Stats on When People Take Social Security

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DetroitRick
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Re: Stats on When People Take Social Security

Post by DetroitRick » Fri Jan 19, 2018 1:03 pm

wrongfunds wrote:
Fri Jan 19, 2018 12:32 pm
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.
It's simple really, when I look at my specific cash needs right now and my short-term income streams. It's all about matching. The income stream from SS will be very useful to me now, and in the future. It meets my needs. Better than the alternatives. But the incremental monthly payments from waiting until age 70 (we're not talking thousands MORE per month of course), will not add as much benefit at that stage of my life. 8 years of payments starting now is material to me. Getting 75% more per month later, by waiting until 70, is not material to me. Those additional dollars (the 75% more), to me, are not life-changing and have no potential to be. Getting 8 years of the lower amount sooner is. For me it's more about matching income needs at each stage of life, less about maximizing. And the "wanting to claim what belongs to me factor" was never a part of my decision. Either way, if I (and wife) croak young, the government can consider it a "tip" for services rendered. :D

walkindude
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Re: Stats on When People Take Social Security

Post by walkindude » Fri Jan 19, 2018 2:38 pm

DetroitRick wrote:
Fri Jan 19, 2018 1:03 pm
It's simple really, when I look at my specific cash needs right now and my short-term income streams. It's all about matching. The income stream from SS will be very useful to me now, and in the future. It meets my needs. Better than the alternatives. But the incremental monthly payments from waiting until age 70 (we're not talking thousands MORE per month of course), will not add as much benefit at that stage of my life. 8 years of payments starting now is material to me. Getting 75% more per month later, by waiting until 70, is not material to me. Those additional dollars (the 75% more), to me, are not life-changing and have no potential to be. Getting 8 years of the lower amount sooner is. For me it's more about matching income needs at each stage of life, less about maximizing. And the "wanting to claim what belongs to me factor" was never a part of my decision. Either way, if I (and wife) croak young, the government can consider it a "tip" for services rendered. :D
I agree with your point that it's a totally personal choice.

However, it's not thousands more per month, but close.

I'm trying to wait, but still a couple of years from 62 with a maximum earnings record. The difference between 62 and 70 for me is over $1600/month (nearly $20K per year). That seems like a lot to me (and especially to my wife since she's a lower earner). It all comes down to cashflow at different times though, as you said. Good luck!

wrongfunds
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Re: Stats on When People Take Social Security

Post by wrongfunds » Fri Jan 19, 2018 2:50 pm

Thanks for your reply! It is indeed very personal and to be perfectly honest still mostly emotional decision rather than a cold calculated logical one in either case.

jasg
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Re: Stats on When People Take Social Security

Post by jasg » Fri Jan 19, 2018 3:03 pm

walkindude wrote:
Fri Jan 19, 2018 2:38 pm

I agree with your point that it's a totally personal choice.

However, it's not thousands more per month, but close.

I'm trying to wait, but still a couple of years from 62 with a maximum earnings record. The difference between 62 and 70 for me is over $1600/month (nearly $20K per year). That seems like a lot to me (and especially to my wife since she's a lower earner). It all comes down to cashflow at different times though, as you said. Good luck!
This thread took me back to one of my spreadsheets to run some real life numbers.

I am a year short of 70, but have been taking SS for six years. I did this for two reasons
1) Breakeven point between 63 & 70 was about age 80 (a difference of about $1200/month)
2) Preservation of pre-tax investments.

Looking back at my actual 60/40 portfolio performance since 2012, my account is 9.3% larger than it would have been had I withdrawn amounts equivalent to my SS payments. Assuming a modest 5% growth on that money, the breakeven point gets pushed out to age 87. I didn't try to factor in tax effects, but that would probably push the breakeven point out a bit more.

gerntz
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Re: Stats on When People Take Social Security

Post by gerntz » Fri Jan 19, 2018 3:12 pm

neilpilot wrote:
Mon Jan 15, 2018 12:13 pm
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.
Since a single female gets the same monthly benefit as a single male of same age and SS payments in, & on average females live longer, they are not getting shortchanged. They are still getting the same benefit the dead males aren't for all the extra years they live. If the intent is to give the same total benefits in retirement, if anything, female benefits ought to be reduced vs. males. But I doubt that will happen.

Diogenes
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Re: Stats on When People Take Social Security

Post by Diogenes » Sat Jan 20, 2018 6:06 am

DetroitRick wrote:
Fri Jan 19, 2018 1:03 pm

It's simple really, when I look at my specific cash needs right now and my short-term income streams. It's all about matching. The income stream from SS will be very useful to me now, and in the future. It meets my needs. Better than the alternatives. But the incremental monthly payments from waiting until age 70 (we're not talking thousands MORE per month of course), will not add as much benefit at that stage of my life. 8 years of payments starting now is material to me. Getting 75% more per month later, by waiting until 70, is not material to me. Those additional dollars (the 75% more), to me, are not life-changing and have no potential to be. Getting 8 years of the lower amount sooner is. For me it's more about matching income needs at each stage of life, less about maximizing. And the "wanting to claim what belongs to me factor" was never a part of my decision. Either way, if I (and wife) croak young, the government can consider it a "tip" for services rendered. :D
I'm in much the same situation. The only logical reason to defer to 70 for both of us (when we will have significant RMD's also), or even 66, would be If it will help with Roth conversions. But since other income pushes us into a tax bracket at 60 that makes that a wash also per i-Orp, what's left? Many toss around the term 'longevity insurance' as the reason. But I hardly think that a max difference of maybe $18K per year future dollars, the best case if I live into my 80's is going to matter.
And the demographics of SS are not improving, and will not in the near future. So something will have to give. Where will those SS contributions come from to support the boomers who saved little?

nclion
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Re: Stats on When People Take Social Security

Post by nclion » Sat Jan 20, 2018 9:19 am

Jags4186 wrote:
Mon Jan 15, 2018 1:30 pm
You would also take SS early if you believed you wouldn't live long enough for waiting to make sense. You could come from a family that dies young. You could have a terminal disease. You could truly believe that by taking the money and investing it you'll do better than waiting until FRA or 70. Your age could be mismatched with your spouses and your benefit could be very small. You're simply taking it early because you'll switch to your spouses benefit later on anyway. That's what my inlaws did. MIL worked just enough to qualify for SS. She took benefits at 62, then when her husband turned 66 she switched to half his benefit and got a $500/mo raise.

You could also not have any other way of supporting yourself.
This too is our situation where my wife was a stay home mom so she has earned only a small amount towards her own SS, but I was under the impression that she would need to wait until FRA to ensure should would receive a whole 50% of my SS once I reach FRA. Note she is 2.5 years older so my plan was for her to start drawing her own SS FRA and then when I reach FRA I would file and she would receive an increase to .5 of my SS. I thought if she started at 62 her benefit would permanently reduced and therefore not be entitled to a whole .5 spouse benefit. Can anyone confirm this?

dbr
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Re: Stats on When People Take Social Security

Post by dbr » Sat Jan 20, 2018 9:25 am

nclion wrote:
Sat Jan 20, 2018 9:19 am


This too is our situation where my wife was a stay home mom so she has earned only a small amount towards her own SS, but I was under the impression that she would need to wait until FRA to ensure should would receive a whole 50% of my SS once I reach FRA. Note she is 2.5 years older so my plan was for her to start drawing her own SS FRA and then when I reach FRA I would file and she would receive an increase to .5 of my SS. I thought if she started at 62 her benefit would permanently reduced and therefore not be entitled to a whole .5 spouse benefit. Can anyone confirm this?
That is my understanding. She does not want to claim benefits before FRA or all types of benefits will be permanently reduced. If this is a misunderstanding someone can correct us.

neilpilot
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Re: Stats on When People Take Social Security

Post by neilpilot » Sat Jan 20, 2018 9:38 am

gerntz wrote:
Fri Jan 19, 2018 3:12 pm
neilpilot wrote:
Mon Jan 15, 2018 12:13 pm
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.
Since a single female gets the same monthly benefit as a single male of same age and SS payments in, & on average females live longer, they are not getting shortchanged. They are still getting the same benefit the dead males aren't for all the extra years they live. If the intent is to give the same total benefits in retirement, if anything, female benefits ought to be reduced vs. males. But I doubt that will happen.
You missed the key word "early". The longer you live, the more you potentially loose if you take EARLY benefits. Females live longer so they potentially loose more.

hulburt1
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Re: Stats on When People Take Social Security

Post by hulburt1 » Sat Jan 20, 2018 9:44 am

I'm not the sharpest tool in the shed but I am in the shed. I have always planned on taking SS at 70. I'm 65 this year.
Now I'm really thinking taking it now. If I take now I will get 1500, I'm taking 1800 out of my Ira) and moving about $25000 a year to Roth.
If I take my ss I would not need to take out 1800 from my Ira. I could move more to my Roth. Last year made 500000 from the Ira. Now I only need 60000 for the year. SS is tax free state wise. I know that SS will increase by abut 8% but In the last 10 years my Ira has increased by 13% per years.

If I have Part b taken out of my SS it can not rise more then what my SS rises. But If I pay for it out of pocket there is no limit on what it can rise.
Maybe I'm missing something. Have other income to cover up to what my expenses are. I'm at 2.5m most of it is in Ira. :sharebeer

mptfan
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Re: Stats on When People Take Social Security

Post by mptfan » Sat Jan 20, 2018 10:01 am

Allan wrote:
Thu Jan 18, 2018 7:04 pm
Did I read that only something like 2%-4% of those getting SS wait until age 70?
Your memory is pretty good. 2% of men and 4% of women wait until age 70 to start collecting social security.

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dm200
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Re: Stats on When People Take Social Security

Post by dm200 » Sat Jan 20, 2018 10:01 am

gerntz wrote:
Fri Jan 19, 2018 3:12 pm
neilpilot wrote:
Mon Jan 15, 2018 12:13 pm
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.
Since a single female gets the same monthly benefit as a single male of same age and SS payments in, & on average females live longer, they are not getting shortchanged. They are still getting the same benefit the dead males aren't for all the extra years they live. If the intent is to give the same total benefits in retirement, if anything, female benefits ought to be reduced vs. males. But I doubt that will happen.
No matter what age the person chooses to begin SS retirement, all other thing being equal, on average a female receives significantly more in SS retirement benefits than a male does. Simple actuarial math - females live longer - and the longer you live the more SS benefits you receive.

Annuities are allowed to charge based on male/female and, typically, for the same dollar amount - males receive more than females.

vested1
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Re: Stats on When People Take Social Security

Post by vested1 » Sat Jan 20, 2018 10:32 am

dbr wrote:
Sat Jan 20, 2018 9:25 am
nclion wrote:
Sat Jan 20, 2018 9:19 am


This too is our situation where my wife was a stay home mom so she has earned only a small amount towards her own SS, but I was under the impression that she would need to wait until FRA to ensure should would receive a whole 50% of my SS once I reach FRA. Note she is 2.5 years older so my plan was for her to start drawing her own SS FRA and then when I reach FRA I would file and she would receive an increase to .5 of my SS. I thought if she started at 62 her benefit would permanently reduced and therefore not be entitled to a whole .5 spouse benefit. Can anyone confirm this?
That is my understanding. She does not want to claim benefits before FRA or all types of benefits will be permanently reduced. If this is a misunderstanding someone can correct us.
Slight correction: Spousal benefits are based on 50% of the other spouse's PIA (amount at spouses FRA), regardless of when the spouse claiming their own benefit files. The spousal benefit for the recipient is reduced if taken before their own FRA. She is 2.5 years older than you. Even if you filed 2.5 years earlier than your FRA, as long as she had attained her own FRA she would receive 50% of your PIA, but only after you have filed for your own benefit. I only add this in case you change your mind and decide to file before your own FRA. Your plan sounds right.

The Wizard
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Re: Stats on When People Take Social Security

Post by The Wizard » Sat Jan 20, 2018 10:49 am

neilpilot wrote:
Sat Jan 20, 2018 9:38 am
gerntz wrote:
Fri Jan 19, 2018 3:12 pm
neilpilot wrote:
Mon Jan 15, 2018 12:13 pm
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.
Since a single female gets the same monthly benefit as a single male of same age and SS payments in, & on average females live longer, they are not getting shortchanged. They are still getting the same benefit the dead males aren't for all the extra years they live. If the intent is to give the same total benefits in retirement, if anything, female benefits ought to be reduced vs. males. But I doubt that will happen.
You missed the key word "early". The longer you live, the more you potentially loose if you take EARLY benefits. Females live longer so they potentially loose more.
I don't think females who claim early LOSE anything.
As noted, if SS was actuarially "fair" (which I'm NOT recommending!), then then women would receive slightly lower monthly benefits than men with the same numbers.
So they are receiving an enhanced benefit to some degree.

Now if you were to say that women have more to GAIN from delaying the start of SS than men do, then I totally agree...
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dm200
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Re: Stats on When People Take Social Security

Post by dm200 » Sat Jan 20, 2018 11:28 am

I don't think females who claim early LOSE anything.
As noted, if SS was actuarially "fair" (which I'm NOT recommending!), then then women would receive slightly lower monthly benefits than men with the same numbers.
So they are receiving an enhanced benefit to some degree.
Actuarlily 100% correct.

wrongfunds
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Re: Stats on When People Take Social Security

Post by wrongfunds » Sat Jan 20, 2018 1:56 pm

I know that SS will increase by abut 8% but In the last 10 years my Ira has increased by 13% per years.
Exactly! We all know that for next 5 years market is going to do lot better than 8% per year :oops:

hulburt1
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Re: Stats on When People Take Social Security

Post by hulburt1 » Sat Jan 20, 2018 5:09 pm

I'm running my own no. I will get 1500 from SS now but get 2000 if I wait untill 70.but I will need to take Ira money to make up that 5 years.
SS will pay over those years and is mostley tax free at our state level of 10% pluse feds will be very low. with Medicard part b can be taken out and can not increase more then you SS increase. If you pay out of pocket you will have to pay increase. No limit on how much. Our Ira money will grow over 10% easy. Mine is up over 13% for the last 10 years. When I take Ira out I pay tax on all of it for the next 5 years untill I'm 70. If you take the SS now I be able to move more Ira to Roth and Very easly make up for the lost in SS after 70.

Now with SS-65 years old
ss 1500
Ira will grow-at about 1.2m thats not with my wife 1.2m(125000 a year
I will take out some to help out

at 70 ss 1500
but Ira will bring in 200000 year
Maybe I need to spend more...live on 60000 a year. :oops:

DrGoogle2017
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Re: Stats on When People Take Social Security

Post by DrGoogle2017 » Sat Jan 20, 2018 7:03 pm

Hulburt, you need to convert to Roth, if you take out SS, you lose the space for Roth.

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ronhh
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Re: Stats on When People Take Social Security

Post by ronhh » Sat Jan 20, 2018 7:12 pm

Any thoughts of taking SS early at 62; and in turn, investing that check each month in VTSAX and VBTLX?
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stumpy
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Re: Stats on When People Take Social Security

Post by stumpy » Mon Jan 22, 2018 5:53 pm

I have a question about taking SS. My wife is 18 months older than me and has not worked in 28 years. If she takes hers at 62 can she still get half of mine when I begin to take mine @ FRA or later. Taking half of mine at my FRA would be 2x what she would get at 62 and about 30% more than she would get at her FRA. Any insights would be helpful

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Re: Stats on When People Take Social Security

Post by CurlyDave » Tue Jan 23, 2018 12:37 am

ronhh wrote:
Sat Jan 20, 2018 7:12 pm
Any thoughts of taking SS early at 62; and in turn, investing that check each month in VTSAX and VBTLX?
Well, I took it early at 62 and just didn't withdraw from my IRA. The money was already invested. I am far ahead of where I would have been by waiting. And, the money is in my own account which is hopefully immune to the slings and arrows of future SS law.

dbr
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Re: Stats on When People Take Social Security

Post by dbr » Tue Jan 23, 2018 10:00 am

ronhh wrote:
Sat Jan 20, 2018 7:12 pm
Any thoughts of taking SS early at 62; and in turn, investing that check each month in VTSAX and VBTLX?
That has been discussed many times. In rough terms the math is that the increase in benefit in delaying SS is about a certain 8% per year delayed. To compete with that you have to be invested at a certain 8% annual growth rate for those eight years and then buy a competitive inflation indexed SPIA.

If what you want is to eshew the benefits of inflation indexed lifetime income in favor or accumulating lump sum wealth, then you might want the SS money right away planning to invest it. If the wealth accumulated is then going to be used to fund income for the rest of your life that would be taking a crooked path that doesn't do a very good job of getting you there.

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BTDT
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Re: Stats on When People Take Social Security

Post by BTDT » Tue Jan 23, 2018 10:15 am

Bottom line- Choosing to take SS at 62 or 70 is a subjective decision. I chose to take SS at 70 for spouse survivor reasons, but 62 for other folks may be the better option? :sharebeer
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Re: Stats on When People Take Social Security

Post by wolf359 » Tue Jan 23, 2018 10:46 am

DetroitRick wrote:
Fri Jan 19, 2018 1:03 pm
wrongfunds wrote:
Fri Jan 19, 2018 12:32 pm
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.
It's simple really, when I look at my specific cash needs right now and my short-term income streams. It's all about matching. The income stream from SS will be very useful to me now, and in the future. It meets my needs. Better than the alternatives. But the incremental monthly payments from waiting until age 70 (we're not talking thousands MORE per month of course), will not add as much benefit at that stage of my life. 8 years of payments starting now is material to me. Getting 75% more per month later, by waiting until 70, is not material to me. Those additional dollars (the 75% more), to me, are not life-changing and have no potential to be. Getting 8 years of the lower amount sooner is. For me it's more about matching income needs at each stage of life, less about maximizing. And the "wanting to claim what belongs to me factor" was never a part of my decision. Either way, if I (and wife) croak young, the government can consider it a "tip" for services rendered. :D
I see your point. However, if you have somehow lost all your other assets, such that you're living only on (or mostly on) social security, then that dollar difference may in fact become very significant to you.

That's what longevity insurance is. It's the chance that you might outlive your assets.

If all goes according to plan, it won't play a factor at all. The higher social security payment is merely gravy, and not that significant compared to other planned income streams. Unless those other streams cease.

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ronhh
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Re: Stats on When People Take Social Security

Post by ronhh » Thu Jan 25, 2018 10:11 am

CurlyDave wrote:
Tue Jan 23, 2018 12:37 am
ronhh wrote:
Sat Jan 20, 2018 7:12 pm
Any thoughts of taking SS early at 62; and in turn, investing that check each month in VTSAX and VBTLX?
Well, I took it early at 62 and just didn't withdraw from my IRA. The money was already invested. I am far ahead of where I would have been by waiting. And, the money is in my own account which is hopefully immune to the slings and arrows of future SS law.
Interesting point. Thanks for sharing.
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Re: Stats on When People Take Social Security

Post by CurlyDave » Thu Jan 25, 2018 12:33 pm

wrongfunds wrote:
Sat Jan 20, 2018 1:56 pm
I know that SS will increase by abut 8% but In the last 10 years my Ira has increased by 13% per years.
Exactly! We all know that for next 5 years market is going to do lot better than 8% per year :oops:

We need to think about this one a little bit more.

The usual breakeven age for SS at 70 vs. 62 is the age of 81. The way this is calculated means that if the return on investment is 0%, someone who lives to 81 will receive exactly the same amount of total benefits no matter when they started SS.

But, I calculate 81 - 62 = 19 years. So, unless we are willing to postulate that the return in the market is going to be 0 (or less) over a period of 19 years, the SS published break even age is too low.

Now I don't have the data in front of me, but I think anyone would be very hard-pressed to find any 19 year period in the past 150 years when CAGR of the market was 0 or less.

Now there is also a second component to the thinking. Even SS admits that the trust find will be exhausted in the early 2030 decade. Unless there is a change to the law (a forbidden assumption on this board) benefits will be reduced to about 75% of current benefits. Essentially, we know that in the absence of a change in law, for someone turning 62 anytime after 2018, there will be a substantial reduction in benefits before the 19 year minimum payback period is reached.

Any "longevity insurance" component of delaying SS is illusory. It is similar to buying an annuity from an insurance company known to be approaching bankruptcy. Sure, it may work out, but the risks are much higher than generally assumed on this board.

And, we can't even hide behind the concept that it is so far in the future we don't know about population changes, etc. Almost everyone who is going to be paying into SS or drawing benefits is alive today.

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Re: Stats on When People Take Social Security

Post by smitcat » Thu Jan 25, 2018 12:55 pm

CurlyDave wrote:
Thu Jan 25, 2018 12:33 pm
wrongfunds wrote:
Sat Jan 20, 2018 1:56 pm
I know that SS will increase by abut 8% but In the last 10 years my Ira has increased by 13% per years.
Exactly! We all know that for next 5 years market is going to do lot better than 8% per year :oops:

We need to think about this one a little bit more.

The usual breakeven age for SS at 70 vs. 62 is the age of 81. The way this is calculated means that if the return on investment is 0%, someone who lives to 81 will receive exactly the same amount of total benefits no matter when they started SS.

But, I calculate 81 - 62 = 19 years. So, unless we are willing to postulate that the return in the market is going to be 0 (or less) over a period of 19 years, the SS published break even age is too low.

Now I don't have the data in front of me, but I think anyone would be very hard-pressed to find any 19 year period in the past 150 years when CAGR of the market was 0 or less.

Now there is also a second component to the thinking. Even SS admits that the trust find will be exhausted in the early 2030 decade. Unless there is a change to the law (a forbidden assumption on this board) benefits will be reduced to about 75% of current benefits. Essentially, we know that in the absence of a change in law, for someone turning 62 anytime after 2018, there will be a substantial reduction in benefits before the 19 year minimum payback period is reached.

Any "longevity insurance" component of delaying SS is illusory. It is similar to buying an annuity from an insurance company known to be approaching bankruptcy. Sure, it may work out, but the risks are much higher than generally assumed on this board.

And, we can't even hide behind the concept that it is so far in the future we don't know about population changes, etc. Almost everyone who is going to be paying into SS or drawing benefits is alive today.
The bedrock calculator will show you various choices on SS with varied results dependent upon what discount and inflation rates you choose. The IORP and RPM calculators will show you the affects of taking SS early or later by also taking into consideration your tax situation and potential Roth conversions which help solve for the most spendable dollars rather than just dollars.
Saying that SS will not be fully funded is fine but suggesting that you may know what the remedy is and taking that to mean that it favors an early election of SS would IMHO be more of a stretch than guessing on future stock market returns.

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Re: Stats on When People Take Social Security

Post by CurlyDave » Fri Jan 26, 2018 2:50 am

smitcat wrote:
Thu Jan 25, 2018 12:55 pm
...Saying that SS will not be fully funded is fine but suggesting that you may know what the remedy is and taking that to mean that it favors an early election of SS would IMHO be more of a stretch than guessing on future stock market returns.
I did not say I "may know what the remedy is". But I do know that pretending that things will go on with no change when that is not possible is not a good idea.

OTOH, if we project based on current law, early election is certainly favored because it leads to more payments before the trust fund is exhausted. I don't see this being a "stretch" -- it is simple math.

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Re: Stats on When People Take Social Security

Post by smitcat » Fri Jan 26, 2018 9:21 am

CurlyDave wrote:
Fri Jan 26, 2018 2:50 am
smitcat wrote:
Thu Jan 25, 2018 12:55 pm
...Saying that SS will not be fully funded is fine but suggesting that you may know what the remedy is and taking that to mean that it favors an early election of SS would IMHO be more of a stretch than guessing on future stock market returns.
I did not say I "may know what the remedy is". But I do know that pretending that things will go on with no change when that is not possible is not a good idea.

OTOH, if we project based on current law, early election is certainly favored because it leads to more payments before the trust fund is exhausted. I don't see this being a "stretch" -- it is simple math.

You can run the early vs later selection of SS on teh IORP with both the SS decrease option as well as the SS 'as is' button 'on'.
That will give you results to compare with potential Roth conversions turned on or off as well.
Extending those quick passes to the RPM model will show more details on the disadvantages or advantages of either.
Everyones results will be different - but ours favors later and staggered SS even with the current law and decreased SS in 2035. (even more so without)

There are more than a dozen remedies available to support the current SS system - any one or a combination of them could/would provide a solution.
I see no good method to predict , discuss or determine which one(s) might be implemented in the future.

Diogenes
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Re: Stats on When People Take Social Security

Post by Diogenes » Fri Jan 26, 2018 12:19 pm

True, but by waiting to claim SS at 70, while meanwhile spending more of your own portfolio, you are choosing to be more dependent on future government payments.
Some may not like that, for various reasons.

hoops777
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Re: Stats on When People Take Social Security

Post by hoops777 » Sat Jan 27, 2018 2:59 am

CurlyDave wrote:
Fri Jan 26, 2018 2:50 am
smitcat wrote:
Thu Jan 25, 2018 12:55 pm
...Saying that SS will not be fully funded is fine but suggesting that you may know what the remedy is and taking that to mean that it favors an early election of SS would IMHO be more of a stretch than guessing on future stock market returns.
I did not say I "may know what the remedy is". But I do know that pretending that things will go on with no change when that is not possible is not a good idea.

OTOH, if we project based on current law, early election is certainly favored because it leads to more payments before the trust fund is exhausted. I don't see this being a "stretch" -- it is simple math.
It is very likely changes made will not effect current SS recipients.The backlash would be overwhelming.I cannot imagine any scenario where senior citizens are told they have lost their benefits or had them cut,with the exception of possibly wealthy recipients who do not need them.
K.I.S.S........so easy to say so difficult to do.

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WestUniversity
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Re: Stats on When People Take Social Security

Post by WestUniversity » Sun Jan 28, 2018 9:13 am

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.”

🍅 🍅
Agreed. Instead of simply reading about what others have said, and agreeing with some prevailing opinion, everyone needs to run the numbers on their own situation and make a decision based upon their set of facts.

For me at about 78, the total projected payments received whether starting SS at 62 or FRA or 70 are materially the same.

Projecting our finances out to 95 (the most optimistic of my life expectancy projections) taking my social security payments at 70 does yield a larger total of payments over that 25-year period than starting SS at 62 by far.

HOWEVER, the loss of the compounding of my investments from taking the larger withdrawals from 62 to 70 far exceeds the pickup from delaying SS payments until 70. And that is using only an assumed rate of return of 7%. The long term historical performance of my portfolio is significantly higher than that.

I should also add that DW is ineligible to receive survivor benefits on my SS.

I will most likely take my SS at 62 because while DW is ineligible to receive survivor benefits on my SS she will receive the benefit of the additional 8 years of compounding, assuming of course that she lives longer than I do...

gerntz
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Re: Stats on When People Take Social Security

Post by gerntz » Sun Jan 28, 2018 10:16 am

smitcat wrote:
Mon Jan 15, 2018 11:38 am
From this chart it looks like the vast majority file when they stop working, so if they stop at 62 they file at 62 and if they stop at 65 they file at 65....

https://www.ssa.gov/policy/docs/ssb/v71n4/v71n4p1.html
I don't see that from data provided. Please explain.

What saddens me is the % of people eligible for DI benefits prior to age 62 rising rapidly. Hard to believe so many more with issues at younger ages with medical care advances.

dbr
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Re: Stats on When People Take Social Security

Post by dbr » Sun Jan 28, 2018 10:23 am

gerntz wrote:
Sun Jan 28, 2018 10:16 am
smitcat wrote:
Mon Jan 15, 2018 11:38 am
From this chart it looks like the vast majority file when they stop working, so if they stop at 62 they file at 62 and if they stop at 65 they file at 65....

https://www.ssa.gov/policy/docs/ssb/v71n4/v71n4p1.html
I don't see that from data provided. Please explain.

What saddens me is the % of people eligible for DI benefits prior to age 62 rising rapidly. Hard to believe so many more with issues at younger ages with medical care advances.
I don't think that paper has data on when people stopped working. But the question would be what should we assume is the employment status of someone who are filing for SS. Persons with low income employment could indeed be taking unreduced benefits and still work. I know people who have done that. A half time job at $16/hr would still stay under the threshold.

Big Dog
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Re: Stats on When People Take Social Security

Post by Big Dog » Sun Jan 28, 2018 10:25 am

The only logical reason to defer to 70 for both of us....But I hardly think that a max difference of maybe $18K per year future dollars, the best case if I live into my 80's is going to matter.
In addition to Mike Piper's book, also suggest that y'all read Wade Phau's book on retirement. The first few chapters are enlightening particularly about longevity.

But to your point: don't forget, that the odds are increasing that one of a married couple will make it into the 90's.......

So, to the me, the "only logical reason" to wait until 70 is longevity. If your health is good and you have good family genes, the odds are good that you will beat the breakeven at age ~82. Absent that, you take the money early bcos you need it to live on.

smitcat
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Re: Stats on When People Take Social Security

Post by smitcat » Sun Jan 28, 2018 10:28 am

gerntz wrote:
Sun Jan 28, 2018 10:16 am
smitcat wrote:
Mon Jan 15, 2018 11:38 am
From this chart it looks like the vast majority file when they stop working, so if they stop at 62 they file at 62 and if they stop at 65 they file at 65....

https://www.ssa.gov/policy/docs/ssb/v71n4/v71n4p1.html
I don't see that from data provided. Please explain.

What saddens me is the % of people eligible for DI benefits prior to age 62 rising rapidly. Hard to believe so many more with issues at younger ages with medical care advances.
Please read the paragraphs and refer to the charts numbered 3 and 4.
I do not think there is any coincidence between the 90+% of people that have little or no retirement savings and the 90+% of people that file for early SS.
It should be no surprise that a vast majority of folks have very little invested funds when they stop working and that as a result a vast majority of folks must file for SS immediately at that time - it is fairly easy to look up these stats

smitcat
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Re: Stats on When People Take Social Security

Post by smitcat » Sun Jan 28, 2018 10:29 am

Here is a cut and paste of a another current Bogle post which may ass some insights....

I believe the amounts of money available to retired couples have always been lower than generally thought of on this site.
The numbers are lower for all sources of income in retirement than I would have thought....

Households Aged 55-64
$62,802 median
$89,986 mean
Households Aged 65-74:
$47,432
$68,905
Households Aged 75 and Older:
$30,635
$45,989


Where Does Most Retirement Income Come From?
According to the Pension Rights Center, older adults get retirement income from the following sources:

Social Security: 85 percent of people 65 and older get Social Security. The average Social Security income in 2017 will be $1,360, according to a fact sheet from the Social Security Administration.

Assets: Sixty-three percent of retirees rely on assets for retirement income. According to Retirement USA, “the median amount of asset income for households where either the householder or spouse was aged 65 or older was $1,542 for those households who received any asset income. In 2008 59 percent of older households had income from assets.”

Pensions: A mere 32 percent of today’s retirees have pensions and this number is trending further downward.

Earnings: 23 percent of older Americans have work income. According to the AARP, the median retirement income earned by retirees from work is $25,000 a year. Note, this is the highest amount of any income source.

Public Assistance or Veteran’s Benefits: About 7 percent of retirees are getting help from government source

Here is a link to the article....
https://www.newretirement.com/retiremen ... come-2017/

gerntz
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Re: Stats on When People Take Social Security

Post by gerntz » Sun Jan 28, 2018 10:31 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/
Sure. If expectancy went back to about 65 years as when SS started, the future financing issues would pretty well self-correct.

gerntz
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Re: Stats on When People Take Social Security

Post by gerntz » Sun Jan 28, 2018 10:39 am

smitcat wrote:
Sun Jan 28, 2018 10:28 am
gerntz wrote:
Sun Jan 28, 2018 10:16 am
smitcat wrote:
Mon Jan 15, 2018 11:38 am
From this chart it looks like the vast majority file when they stop working, so if they stop at 62 they file at 62 and if they stop at 65 they file at 65....

https://www.ssa.gov/policy/docs/ssb/v71n4/v71n4p1.html
I don't see that from data provided. Please explain.

What saddens me is the % of people eligible for DI benefits prior to age 62 rising rapidly. Hard to believe so many more with issues at younger ages with medical care advances.
Please read the paragraphs and refer to the charts numbered 3 and 4.
I do not think there is any coincidence between the 90+% of people that have little or no retirement savings and the 90+% of people that file for early SS.
It should be no surprise that a vast majority of folks have very little invested funds when they stop working and that as a result a vast majority of folks must file for SS immediately at that time - it is fairly easy to look up these stats
Those charts are for people 76 & older today, not today's 62-70 population.

smitcat
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Re: Stats on When People Take Social Security

Post by smitcat » Sun Jan 28, 2018 10:40 am

Big Dog wrote:
Sun Jan 28, 2018 10:25 am
The only logical reason to defer to 70 for both of us....But I hardly think that a max difference of maybe $18K per year future dollars, the best case if I live into my 80's is going to matter.
In addition to Mike Piper's book, also suggest that y'all read Wade Phau's book on retirement. The first few chapters are enlightening particularly about longevity.

But to your point: don't forget, that the odds are increasing that one of a married couple will make it into the 90's.......

So, to the me, the "only logical reason" to wait until 70 is longevity. If your health is good and you have good family genes, the odds are good that you will beat the breakeven at age ~82. Absent that, you take the money early bcos you need it to live on.
When you play a bit with the various calculators such as...
Bedrockcapital - for SS optimization
IORP - for overall SS/Roth/retire accounts savings
RPM- for overall SS/Roth/Retire accounts savings

You end up testing many possibilities that include the opportunities and problems that these variables can cause to your static plans:
- When to take SS
- Various portfolio income models
- Ages of demise
- Tax affect of SS/Roth/account increases over time
- Tax issues when one spouse has passed
So playinmg with them a bit it becomes clear that what you can spend is variable by what you do earlier on and how it if affectied by all of these potential variables.

With that said I find that there are other 'logical reasons' to wait till 70 to take SS.
- You have optimzied both spouses SS (one may wait till 70 the other goes earlier)
- Your plan includes a variation in ages with eash spouse
- Your plan takes into account the possibility of one spouse living much longer than the other (income and taxes)
- Your plan includes the ability to Roth convert and you optimize the space available
- Your taxes favor a later SS claim
- Your portfolio strategy is best when you have a larger SS floor later on
- An heir or inhertiance is enhanced by later SS

Allan
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Re: Stats on When People Take Social Security

Post by Allan » Sun Jan 28, 2018 10:41 am

I wonder if a lot of people plan to wait until 70, but when they reach full retirement age it is just too enticing to not receive what might feel like "free" money. I have always planned on waiting, I don't need the money and I like the 8% per annual increase in benefits. But as someone about to turn 67, it is tempting! I could receive over $32,000 a year, for just signing up. One thing that helps me delay, other than the 8% annual increase, is that I am able to receive spousal benefits of $13,000 a year based on my wife's benefits, so by signing up now I not only lose the 8% a year in increased benefits but the delta is only $19,000 based on what I could receive and what I am now receiving. And of course by waiting, if I die before my wife does she would receive my increased benefits (I think!).

Allan

smitcat
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Re: Stats on When People Take Social Security

Post by smitcat » Sun Jan 28, 2018 10:44 am

gerntz wrote:
Sun Jan 28, 2018 10:39 am
smitcat wrote:
Sun Jan 28, 2018 10:28 am
gerntz wrote:
Sun Jan 28, 2018 10:16 am
smitcat wrote:
Mon Jan 15, 2018 11:38 am
From this chart it looks like the vast majority file when they stop working, so if they stop at 62 they file at 62 and if they stop at 65 they file at 65....

https://www.ssa.gov/policy/docs/ssb/v71n4/v71n4p1.html
I don't see that from data provided. Please explain.

What saddens me is the % of people eligible for DI benefits prior to age 62 rising rapidly. Hard to believe so many more with issues at younger ages with medical care advances.
Please read the paragraphs and refer to the charts numbered 3 and 4.
I do not think there is any coincidence between the 90+% of people that have little or no retirement savings and the 90+% of people that file for early SS.
It should be no surprise that a vast majority of folks have very little invested funds when they stop working and that as a result a vast majority of folks must file for SS immediately at that time - it is fairly easy to look up these stats
Those charts are for people 76 & older today, not today's 62-70 population.
Historical patterns have been consistent - cannot get much of a current 62 year old delaying % until they themselves reach 70.
Please see the additional post above about how much the average and mean retired family have in their spending budget and where it is sourced.

gerntz
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Re: Stats on When People Take Social Security

Post by gerntz » Sun Jan 28, 2018 10:52 am

smitcat wrote:
Sun Jan 28, 2018 10:44 am

Historical patterns have been consistent - cannot get much of a current 62 year old delaying % until they themselves reach 70.
Please see the additional post above about how much the average and mean retired family have in their spending budget and where it is sourced.
Thanks, but looks to me the article is no longer available - if I'm looking in right place.

smitcat
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Re: Stats on When People Take Social Security

Post by smitcat » Sun Jan 28, 2018 11:02 am

gerntz wrote:
Sun Jan 28, 2018 10:52 am
smitcat wrote:
Sun Jan 28, 2018 10:44 am

Historical patterns have been consistent - cannot get much of a current 62 year old delaying % until they themselves reach 70.
Please see the additional post above about how much the average and mean retired family have in their spending budget and where it is sourced.
Thanks, but looks to me the article is no longer available - if I'm looking in right place.

There are dozens of articles that you can search out about these topics , here are a couple not necessarily the best for whatever use you may have.....

https://www.newretirement.com/retiremen ... come-2017/

https://www.fool.com/retirement/general ... ocial.aspx

smitcat
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Re: Stats on When People Take Social Security

Post by smitcat » Sun Jan 28, 2018 11:05 am

Allan wrote:
Sun Jan 28, 2018 10:41 am
I wonder if a lot of people plan to wait until 70, but when they reach full retirement age it is just too enticing to not receive what might feel like "free" money. I have always planned on waiting, I don't need the money and I like the 8% per annual increase in benefits. But as someone about to turn 67, it is tempting! I could receive over $32,000 a year, for just signing up. One thing that helps me delay, other than the 8% annual increase, is that I am able to receive spousal benefits of $13,000 a year based on my wife's benefits, so by signing up now I not only lose the 8% a year in increased benefits but the delta is only $19,000 based on what I could receive and what I am now receiving. And of course by waiting, if I die before my wife does she would receive my increased benefits (I think!).

Allan
I find that if you have a plan that is supported by your goals and the outputs of the calculators above then the choices become a result of the facts and the plan not affected by 'enticement'.
We will revisit the plan each year to prove out our best choices to follow with our inputs.

SGM
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Re: Stats on When People Take Social Security

Post by SGM » Sun Jan 28, 2018 12:02 pm

I made my decision to delay some time ago and essentially for the longevity insurance for my spouse. I retired at 66 and will take SS at 70. My delay meant foregoing $115,200 of the 4 years of SS security payments. My yearly increase will be $9,216 by taking it at age 70 instead of 66. If I had $230,400 in additional savings and withdrew 4% at age 70 that would be equal to a $9,216 initial withdrawal.

If I took a joint survivor annuity with $115,200 today and received my first payment in 4 years the monthly payment would have been $653 for a yearly increase of only $7836. And that annuity would not have a cola. The numbers were similar when I checked it at age 66.

Having that higher SS payment for hopefully many years will lower my need to withdraw from a portfolio leaving a larger inheritance. While delaying my SS my portfolio has grown by leaps and bounds and i have not just been scraping by.

Ron
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Re: Stats on When People Take Social Security

Post by Ron » Sun Jan 28, 2018 3:56 pm

All I know is that this is no longer a decision for me.

I receive my first age-70 SS deposit --- Tomorrow! :oops:

May everybody be happy with their own decision (I know I am...)

- Ron

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Electron
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Re: Stats on When People Take Social Security

Post by Electron » Tue Feb 06, 2018 2:37 pm

I also waited until age 70 and believe it was the right decision for me. One factor is the fact that expenditures are often quite a bit higher later in retirement. Note also that inflation adjustments would be applied to a larger amount. Taking Social Security early and investing could do well but it is difficult to project any investment return. We've had periods such as 1966-1982 where returns were low and inflation was also high during that period. If I were to invest one possibility might be Municipal bonds held to maturity. The investment and tax analysis can be very complicated whether taking the benefit early or late.

Here is an interesting history showing Social Security Cost of Living Adjustments going back to 1975.

https://www.ssa.gov/oact/cola/colaseries.html
Electron

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Lancelot
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Re: Stats on When People Take Social Security

Post by Lancelot » Thu Jun 14, 2018 6:42 pm

jharkin wrote:
Mon Jan 15, 2018 9:57 am
Its not just that most people dont understand it.. The vast majority of the population has no other savings and if they are not still working full time, HAVE to take it early to survive.

Both my and my wife's parents all took it early, in spite of my many attempts to explain to them why it was beneficial to wait. And they all worked past the age they started drawing.

The old saying "You can lead a horse to water....."
I agree. Many folks are on automatic and take the money at 62. There are good reasons to file early, but it depends on each person's specific circumstances.
No Where for Very Long...

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