Delaying Social Security Until 70

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montanagirl
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Re: Delaying Social Security Until 70

Post by montanagirl » Fri Sep 21, 2018 10:00 am

I took mine at 69 1/2, mainly because I was still working full time until FRA, and then was still able to work doing this and that until this year. Plus my benefit at FRA was not going to be all that great, due to some dropout years, so waiting put it in the "decent" zone. It would have been nice to go all the way til 70 but it felt right. It was an intuitive thing at this point.

As for others, I don't want to claim to speak for them. I know one friend my age claimed at 62 because "who knows if it's gonna be there" yet she was still working full time. I thought it was crazy, until she got cancer. It's like she just knew.

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ObliviousInvestor
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Re: Delaying Social Security Until 70

Post by ObliviousInvestor » Fri Sep 21, 2018 10:07 am

Small Law Survivor wrote: โ†‘
Fri Sep 21, 2018 9:53 am
retired early&luv it wrote: โ†‘
Sun Sep 16, 2018 5:40 am
Apparently the social security staff often give a recipient a lump sum representing half of a year of benefits and then calculate your retirement based on an age of 69.5 instead of 70. Make sure you tell them you do not want any retroactive lump sum.

The source of my information is three years old, at this link:
https://www.cnbc.com/2015/06/22/the-lat ... ntary.html
Hmmm ... exactly how would one avoid this?
Just tell them when you want your benefit to start (e.g., I want my entitlement to retirement benefits to begin in the month I turn 70). In the absence of any such information, the SSA gives you as much as they can immediately (which means a lump sum of up to 6 months for people filing after FRA).
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JW-Retired
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Re: Delaying Social Security Until 70

Post by JW-Retired » Fri Sep 21, 2018 10:12 am

tennisplyr wrote: โ†‘
Fri Sep 21, 2018 7:46 am
We took it a 62 and now in late sixties. I know we've used a couple of hundred thousand of SS money while ours continued to grow. A bird in the hand kind of thing. I have zero regrets!!
..............
..............
I'm happy ๐Ÿ˜€
IMO, it's more like you caught the bird in the bush. The US stock market nearly tripled in the last 7 years. If you have been holding a fair amount of equities you've had fabulous luck in picking your retirement date.

I'd be happy too. :beer
JW
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Ron
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Re: Delaying Social Security Until 70

Post by Ron » Fri Sep 21, 2018 11:03 am

ObliviousInvestor wrote: โ†‘
Fri Sep 21, 2018 10:07 am
Small Law Survivor wrote: โ†‘
Fri Sep 21, 2018 9:53 am
retired early&luv it wrote: โ†‘
Sun Sep 16, 2018 5:40 am
Apparently the social security staff often give a recipient a lump sum representing half of a year of benefits and then calculate your retirement based on an age of 69.5 instead of 70. Make sure you tell them you do not want any retroactive lump sum.

The source of my information is three years old, at this link:
https://www.cnbc.com/2015/06/22/the-lat ... ntary.html
Hmmm ... exactly how would one avoid this?
Just tell them when you want your benefit to start (e.g., I want my entitlement to retirement benefits to begin in the month I turn 70). In the absence of any such information, the SSA gives you as much as they can immediately (which means a lump sum of up to 6 months for people filing after FRA).
I did a file/suspend at my FRA age of 66, four years ago.

When I turned 70 this year, I did not re-file for SS benefits; there was no need to do so since the "system" was to release my suspension when I turned 70, and it did so. I received my first benefit deposit with all DRC's and COLA's without discussion of/with the SSA.

My wife, turning 70 this year (same age as me) went through a different scenario. Since she had been collecting benefits based upon my record for the last four years, she applied for her own age-70 benefit in March with an effective date of May (her birth month). She made no notation on her on-line application for retro payments; however she did get a call from SSA giving her the option to do so - which she of course declined. There is an option on when you want benefits to start (with payments starting the following month) on the on-line application.

Her May deposit was normal, based upon my record. Her June deposit was increased based upon her record, along with applying the 48 month DRC's along with retroactive COLA's from age 66.

- Ron

SGM
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Re: Delaying Social Security Until 70

Post by SGM » Fri Sep 21, 2018 11:39 am

A friend of mine reported that a SS agent tried to convince her to take a check for 6 months and receive a 69 1/2 year benefit instead of a 70 year benefit. She had to argue with him to get her full delayed 70 year benefit.

I submitted the following statement in the comment section with my application. I cannot recall where I had seen this statement before. Maybe it is on the wiki but I am too busy to look it up.

"I wish to receive my maximum benefit, including all delayed retirement credits to age 70. I do not wish to receive any retroactive payments based on a retirement age earlier than 70."

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tennisplyr
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Re: Delaying Social Security Until 70

Post by tennisplyr » Fri Sep 21, 2018 4:44 pm

JW-Retired wrote: โ†‘
Fri Sep 21, 2018 10:12 am
tennisplyr wrote: โ†‘
Fri Sep 21, 2018 7:46 am
We took it a 62 and now in late sixties. I know we've used a couple of hundred thousand of SS money while ours continued to grow. A bird in the hand kind of thing. I have zero regrets!!
..............
..............
I'm happy ๐Ÿ˜€
IMO, it's more like you caught the bird in the bush. The US stock market nearly tripled in the last 7 years. If you have been holding a fair amount of equities you've had fabulous luck in picking your retirement date.

I'd be happy too. :beer
JW
You got that right, I've had a number of posts citing how fortunate I've been :thumbsup :thumbsup
Those who move forward with a happy spirit will find that things always work out.

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grabiner
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Re: Delaying Social Security Until 70

Post by grabiner » Fri Sep 21, 2018 11:15 pm

Tdubs wrote: โ†‘
Sat Sep 15, 2018 2:38 pm
There was a very recent thread on this, and many concluded it was best to file early. I don't agree, but there are other reasons it makes sense.

1) The day after your retire the market plunges 30%, and you have some large early retirement expenses. Best to file rather than tap your accounts.
The way to protect against this is to put money in bonds for the interim. If you are going to take SS at 70 rather than 62, you can avoid taking any extra risk by buying an eight-year TIPS ladder to cover the lost SS benefits. (In return for the money you used for this ladder, you will effectively have a big inflation-adjusted annuity starting at 70 from your higher benefits.)
2) People make their calculations assuming they will live an average lifespan and prefer early happiness when they are healthy.
Again, this doesn't depend on when you take SS. You can spend more from your portfolio at age 62-69, and less at age 70+. If you live an average lifespan, you will have a slightly larger estate when you die.

Having seen folks try to live on their SS alone at the end of their lives, I'd say you should prepare to live a long life, even if you don't. Especially if you have a spouse.
This is the most important reason that retirees with moderate wealth should prefer to delay SS. If you delay SS, you will have less money to spend in retirement if you die at 75, but more if you die at 95. And if you die at 95, you will have much more need to have money to spend.

Higher-income retirees don't need to worry about this; anything left over will go to the heirs. They can thus work from expected value. For a man in average health, expected value is maximized by claiming at 68 or 69, not 70. (However, most higher-income retirees who are considering this issue have above-average life expectancies, both because higher-income retirees have a longer life expectancy in general, and because those with shorter life expectancies are likely to know it.)
Wiki David Grabiner

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celia
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Re: Delaying Social Security Until 70

Post by celia » Fri Sep 21, 2018 11:30 pm

Ron wrote: โ†‘
Sat Sep 15, 2018 2:04 pm
"If you took benefits early, why did you do so?"

We didn't. My wife/me both took our age-70 SS benefit this year, but I'll answer your question anyway, why we did it opposite of what most do.

We were fortunate that we fell under the old rules that allowed us to do the file/suspend/restricted route, which gave my wife a total of just over $60k while she waited for her own age 70 benefit.
Using Ron's post as an example (since he replied first), I'll bet that most Bogleheads in the same age bracket did/are doing this. But SS is probably counting them as one person starting at 70 while another is starting at FRA. So instead of 2% of the beneficiaries waiting until age 70, it could be closer to 4% (when the second spouse bumps up their own benefit while waiting until age 70).

2015
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Re: Delaying Social Security Until 70

Post by 2015 » Sat Sep 22, 2018 10:50 pm

grabiner wrote: โ†‘
Fri Sep 21, 2018 11:15 pm
Tdubs wrote: โ†‘
Sat Sep 15, 2018 2:38 pm
There was a very recent thread on this, and many concluded it was best to file early. I don't agree, but there are other reasons it makes sense.

1) The day after your retire the market plunges 30%, and you have some large early retirement expenses. Best to file rather than tap your accounts.
The way to protect against this is to put money in bonds for the interim. If you are going to take SS at 70 rather than 62, you can avoid taking any extra risk by buying an eight-year TIPS ladder to cover the lost SS benefits. (In return for the money you used for this ladder, you will effectively have a big inflation-adjusted annuity starting at 70 from your higher benefits.)
2) People make their calculations assuming they will live an average lifespan and prefer early happiness when they are healthy.
Again, this doesn't depend on when you take SS. You can spend more from your portfolio at age 62-69, and less at age 70+. If you live an average lifespan, you will have a slightly larger estate when you die.

Having seen folks try to live on their SS alone at the end of their lives, I'd say you should prepare to live a long life, even if you don't. Especially if you have a spouse.
This is the most important reason that retirees with moderate wealth should prefer to delay SS. If you delay SS, you will have less money to spend in retirement if you die at 75, but more if you die at 95. And if you die at 95, you will have much more need to have money to spend.

Higher-income retirees don't need to worry about this; anything left over will go to the heirs. They can thus work from expected value. For a man in average health, expected value is maximized by claiming at 68 or 69, not 70. (However, most higher-income retirees who are considering this issue have above-average life expectancies, both because higher-income retirees have a longer life expectancy in general, and because those with shorter life expectancies are likely to know it.)

Well said.
Some use Tips ladders to bridge ages 62-70, others use other instruments. In my case, it's (somewhat) laddered CD's. I like the idea that every month I delay SS I am buying the best inflation-indexed annuity available starting at age 70. Delaying SS is not affecting my spending patterns now or later, and if I die before collecting, I'll be dead and unavailable to care. Delaying SS also provides me the opportunity for roth conversions to attenuate taxes from SS/RMD's at 70.

SGM
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Re: Delaying Social Security Until 70

Post by SGM » Sun Sep 23, 2018 2:55 am

I put money into a 7 year USAA savings annuity that paid initially 4% tax deferred starting 10 years before I took delayed SS at 70 while retiring at age 66. It currently pays 3.2% tax deferred. In the last 3 years of delaying SS I could have withdrawn any amount without penalty. After the first year and prior to 7 years I could have withdrawn 10% without penalty. It is not annuitized and currently acts more like a tax deferred CD.

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Re: Delaying Social Security Until 70

Post by The Wizard » Sun Sep 23, 2018 4:17 am

Small Law Survivor wrote: โ†‘
Fri Sep 21, 2018 9:53 am
retired early&luv it wrote: โ†‘
Sun Sep 16, 2018 5:40 am
Apparently the social security staff often give a recipient a lump sum representing half of a year of benefits and then calculate your retirement based on an age of 69.5 instead of 70. Make sure you tell them you do not want any retroactive lump sum.

The source of my information is three years old, at this link:
https://www.cnbc.com/2015/06/22/the-lat ... ntary.html
Hmmm ... exactly how would one avoid this?
A little over a year from now, three months before I turn 70, I'll go over to a SS office early one morning to apply for my maximal benefit in person.
That makes it easy to clarify the details...
Attempted new signature...

Retired2013
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Re: Delaying Social Security Until 70

Post by Retired2013 » Sun Sep 23, 2018 6:01 am

dknightd wrote: โ†‘
Sun Sep 16, 2018 9:10 am
Our plan is wife claims her smaller benefit at FRA. That way her eventual spousal benefit will not be reduced. I'll claim at 70. Unfortunately we missed the restricted filing options, otherwise our strategy might have been different (and better). We both expect to have more or less average lifetimes. But if one of us lives longer they will appreciate having the money.
If things change I might claim sooner, but not likely. It is much easier to decide to claim earlier than it is to wish you had claimed later. So I plan to claim as late as possible (or when I turn 70, whichever comes first)
I've got conflicting information on this. I plan on taking at age 70. I believe that my wife should take hers at age 62. If my SS is $3,000 per month and I pass away first, does the wife take over my full payment of $3,000 or is it my full payment amount reduced because she took her SS at age 62? I'm under the impression that she would receive my full payment of $3,000.

abner kravitz
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Re: Delaying Social Security Until 70

Post by abner kravitz » Sun Sep 23, 2018 7:46 am

Retired2013 wrote: โ†‘
Sun Sep 23, 2018 6:01 am
dknightd wrote: โ†‘
Sun Sep 16, 2018 9:10 am
Our plan is wife claims her smaller benefit at FRA. That way her eventual spousal benefit will not be reduced. I'll claim at 70. Unfortunately we missed the restricted filing options, otherwise our strategy might have been different (and better). We both expect to have more or less average lifetimes. But if one of us lives longer they will appreciate having the money.
If things change I might claim sooner, but not likely. It is much easier to decide to claim earlier than it is to wish you had claimed later. So I plan to claim as late as possible (or when I turn 70, whichever comes first)
I've got conflicting information on this. I plan on taking at age 70. I believe that my wife should take hers at age 62. If my SS is $3,000 per month and I pass away first, does the wife take over my full payment of $3,000 or is it my full payment amount reduced because she took her SS at age 62? I'm under the impression that she would receive my full payment of $3,000.
It is my understanding also that she would get the full payment.

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Re: Delaying Social Security Until 70

Post by Small Law Survivor » Sun Sep 23, 2018 8:31 am

The Wizard wrote: โ†‘
Sun Sep 23, 2018 4:17 am
A little over a year from now, three months before I turn 70, I'll go over to a SS office early one morning to apply for my maximal benefit in person.
That makes it easy to clarify the details...
I've had to got to my local SS office a few times already for various things. Would really like to avoid ever going there again!

Austintatious
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Re: Delaying Social Security Until 70

Post by Austintatious » Sun Sep 23, 2018 9:51 am

Small Law Survivor wrote: โ†‘
Sun Sep 23, 2018 8:31 am
The Wizard wrote: โ†‘
Sun Sep 23, 2018 4:17 am
A little over a year from now, three months before I turn 70, I'll go over to a SS office early one morning to apply for my maximal benefit in person.
That makes it easy to clarify the details...
I've had to got to my local SS office a few times already for various things. Would really like to avoid ever going there again!
Our (DW and me) one visit to our local office was arranged by appointment. Despite a fully occupied waiting area, it occurred precisely on time and things could not have been accomplished more efficiently. I've passed by that office on many occasions. At times, it's crowded and at other times, it's near empty. Showing up without an appointment during a busy time would likely mean a long wait. No surprise there, I would think.

We've also talked with IRS folks on multiple occasions by phone. Surprisingly, we've found that our local office has been more efficient in providing accurate information, things like projected PIAs (primary insurance amounts), filing for spousal benefits, details regarding how benefit payments are to be handled, etc. than have the regional/national offices. Anyway, just another's perspective.

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Lancelot
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Re: Delaying Social Security Until 70

Post by Lancelot » Sun Sep 23, 2018 7:38 pm

SGM wrote: โ†‘
Fri Sep 21, 2018 11:39 am

I submitted the following statement in the comment section with my application. I cannot recall where I had seen this statement before. Maybe it is on the wiki but I am too busy to look it up.

"I wish to receive my maximum benefit, including all delayed retirement credits to age 70. I do not wish to receive any retroactive payments based on a retirement age earlier than 70."
I applied for ex spousal benefits on line; I also made similar comments about wanting to receive only ex spousal benefits and let my own record accrue delayed retirment credits. There was also an election on the (online) application to choose spousal benefits at the earliest possible date (FRA) with out receiving my own retirement benefit. Six days after I submitted the application, a SS rep called me, verified the amount of ex spouse benefit I will receive and requested one document, which I mailed to her. So far so good :sharebeer
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