Social security now or latet

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HappyJack
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Social security now or latet

Post by HappyJack »

With all the uncertainty regarding the solvency and the politics surrounding Social Security I am wondering if I would be better to grab mine at 66 rather than the traditional advice to wait until 70. Thoughts? Concerns? Thanks
Trader Joe
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Re: Social security now or latet

Post by Trader Joe »

HappyJack wrote: Thu Aug 29, 2019 6:24 pm With all the uncertainty regarding the solvency and the politics surrounding Social Security I am wondering if I would be better to grab mine at 66 rather than the traditional advice to wait until 70. Thoughts? Concerns? Thanks
I am not sure what "uncertainty" that you are referring to. My plan is to take Social Security the very first day that I am eligible.
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dwickenh
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Re: Social security now or latet

Post by dwickenh »

I would not let uncertainty make your decision. I would base it on your need for the money, general health, and other funds that may allow you to delay. The decision if single seems a little easier as there is no spouse to worry about getting survivor benefits. 62 would not be my first choice unless the answer to the above criteria decides it for you.(I am turning 65 and have not claimed yet other than a survivor benefit on DW's account).
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billfromct
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Re: Social security now or latet

Post by billfromct »

And of course it would depend if you are still working or not.

bill
Silk McCue
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Re: Social security now or latet

Post by Silk McCue »

HappyJack wrote: Thu Aug 29, 2019 6:24 pm With all the uncertainty regarding the solvency and the politics surrounding Social Security I am wondering if I would be better to grab mine at 66 rather than the traditional advice to wait until 70. Thoughts? Concerns? Thanks
Using the search bar will find numerous threads that include this consideration. Don’t let fear drive your decision.

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HappyJack
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Re: Social security now or latet

Post by HappyJack »

Op here. I’m 66 wife is 65 and is taking benefits now. The uncertainty I was citing regards the potential solvency issue of SS.
Silk McCue
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Re: Social security now or latet

Post by Silk McCue »

HappyJack wrote: Thu Aug 29, 2019 6:41 pm Op here. I’m 66 wife is 65 and is taking benefits now. The uncertainty I was citing regards the potential solvency issue of SS.
If your benefit at 70 is higher than what she is receiving now then wait so that the survivor has the highest possible benefit when the benefit of the first to die is gone. Longevity insurance.

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lws6772
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Re: Social security now or latet

Post by lws6772 »

Trader Joe wrote: Thu Aug 29, 2019 6:27 pm
HappyJack wrote: Thu Aug 29, 2019 6:24 pm With all the uncertainty regarding the solvency and the politics surrounding Social Security I am wondering if I would be better to grab mine at 66 rather than the traditional advice to wait until 70. Thoughts? Concerns? Thanks
I am not sure what "uncertainty" that you are referring to. My plan is to take Social Security the very first day that I am eligible.
When you say first day, are you referring to age 62?
So many fish, so little time.
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JoeRetire
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Re: Social security now or latet

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HappyJack wrote: Thu Aug 29, 2019 6:24 pm With all the uncertainty regarding the solvency and the politics surrounding Social Security I am wondering if I would be better to grab mine at 66 rather than the traditional advice to wait until 70. Thoughts? Concerns? Thanks
If you are the higher earner, wait until 70 so that your survivor gets maximum benefits.
Expect solvency.
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Chip
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Re: Social security now or latet

Post by Chip »

HappyJack wrote: Thu Aug 29, 2019 6:41 pm Op here. I’m 66 wife is 65 and is taking benefits now. The uncertainty I was citing regards the potential solvency issue of SS.
Since you are 66 that means you were born before 1/2/54. Since your wife is already taking benefits you are eligible to file for spousal benefits only while allowing your own benefit to grow. This is called a restricted filing.

Are you doing that? It's basically free money.
Last edited by Chip on Fri Aug 30, 2019 5:29 am, edited 1 time in total.
gclancer
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Re: Social security now or latet

Post by gclancer »

Silk McCue wrote: Thu Aug 29, 2019 6:43 pm Longevity insurance.
I know nothing about OP, but I would say the risk of OP and OP’s spouse out living their money is higher than social security becoming insolvent. I would delay to 70 myself.
OnTrack2020
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Re: Social security now or latet

Post by OnTrack2020 »

We do not have longevity in our parents or grandparents, so waiting to take SS at 70 for us really isn't an option. Then we we figured out the breakeven point between taking at 62 versus taking at 67, it would be 16 years. We decided on 62, maybe 63, but we won't be waiting much later than that.
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Re: Social security now or latet

Post by Silk McCue »

OnTrack2020 wrote: Fri Aug 30, 2019 7:08 am We do not have longevity in our parents or grandparents, so waiting to take SS at 70 for us really isn't an option. Then we we figured out the breakeven point between taking at 62 versus taking at 67, it would be 16 years. We decided on 62, maybe 63, but we won't be waiting much later than that.
Break-even is unimportant. When your dead you won’t care. You will care if you live longer than expected and don’t have enough income to meet your needs. The decision needs to made within the totality of our financial situation.

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Phineas J. Whoopee
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Re: Social security now or latet

Post by Phineas J. Whoopee »

Despite what I often read in the press, the Social Security Administration has no solvency problem. That's a scary word for a lesser issue. It still is an issue, mind you, but it's a lesser one than insolvency.

From the very beginning Social Security has been a pay-as-you-go program. This year's benefits are paid out of this year's SS tax receipts.

Relevant to this discussion are the 1983 amendments. A good part of what they were about was how to handle the Baby Boom generation, much bigger than any previous, particularly how to pay their benefits as-we-go with a smaller generation following them.

There were three provisions I'll mention in this post:

1) An increase in the SS tax to invest in a growing trust fund so Boomers would pay part of their own benefits in advance;
2) A decrease in benefits, implemented by gradually increasing full retirement age from 65 to 67; and
3) Clarity that Congress would not make up for any shortfall out of general revenue.

It was a tax increase combined with a Boomer benefit cut.

The third provision was key to the bill being passed. It couldn't add to the deficit. That's what we're going to run up against in the mid 2030s, fifty years later which I think is pretty good for financial legislation.

If Congress doesn't change the law, somewhere in the mid 2030s the Boomer-inspired trust fund will be exhausted, and there will only be enough tax coming in to pay about 3/4 of what the formulas say. That isn't insolvency, just a benefit cut. Granted a cut is not nice, but insolvency it isn't.

Rather than speculate on future legislation I'll point out the 1983 amendments were enacted just months before the system would have been on shaky ground.

I hope that helps with clarity.

PJW
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JoeRetire
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Re: Social security now or latet

Post by JoeRetire »

Phineas J. Whoopee wrote: Fri Aug 30, 2019 6:02 pmThe third provision was key to the bill being passed. It couldn't add to the deficit.
That seems rather quaint in these times.
Rather than speculate on future legislation I'll point out the 1983 amendments were enacted just months before the system would have been on shaky ground.
I don't think anyone would be surprised if the timing is similar this time around.
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KATNYC
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Re: Social security now or latet

Post by KATNYC »

It depends. My dad is eligible but waiting since he is still working. He mentioned caps on earned income so that is his reason to wait.
megabad
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Re: Social security now or latet

Post by megabad »

HappyJack wrote: Thu Aug 29, 2019 6:24 pm With all the uncertainty regarding the solvency and the politics surrounding Social Security I am wondering if I would be better to grab mine at 66 rather than the traditional advice to wait until 70. Thoughts? Concerns? Thanks
My thoughts are that I have found predicting the future very difficult. I would make your decisions based on the things you have the most control over rather than predicting the future of things you have very little control over. That are reasons to take SS early, but I do not find this one to be very compelling.
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Re: Social security now or latet

Post by Vanguard Fan 1367 »

I am going to try to wait till 70 to take my Social Security. I don't need the money now and would like the extra monthly payout in case there is some sort of market correction.
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celia
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Re: Social security now or latet

Post by celia »

HappyJack wrote: Thu Aug 29, 2019 6:24 pm With all the uncertainty regarding the solvency and the politics surrounding Social Security I am wondering if I would be better to grab mine at 66 rather than the traditional advice to wait until 70. Thoughts? Concerns? Thanks
OP, Did you know that once you get to Full Retirement Age (66 for you) your monthly benefit is guaranteed to increase 8% a year for each year you waited up to age 70. So that means you will get at least 32% more if you start at age 70 instead of age 66. On top of this, whether you wait or not, there is an annual cost-of-living adjustment. Your yearly adjustment will be larger if your monthly benefit is larger.
Phineas J. Whoopee wrote: Fri Aug 30, 2019 6:02 pm If Congress doesn't change the law, somewhere in the mid 2030s the Boomer-inspired trust fund will be exhausted, and there will only be enough tax coming in to pay about 3/4 of what the formulas say. That isn't insolvency, just a benefit cut. Granted a cut is not nice, but insolvency it isn't.
So, in the worst case, you might lose 25% of your monthly benefit. If you wait until age 70 to start collecting, you will still be collecting more than your original age 66 amount (which also could be reduced by 25%).

Here's the part that many of us use to our advantage: If you have less income in your early retirement years (your 60s), those are years that are great for doing Roth conversions, especially if your future RMDs will push you into a higher tax bracket. That is another topic, for which there are already lots of threads.
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HappyJack
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Re: Social security now or latet

Post by HappyJack »

Thank you all. Much new information.
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