Time to look at SS [When should I take Social Security?]

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hulburt1
Posts: 331
Joined: Tue Jul 15, 2014 9:17 pm

Time to look at SS [When should I take Social Security?]

Post by hulburt1 » Tue Sep 04, 2018 9:55 am

I'm 66 next year. I do not need the money but I'm thinking it's time to take SS. I'll get 1500 if wait 2000 a month 70.
Wife is 62 will get 2500 at 70. Should I take my SS. and if she dies I would get her 2500 at 70? I'm moving $40000 a year to Roth. I could put more in Roth If used SS to live off of now. I have 1.3m and only use up about 36000 a year. So take now if wait it only increases my yearly income by 6000. I make that much in a month from the stock market.

PFInterest
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Re: Time to look at SS

Post by PFInterest » Tue Sep 04, 2018 9:55 am

hulburt1 wrote:
Tue Sep 04, 2018 9:55 am
I'm 66 next year. I do not need the money but I'm thinking it's time to take SS. I'll get 1500 if wait 2000 a month 70.
Wife is 62 will get 2500 at 70. Should I take my SS. and if she dies I would get her 2500 at 70? I'm moving $40000 a year to Roth. I could put more in Roth If used SS to live off of now. I have 1.3m and only use up about 36000 a year. So take now if wait it only increases my yearly income by 6000. I make that much in a month from the stock market.
you are the perfect example of NOT taking SS at 66.

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jeffyscott
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Re: Time to look at SS

Post by jeffyscott » Tue Sep 04, 2018 10:44 am

hulburt1 wrote:
Tue Sep 04, 2018 9:55 am
I'm 66 next year. I do not need the money but I'm thinking it's time to take SS. I'll get 1500 if wait 2000 a month 70.
Wife is 62 will get 2500 at 70.
My understanding is it usually makes sense for the lower earning spouse to take it at 62, because the lower benefit will end and higher benefit will continue when there is one surviving spouse. Or does the higher earning spouse being younger change that rule of thumb?
press on, regardless - John C. Bogle

rkhusky
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Re: Time to look at SS

Post by rkhusky » Tue Sep 04, 2018 10:53 am

The OP might want to look at this recent thread showing some of the pitfalls with the taxation of SS:
viewtopic.php?f=10&t=258064

Beehave
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Re: Time to look at SS

Post by Beehave » Tue Sep 04, 2018 12:56 pm

At age 66 there's a bump in the benefit of waiting. If you don't want to wait until 70, I'd suggest considering age 67.5 or 68 or so for claiming.
This is income for life with inflation protection that is taxed lower than regular income. Even if not absolutely maxing it out by waiting until 70, there's very good reason to delay to about 68 if you can afford to. In the case of OP, strongly also suggest spouse waiting until 70 if possible.

Best wishes.

Jeff Albertson
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Re: Time to look at SS

Post by Jeff Albertson » Tue Sep 04, 2018 2:12 pm

Each year that you delay receiving it past age 62 increases your payout by an average of 7.32% per year.

https://www.amazon.com/Ages-Investor-Cr ... n+investor

delamer
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Re: Time to look at SS

Post by delamer » Tue Sep 04, 2018 3:14 pm

jeffyscott wrote:
Tue Sep 04, 2018 10:44 am
hulburt1 wrote:
Tue Sep 04, 2018 9:55 am
I'm 66 next year. I do not need the money but I'm thinking it's time to take SS. I'll get 1500 if wait 2000 a month 70.
Wife is 62 will get 2500 at 70.
My understanding is it usually makes sense for the lower earning spouse to take it at 62, because the lower benefit will end and higher benefit will continue when there is one surviving spouse. Or does the higher earning spouse being younger change that rule of thumb?
Good question regarding the spouse with the larger benefit being younger — this is my situation.

JoeRetire
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Re: Time to look at SS

Post by JoeRetire » Tue Sep 04, 2018 3:23 pm

hulburt1 wrote:
Tue Sep 04, 2018 9:55 am
I'm 66 next year. I do not need the money but I'm thinking it's time to take SS. I'll get 1500 if wait 2000 a month 70.
Wife is 62 will get 2500 at 70. Should I take my SS. and if she dies I would get her 2500 at 70? I'm moving $40000 a year to Roth. I could put more in Roth If used SS to live off of now. I have 1.3m and only use up about 36000 a year. So take now if wait it only increases my yearly income by 6000. I make that much in a month from the stock market.
Is your wife still working? It matters.

Consider checking out https://opensocialsecurity.com/
Remember to play around with the Advanced Options. And consider selecting "Assumed age at death" if you don't think your longevity and that of your wife are "average".

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dm200
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Re: Time to look at SS

Post by dm200 » Tue Sep 04, 2018 3:33 pm

hulburt1 wrote:
Tue Sep 04, 2018 9:55 am
I'm 66 next year. I do not need the money but I'm thinking it's time to take SS. I'll get 1500 if wait 2000 a month 70.
Wife is 62 will get 2500 at 70. Should I take my SS. and if she dies I would get her 2500 at 70? I'm moving $40000 a year to Roth. I could put more in Roth If used SS to live off of now. I have 1.3m and only use up about 36000 a year. So take now if wait it only increases my yearly income by 6000. I make that much in a month from the stock market.
In your situation, I would wait to age 70.

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One Ping
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Re: Time to look at SS

Post by One Ping » Tue Sep 04, 2018 3:57 pm

hulburt1 wrote:
Tue Sep 04, 2018 9:55 am
I'm 66 next year. I do not need the money but I'm thinking it's time to take SS. I'll get 1500 if wait 2000 a month 70.
Wife is 62 will get 2500 at 70. Should I take my SS. and if she dies I would get her 2500 at 70? I'm moving $40000 a year to Roth. I could put more in Roth If used SS to live off of now. I have 1.3m and only use up about 36000 a year. So take now if wait it only increases my yearly income by 6000. I make that much in a month from the stock market.
JoeRetire wrote:
Tue Sep 04, 2018 3:23 pm
Consider checking out https://opensocialsecurity.com/
dm200 wrote:
Tue Sep 04, 2018 3:33 pm
In your situation, I would wait to age 70.
https://opensocialsecurity.com/ seems to think the same thing.

Male birthday 6/15/1953
PIA 1500
Female birthday 6/15/1956
PIA 1894 (i.e., 2500/1.32)
opensocialsecurity wrote: Recommended Strategy

The strategy that maximizes the total dollars you can be expected to spend over your lifetimes is as follows:

Your spouse files for her retirement benefit to begin 9/2018 (i.e., now), at age 62 and 3 months.
You file for your spousal benefit to begin 6/2019, at age 66 and 0 months.
You file for your retirement benefit to begin 6/2023, at age 70 and 0 months.
Detailed numbers may be different, but likely wouldn't change the recommended strategy much.

One Ping
"Re-verify our range to target ... one ping only."

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Johnnie
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Re: Time to look at SS

Post by Johnnie » Tue Sep 04, 2018 4:14 pm

Ironically enough, on the same day you post this another Hulbert (Hulbert 2?) has this article about a new study up on Marketwatch:

Why people who claim Social Security early often live to regret it

It's not directly on point for your your purposes but you'll probably want to take a peek anyway. (Like many here I have great respect for Mark Hulbert and never miss his stuff.)

Good luck!
"I know nothing."

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jeffyscott
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Re: Time to look at SS

Post by jeffyscott » Tue Sep 04, 2018 5:06 pm

delamer wrote:
Tue Sep 04, 2018 3:14 pm
jeffyscott wrote:
Tue Sep 04, 2018 10:44 am
hulburt1 wrote:
Tue Sep 04, 2018 9:55 am
I'm 66 next year. I do not need the money but I'm thinking it's time to take SS. I'll get 1500 if wait 2000 a month 70.
Wife is 62 will get 2500 at 70.
My understanding is it usually makes sense for the lower earning spouse to take it at 62, because the lower benefit will end and higher benefit will continue when there is one surviving spouse. Or does the higher earning spouse being younger change that rule of thumb?
Good question regarding the spouse with the larger benefit being younger — this is my situation.
It appears it does change it, according the link Joe retire gave: https://opensocialsecurity.com/

In my case the older spouse had the higher earnings and it said to claim at 62 and 70, as I had expected. When I left everything the same but reversed the birth dates, it changed the recommendation to about 66 (65 and 10 mo.) and 70.
press on, regardless - John C. Bogle

hulburt1
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Re: Time to look at SS

Post by hulburt1 » Tue Sep 04, 2018 6:30 pm

Thanks..I'm Hulburt not the famous Hulbert.

hulburt1
Posts: 331
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Re: Time to look at SS

Post by hulburt1 » Tue Sep 04, 2018 6:51 pm

I think I put the no. in right. As I read wife take at 62 and I take spouse at 66.

Your Information

Marital statusSingleMarriedDivorcedWidow(er)

GenderMaleFemale

Date of birth123456789101112123456789101112131415161718192021222324252627282930311925192619271928192919301931193219331934193519361937193819391940194119421943194419451946194719481949195019511952195319541955195619571958195919601961196219631964196519661967196819691970197119721973197419751976197719781979198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012201320142015201620172018

PIA
Your primary insurance amount (PIA) is the amount of your monthly retirement benefit, if you file for it at your full retirement age. You can get an estimate of your PIA from your Social Security statement. You can also call the SSA to request that they calculate your PIA, or you can calculate it yourself with the calculator at SocialSecurity.tools or the SSA's "Any PIA" calculator.

Have you already filed for retirement benefits?YesNo

Your Spouse's Information

GenderMaleFemale

Date of birth123456789101112123456789101112131415161718192021222324252627282930311925192619271928192919301931193219331934193519361937193819391940194119421943194419451946194719481949195019511952195319541955195619571958195919601961196219631964196519661967196819691970197119721973197419751976197719781979198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012201320142015201620172018

PIA

Has your spouse already filed for retirement benefits?YesNo

Submit

Recommended Strategy

The strategy that maximizes the total dollars you can be expected to spend over your lifetimes is as follows:
•Your spouse files for his/her retirement benefit to begin 9/2018, at age 62 and 6 months.
•You file for your spousal benefit to begin 4/2019, at age 66 and 0 months.
•You file for your retirement benefit to begin 4/2023, at age 70 and 0 months.

The present value of this proposed solution would be $688,261.

This means that with this strategy you could expect to receive, on average, $688,261 of total Social Security benefits over the course of your lifetime, after adjusting for the fact that a dollar received in the future is worth less than a dollar received today (because the sooner you receive a dollar the sooner you can invest it). See this article for a more thorough explanation of the "present value" concept.

Year-by-Year Benefit Amounts

The following table shows what your year-by-year benefit amounts would be if both people are still alive throughout the year in question. The survivor benefit amounts at the bottom of the table assume that a) the deceased person lived at least until the age at which they planned to file for their retirement benefit and that b) the surviving person waits at least until their full retirement age to file for a survivor benefit.



Year

Your Annual Retirement Benefit

Your Annual Spousal Benefit

Your Annual Survivor Benefit

Your Spouse's Annual Retirement Benefit

Your Spouse's Annual Spousal Benefit

Your Spouse's Annual Survivor Benefit

Total

2018 $0 $0 $0 $6,067 $0 $0 $6,067
2019 $0 $9,000 $0 $18,200 $0 $0 $27,200
2020 $0 $12,000 $0 $18,200 $0 $0 $30,200
2021 $0 $12,000 $0 $18,200 $0 $0 $30,200
2022 $0 $12,000 $0 $18,200 $0 $0 $30,200
2023 $17,820 $3,000 $0 $18,200 $0 $0 $39,020
2024 $23,760 $0 $0 $18,200 $0 $0 $41,960
2025 $23,760 $0 $0 $18,200 $0 $0 $41,960
2026 $23,760 $0 $0 $18,200 $0 $0 $41,960
2027 and beyond $23,760 $0 $0 $18,200 $0 $0 $41,960
If you outlive your spouse $23,760 $0 $0 $0 $0 $0 $23,760
If your spouse outlives you $0 $0 $0 $18,200 $0 $5,560 $23,760

JoeRetire
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Re: Time to look at SS

Post by JoeRetire » Wed Sep 05, 2018 6:48 am

One Ping wrote:
Tue Sep 04, 2018 3:57 pm
hulburt1 wrote:
Tue Sep 04, 2018 9:55 am
I'm 66 next year. I do not need the money but I'm thinking it's time to take SS. I'll get 1500 if wait 2000 a month 70.
Wife is 62 will get 2500 at 70. Should I take my SS. and if she dies I would get her 2500 at 70? I'm moving $40000 a year to Roth. I could put more in Roth If used SS to live off of now. I have 1.3m and only use up about 36000 a year. So take now if wait it only increases my yearly income by 6000. I make that much in a month from the stock market.
JoeRetire wrote:
Tue Sep 04, 2018 3:23 pm
Consider checking out https://opensocialsecurity.com/
dm200 wrote:
Tue Sep 04, 2018 3:33 pm
In your situation, I would wait to age 70.
https://opensocialsecurity.com/ seems to think the same thing.

Male birthday 6/15/1953
PIA 1500
Female birthday 6/15/1956
PIA 1894 (i.e., 2500/1.32)
opensocialsecurity wrote: Recommended Strategy

The strategy that maximizes the total dollars you can be expected to spend over your lifetimes is as follows:

Your spouse files for her retirement benefit to begin 9/2018 (i.e., now), at age 62 and 3 months.
You file for your spousal benefit to begin 6/2019, at age 66 and 0 months.
You file for your retirement benefit to begin 6/2023, at age 70 and 0 months.
Detailed numbers may be different, but likely wouldn't change the recommended strategy much.

One Ping
What did you use for an expected age of death for both individual and spouse? Or did you just take the default?

Bacchus01
Posts: 1935
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Re: Time to look at SS

Post by Bacchus01 » Wed Sep 05, 2018 7:08 am

My wife is 5 years older and much lower earnings. The calculators generally show to take hers first and earlier. We will probably take hers at 62. Then 13 years later we both draw on mine.

I don’t believe I can draw on hers at all.

JoeRetire
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Re: Time to look at SS

Post by JoeRetire » Wed Sep 05, 2018 7:29 am

Bacchus01 wrote:
Wed Sep 05, 2018 7:08 am
My wife is 5 years older and much lower earnings. The calculators generally show to take hers first and earlier. We will probably take hers at 62. Then 13 years later we both draw on mine.
Are you sure you can "both draw on mine"?

JW-Retired
Posts: 6957
Joined: Sun Dec 16, 2007 12:25 pm

Re: Time to look at SS

Post by JW-Retired » Wed Sep 05, 2018 7:29 am

We aim to pay no more taxes then we must. Counting state taxes, all our other income in retirement is taxed at a rate about half again higher than Social Security is. As soon as I understood how SS works and we realized that would happen, it was obvious to delay SS as long as possible.

Thank you sscritic for enlightening us about SS!
JW
Retired at Last

Bacchus01
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Re: Time to look at SS

Post by Bacchus01 » Wed Sep 05, 2018 7:33 am

JoeRetire wrote:
Wed Sep 05, 2018 7:29 am
Bacchus01 wrote:
Wed Sep 05, 2018 7:08 am
My wife is 5 years older and much lower earnings. The calculators generally show to take hers first and earlier. We will probably take hers at 62. Then 13 years later we both draw on mine.
Are you sure you can "both draw on mine"?
Yes. Why wouldn’t we?

CurlyDave
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Re: Time to look at SS

Post by CurlyDave » Wed Sep 05, 2018 7:35 am

I am now 73. I took SS at 62 and have never regretted it for a second.

For 11 years I have spent Uncle's money while my own portfolio has grown at a lot more than 8%.

Either use a calculator that takes time value of money into account, or build your own Excel spreadsheet that does it. It takes a few hours to think out how to do this, but it is very worthwhile. If the CAGR of your portfolio exceeds 8% there is no break even age. You could live to 150 and not break even. As a practical matter if your portfolio CAGR is greater than about 5% you are better off claiming early.

Just to put icing on the cake, read the SS Trustees' report, which you can get from their website. Somewhere in the 2033-34 time frame the SS Trust Fund runs out of money and, if there are no changes in the law, benefits will be reduced to about 75% of what they are now. That is not the "indefinite future". It is well within the expected lifetime of anyone who has not yet claimed SS.

Discussion of how the law may change is a forbidden topic, but under current law SS does not represent any kind of longevity insurance at all.

Real longevity insurance is achieved by having a nice plump portfolio of your own. The sooner you start spending someone else's money and saving your own, the better off you are going to be...

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One Ping
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Re: Time to look at SS

Post by One Ping » Wed Sep 05, 2018 11:26 am

JoeRetire wrote:
Wed Sep 05, 2018 6:48 am
One Ping wrote:
Tue Sep 04, 2018 3:57 pm
hulburt1 wrote:
Tue Sep 04, 2018 9:55 am
I'm 66 next year. I do not need the money but I'm thinking it's time to take SS. I'll get 1500 if wait 2000 a month 70.
Wife is 62 will get 2500 at 70. Should I take my SS. and if she dies I would get her 2500 at 70? I'm moving $40000 a year to Roth. I could put more in Roth If used SS to live off of now. I have 1.3m and only use up about 36000 a year. So take now if wait it only increases my yearly income by 6000. I make that much in a month from the stock market.
JoeRetire wrote:
Tue Sep 04, 2018 3:23 pm
Consider checking out https://opensocialsecurity.com/
dm200 wrote:
Tue Sep 04, 2018 3:33 pm
In your situation, I would wait to age 70.
https://opensocialsecurity.com/ seems to think the same thing.

Male birthday 6/15/1953
PIA 1500
Female birthday 6/15/1956
PIA 1894 (i.e., 2500/1.32)
opensocialsecurity wrote: Recommended Strategy

The strategy that maximizes the total dollars you can be expected to spend over your lifetimes is as follows:

Your spouse files for her retirement benefit to begin 9/2018 (i.e., now), at age 62 and 3 months.
You file for your spousal benefit to begin 6/2019, at age 66 and 0 months.
You file for your retirement benefit to begin 6/2023, at age 70 and 0 months.
Detailed numbers may be different, but likely wouldn't change the recommended strategy much.

One Ping
What did you use for an expected age of death for both individual and spouse? Or did you just take the default?
I generally use the default 'mortality weighting' and discount rate (see below from the opensocialsecurity "About" page). For me it's a good way to avoid the trying to guess when you die problem. The inputs I used were guesses based on what was said in the OP. They are surely wrong in detail, but probably close enough to get the general gist of who should claim what benefit in which order and roughly when. The details may change the timing, but probably not the strategy.
opensocialsecurity wrote: How does the calculator work?

For those just seeking a summary explanation, let's consider the simplest example scenario: an unmarried person, using the calculator prior to age 62. For such a person, the calculator:

1. First assumes they file as early as possible, at 62.
2. Calculates the amount of their monthly retirement benefit under such assumption.
3. For each year up to age 115, the calculator multiplies the annual retirement benefit by the user's probability of being alive in such year, to arrive at a probability-weighted annual benefit.
4.That probability-weighted benefit is then discounted back to age-62 value using the discount rate the user provided as input (i.e., to account for the fact that a dollar today can be invested and is therefore worth more than even an inflation-adjusted dollar in the future).
5. All of those probability-weighted, discounted benefit amounts are summed, to arrive at a total "present value" for the assumed claiming strategy (e.g., claiming ASAP at 62).
6. The above process is repeated for each possible claiming age (i.e., every month between 62 and 70).
7. The claiming age that had the highest present value is then suggested to the user, and the present value associated with such claiming age is provided as well.

If the person is older than 62 when using the calculator, claiming strategies that are no longer possible (i.e., filing in the past) are eliminated from the analysis.

For a married couple, it's the same sort of process, but with more going on. Specifically:

1. In addition to retirement benefits, spousal benefits and survivor benefits are included in the analysis.
2. Probability weighting the various benefits each period involves separate calculations for "probability only Spouse A is alive", "probability only Spouse B is alive", and "probability both spouses are still alive."
3. Each combination of possible claiming ages must be considered, for both spouses, and for both types of benefits (i.e., retirement and spousal).
One Ping
"Re-verify our range to target ... one ping only."

bradpevans
Posts: 337
Joined: Sun Apr 08, 2018 1:09 pm

Re: Time to look at SS

Post by bradpevans » Wed Sep 05, 2018 12:01 pm

CurlyDave wrote:
Wed Sep 05, 2018 7:35 am
I am now 73. I took SS at 62 and have never regretted it for a second.

For 11 years I have spent Uncle's money while my own portfolio has grown at a lot more than 8%.

Either use a calculator that takes time value of money into account, or build your own Excel spreadsheet that does it. It takes a few hours to think out how to do this, but it is very worthwhile. If the CAGR of your portfolio exceeds 8% there is no break even age. You could live to 150 and not break even. As a practical matter if your portfolio CAGR is greater than about 5% you are better off claiming early.

Just to put icing on the cake, read the SS Trustees' report, which you can get from their website. Somewhere in the 2033-34 time frame the SS Trust Fund runs out of money and, if there are no changes in the law, benefits will be reduced to about 75% of what they are now. That is not the "indefinite future". It is well within the expected lifetime of anyone who has not yet claimed SS.

Discussion of how the law may change is a forbidden topic, but under current law SS does not represent any kind of longevity insurance at all.

Real longevity insurance is achieved by having a nice plump portfolio of your own. The sooner you start spending someone else's money and saving your own, the better off you are going to be...
[OT comment removed by admin LadyGeek]

But had you started the same choices in 2005 +/-, you might not have faired as well.

When people say longevity insurance, i take that to mean the checks keep coming so long as I'm alive.
With your own money, a safe and sustainable withdrawl rate enters the picture.

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Peter Foley
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Location: Lake Wobegon

Re: Time to look at SS

Post by Peter Foley » Wed Sep 05, 2018 12:09 pm

One consideration that does not often come up in these discussions is one's birthday.

If you have a birthday late in the year and are doing Roth conversions, it may be to your advantage taxwise to wait until the next year. This is especially true if you are in one of the income windows where SS Benefits are taxed at a high marginal rate.

JoeRetire
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Re: Time to look at SS

Post by JoeRetire » Wed Sep 05, 2018 1:47 pm

One Ping wrote:
Wed Sep 05, 2018 11:26 am
I generally use the default 'mortality weighting' and discount rate (see below from the opensocialsecurity "About" page). For me it's a good way to avoid the trying to guess when you die problem. The inputs I used were guesses based on what was said in the OP. They are surely wrong in detail, but probably close enough to get the general gist of who should claim what benefit in which order and roughly when. The details may change the timing, but probably not the strategy.
The age at death is one detail which could easily change the strategy.

The default mortality table is reasonable if you don't have any sense of family longevity. But it covers such a wide range of folks, that many of us here would skew to an older age at death IMHO.

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jeffyscott
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Re: Time to look at SS

Post by jeffyscott » Wed Sep 05, 2018 2:16 pm

JoeRetire wrote:
Wed Sep 05, 2018 1:47 pm
One Ping wrote:
Wed Sep 05, 2018 11:26 am
I generally use the default 'mortality weighting' and discount rate (see below from the opensocialsecurity "About" page). For me it's a good way to avoid the trying to guess when you die problem. The inputs I used were guesses based on what was said in the OP. They are surely wrong in detail, but probably close enough to get the general gist of who should claim what benefit in which order and roughly when. The details may change the timing, but probably not the strategy.
The age at death is one detail which could easily change the strategy.

The default mortality table is reasonable if you don't have any sense of family longevity. But it covers such a wide range of folks, that many of us here would skew to an older age at death IMHO.
At least for me, using the alternative longer life expectancy factors (non-smoker preferred or super-preferred) at https://opensocialsecurity.com/ did not change the suggested strategy of younger, lower earning spouse claiming at 62 and older, higher earning at 70.

I also tried discount rates up to 2% real with no change.

The expected benefit cut of 23% in 2034 also did not change the strategy. Had to increase the cut to 30% and use a 2% real discount rate to move the age 70 recommendation by a few months (eg. using SS life expectancy table, 2% real discount rate, and 30% cut in 2034 moved it from 70 to 69 years, 4 months).

So the recommendations, for my situation anyway, seem to be pretty insensitive to changes in assumptions.
press on, regardless - John C. Bogle

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David Jay
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Re: Time to look at SS

Post by David Jay » Wed Sep 05, 2018 2:45 pm

Bacchus01 wrote:
Wed Sep 05, 2018 7:33 am
JoeRetire wrote:
Wed Sep 05, 2018 7:29 am
Bacchus01 wrote:
Wed Sep 05, 2018 7:08 am
My wife is 5 years older and much lower earnings. The calculators generally show to take hers first and earlier. We will probably take hers at 62. Then 13 years later we both draw on mine.
Are you sure you can "both draw on mine"?
Yes. Why wouldn’t we?
I'm not sure where Joe is thinking, but you are correct.

When you retire you receive your age 70 benefit, your spouse begins to receive 50% of your PIA, less her early filing offset (dollar-for-dollar, not percentage). But she gets 5 years of benefits which more than compensates for the (small) reduction in spousal from her filing before FRA.

We are doing something similar, but she is waiting until I retire from work (her age 63) to file.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

JoeRetire
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Joined: Tue Jan 16, 2018 2:44 pm

Re: Time to look at SS

Post by JoeRetire » Wed Sep 05, 2018 2:54 pm

jeffyscott wrote:
Wed Sep 05, 2018 2:16 pm
At least for me, using the alternative longer life expectancy factors (non-smoker preferred or super-preferred) at https://opensocialsecurity.com/ did not change the suggested strategy of younger, lower earning spouse claiming at 62 and older, higher earning at 70.
The life expectancy tables aren't very different from one another, so it's not a surprise that you don't see a difference.

Try selecting "Assumed age at death" from the Mortality table dropdown list. And then select an age like 90 or 95 (as I do) for the primary and spouse.
You may well see a change in strategy.

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Re: Time to look at SS

Post by JoeRetire » Wed Sep 05, 2018 2:56 pm

David Jay wrote:
Wed Sep 05, 2018 2:45 pm
Bacchus01 wrote:
Wed Sep 05, 2018 7:33 am
JoeRetire wrote:
Wed Sep 05, 2018 7:29 am
Bacchus01 wrote:
Wed Sep 05, 2018 7:08 am
My wife is 5 years older and much lower earnings. The calculators generally show to take hers first and earlier. We will probably take hers at 62. Then 13 years later we both draw on mine.
Are you sure you can "both draw on mine"?
Yes. Why wouldn’t we?
I'm not sure where Joe is thinking, but you are correct.
Joe wasn't thinking correctly at the time and I should have gone back and deleted the post while I had time. But I got distracted.

Sorry for the confusion - you are correct. My apologies! I try hard not to confuse or derail a thread where people are trying to learn. I don't always succeed.

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Re: Time to look at SS

Post by jeffyscott » Wed Sep 05, 2018 3:45 pm

JoeRetire wrote:
Wed Sep 05, 2018 2:54 pm
jeffyscott wrote:
Wed Sep 05, 2018 2:16 pm
At least for me, using the alternative longer life expectancy factors (non-smoker preferred or super-preferred) at https://opensocialsecurity.com/ did not change the suggested strategy of younger, lower earning spouse claiming at 62 and older, higher earning at 70.
The life expectancy tables aren't very different from one another, so it's not a surprise that you don't see a difference.

Try selecting "Assumed age at death" from the Mortality table dropdown list. And then select an age like 90 or 95 (as I do) for the primary and spouse.
You may well see a change in strategy.
Yep, dual 90s with the remaining left at default assumptions does it, makes it about 70 for both. I'd not be willing to base our strategy on something with such low odds occurring (maybe 4-5%?), though. We will be pretty certain to have more than enough, regardless of when we claim and with that, the 62/70 strategy seems likely to be the one that makes the most sense.

If anything, I'd be inclined to claim earlier, that way I am guaranteed of one win. Either I come out ahead, financially, by dying early or I get to live a longer life while still having enough :beer .
press on, regardless - John C. Bogle

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Re: Time to look at SS [When should I take Social Security?]

Post by LadyGeek » Wed Sep 05, 2018 3:51 pm

This thread is now in the Personal Finance (Not Investing) forum (Social Security). I also retitled the thread.

I removed an off-topic comment and one post which challenged the legality of Social Security as an entitlement.

Please stay on-topic, which is helping the OP decide when to take Social Security.
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Re: Time to look at SS

Post by JoeRetire » Wed Sep 05, 2018 3:53 pm

jeffyscott wrote:
Wed Sep 05, 2018 3:45 pm
Yep, dual 90s with the remaining left at default assumptions does it, makes it about 70 for both. I'd not be willing to base our strategy on something with such low odds occurring (maybe 4-5%?), though.
Fair enough.

Some of us expect a longer life than others. And some of us aren't playing the odds as much as insuring against longevity.
If anything, I'd be inclined to claim earlier, that way I am guaranteed of one win. Either I come out ahead, financially, by dying early or I get to live a longer life while still having enough :beer .
I don't see the one guaranteed win. For me, dying early while claiming early means a negative impact to my surviving wife. I want to do everything I can to ensure she is in the best possible shape should I predecease her.

We'll be okay either way, but I believe we'll be better by delaying.

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Re: Time to look at SS

Post by jeffyscott » Wed Sep 05, 2018 4:28 pm

JoeRetire wrote:
Wed Sep 05, 2018 3:53 pm
I don't see the one guaranteed win. For me, dying early while claiming early means a negative impact to my surviving wife.
Good point. Even with my death at 71, it still gives 62/70 as the optimum, as long as spouse makes it to at least 83-90 (depending on other assumptions used). So, I guess another point in favor of that one, for us anyway.
press on, regardless - John C. Bogle

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Re: Time to look at SS [When should I take Social Security?]

Post by #Cruncher » Wed Sep 05, 2018 7:30 pm

CurlyDave wrote:
Wed Sep 05, 2018 7:35 am
I am now 73. I took SS at 62 and have never regretted it for a second. … If the CAGR of your portfolio exceeds 8% there is no break even age. You could live to 150 and not break even. As a practical matter if your portfolio CAGR is greater than about 5% you are better off claiming early.
I agree that with an 8% real growth rate one will be better off claiming early regardless of longevity. But it's less clear, CurlyDave, that one is also better off even with 5%. For example, with 5% real growth someone with a Normal Retirement Age (NRA) of 66 needs to collect only past age 86.0 to warrant delaying to age 64 instead of starting at 62. [1] This is shown in the following table. [2]

Code: Select all

  1  Born            1954
  2  NRA            66.00
  3  Early age         62
  4  Early amount   75.00
Row  Col A          Col B  Col C  Col D  Col E  Col F  Col G  Col H  Col I
  5  Later age         63     64     65     66     67     68     69     70
  6  Later amount   80.00  86.67  93.33 100.00 108.00 116.00 124.00 132.00
  7  Forever Pct    6.67%  7.50%  7.56%  7.46%  7.57%  7.54%  7.45%  7.32%

Code: Select all

                    ---------- Breakeven Age for Claiming Later ----------     
  8  Grows at 0%     78.0   76.9   77.3   78.0   78.4   79.0   79.7   80.5
  9  Grows at 1%     79.3   77.9   78.3   79.1   79.4   80.0   80.8   81.6
 10  Grows at 2%     81.0   79.2   79.6   80.3   80.6   81.2   82.0   82.9
 11  Grows at 3%     83.2   80.8   81.1   82.0   82.2   82.8   83.7   84.6
 12  Grows at 4%     86.4   83.0   83.2   84.2   84.3   84.9   85.8   86.9
 13  Grows at 5%     91.4  [86.0]  86.2   87.3   87.3   87.9   89.0   90.3
 14  Grows at 6%    102.5   91.2   91.1   92.6   92.1   92.9   94.3   96.1
 15  Grows at 7%      N/A  103.6  102.4  105.8  103.4  104.6  107.7  112.9
Notes:
  • Normal (aka Full) Retirement Age (NRA) in row 2 depends on year born as shown on SSA's Effect of Early or Delayed Retirement on Retirement Benefits. The NRA in turn determines what percent of the Primary Insurance Amount (PIA) one will get when claiming at different ages 62 - 70. These are shown in row 4 and row 6.
  • The "Forever Pct" in row 7 is the growth rate such that the present value (PV) from claiming at the later age will never "catch up" with the PV of claiming at the "Early age" regardless of how long benefits continue.
  • The breakeven ages in rows 8 - 15 are the age where, when discounted at the rate in column A, the PV of the benefits from claiming later equal those of claiming early. If benefits continue longer, the PV from claiming later will be greater.
For anyone wishing to see these results for a different NRA or versus a different "Early age", follow these steps:
  • Select All, Copy, and Paste [3] the following at cell A1 of a blank Excel sheet:

    Code: Select all

    Born	1954
    NRA	=MIN(67,66+MAX(0,B1-1954)/6)
    Early age	62
    Early amount	=100*IF(B3<$B2,1-(5/900)*MIN(36,($B2-B3)*12)-(5/1200)*MAX(0,($B2-B3)*12-36),1+(8/1200)*(B3-$B2)*12)
    Later age	63	=B5+1
    Later amount	=100*IF(B$5<$B2,1-(5/900)*MIN(36,($B2-B$5)*12)-(5/1200)*MAX(0,($B2-B$5)*12-36),1+(8/1200)*(B$5-$B2)*12)	=100*IF(C$5<$B2,1-(5/900)*MIN(36,($B2-C$5)*12)-(5/1200)*MAX(0,($B2-C$5)*12-36),1+(8/1200)*(C$5-$B2)*12)
    Forever Pct	=IF(B5=$B3,"n/a",($B4/B6)^(1/($B3-B5))-1)	=IF(C5=$B3,"n/a",($B4/C6)^(1/($B3-C5))-1)
    0	=IF(B$5=$B$3,"n/a",IF($A8=0,B$5+$B$4*(B$5-$B$3)/(B$6-$B$4),$B$3-LN((B$6*(1+$A8)^($B$3-B$5)-$B$4)/(B$6-$B$4))/LN(1+$A8)))	=IF(C$5=$B$3,"n/a",IF($A8=0,C$5+$B$4*(C$5-$B$3)/(C$6-$B$4),$B$3-LN((C$6*(1+$A8)^($B$3-C$5)-$B$4)/(C$6-$B$4))/LN(1+$A8)))
    =A8+0.01	=IF(B$5=$B$3,"n/a",IF($A9=0,B$5+$B$4*(B$5-$B$3)/(B$6-$B$4),$B$3-LN((B$6*(1+$A9)^($B$3-B$5)-$B$4)/(B$6-$B$4))/LN(1+$A9)))	=IF(C$5=$B$3,"n/a",IF($A9=0,C$5+$B$4*(C$5-$B$3)/(C$6-$B$4),$B$3-LN((C$6*(1+$A9)^($B$3-C$5)-$B$4)/(C$6-$B$4))/LN(1+$A9)))
  • Format for readability.
  • Enter year Born, Early age, and first Later age in cells B1, B3, and B5.
  • Copy cells C5:C9 right until age 70 is in row 5.
  • Copy row 9 down as far as desired.
  1. Living to 86 isn't unusual. For example, my longevity estimator with the SSA 1950 Cohort Life Table shows that for a man/woman couple both age 62, the chance of living to age 86 is 37% for the man, 49% for the woman, and 68% for at least one of them.
  2. Apart from adding the "Forever Pct" in row 7, this is the same table as in my post, Re: Investing monthly Social Security payments.
  3. If you have trouble pasting, try "Paste Special" and "Text".

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Re: Time to look at SS [When should I take Social Security?]

Post by Klmaxx » Wed Sep 05, 2018 9:09 pm

There are a lot of unique solutions to the timing of taking social security, however, higher income married couples with normal life expectancies are generally advised for the higher earnings spouse to defer to age 70. The trouble with this advice and the SS calculators which qualify the benefits, is they tend not to take into account taxes in retirement. So for example, the benefit of deferral to age 70 for a 65 year old, who expects to be in a higher tax bracket at age 70, is reduced by higher taxes on the benefits.

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Re: Time to look at SS [When should I take Social Security?]

Post by Zott » Wed Sep 05, 2018 9:55 pm

One fact should be kept in mind regarding the recommendation for the OP from Opensocialsecurity---that, having been born in 1953, he is eligible for a spousal benefit under a restricted application. The program recommmends that he should do that--might be different if he was born after 1953 when that benefit is no longer available.

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Re: Time to look at SS [When should I take Social Security?]

Post by CurlyDave » Thu Sep 06, 2018 12:46 am

#Cruncher wrote:
Wed Sep 05, 2018 7:30 pm
...I agree that with an 8% real growth rate one will be better off claiming early regardless of longevity. But it's less clear, CurlyDave, that one is also better off even with 5%. For example, with 5% real growth someone with a Normal Retirement Age (NRA) of 66 needs to collect only past age 86.0 to warrant delaying to age 64 instead of starting at 62...
I agree your tables show that 5% real growth is right on the edge, and may show a slight benefit to waiting until 64 to claim.

But there are other factors not in the tables:

1. Even the SS Trustees say that 2033 or 2034, is the midnight hour, when Cinderella's coach turns back into a pumpkin and benefits are reduced, under current law and assumptions, to 77% of existing. This is only 15 or 16 years in the future. A person turning 62 and being faced with the choice of when to take SS will be 77 or 78. Multiply the expected payments by 0.77 after 2034 and that break even age stretches out. The situation is even worse for younger people. If one goes back and looks at the historical SS Trustees' reports the trend has been for the Trust Fund depletion date to come closer and closer, although it has recently stabilized.

2. The inflation correction for SS benefits is the Chained CPI, not the same CPI-W usually used to correct nominal for real dollars. It is smaller than the CPI-W.

3. Depending on what article I read the average CAGR of equities has been somewhere between 9.9% and 11% for the past century. Going forward, many famous people have been predicting a lower number, on the order of 5% real. The only problem is that they have been predicting this for 3 or 4 years, while actual results have been much higher. Inflation seems too have stabilized in the 2-3% range which would give a reasonable real CAGR of 3-9%. No help from that crystal ball.

The judgement I made was that the benefit of waiting was small at best, compared to the possible benefit of claiming at the earliest date.

YMMV depending on your risk tolerance, but my main point is that waiting until 70 is not the obvious choice that many make it out to be.

galectin
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Re: Time to look at SS [When should I take Social Security?]

Post by galectin » Thu Sep 06, 2018 2:22 am

First: It is hard to predict what will happen with SS in the next ten years with respect to congressional actions to address the anticipated shortfall in 2033 or so. So, here is what the DW and I did.

I worked until age 67 in April. The DW is the same age, with a bd in July..

When we reached FRA for us at age 66 we claimed the DW as primary and me as spousal. Since I had earned income in 2017 until the middle of May, we claimed SS with me as primary in Jan of 2018 with the DW going to spousal, which was more than her primary benefit.

We had enough in retirement accounts that we could postpone SS until age seventy, but decided to not do so for the following reasons:

1. DW's parents died at ages 58 and 70.

2. My parents died at ages 79 and 80.

3. I was diagnosed with lymphoma (Follicular cell sub-type, which fortunately is one of the more redolent types) at age 63. After one round of chemotherapy about a year after the initial diagnosis, I have just entered my third year of remission (WOO-HOO!!), but consider this a negative factor for longevity.

4. While I won't attempt to predict what the congresscritters will do in the future to make SS more solvent, I feel that taking a lower benefit for a longer period of time will be better than waiting to claim at age 70 to maximize the monthly SS payment.

5. Most importantly, we are fortunate that our current (and anticipated) spending rate is significantly below our SS income plus the anticipated disbursements (at 4 % currently, and RMD levels in 2 years) from our retirement funds. This is due to a combination of us living in a LCOL area, having frugal tastes, and having a reasonably significant amount of funds in our retirement accounts.

Finally, while maximizing benefits and frugality are important things to do, I would encourage my follow retired Bogleheads to take a sober look at your retirement resources, and if they are adequate for your spending rates, don't obsess about trying to top-out your income. Concentrate your neurons on enjoying retirement.

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Re: Time to look at SS

Post by Bacchus01 » Thu Sep 06, 2018 7:33 am

David Jay wrote:
Wed Sep 05, 2018 2:45 pm
Bacchus01 wrote:
Wed Sep 05, 2018 7:33 am
JoeRetire wrote:
Wed Sep 05, 2018 7:29 am
Bacchus01 wrote:
Wed Sep 05, 2018 7:08 am
My wife is 5 years older and much lower earnings. The calculators generally show to take hers first and earlier. We will probably take hers at 62. Then 13 years later we both draw on mine.
Are you sure you can "both draw on mine"?
Yes. Why wouldn’t we?
I'm not sure where Joe is thinking, but you are correct.

When you retire you receive your age 70 benefit, your spouse begins to receive 50% of your PIA, less her early filing offset (dollar-for-dollar, not percentage). But she gets 5 years of benefits which more than compensates for the (small) reduction in spousal from her filing before FRA.

We are doing something similar, but she is waiting until I retire from work (her age 63) to file.
She (we) get 13 years, not 5. More than worth it

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Re: Time to look at SS [When should I take Social Security?]

Post by smitcat » Thu Sep 06, 2018 7:48 am

CurlyDave wrote:
Thu Sep 06, 2018 12:46 am
#Cruncher wrote:
Wed Sep 05, 2018 7:30 pm
...I agree that with an 8% real growth rate one will be better off claiming early regardless of longevity. But it's less clear, CurlyDave, that one is also better off even with 5%. For example, with 5% real growth someone with a Normal Retirement Age (NRA) of 66 needs to collect only past age 86.0 to warrant delaying to age 64 instead of starting at 62...
I agree your tables show that 5% real growth is right on the edge, and may show a slight benefit to waiting until 64 to claim.

But there are other factors not in the tables:

1. Even the SS Trustees say that 2033 or 2034, is the midnight hour, when Cinderella's coach turns back into a pumpkin and benefits are reduced, under current law and assumptions, to 77% of existing. This is only 15 or 16 years in the future. A person turning 62 and being faced with the choice of when to take SS will be 77 or 78. Multiply the expected payments by 0.77 after 2034 and that break even age stretches out. The situation is even worse for younger people. If one goes back and looks at the historical SS Trustees' reports the trend has been for the Trust Fund depletion date to come closer and closer, although it has recently stabilized.

2. The inflation correction for SS benefits is the Chained CPI, not the same CPI-W usually used to correct nominal for real dollars. It is smaller than the CPI-W.

3. Depending on what article I read the average CAGR of equities has been somewhere between 9.9% and 11% for the past century. Going forward, many famous people have been predicting a lower number, on the order of 5% real. The only problem is that they have been predicting this for 3 or 4 years, while actual results have been much higher. Inflation seems too have stabilized in the 2-3% range which would give a reasonable real CAGR of 3-9%. No help from that crystal ball.

The judgement I made was that the benefit of waiting was small at best, compared to the possible benefit of claiming at the earliest date.

YMMV depending on your risk tolerance, but my main point is that waiting until 70 is not the obvious choice that many make it out to be.
Your mileage will also greatly vary dependent upon the Roth conversions that you can or cannot get done prior to claiming SS.
The ability to 'optimize' your personal situation includes the affects of all income and taxes for your specifics.
We have found the extended IORP to be a great tool to estimate many versions and seek out the one or few options which appear most beneficial for our inputs and goals. We then use the RPM calculator to do a much more detailed look (with more effort required) at the results of the plans we are considering.
In our case this in depth look favors delaying SS whether or not the SS is reduced - we run it both ways.
Our goals include maximizing the after tax spendable money.
My thoughts - use these tools with your specific inputs which will differ from all others on the forum and get your best answer - not one that best fit someone else.

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Re: Time to look at SS [When should I take Social Security?]

Post by Ron » Thu Sep 06, 2018 8:16 am

smitcat wrote:
Thu Sep 06, 2018 7:48 am
<snip...> - not one that best fit someone else.
Yes, and that's the reason that we both waited until this year, at age 70, to claim our respective benefits :D ...

- Ron

smitcat
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Re: Time to look at SS [When should I take Social Security?]

Post by smitcat » Thu Sep 06, 2018 8:43 am

Ron wrote:
Thu Sep 06, 2018 8:16 am
smitcat wrote:
Thu Sep 06, 2018 7:48 am
<snip...> - not one that best fit someone else.
Yes, and that's the reason that we both waited until this year, at age 70, to claim our respective benefits :D ...

- Ron
Ron - Fantastic!!!! congratulations and much luck in your future retirement explorations.
Hope to follow your lead in the near future.

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Re: Time to look at SS [When should I take Social Security?]

Post by ObliviousInvestor » Thu Sep 06, 2018 8:48 am

CurlyDave wrote:
Thu Sep 06, 2018 12:46 am
2. The inflation correction for SS benefits is the Chained CPI, not the same CPI-W usually used to correct nominal for real dollars. It is smaller than the CPI-W.
Social Security COLAs are based on CPI-W, not chained CPI.
https://www.ssa.gov/OP_Home/cfr20/404/404-0272.htm
https://www.ssa.gov/oact/STATS/cpiw.html
Mike Piper, author/blogger

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Re: Time to look at SS [When should I take Social Security?]

Post by jeffyscott » Thu Sep 06, 2018 9:08 am

#Cruncher wrote:
Wed Sep 05, 2018 7:30 pm
I agree that with an 8% real growth rate one will be better off claiming early regardless of longevity. But it's less clear, CurlyDave, that one is also better off even with 5%. For example, with 5% real growth someone with a Normal Retirement Age (NRA) of 66 needs to collect only past age 86.0 to warrant delaying to age 64 instead of starting at 62. [1] This is shown in the following table.
Would using different values for the discount rate at https://opensocialsecurity.com/ also effectively show this. I certainly would not project 8% real returns on my investments at this time, but if I put that in as the discount rate then it tells be that both of us taking at 62 is the best option. Putting a more reasonable, but still optimistic (IMO) 4% real pushes me back to near 70 (69.5).

I would only use expected bond or CD returns as the discount rate, myself and with that even 2% real is highly optimistic and 2% real with a 23% benefit cut, still puts me at 69.5 as the optimum.
press on, regardless - John C. Bogle

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Re: Time to look at SS [When should I take Social Security?]

Post by CurlyDave » Thu Sep 06, 2018 9:19 am

ObliviousInvestor wrote:
Thu Sep 06, 2018 8:48 am
CurlyDave wrote:
Thu Sep 06, 2018 12:46 am
2. The inflation correction for SS benefits is the Chained CPI, not the same CPI-W usually used to correct nominal for real dollars. It is smaller than the CPI-W.
Social Security COLAs are based on CPI-W, not chained CPI.
https://www.ssa.gov/OP_Home/cfr20/404/404-0272.htm
https://www.ssa.gov/oact/STATS/cpiw.html
You are correct. It was proposed but not written into the law.

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Re: Time to look at SS [When should I take Social Security?]

Post by bltn » Thu Sep 06, 2018 10:30 am

Having read and skimmed most of these posts, I haven t seen one factor mentioned. Most people will have more energy for travel and other activities between ages 60 -70 than between ages 70-80. So they might make better use of the income by taking it earlier from that standpoint.
However the needs might be greater later in life with long term care and increased medical expenses.
The point made earlier about the only retirement income source we can control being our own nest egg was a good one. Pension sources, be they public or private, are beyond our control.

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Re: Time to look at SS

Post by David Jay » Thu Sep 06, 2018 10:42 am

Bacchus01 wrote:
Thu Sep 06, 2018 7:33 am
David Jay wrote:
Wed Sep 05, 2018 2:45 pm
Bacchus01 wrote:
Wed Sep 05, 2018 7:33 am
JoeRetire wrote:
Wed Sep 05, 2018 7:29 am
Bacchus01 wrote:
Wed Sep 05, 2018 7:08 am
My wife is 5 years older and much lower earnings. The calculators generally show to take hers first and earlier. We will probably take hers at 62. Then 13 years later we both draw on mine.
Are you sure you can "both draw on mine"?
Yes. Why wouldn’t we?
I'm not sure where Joe is thinking, but you are correct.

When you retire you receive your age 70 benefit, your spouse begins to receive 50% of your PIA, less her early filing offset (dollar-for-dollar, not percentage). But she gets 5 years of benefits which more than compensates for the (small) reduction in spousal from her filing before FRA.

We are doing something similar, but she is waiting until I retire from work (her age 63) to file.
She (we) get 13 years, not 5. More than worth it
The 5 years I was referring to are from age 62 (when she gets a reduced benefit - note that this reduction will follow through into her spousal after you claim) to her FRA at 67 (if her birth year is 1960 or later. I'm 1957, my FRA is 66 years, 6 months).

If she waits until FRA (nominally age 67), her spousal on your benefit (when you file) will have no reduction. But she loses 5 years of payments if she waits until her FRA. That is the trade-off.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

Bacchus01
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Re: Time to look at SS

Post by Bacchus01 » Fri Sep 07, 2018 5:50 am

David Jay wrote:
Thu Sep 06, 2018 10:42 am
Bacchus01 wrote:
Thu Sep 06, 2018 7:33 am
David Jay wrote:
Wed Sep 05, 2018 2:45 pm
Bacchus01 wrote:
Wed Sep 05, 2018 7:33 am
JoeRetire wrote:
Wed Sep 05, 2018 7:29 am

Are you sure you can "both draw on mine"?
Yes. Why wouldn’t we?
I'm not sure where Joe is thinking, but you are correct.

When you retire you receive your age 70 benefit, your spouse begins to receive 50% of your PIA, less her early filing offset (dollar-for-dollar, not percentage). But she gets 5 years of benefits which more than compensates for the (small) reduction in spousal from her filing before FRA.

We are doing something similar, but she is waiting until I retire from work (her age 63) to file.
She (we) get 13 years, not 5. More than worth it
The 5 years I was referring to are from age 62 (when she gets a reduced benefit - note that this reduction will follow through into her spousal after you claim) to her FRA at 67 (if her birth year is 1960 or later. I'm 1957, my FRA is 66 years, 6 months).

If she waits until FRA (nominally age 67), her spousal on your benefit (when you file) will have no reduction. But she loses 5 years of payments if she waits until her FRA. That is the trade-off.
Ah, good point. I think the calculator I used last actually suggested she take hers at like 64 and then I take mine (and she take spousal) when I’m like 68 and she’s 73. I will runnthat every year and then plug into I-pro and then determine retirement planning from there. It’s a fun annual exercise at 45. :)

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Re: Time to look at SS [When should I take Social Security?]

Post by pennywise » Fri Sep 07, 2018 6:28 am

Zott wrote:
Wed Sep 05, 2018 9:55 pm
One fact should be kept in mind regarding the recommendation for the OP from Opensocialsecurity---that, having been born in 1953, he is eligible for a spousal benefit under a restricted application. The program recommmends that he should do that--might be different if he was born after 1953 when that benefit is no longer available.
I was very surprised to get the results of the calculator that incorporated this--we are a dual income/dual SS benefit couple whose PIAs are almost identical. Husband is 4 years older and born in 1953 so the recommendation was that I start my benefits at 62, he takes spousal of half my PIA then he starts his own benefits, with the concomitant large bump for waiting, at 70 YO. It's tempting, because if I outlive him I will have the widow's benefit amount ie his level, even with my having taken a reduced SS benefit of my own. I had no idea that strategy existed! (Thanks Mike Piper!)

As noted, social security can be a complicated decision depending on so many factors. Definitely worth taking time to really dig into the nuances and figure out what's best for your own situation.

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David Jay
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Re: Time to look at SS

Post by David Jay » Fri Sep 07, 2018 8:30 am

Bacchus01 wrote:
Fri Sep 07, 2018 5:50 am
It’s a fun annual exercise at 45. :)
I don't think there is any way you get to 62 without some rule changes...
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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

Re: Time to look at SS [When should I take Social Security?]

Post by Bacchus01 » Fri Sep 07, 2018 9:54 am

pennywise wrote:
Fri Sep 07, 2018 6:28 am
Zott wrote:
Wed Sep 05, 2018 9:55 pm
One fact should be kept in mind regarding the recommendation for the OP from Opensocialsecurity---that, having been born in 1953, he is eligible for a spousal benefit under a restricted application. The program recommmends that he should do that--might be different if he was born after 1953 when that benefit is no longer available.
I was very surprised to get the results of the calculator that incorporated this--we are a dual income/dual SS benefit couple whose PIAs are almost identical. Husband is 4 years older and born in 1953 so the recommendation was that I start my benefits at 62, he takes spousal of half my PIA then he starts his own benefits, with the concomitant large bump for waiting, at 70 YO. It's tempting, because if I outlive him I will have the widow's benefit amount ie his level, even with my having taken a reduced SS benefit of my own. I had no idea that strategy existed! (Thanks Mike Piper!)

As noted, social security can be a complicated decision depending on so many factors. Definitely worth taking time to really dig into the nuances and figure out what's best for your own situation.
I don't believe the larger PIA can claim on their spousal if they are eligible to draw. For example, I cannot draw on my wife's. She is 5 years old. So if she took at 62, then I started at 62, I would have to take my reduced PIA and not draw on hers because mine is higher. Just watch for that. I'd prefer to have her take hers at 62, then I take spousal when she is 67 (and I'm 62) and then we flip over to mine with her taking spousal when I'm 70 and she's 75. Alas, it wont' work that way.

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