these past 8 years. Going forward is unknown.
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Re: Stats on When People Take Social Security

Post by Leif »

I'll wait until 70. I'm not planning to buy a annuity, except for an age 70 SS "annuity". With a full COLA, federal tax benefit (not fully taxed), and in my case no state income tax on the benefit (in an otherwise high tax state), it is one of the best you can "buy". If I don't live long then perhaps my wife can benefit.

Longevity Insurance ++
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Re: Stats on When People Take Social Security

Post by DrGoogle2017 »

CurlyDave wrote: Thu Jan 18, 2018 1:04 am
DrGoogle2017 wrote: Wed Jan 17, 2018 1:16 pm
If your account is depleted after 8 years then you should take it at 62. But for me taking at 62, I get about $1800 per month, less than $24k per year, that’s about $192k for 8 years. It’s not a huge amount for some portfolio. Plus I will pay tax on that amount. At 15% for about $20k( only 85% is taxed), so I really net about $160k for 8 years. It depend on your account size, some of BHs might net that amount in a month from our investment.
What I actually said was "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."

There was never any mention of "depletion".

One of the ways of dealing with SORR risk is to start taking SS when the market goes south. The big point is that every dollar I don't have to take out during a down (deflated) market, is a dollar that will fully participate in the recovery.

I have never actually seen any of the "big names" point out this simple truth, but that does not indicate invalidity.
SORR risk is one good reason to delay taking SS. I think it makes sense if you retire before the Great Recession, but not now. If you are taking it now when the market is at an all time high, if the market goes south, you have nothing to temper that risk.
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Re: Stats on When People Take Social Security

Post by Big Dog »

There are some of us who have a valid reason to believe we will not survive to our 80s. The actuarial tables may be valid for the total population, but perhaps not for some who already have chronic diseases.
That is absolutely correct. In addition to having a chronic disease yourself, your genes come into play: how long did your parents live, for a proxy?
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Re: Stats on When People Take Social Security

Post by teen persuasion »

Big Dog wrote: Thu Jan 18, 2018 12:42 pm
There are some of us who have a valid reason to believe we will not survive to our 80s. The actuarial tables may be valid for the total population, but perhaps not for some who already have chronic diseases.
That is absolutely correct. In addition to having a chronic disease yourself, your genes come into play: how long did your parents live, for a proxy?
In my case, I expect and plan to live past 100. My parents are both alive and healthy (and each has older living siblings), and a great aunt lived to 103.

My husband's case is murkier - he's adopted. He has no idea of family longevity, or lack of. Subconsciously, he's influenced by his adoptive mother's death in her 50s. He's never believed he'd live long enough to retire. I've been working to show him that he needs to plan as if at least one of us lives a long time. As I was a SAHM for a long time, my SS will depend on maximizing his SS payment. So the plan, for us, is to delay taking his SS as long as possible.
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Re: Stats on When People Take Social Security

Post by wolf359 »

Jack FFR1846 wrote: Mon Jan 15, 2018 10:43 am I would expect that every year that goes by is going to see more and more taking it at 62. Why? For one thing, the impending drop to zero of the ss trust fund, at which point, the benefits are likely going to be greatly reduced.

I ask my son (21 yo) when he would take SS and he just laughs and says "good one dad, that's going away before I could ever take it".
I'm GenX. I remember there being a poll when I was around 21 about whether or not people believed Social Security would be around when they retired. It made the news that more GenXers at the time believed in UFOs than believed that they would collect Social Security. That's probably true of Millennials today.

I'm now 50. Not claiming yet for another 20 years, but SS is still around. Even if its payout is reduced by 1/3, it will still meet my needs (as longevity insurance.)
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Re: Stats on When People Take Social Security

Post by wolf359 »

CurlyDave wrote: Tue Jan 16, 2018 9:27 pm
Leesbro63 wrote: Mon Jan 15, 2018 8:45 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.
This was a very interesting perspective, and I had not looked at it this way before. Now my strategy may become "delay as long as possible unless there is a massive stock market crash and I can live off social security and not draw down my portfolio.

Still, the decision point is 12 years or more in the future.
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Re: Stats on When People Take Social Security

Post by Ron »

wolf359 wrote: Thu Jan 18, 2018 1:38 pm<snip...>This was a very interesting perspective, and I had not looked at it this way before. Now my strategy may become "delay as long as possible unless there is a massive stock market crash and I can live off social security and not draw down my portfolio.
OTOH, there are folks like me that also retired in 2007, did not claim SS, and were able to live quite comfortably during the next decade without any impact to their portfolio.

No pension, no SS; just withdrawals from my general 60/40 portfolio of well over $.6M during the period with a portfolio value on 12/31/2017 just above the level of 12/31/2007. Holding a good deal of cash helped me weather the downturn without selling any equity/bond holdings.

I'll start my age 70 SS benefit in a few weeks. My wife (same age -4 months) will start her age 70 benefit in June. She/we were fortunate to still qualify for the FRA file/suspend and restricted application process, resulting in her getting (based upon my record) of over $60k for her four years of delay.

I don't think you will ever get a group of more than one person to agree with the proper decision on what to do on this topic. Everybody that follows their own path "knows" that they did the right thing. And that's OK...

Differences make the world go round :sharebeer

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Re: Stats on When People Take Social Security

Post by vested1 »

Big Dog wrote: Thu Jan 18, 2018 12:42 pm
There are some of us who have a valid reason to believe we will not survive to our 80s. The actuarial tables may be valid for the total population, but perhaps not for some who already have chronic diseases.
That is absolutely correct. In addition to having a chronic disease yourself, your genes come into play: how long did your parents live, for a proxy?
Reasons to delay may also depend on your marital status (and how much you like your spouse). I am currently delaying primarily for the longevity insurance for my wife. If I found out I had a terminal disease and would be dead before age 70 I would still delay as long as possible. The increased payment for my wife is good for her lifetime, as well as a higher COLA dollar amount (not much).

I just found my original SS estimated benefit that I pulled up at age 61. Benefit at age 62 $1,807, which is about $250 more than my wife would have received at 62. I'm 66 this year and my wife is 65, both born on the same day in July. By delaying until July she gets $1,974, and I get half of her PIA, $1,058 using a restricted application.

Discounting COLA raises, say we both took it at 62. Her survivor benefit at my age 62 death or beyond would be $1,807. Because we delayed, if I died in 5 months at my FRA she would get $2,512, over $700 a month more than if I had filed at 62. Age 67 $2,713, age 68 $2,914, age 69 $3,115, age 70 and beyond $3,316.

I'll have to remind myself to ask her which one she would prefer. Come to think of it, once I turn 70 I'd better sleep with one eye open. :wink:

Edited to add: Both of our parents lived into their 90's, all of our siblings are alive, the oldest in their late 70's.
Last edited by vested1 on Thu Jan 18, 2018 3:28 pm, edited 1 time in total.
dbr
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Re: Stats on When People Take Social Security

Post by dbr »

It should not be uncertain what the consequences of such decisions in each individual case are, but each person certainly gets to choose what consequences to sign up for. A lot or the discussion is about making clear the consequences more than telling people what they should do.
vested1
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Re: Stats on When People Take Social Security

Post by vested1 »

dbr wrote: Thu Jan 18, 2018 3:26 pm It should not be uncertain what the consequences of such decisions in each individual case are, but each person certainly gets to choose what consequences to sign up for. A lot or the discussion is about making clear the consequences more than telling people what they should do.
Exactly.
DrGoogle2017
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Re: Stats on When People Take Social Security

Post by DrGoogle2017 »

Big Dog wrote: Thu Jan 18, 2018 12:42 pm
There are some of us who have a valid reason to believe we will not survive to our 80s. The actuarial tables may be valid for the total population, but perhaps not for some who already have chronic diseases.
That is absolutely correct. In addition to having a chronic disease yourself, your genes come into play: how long did your parents live, for a proxy?
You can be lucky like Jimmy Carter, he is now in his 90s, none of his relatives lived beyond 50s.
And the reseverse can also be true, there is also no guarantee that if your parents die in their 90s and you might live long either. It depends on a lot of things.
I like to do things to improve my odds, but there is no guarantee on anything.
MathWizard
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Re: Stats on When People Take Social Security

Post by MathWizard »

dbr wrote: Mon Jan 15, 2018 8:50 am First hit in a Google search: https://www.fool.com/retirement/general ... ng-so.aspx


"Data source: Center for Retirement Research.

Using a weighted average of the data in this chart, we can approximate the average American's age when starting Social Security as 64 years old."
The second chart, on the effects of taking it early will only get worse, since the FRA will soon rise to 67, and the -25% at 62, will be more like -33%
and waiting until 70 will only net a person about 25% above taking it at FRA.
MathWizard
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Re: Stats on When People Take Social Security

Post by MathWizard »

The Wizard wrote: Wed Jan 17, 2018 10:59 am
dm200 wrote: Wed Jan 17, 2018 10:07 am
vested1 wrote: Wed Jan 17, 2018 9:53 am
dbr wrote: Wed Jan 17, 2018 9:45 am
I have no input on how young people should plan on far off SS as that is political speculation. I would observe that all retirement planning is an exercise is successive approximation as time goes on.
We agree. It's unfortunate that many base this decision, even those who are 62 and older, on their political beliefs. Speculating on the future of SS is a fool's errand.
Just looking at the factual past, I do not believe there have been any actual reductions in SS retirement benefits for those already collecting or eligible...
That depends on how you do the math.
When 50% of SS income suddenly became federally taxable for higher income retirees, that effectively cut their net benefit by some percentage...
I agree, but it is 85% of SS income if your income is high enough.

(If other income + 1/2 of SS exceeds $44K for a couple, or $34 for a single person, then 85% of your benefits are taxable.)
This is a case where ROTH distributions do not count, but deferred income from 401ks and tIRAs does.
Allan
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Re: Stats on When People Take Social Security

Post by Allan »

Did I read that only something like 2%-4% of those getting SS wait until age 70? But you read that a lot of folks on this forum plan to wait. I am 67 and plan to not start until age 70. I wonder if a lot of younger people say they are going to wait but when they reach age 62, then 66, just can't bring themselves to pass up what feels like "free money" (of course it isn't), and file before age 70. Thus only a small % actually do postpone until age 70.

Allan
Dottie57
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Re: Stats on When People Take Social Security

Post by Dottie57 »

wrongfunds wrote: Thu Jan 18, 2018 9:50 am One of the best thing about this decision to delay is that it is NOT irrevocable. You get to change your mind anytime. On the other hand, the decision NOT to delay IS irrevocable.
+1
hulburt1
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Re: Stats on When People Take Social Security

Post by hulburt1 »

With Stocks going up. I can do a bigger Roth and use my Ira to live on also. If we get a bad hit. I will start using my SS and save my Ira. The SS is a good back up. I'm 65 and have 2.5m but live on 60000. I feel I'm in a good spot. If I die young wife will still be ok.
CJC000
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Re: Stats on When People Take Social Security

Post by CJC000 »

I ran all the calculators, made Excel spreadsheets and read all I could about SS. My plan is to take SS at 66 based on our annual budget projections. AF pension and SS at 62 covers 90% of our budget. I would need to cover that 10% with 401K money for the foreseeable future. AF pension and SS at 66 covers 125% of our budget. That leaves the 401k money alone to grow tax advantaged, use for special events, gift, legacy to kids/grandkids. Still have another two years to think it over...
Big Dog
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Re: Stats on When People Take Social Security

Post by Big Dog »

You can be lucky like Jimmy Carter, he is now in his 90s, none of his relatives lived beyond 50s.
I admit I know nothing about Jimmy's parents, but as you note that it can be advantageous to practice things that increase your life span. (In my case, both parents died before 70, but they both had chronic issues due in part, to poor lifestyle choices and avoiding medical care when it could have had a more positive impact.)

I plan to take SSN at 70.
Dandy
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Re: Stats on When People Take Social Security

Post by Dandy »

1. 2008 age 60 lost job but had a modest pension and retiree health insurance
2. Waited until age 65 to collect max additional small pension
3. Wife took SS at age 62 (low wage earner)
4. My age 66 took spousal on wife's SS
5. 2018 will take full SS at age 70 in March

Goal was to maximize retirement income floor for me and in case of my earlier death my wife. Pensions will be reduced by 50%. Keys for the ability to wait to age 70 (aside from luck) was no debt, having a modest pension to start, having a decent allocation to cash-like assets and having a decent nest egg to begin with. I have always benefited from delayed gratification and look forward to less reliance on my portfolio to support retirement.

Could taking SS at 62 and having more assets invested have worked out better? Possibly, especially since we have had a great bull market since. To me it was SS at 70 and having inflation protection for that for me and my wife a "sure" thing vs additional investing "risk"/reward.

I could easily see taking SS earlier if my circumstances were less favorable.
Bacchus01
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Re: Stats on When People Take Social Security

Post by Bacchus01 »

Allan wrote: Thu Jan 18, 2018 6:04 pm Did I read that only something like 2%-4% of those getting SS wait until age 70? But you read that a lot of folks on this forum plan to wait. I am 67 and plan to not start until age 70. I wonder if a lot of younger people say they are going to wait but when they reach age 62, then 66, just can't bring themselves to pass up what feels like "free money" (of course it isn't), and file before age 70. Thus only a small % actually do postpone until age 70.

Allan
Given the average savings for retirement in this country, most people can’t afford to wait
The Wizard
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Re: Stats on When People Take Social Security

Post by The Wizard »

itstoomuch wrote: Thu Jan 18, 2018 9:13 am ...WHY? Some BH who followed this advice, would have rapidly realized their mistake these past 8 years.
In this 9 year Bull Market, the TSM or similar, beats the delay SS accrual.
Right.
So the plan then should be simply to schedule a nice bull market run for the years from your age 62 to 70.
Odd that others haven't figured this out...
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jharkin
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Re: Stats on When People Take Social Security

Post by jharkin »

smitcat wrote: Mon Jan 15, 2018 12:09 pm
"I think the degree to which people "have" to take it early can be overstated."
With the average retiree complete net worth being somewhare around $150K I believe your are misinformed here.
And most of those $150k net worth "average" families have nearly all of it tied up in home equity. In other words, they cant live off that money unless they reverse mortgage.

Many on this forum vastly underestimate what a rarefied and special audience we are here.
itstoomuch
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Re: Stats on When People Take Social Security

Post by itstoomuch »

^ As the followup, Wiz,
Obviously in a sideways or down Market, spending down your NestEgg may be preferable but of course you are trading off the Sequence of Returns problem for future SS accrued benefits.
It is my opinion that Market Timing may be a solution to the this question of when to initiate SS .
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
The Wizard
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Re: Stats on When People Take Social Security

Post by The Wizard »

itstoomuch wrote: Fri Jan 19, 2018 8:49 am ^ As the followup, Wiz,
Obviously in a sideways or down Market, spending down your NestEgg may be preferable but of course you are trading off the Sequence of Returns problem for future SS accrued benefits.
It is my opinion that Market Timing may be a solution to the this question of when to initiate SS .
Market Timing of sorts was my Plan B when I retired at age 63 in 2013, but with the opposite polarity of your plan.
So long as stock market is holding steady or increasing, then continue delaying start of SS benefits toward age 70.
But if stocks crash 20% or more and don't seem to be recovering, then seriously consider claiming SS then.

Turns out I only needed to withdraw in the 4% range from my tax deferred portfolio to bridge the gap to age 70, thus far.
So yeah, my portfolio has grown a bit these past few years even with the withdrawals...
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DetroitRick
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Re: Stats on When People Take Social Security

Post by DetroitRick »

This has been a great discussion, much more nuanced than the simplistic do/don't recommendations I hear elsewhere. Clearly there is only one good answer to the "when" question: "it depends". It's just a matter of matching this decision to you and your family's SPECIFIC needs. The decision involves both quantitative and qualitative considerations.

I just signed up in December to start at 62. With full understanding of all the pro's and con's. And complete understanding of all the underlying math.

3 things to add to what has already been said:
1)There is actually a limited opportunity for a do-over if you end up deciding you took SS too soon (at least for now). But that window is short - 12 months after you first become entitled to those benefits. You also can only do this once per lifetime AND you have to repay all benefits received. This was the final factor I looked at in my own decision - because there are 2 low-probability events that could occur for me this year that could make me change my mind about my start date. Unlikely, but possible. So I have options.

Full link to this policy on SSA.gov:
https://www.ssa.gov/planners/retire/withdrawal.html

2)Folks stress the longevity insurance that SS provides, and that is certainly true. And it's better than what the annuity marketplace offers. But, I did not find the dollar difference between payments at age 62 and age 70 to have any possibility of being life-changing for us. Of course, the percentage difference is obviously big. But you can't spend a percentage. While I'm somewhat close to the maximum possible payout, looking at the pure dollar difference between age 62 and 70 was not enough to sway me given all the other factors in my life. I just can't see a scenario where it would matter all that much to me. Sure, I can see where others might feel different. So this is another area where we can all reasonably reach a different conclusion.

3)The challenge in retirement is to meet your own needs at each stage of retirement. Whatever those needs are. Some people place more value on spending needs early vs. late, and that is a purely personal choice. So we all differ on how to best match financial resources to these stages. There is definitely no black and white answer, and it is not simply a matter of financial discipline (get less sooner vs. get more later).

Best of luck to everybody who has yet to make the decision. One piece of advice - avoid those lunch seminars and take a look at Mike Piper's book - "Social Security Made Simple". I found it very useful.
wrongfunds
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Re: Stats on When People Take Social Security

Post by wrongfunds »

2)Folks stress the longevity insurance that SS provides, and that is certainly true. And it's better than what the annuity marketplace offers. But, I did not find the dollar difference between payments at age 62 and age 70 to have any possibility of being life-changing for us. Of course, the percentage difference is obviously big. But you can't spend a percentage. While I'm somewhat close to the maximum possible payout, looking at the pure dollar difference between age 62 and 70 was not enough to sway me given all the other factors in my life. I just can't see a scenario where it would matter all that much to me. Sure, I can see where others might feel different. So this is another area where we can all reasonably reach a different conclusion.
I don't quite get this part. If the difference in amount is not "enough" or "life changing", why do you "need" to take it early? Your reply did NOT mention anything about wanting to "claim what belongs to me" factor.
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