Take Social Security now, at 66, during Corona-virus?

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theac
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Take Social Security now, at 66, during Corona-virus?

Post by theac »

Four years ago I had itchy fingers to go ahead and file at 62,
but felt it was better to wait till 66 since I didn't need the income, etc.

Well I'll be 66 in a few months, and was planning on filing my online application in May.
Even now, I still don't need the income, but am happy I waited at least till now.

However, Corona-virus has (possibly?) inserted a new variable in the equation.

Any ideas on why "it might be better to NOT take it this year,"
in the midst of uncertain times?
Or,any ideas on why "it might be better to take it this year,"
BECAUSE of these uncertain times?

Of course nobody can know any of these things for sure,
but a couple of things I've considered are:

Is it better to take it now since SS could run into future problems
and at least I'll be glad I got something out of it before they do?

What if hyper-inflation comes, does it really make any difference if I wait
or take it now since SS are all COLA payments/increases anyway?

Personally I feel like just taking it now at 66, and let the chips fall where they may.
I'm very pleased that I didn't act ON THE STRONG IMPULSE I was having at 62,
and patiently waited, even though last year I started getting those thoughts like
"maybe waiting till 63 was good enough" and
"waiting another year isn't going to add that much more" :D

Shrugged all that off, glad I did, and here I am.
So any ideas on a good course of action going forward from here
with this new Corona-virus in the mix, and possible effects of taking it now vs waiting?


Single
No debt
On a non-COLA pension that covers my expenses
Plenty of safety net in low risk investments and cash
Good health, longevity in gene pool, no high-risk activities such as sky-diving, scuba...

Here is the Topic from 4 years ago with my stats, etc.:

viewtopic.php?f=2&t=191148
"We keep you alive to serve this ship. Row well...and live." Ben Hur...and The Taxman! hahaha
mhalley
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Re: Take Social Security now, at 66, during Corona-virus?

Post by mhalley »

Unless the price drop in the stock market caused unexpected losses resulting in a change in your withdrawal rate such that you now need the money, I don’t think the rona causes a change in your SS strategy from open social security.com
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Re: Take Social Security now, at 66, during Corona-virus?

Post by Vanguard Fan 1367 »

I am like you and don't need the money. I am waiting till 70 to start my benefits because I would like the extra annual income that I will get at that time.

No one knows the future but I suspect that in 4 years you will enjoy the bigger paycheck of waiting since you don't need the money now.
Upton Sinclair: "It is difficult to get a man to understand something when his salary depends on his not understanding it."
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CyclingDuo
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Re: Take Social Security now, at 66, during Corona-virus?

Post by CyclingDuo »

theac wrote: Fri Apr 24, 2020 11:58 pm Four years ago I had itchy fingers to go ahead and file at 62,
but felt it was better to wait till 66 since I didn't need the income, etc.

Well I'll be 66 in a few months, and was planning on filing my online application in May.
Even now, I still don't need the income, but am happy I waited at least till now.

However, Corona-virus has (possibly?) inserted a new variable in the equation.

Any ideas on why "it might be better to NOT take it this year,"
in the midst of uncertain times?
Or,any ideas on why "it might be better to take it this year,"
BECAUSE of these uncertain times?

Of course nobody can know any of these things for sure,
but a couple of things I've considered are:

Is it better to take it now since SS could run into future problems
and at least I'll be glad I got something out of it before they do?

What if hyper-inflation comes, does it really make any difference if I wait
or take it now since SS are all COLA payments/increases anyway?

Personally I feel like just taking it now at 66, and let the chips fall where they may.
I'm very pleased that I didn't act ON THE STRONG IMPULSE I was having at 62,
and patiently waited, even though last year I started getting those thoughts like
"maybe waiting till 63 was good enough" and
"waiting another year isn't going to add that much more" :D

Shrugged all that off, glad I did, and here I am.
So any ideas on a good course of action going forward from here
with this new Corona-virus in the mix, and possible effects of taking it now vs waiting?


Single
No debt
On a non-COLA pension that covers my expenses
Plenty of safety net in low risk investments and cash
Good health, longevity in gene pool, no high-risk activities such as sky-diving, scuba...

Here is the Topic from 4 years ago with my stats, etc.:

viewtopic.php?f=2&t=191148
If you don't need the money now, I would vote to defer until you are 70 based on your health, longevity, and non-COLA pension. Now that you've reached FRA, you'll get an 8% bump in your benefit each year you delay until 70. You're not going to get an 8% risk free return every year that I know of at the current moment in another investment.
"Save like a pessimist, invest like an optimist." - Morgan Housel
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samsoes
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Re: Take Social Security now, at 66, during Corona-virus?

Post by samsoes »

I vote to take it now. Although SS is actuarially neutral, in these uncertain times one cannot be too presumptuous. "A bird in the hand," so to speak. There were many folks your age who, 2 months ago, were otherwise healthy and now have succumbed to COVID-19. And since you are single, there is no spouse to assume your benefits and SS isn't otherwise inheritable.

Take it now. If you don't need it, consider it to be dry powder and put it into a separate brokerage account and buy index funds.
Or better yet, give some to relatives or donate to charity.

'Cuz you never know.
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JoeRetire
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Re: Take Social Security now, at 66, during Corona-virus?

Post by JoeRetire »

theac wrote: Fri Apr 24, 2020 11:58 pm However, Corona-virus has (possibly?) inserted a new variable in the equation.
In what way? How has the virus changed your calculus?
Is it better to take it now since SS could run into future problems
and at least I'll be glad I got something out of it before they do?
You think these "future problems" mean that you won't get anything? And you didn't think that before the virus?
What if hyper-inflation comes, does it really make any difference if I wait
or take it now since SS are all COLA payments/increases anyway?
In conditions of hyper inflation, don't you think it would make sense to have as much inflation-protected income as possible, rather than relying more on a non-COLA pension?
Personally I feel like just taking it now at 66, and let the chips fall where they may.
They are your dice. You can roll them as you please. You are single, so nobody other than you would be hurt financially, no matter what you choose.
So any ideas on a good course of action going forward from here
A good course of action would be to check out https://opensocialsecurity.com/

"Nonetheless, the decision to delay Social Security can be evaluated based on the implicit rate of return it creates by choosing to delay, and over longer time horizons – when clients may “need the money most” as they have more years of retirement expenses to cover in the first place – the return of the Social Security delay becomes quite compelling. In fact, the return is generally far superior to any risk-adjusted returns that can be achieved over comparable time periods by the available alternatives, whether investing in risk-free bonds, growth equities, or buying a commercially available annuity. And because the system is indexed to inflation, its real returns will be maintained even if inflation rises, and will only become better if longevity continues to increase as well. In fact, ultimately the decision to delay Social Security delivers the best results when there is either unexpected inflation, unusually long longevity, or especially bad market returns, which are the exact three scenarios that traditional portfolios are the least effective at managing, making the decision to delay Social Security the ultimate form of “anti-fragile” triple hedge!"

https://www.kitces.com/blog/how-delayin ... y-can-buy/
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
vested1
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Re: Take Social Security now, at 66, during Corona-virus?

Post by vested1 »

I contributed to your earlier thread and wanted to congratulate you on your patience in waiting until age 66, which in retrospect was a wise decision. I'm going to be 68 in a couple of months and am still delaying, but I'm married, so my reasons for doing so are more advantageous than yours.

The coronavirus makes us all confront our mortality, and more so when older than 60. My vote would still be to delay until 70 however. A 32% increase plus COLA in only 4 years is quite an incentive if you don't really need the money. Who knows what the return on investments will be during that time, with what must be an inevitable impact that is currently being artificially delayed IMHO. A sure thing (increase in benefit) is a strong incentive in this environment, and you can always change your mind and claim at any time if your luck changes for the worse financially.

You can't change your mind once you file however. Either way you should be in good shape to weather the storm.
nanameg
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Re: Take Social Security now, at 66, during Corona-virus?

Post by nanameg »

We too were planning to wait until 70 ( 64 now) but reading about how SS trust fund is expected to be impacted by the market downturn has me wondering too. But the Fed printed so much money in response to Covid...won’t the gov resuscitate SS as needed as well?

All this printing of money does make me wonder if hyperinflation is in our future.
lstone19
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Re: Take Social Security now, at 66, during Corona-virus?

Post by lstone19 »

I think the main reason to question when to file is what impact COVID-19 has had on mortality. SS is supposed to be actuarily neutral but if mortality has changed, then it no longer is. Currently, both my wife and I, with near equal expected PIAs and both in our early 60s, planned to wait until 70. But if COVID-19 has shifted mortality enough to make it less likely for us to both live to the break-even point, then it may make sense for one of us to file now.
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JoeRetire
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Re: Take Social Security now, at 66, during Corona-virus?

Post by JoeRetire »

nanameg wrote: Sat Apr 25, 2020 7:03 am We too were planning to wait until 70 ( 64 now) but reading about how SS trust fund is expected to be impacted by the market downturn has me wondering too. But the Fed printed so much money in response to Covid...won’t the gov resuscitate SS as needed as well?
That would require future legislation about which we are not supposed to speculate.

Congress has dumped trillions into the economy recently to save businesses and workers. We can all ponder if they would do the same to save grandma and grandpa.
All this printing of money does make me wonder if hyperinflation is in our future.
No sign of that yet. But the future is long.

If hyperinflation were to occur, I'd feel better if I had more inflation-protected income.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
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Tamarind
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Re: Take Social Security now, at 66, during Corona-virus?

Post by Tamarind »

Since you don't need the income, why not wait? I'm sure you've already thought about this, but 8% a year on your lifetime annuity is awfully good insurance.

It seems to me that when enough savings are available, it's less important to maximize the amount received from social security and more important to cover the potential for an unexpectedly long life combined with late failure of nest egg.
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theac
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Re: Take Social Security now, at 66, during Corona-virus?

Post by theac »

vested1 wrote: Sat Apr 25, 2020 6:46 am I contributed to your earlier thread and wanted to congratulate you on your patience in waiting until age 66, which in retrospect was a wise decision. I'm going to be 68 in a couple of months and am still delaying, but I'm married, so my reasons for doing so are more advantageous than yours.

The coronavirus makes us all confront our mortality, and more so when older than 60. My vote would still be to delay until 70 however. A 32% increase plus COLA in only 4 years is quite an incentive if you don't really need the money. Who knows what the return on investments will be during that time, with what must be an inevitable impact that is currently being artificially delayed IMHO. A sure thing (increase in benefit) is a strong incentive in this environment, and you can always change your mind and claim at any time if your luck changes for the worse financially.

You can't change your mind once you file however. Either way you should be in good shape to weather the storm.
Ah man, I'm all dressed up for the prom, and now you guys are telling me I can't go! :P

Oh well, as much as I'd like to pull the trigger, JUST TO GET IT OVER WITH,
nothing has really changed in my circumstances to warrant taking it now,
other than, "I can," just like "I could have" 4 years ago.

Guess I'll keep tugging along with my month-to-month strategy, it got me this far.
If I decide not to hold out till the full 70 and take it somewhere before then,
I'll just look at it as every month that I did delay was another small bonus.

Just for the record, I really don't think I'm going to shoot for the full 70,
but I am going to keep going in that direction.

Thanks to all for the input.
"We keep you alive to serve this ship. Row well...and live." Ben Hur...and The Taxman! hahaha
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theac
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Re: Take Social Security now, at 66, during Corona-virus?

Post by theac »

Tamarind wrote: Sat Apr 25, 2020 8:25 am Since you don't need the income, why not wait? I'm sure you've already thought about this, but 8% a year on your lifetime annuity is awfully good insurance.

It seems to me that when enough savings are available, it's less important to maximize the amount received from social security and more important to cover the potential for an unexpectedly long life combined with late failure of nest egg.
Yep, can't argue with that. :P
"We keep you alive to serve this ship. Row well...and live." Ben Hur...and The Taxman! hahaha
Pu239
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Re: Take Social Security now, at 66, during Corona-virus?

Post by Pu239 »

I'm midway between full retirement age and 70 and have decided to stick with our plan to wait till 70 after reaching my target claiming age of 68. We reevaluated this decision (once again - like you, it hasn't been a "one and done" type of decision) post tax return and at the beginning of the virus shutdown, making sure we had enough cash to last until 70 (original plan) and weather the uncertainties of the shutdown (emergency gifts/loans to kids, additional health expense, etc.). The risk of losing out because of early death is always present regardless of cause; however, we don't need the money now or over the next couple of years so we're keeping to our long term plan. Coronavirus is nerve wracking so I appreciate your concerns. We prefer looking at our glass as being half full.
Between the idea And the reality...Between the motion And the act...Falls the Shadow - T. S. Eliot
Patzer
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Re: Take Social Security now, at 66, during Corona-virus?

Post by Patzer »

I think you should wait until 70.
Delaying social security is the cheapest way to hedge against longevity risk and inflation, and should be delayed as long as anyone can afford to do so without it materially negatively impacting their lifestyle, excluding cases where the person has a scientific reason to think their lifespan will be shorter than average.
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dodecahedron
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Re: Take Social Security now, at 66, during Corona-virus?

Post by dodecahedron »

theac wrote: Sat Apr 25, 2020 8:52 am
vested1 wrote: Sat Apr 25, 2020 6:46 am You can't change your mind once you file however. Either way you should be in good shape to weather the storm.
Ah man, I'm all dressed up for the prom, and now you guys are telling me I can't go! :P
It is NOT correct that you can´t change your mind once you file.

Within 12 months of starting SS retirement benefits, you have a one per lifetime option to withdraw your application to start and repay all benefits received thus far. You then can choose whatever later point you want to file. Details here.

https://www.ssa.gov/planners/retire/withdrawal.html

This do-over window used to be far more generous than 12 months. There were folks who took at 62 and decided to repay all benefits and start over at 70.

But you still have a 12 month window to change your mind.

Edited to add: in addition, you also have the option of *suspending* your retirement benefits at any time after FRA. This will allow delayed retirement credits to start running again (but not retroactively) and does not require repaying anything.
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Sandtrap
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Re: Take Social Security now, at 66, during Corona-virus?

Post by Sandtrap »

theac wrote: Fri Apr 24, 2020 11:58 pm Single
No debt
On a non-COLA pension that covers my expenses
Plenty of safety net in low risk investments and cash
Good health, longevity in gene pool, no high-risk activities such as sky-diving, scuba...

Here is the Topic from 4 years ago with my stats, etc.:

viewtopic.php?f=2&t=191148
Would you take SS at age 66 if COVID19 did not exist and the economy was steady?
Why not wait until age 70 or when your SS returns are optimal?

If you don't "need" to, then why?
Beware the feeling of "needing to do something" in an already well thought out plan.

You have mentioned "sky diving" and "SCUBA" in the past thread, and here. Maybe it might be time to take a few SCUPA classes even if at the local swimming pool?

j :happy
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Pu239
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Re: Take Social Security now, at 66, during Corona-virus?

Post by Pu239 »

Forgot to mention that another advantage of delaying ss for us is making partial Roth conversions to avoid the ss "hump".
Between the idea And the reality...Between the motion And the act...Falls the Shadow - T. S. Eliot
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dodecahedron
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Re: Take Social Security now, at 66, during Corona-virus?

Post by dodecahedron »

Sandtrap wrote: Sat Apr 25, 2020 9:28 am
theac wrote: Fri Apr 24, 2020 11:58 pm Single
No debt
On a non-COLA pension that covers my expenses
Plenty of safety net in low risk investments and cash
Good health, longevity in gene pool, no high-risk activities such as sky-diving, scuba...

Here is the Topic from 4 years ago with my stats, etc.:

viewtopic.php?f=2&t=191148
Would you take SS at age 66 if COVID19 did not exist and the economy was steady?
Why not wait until age 70 or when your SS returns are optimal?

If you don't "need" to, then why?
Beware the feeling of "needing to do something" in an already well thought out plan.
Any well thought out plan for SS filing should certainly take into account the possibility of an unexpected change in expected longevity. The typical example given is something like a cancer diagnosis with poor prognosis, but folks living in COVID-19 hotspots might also consider themselves to be currently facing a significant change in their mortality risk over the next 12 months. This is particularly true if they themselves or a household member is in a high-risk profession (e.g., works in a hospital.

I am not in the OP´s shoes (since my SS benefits are dominated by my widow´s benefits, which do not grow after FRA), but if I were in their shoes, I *might* consider filing for SS benefits now and keeping open the option of withdrawing/repaying if I survive the next 12 months.

On the other hand, this is an option involving the possibility of bureaucratic SNAFUs even in normal times and might well be worse than usual after SS returns to normal operations post-COVID.
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dodecahedron
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Re: Take Social Security now, at 66, during Corona-virus?

Post by dodecahedron »

Sandtrap wrote: Sat Apr 25, 2020 9:28 am
You have mentioned "sky diving" and "SCUBA" in the past thread, and here. Maybe it might be time to take a few SCUPA classes even if at the local swimming pool?

j :happy
I believe local swimming pools have been shut down in virtually every state. Even when they reopen, I think it will be a while before it is considered prudent for folks in the sixty-plus age category to be using such congregate facilities for classes.

Maybe private SCUBA classes in someone´s backyard pool might be an option. Perhaps even with instruction via Zoom on a water resistant poolside computer.
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dwickenh
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Re: Take Social Security now, at 66, during Corona-virus?

Post by dwickenh »

vested1 wrote: Sat Apr 25, 2020 6:46 am I contributed to your earlier thread and wanted to congratulate you on your patience in waiting until age 66, which in retrospect was a wise decision. I'm going to be 68 in a couple of months and am still delaying, but I'm married, so my reasons for doing so are more advantageous than yours.

The coronavirus makes us all confront our mortality, and more so when older than 60. My vote would still be to delay until 70 however. A 32% increase plus COLA in only 4 years is quite an incentive if you don't really need the money. Who knows what the return on investments will be during that time, with what must be an inevitable impact that is currently being artificially delayed IMHO. A sure thing (increase in benefit) is a strong incentive in this environment, and you can always change your mind and claim at any time if your luck changes for the worse financially.

You can't change your mind once you file however. Either way you should be in good shape to weather the storm.
I believe you can change your mind in the first 12 months, returning all of the received payments and suspend until a later age.

Edit to give credit for this info to dodecahedron in his prior post.
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett
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Re: Take Social Security now, at 66, during Corona-virus?

Post by tibbitts »

While everybody talks about waiting until 70, Opensocialsecurity suggests that my optimal claiming age will be close to 70 without reductions based on current law, but somewhat less than that with the reductions. I'm assuming everyone is assuming reductions will take place per current law.
vested1
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Re: Take Social Security now, at 66, during Corona-virus?

Post by vested1 »

dwickenh wrote: Sat Apr 25, 2020 9:48 am
vested1 wrote: Sat Apr 25, 2020 6:46 am I contributed to your earlier thread and wanted to congratulate you on your patience in waiting until age 66, which in retrospect was a wise decision. I'm going to be 68 in a couple of months and am still delaying, but I'm married, so my reasons for doing so are more advantageous than yours.

The coronavirus makes us all confront our mortality, and more so when older than 60. My vote would still be to delay until 70 however. A 32% increase plus COLA in only 4 years is quite an incentive if you don't really need the money. Who knows what the return on investments will be during that time, with what must be an inevitable impact that is currently being artificially delayed IMHO. A sure thing (increase in benefit) is a strong incentive in this environment, and you can always change your mind and claim at any time if your luck changes for the worse financially.

You can't change your mind once you file however. Either way you should be in good shape to weather the storm.
I believe you can change your mind in the first 12 months, returning all of the received payments and suspend until a later age.

Edit to give credit for this info to dodecahedron in his prior post.
You're right of course, as is the other member who pointed that out. I shouldn't have assumed the OP knew that, although it may have been mentioned in their previous thread. I wonder how many actually do change their mind within 12 months of claiming and pay back the money they've already spent?
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Watty
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Re: Take Social Security now, at 66, during Corona-virus?

Post by Watty »

JoeRetire wrote: Sat Apr 25, 2020 6:32 am A good course of action would be to check out https://opensocialsecurity.com/
On that website you can also compare different strategies and it will give you a dollar value of how much the different options might be worth. As I understand it that dollar value is calculated using your life expectancy and also discounting future income since a dollar now is worth more than a dollar when you are 90.

The question is not just what the best choice is, it is also how much does that actually gets you compared to some other choice.

When I looked at that the difference was only about $23K if I start SS at my full retirement age and not at 70.

Part of the reason that it does not make a huge difference to me that my wife is that my Social Security benefit is a lot higher than my wifes. You numbers may be a lot different.

Something that I did not understand at first was that if you are married and your Social Security is a lot higher than your spouses then once you are both collecting Social Security then your spouse will likely be collecting a spousal benefit that is based on your benefit at your full retirement age and their spousal benefit will not increase if you delay starting until you are 70.

For example if you would get $2,000 a month at your full retirement age then your spouse could get $1,000 a month based on your history. If you delay it a few years and start it when you could get $2,500 then your spouse would still get the same $1,000 a month not $1,250. (This assume no reductions for the spouse starting SS early)

They would still get your larger benefit if they outlive you.

I did not check your age but I was born after the cutoff date for the "file and suspend" restriction that they put in a few years ago so my wife will be collecting a smaller Social Security amount on her earning history until I start my Social Security and then she can get a spousal benefit based on my earnings history. After my full retirement age the difference will be around $500. This means that every month I delay starting Social Security I would not only give up the money I could have gotten but also the extra $500 that she could have gotten.

The numbers can work out a lot of different ways but for me this means that delaying my SS past my full retirement age is less of an easy decision.

It may depend on how my portfolio is doing then but I may start my Social Security when I reach my full retirement age.
randomguy
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Re: Take Social Security now, at 66, during Corona-virus?

Post by randomguy »

CyclingDuo wrote: Sat Apr 25, 2020 6:08 am
If you don't need the money now, I would vote to defer until you are 70 based on your health, longevity, and non-COLA pension. Now that you've reached FRA, you'll get an 8% bump in your benefit each year you delay until 70. You're not going to get an 8% risk free return every year that I know of at the current moment in another investment.
You aren't going to get an 8% return form delaying SS either. An 8% benefit increase is not remotely the same as an 8% return.

The arguments for taking SS now is that you don't have to take money out of a portfolio that is likely down. Covid19 isn't going to change your life expectancy in a way that matters (i.e. if you get it next month, you aren't going to get enough from SS to matter before you die). The argument for the delay is the same as always that the security of potentially getting a bigger check later is very comforting.

And for pure speculation, Covid19 could really mess up the SS financial situation. We have had a huge drop in payroll taxes which will bring in the insolvency date. That might favor taking the money now. But you are off in speculation land. Personally I would stay the course. Ignoring short term stuff is almost always the right choice.
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dwickenh
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Re: Take Social Security now, at 66, during Corona-virus?

Post by dwickenh »

vested1 wrote: Sat Apr 25, 2020 10:15 am
dwickenh wrote: Sat Apr 25, 2020 9:48 am
vested1 wrote: Sat Apr 25, 2020 6:46 am I contributed to your earlier thread and wanted to congratulate you on your patience in waiting until age 66, which in retrospect was a wise decision. I'm going to be 68 in a couple of months and am still delaying, but I'm married, so my reasons for doing so are more advantageous than yours.

The coronavirus makes us all confront our mortality, and more so when older than 60. My vote would still be to delay until 70 however. A 32% increase plus COLA in only 4 years is quite an incentive if you don't really need the money. Who knows what the return on investments will be during that time, with what must be an inevitable impact that is currently being artificially delayed IMHO. A sure thing (increase in benefit) is a strong incentive in this environment, and you can always change your mind and claim at any time if your luck changes for the worse financially.

You can't change your mind once you file however. Either way you should be in good shape to weather the storm.
I believe you can change your mind in the first 12 months, returning all of the received payments and suspend until a later age.

Edit to give credit for this info to dodecahedron in his prior post.
You're right of course, as is the other member who pointed that out. I shouldn't have assumed the OP knew that, although it may have been mentioned in their previous thread. I wonder how many actually do change their mind within 12 months of claiming and pay back the money they've already spent?
I agree the giving back is not likely!!
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett
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Re: Take Social Security now, at 66, during Corona-virus?

Post by David Jay »

You actually get 8/12 of 1% more every month you delay.
Wait a Month.
Rinse and Repeat.
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Re: Take Social Security now, at 66, during Corona-virus?

Post by Nestegg_User »

dwickenh wrote: Sat Apr 25, 2020 9:48 am
vested1 wrote: Sat Apr 25, 2020 6:46 am I contributed to your earlier thread and wanted to congratulate you on your patience in waiting until age 66, which in retrospect was a wise decision. I'm going to be 68 in a couple of months and am still delaying, but I'm married, so my reasons for doing so are more advantageous than yours.

The coronavirus makes us all confront our mortality, and more so when older than 60. My vote would still be to delay until 70 however. A 32% increase plus COLA in only 4 years is quite an incentive if you don't really need the money. Who knows what the return on investments will be during that time, with what must be an inevitable impact that is currently being artificially delayed IMHO. A sure thing (increase in benefit) is a strong incentive in this environment, and you can always change your mind and claim at any time if your luck changes for the worse financially.

You can't change your mind once you file however. Either way you should be in good shape to weather the storm.
I believe you can change your mind in the first 12 months, returning all of the received payments and suspend until a later age.

Edit to give credit for this info to dodecahedron in his her prior post.
(edited to correct)

AFA waiting, you do get the increase every month you delay (but there are a few "bumps" that don't quite give you the same amount)....if you get your "retirement matrix" from SS (when they reopen or possibly from the website) you can see these minor discrepancies. This is especially true when you take your SS after the start of the year, since the credits won't apply until the following Jan... (should "true up", I believe, wherein you get a lump sum for those)... but if I start before 70 I'm going to start in December so that the credits immediately start in the new year and the SS checks start arriving in January.
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Re: Take Social Security now, at 66, during Corona-virus?

Post by JW-Retired »

I don't see that SS taxation, especially state taxation, has been mentioned.

Most states don't tax SS and none of the high tax states do. That makes delay of SS as much as you can a really easy call. Especially if you are in a hefty bracket in a high tax state like my dear old California.

It added up to avoiding a lot of tax for me. :D
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Re: Take Social Security now, at 66, during Corona-virus?

Post by retire57 »

What would you do with the extra income?
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Re: Take Social Security now, at 66, during Corona-virus?

Post by squirm »

Just remember to take into account your enjoyment to use it. Who cares if you wait another five years to collect more and then end up with Parkinson's like an uncle I had. He was alive to collect but can't enjoy it. Don't be greedy I guess. Everyone here who post and you're taking advice from is alive and has the ability to read/write and has cognitive function so take that into account, so the bias is to wait for a bigger payout.
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Re: Take Social Security now, at 66, during Corona-virus?

Post by CyclingDuo »

randomguy wrote: Sat Apr 25, 2020 10:32 am
CyclingDuo wrote: Sat Apr 25, 2020 6:08 am
If you don't need the money now, I would vote to defer until you are 70 based on your health, longevity, and non-COLA pension. Now that you've reached FRA, you'll get an 8% bump in your benefit each year you delay until 70. You're not going to get an 8% risk free return every year that I know of at the current moment in another investment.
You aren't going to get an 8% return form delaying SS either. An 8% benefit increase is not remotely the same as an 8% return.
Each year you delay, your benefit increases by 8%. I guess I was swayed by something I read here...
https://kuhnadvisors.com/social-securit ... investing/

Kitces goes into some calculations of delaying Social Security as the best long-term return money can buy here:

https://www.kitces.com/blog/how-delayin ... y-can-buy/
randomguy wrote: Sat Apr 25, 2020 10:32 amThe arguments for taking SS now is that you don't have to take money out of a portfolio that is likely down. Covid19 isn't going to change your life expectancy in a way that matters (i.e. if you get it next month, you aren't going to get enough from SS to matter before you die). The argument for the delay is the same as always that the security of potentially getting a bigger check later is very comforting.

And for pure speculation, Covid19 could really mess up the SS financial situation. We have had a huge drop in payroll taxes which will bring in the insolvency date. That might favor taking the money now. But you are off in speculation land. Personally I would stay the course. Ignoring short term stuff is almost always the right choice.
OP said they didn't need the money right now, so was assuming they were not drawing from the equity side of their portfolio based on three important points the OP mentioned:

•On a non-COLA pension that covers my expenses
•Plenty of safety net in low risk investments and cash
•Good health, longevity in gene pool, no high-risk activities such as sky-diving, scuba...


Why take it now if the benefit increases 8% each year going forward until age 70 in such a scenario?

I don't want to speculate on SS or Covid19 either in terms of the OP making an emotional decision in the short term because of it if the long term would have better results by ignoring the current crisis.

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Re: Take Social Security now, at 66, during Corona-virus?

Post by JoeRetire »

dodecahedron wrote: Sat Apr 25, 2020 9:40 amAny well thought out plan for SS filing should certainly take into account the possibility of an unexpected change in expected longevity. The typical example given is something like a cancer diagnosis with poor prognosis, but folks living in COVID-19 hotspots might also consider themselves to be currently facing a significant change in their mortality risk over the next 12 months. This is particularly true if they themselves or a household member is in a high-risk profession (e.g., works in a hospital.
Or they could take more precautions in hopes that they will live.
On the other hand, this is an option involving the possibility of bureaucratic SNAFUs even in normal times and might well be worse than usual after SS returns to normal operations post-COVID.
I don't understand this statement. Can you clarify?
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Re: Take Social Security now, at 66, during Corona-virus?

Post by JoeRetire »

tibbitts wrote: Sat Apr 25, 2020 9:51 am While everybody talks about waiting until 70, Opensocialsecurity suggests that my optimal claiming age will be close to 70 without reductions based on current law, but somewhat less than that with the reductions. I'm assuming everyone is assuming reductions will take place per current law.
I'm not making that assumption.
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Re: Take Social Security now, at 66, during Corona-virus?

Post by JoeRetire »

Watty wrote: Sat Apr 25, 2020 10:21 am Something that I did not understand at first was that if you are married and your Social Security is a lot higher than your spouses then once you are both collecting Social Security then your spouse will likely be collecting a spousal benefit that is based on your benefit at your full retirement age and their spousal benefit will not increase if you delay starting until you are 70.
That's true.

Your wife will get 1/2 of your FRA benefit for spousal benefits, while you collect your maximum amount for the rest of your life. The big benefit is if you pass first. She will get your maximum amount as a survivor benefit for the remainder of her life.

Using the Advanced Options of Open Social Security you can explore what happens in scenarios where one of you dies young or where at least one of you lives for a long, long time.
The numbers can work out a lot of different ways but for me this means that delaying my SS past my full retirement age is less of an easy decision.
Unless you want to optimize the combined amount you receive. Then it's a pretty easy decision.
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Re: Take Social Security now, at 66, during Corona-virus?

Post by celia »

theac wrote: Fri Apr 24, 2020 11:58 pm Any ideas on why "it might be better to NOT take it this year, “in the midst of uncertain times?

Or,any ideas on why "it might be better to take it this year," BECAUSE of these uncertain times?
I’ll be honest here. The virus has nothing to do with it EXCEPT with a lot of people out of work, not as many people are currently paying the wIthholding ‘payroll tax’ that funds SS and Medicare compared to normal years. But there may be some good in that if it finally forces Congress to address the funding issue.

The most important reason you need to wait until age 70 is because:
a non-COLA pension that covers my expenses
In 20 or 30 years, that pension will be a pittance and you will be relying on SS more and more. It’s COLA, based on a larger base payment, will be your saving grace.

Look at it this way: You have made it to the halfway mark between age 62 and 70. If you could wait the first 4 years, you can do that again. We promise we will let you out at age 70 to go on your spending spree!

Stay safe and healthy, wherever you are.
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Re: Take Social Security now, at 66, during Corona-virus?

Post by sawdust60 »

66 is a good age to compare and understand the difference vs. waiting to age 70.

Keep in mind that with SS being fairly actuarial neutral, you are mostly taking a bet on your longevity and your investment returns. (Except that there is added benefit for a surviving spouse.)

Also note that the SS calculators don't attempt to factor in the tax impacts, so further modeling with your numbers could result in a different answer with tax and IRMAA considered.

A simple example. Assume 4 years results in $100k in your savings account. Would you keep the $100k, or would you buy an annuity?
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Re: Take Social Security now, at 66, during Corona-virus?

Post by BluesH »

I've now seen 3 posts that claim that SS is actuarially neutral. Correction -- SS was designed to be actuarially neutral in 1986, using data that was a few years older than that (1983, IIRC). Since 1986:
  • Longevity has increased
  • Interest rates have decreased
  • Expected equity returns have decreased
All 3 of these points skew in favor of claiming at a later age. Bottom line is that SS is no longer actuarially neutral. I once saw a study that tried to quantize this effect, and it was not insignificant. If I can find that study, I'll post it here.
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Re: Take Social Security now, at 66, during Corona-virus?

Post by grabiner »

BluesH wrote: Sat Apr 25, 2020 5:00 pm I've now seen 3 posts that claim that SS is actuarially neutral. Correction -- SS was designed to be actuarially neutral in 1986, using data that was a few years older than that (1983, IIRC). Since 1986:
  • Longevity has increased
  • Interest rates have decreased
  • Expected equity returns have decreased
All 3 of these points skew in favor of claiming at a later age. Bottom line is that SS is no longer actuarially neutral. I once saw a study that tried to quantize this effect, and it was not insignificant. If I can find that study, I'll post it here.
It can't be fully actuarially neutral given the formula, which is linear over several periods. If your SS at FRA of 66 is $20,000, then it is an extra $1600 for each year from 67 to 70. If your investments match inflation, the break-even for waiting from 66 to 67 is 1+20000/1600=13.5 years, and similarly the break-even for waiting from 67 to 68 is 14.5 years, from 68 to 69 is 15.5 years, and from 69 to 70 is 1+24800/1600=16.5 years. Waiting from 69 to 70 is actuarially negative for a man, but positive for a woman, or for a man whose spouse may get benefits based on his record. Thus the expected value for a man in average health is maximized if he claims at 69. (I still recommend claiming at 70, both because this decreases risk, and because most people with below-average life expectancies know this.)
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Re: Take Social Security now, at 66, during Corona-virus?

Post by BluesH »

grabiner wrote: Sat Apr 25, 2020 10:08 pm It can't be fully actuarially neutral given the formula, which is linear over several periods.
Your point appears to be that the actuarial neutrality that the SSA was shooting for in 1986 was only approximate. That's true. Making it exactly 8% of the PIA for each year from 66 to 70 can't be strictly accurate. It was an approximation to make the formula easier to understand and apply.

My point is that even this approximate actuarial neutrality no longer applies after 34+ years. The 3 factors that I mentioned, which have changed in the intervening years, break even the approximate neutrality. All 3 factors change the calculation in the same direction, making it more advantageous to wait to file at 70. Of course, opposing that push is the fact that the fund will run out in 2033, yielding (if not fixed) a reduction in benefits of 21%. Does that balance the 3 forces I mentioned? I don't know. Would love to see further studies.
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Re: Take Social Security now, at 66, during Corona-virus?

Post by randomguy »

CyclingDuo wrote: Sat Apr 25, 2020 1:43 pm
randomguy wrote: Sat Apr 25, 2020 10:32 am
CyclingDuo wrote: Sat Apr 25, 2020 6:08 am
If you don't need the money now, I would vote to defer until you are 70 based on your health, longevity, and non-COLA pension. Now that you've reached FRA, you'll get an 8% bump in your benefit each year you delay until 70. You're not going to get an 8% risk free return every year that I know of at the current moment in another investment.
You aren't going to get an 8% return form delaying SS either. An 8% benefit increase is not remotely the same as an 8% return.
Each year you delay, your benefit increases by 8%. I guess I was swayed by something I read here...
https://kuhnadvisors.com/social-securit ... investing/


CyclingDuo
If you give me 24k and I give you 2k, did you get an 8% return or a -90% return? Getting that 8% increase in benefit isn't free. It is something that you pay for and ma or may not end up with a positive return. It all depends on how long you live. Delaying to 70 is great from longevity protection point of view. But you aren't making 8% (well maybe if you live long enough) by doing it.
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Re: Take Social Security now, at 66, during Corona-virus?

Post by gr7070 »

There are few, if any, things that Covid-19 would change my long-term plans. SS filling would not be one of them.

I'd continue with my previous long term plan.

I'll let others challenge your decision to take SS at 66. If you choose to change your SS filing date do so for reasons not related to Covid-19.
Last edited by gr7070 on Sun Apr 26, 2020 10:15 am, edited 1 time in total.
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Re: Take Social Security now, at 66, during Corona-virus?

Post by smitcat »

BluesH wrote: Sat Apr 25, 2020 11:52 pm
grabiner wrote: Sat Apr 25, 2020 10:08 pm It can't be fully actuarially neutral given the formula, which is linear over several periods.
Your point appears to be that the actuarial neutrality that the SSA was shooting for in 1986 was only approximate. That's true. Making it exactly 8% of the PIA for each year from 66 to 70 can't be strictly accurate. It was an approximation to make the formula easier to understand and apply.

My point is that even this approximate actuarial neutrality no longer applies after 34+ years. The 3 factors that I mentioned, which have changed in the intervening years, break even the approximate neutrality. All 3 factors change the calculation in the same direction, making it more advantageous to wait to file at 70. Of course, opposing that push is the fact that the fund will run out in 2033, yielding (if not fixed) a reduction in benefits of 21%. Does that balance the 3 forces I mentioned? I don't know. Would love to see further studies.
"All 3 factors change the calculation in the same direction, making it more advantageous to wait to file at 70."
Agreed , and there are other factors to consider which often favor waiting:
- figuring the after tax value of the funds with each model
- figuring if you do Roth conversions while waiting to file SS and after tax results of that
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Re: Take Social Security now, at 66, during Corona-virus?

Post by theac »

I agree that under MY CIRCUMSTANCES its best that I not take it now,
and the longer I resist taking it, the better.
Especially considering my planned purpose for the SS checks.

For me, it's not about getting the most money out of the system that I can,
but about having the biggest safety net,
just in case some terrible tragedy should befall me--such as living a long life! :P

Oh, and some mentioned taking advantage of this time to do any ROTH converting,
but I got those all taken care of and was done with the tIRA by the time I was 62.
So no future worries about RMDs. But thanks for the info in case I hadn't yet done it.

I wanted to have the option to file at 62 if needed, which now turns out I didn't.
Well looks like I'm back to my "Not filing today" strategy,
possibly for the next 4 full years. :shock:
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Re: Take Social Security now, at 66, during Corona-virus?

Post by reln »

theac wrote: Fri Apr 24, 2020 11:58 pm Four years ago I had itchy fingers to go ahead and file at 62,
but felt it was better to wait till 66 since I didn't need the income, etc.

Well I'll be 66 in a few months, and was planning on filing my online application in May.
Even now, I still don't need the income, but am happy I waited at least till now.

However, Corona-virus has (possibly?) inserted a new variable in the equation.

Any ideas on why "it might be better to NOT take it this year,"
in the midst of uncertain times?
Or,any ideas on why "it might be better to take it this year,"
BECAUSE of these uncertain times?

Of course nobody can know any of these things for sure,
but a couple of things I've considered are:

Is it better to take it now since SS could run into future problems
and at least I'll be glad I got something out of it before they do?

What if hyper-inflation comes, does it really make any difference if I wait
or take it now since SS are all COLA payments/increases anyway?

Personally I feel like just taking it now at 66, and let the chips fall where they may.
I'm very pleased that I didn't act ON THE STRONG IMPULSE I was having at 62,
and patiently waited, even though last year I started getting those thoughts like
"maybe waiting till 63 was good enough" and
"waiting another year isn't going to add that much more" :D

Shrugged all that off, glad I did, and here I am.
So any ideas on a good course of action going forward from here
with this new Corona-virus in the mix, and possible effects of taking it now vs waiting?


Single
No debt
On a non-COLA pension that covers my expenses
Plenty of safety net in low risk investments and cash
Good health, longevity in gene pool, no high-risk activities such as sky-diving, scuba...

Here is the Topic from 4 years ago with my stats, etc.:

viewtopic.php?f=2&t=191148
In your case I'd wait since you don't need it yet and let it continue to increase in value because of the favorable mortality and interest assumptions.
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Re: Take Social Security now, at 66, during Corona-virus?

Post by SQRT »

Tamarind wrote: Sat Apr 25, 2020 8:25 am

It seems to me that when enough savings are available, it's less important to maximize the amount received from social security and more important to cover the potential for an unexpectedly long life combined with late failure of nest egg.
Agree. If you have enough other assets, longevity insurance becomes the best reason to defer. I have deferred mine till 70 and will start collecting in a few months. I informed them (In Canada so it’s CPP) several months ago as to when I wanted to start and they have confirmed (via email) that they have received my request and my CPP will start as instructed.
Last edited by SQRT on Sun Apr 26, 2020 8:48 am, edited 1 time in total.
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Re: Take Social Security now, at 66, during Corona-virus?

Post by nisiprius »

I would put into the equation the question of how well and how quickly Social Security will respond to requests. Social Security is said to have some fairly antiquated IT. In normal times, it's not awful, but you can't turn the spigot on and off instantaneously. At one point--when I reached full retirement age and was supposed to get a benefits boost to make up for the earned income benefits adjustment--it took almost a full year to see the monthly increase, because the adjustment was made in a batch run and I'd just missed the last batch. When I finally got the increase, it was accompanied by a lump-sum retroactive payment making up for the delay, so, theoretically, no biggie; and I didn't need the extra money. But the wait was unnerving.

Stuff like that.

So they're running creaky IT, and it is possible they are running at reduced efficiency due to people working from home, or effort being diverted to other things. For example, they are involved in stimulus payments to Social Security recipients who didn't file taxes.

Right now, my tax refund is being delayed because I had to file on paper and the IRS has paused processing of paper returns.

In other words, if I were on the fence, whichever way I would lean in normal times, I would currently lean toward getting the benefits started--while government services are still running reasonably smoothly, rather than waiting until I really needed it and running into glitches.

Of course you could also argue the other way, and say "wait until things are back to normal," but I am skeptical about just how far we will get back, and to what kind of normal.
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Re: Take Social Security now, at 66, during Corona-virus?

Post by SGM »

This was a hot topic for me when I was approaching full retirement age. I began converting traditional tax deferred accounts when it was first allowed regardless of income in 2010. Over a period of 6 or more years I converted all those traditional tax deferred accounts to Roth accounts. I paid all conversion taxes out of my taxable account. I was happy to lower my taxable income a little and to begin a long period of never taxed income. This has worked out well for us as our Roth accounts doubled in value as the market rose. Even with the recent market lows, our Roth accounts only decreased 5 % in value. No unneeded RMDs to worry about. SS payments are over 32% more plus inflation adjustments than they would have been if I took SS at age 66.
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Re: Take Social Security now, at 66, during Corona-virus?

Post by dodecahedron »

JoeRetire wrote: Sat Apr 25, 2020 1:48 pm
dodecahedron wrote: Sat Apr 25, 2020 9:40 amAny well thought out plan for SS filing should
On the other hand, this [withdrawing an application for SS retirement and repaying benefits received within 12 months of retirement application] is an option involving the possibility of bureaucratic SNAFUs even in normal times and might well be worse than usual after SS returns to normal operations post-COVID.
I don't understand this statement. Can you clarify?
The option I was discussing in my previous post is relatively uncommon and getting such a nonstandard transaction processed correctly by SSA can be a challenge even when the SSA bureaucracy is functioning normally. Currently SS offices are not functioning normally and there is likely to be a big backlog of unprocessed paperwork when the SSA tries to back to normal functioning.
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Re: Take Social Security now, at 66, during Corona-virus?

Post by bltn »

theac wrote: Sun Apr 26, 2020 6:51 am I agree that under MY CIRCUMSTANCES its best that I not take it now,
and the longer I resist taking it, the better.
Especially considering my planned purpose for the SS checks.

For me, it's not about getting the most money out of the system that I can,
but about having the biggest safety net,
just in case some terrible tragedy should befall me--such as living a long life! :P

Oh, and some mentioned taking advantage of this time to do any ROTH converting,
but I got those all taken care of and was done with the tIRA by the time I was 62.
So no future worries about RMDs. But thanks for the info in case I hadn't yet done it.

I wanted to have the option to file at 62 if needed, which now turns out I didn't.
Well looks like I'm back to my "Not filing today" strategy,
possibly for the next 4 full years. :shock:
I think your doing the right thing. Re evaluate in a year.
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