delamer wrote: ↑Fri Nov 24, 2017 9:37 pm
DrGoogle2017 first point above is what I don't understand either. Do people who are concerned about changes to the SS program think that they will somehow be innoculated against their benefits being reduced if they take them at 62? Or do they think the whole system is going to collapse and no one will receive any benefits after a certain date and they want to grab every penny before then?
I just don't get it.
Not that simplistic. If someone is not planning Roth conversions, the answer is much less clear. The issue of possible future changes is just another extra wrinkle. If cash is not needed from either SS or investments until FRA, or 70, the easy answer is to defer filing. However, if you plan to draw down investments under your control while you wait for a higher future payout, you must consider how long it will take to break even, and what impact changes would have.
In my wife’s case, if she deferred from 62 to 66, while taking the same amount from her 401k, and paying the taxes, it would take 8 years past 66 just to break even. Much longer if she waited to 70. Meanwhile, should the market continue to do well, the lower 401k balances that we control would extend the break-even dates further.
At the same time, if there are any changes to the system which demographics will at some point require, it will likely not result in a higher future benefit.
About 48 percent of folks file when they are 62, and a large majority by FRA. Perhaps many just need the money, but many others here make the decision for the reasons above.