Social Security -- Take it at 62, 67 or 70

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dknightd
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Re: Social Security -- Take it at 62, 67 or 70

Post by dknightd » Mon Aug 12, 2019 11:34 am

The reality is you will not know when was the best to time to claim your benefit.

bberris
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Re: Social Security -- Take it at 62, 67 or 70

Post by bberris » Mon Aug 12, 2019 11:52 am

willthrill81 wrote:
Mon Aug 12, 2019 9:25 am
bberris wrote:
Mon Aug 12, 2019 9:23 am
JoeRetire wrote:
Sat Aug 10, 2019 6:45 am
tibbitts wrote:
Fri Aug 09, 2019 8:50 pm
The future reduction to social security is established law - only the precise date and amount is subject to speculation, and even then only within a relatively small range of reasonable possibilities. It's correct that further reductions or changes in tax law are speculative.
That's true.

And if you have decided that you must do all your personal retirement planning based solely on existing law, then you can use calculators like https://opensocialsecurity.com/ , speculate on the date and the amount of the future reduction, and stick to whatever the calculator suggests you should do.

Or, you could look at the entire history of Social Security, realize that Congress has never let these reductions actually take effect, speculate that the planned reductions will not occur, and plan accordingly.

I know which scenario seems far more likely to me. You get to choose your own path.
But they have levied tax on benefits and raised the full retirement age. But no "reductions".
From the perspective of the retiree, both of those actions are potentially equivalent to a reduction. Taxing benefits impacts those already receiving benefits, while raising the FRA impacts how much future retirees receive. But perhaps you're viewing a 'reduction' in terms of lower pre-tax benefits for those who are already receiving them.
I meant it as a bad joke. The taxation of benefits affects current and future beneficiaries. Since the threshholds for taxing benefits are not inflation indexed, everyone will be taxed on benefits eventually.

JediMisty
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Re: Social Security -- Take it at 62, 67 or 70

Post by JediMisty » Mon Aug 12, 2019 12:03 pm

willthrill81 wrote:
Mon Aug 12, 2019 9:24 am
HomerJ wrote:
Mon Aug 12, 2019 9:19 am
22twain wrote:
Mon Aug 12, 2019 6:49 am
HomerJ wrote:
Sun Aug 11, 2019 1:50 pm
My point is that heavily spending down your portfolio, and depending on the SS program to NOT change could entail some risk.
What counts as “heavily spending down”?

In our case, the SS benefits foregone by both of us waiting from age 62 to 70 amount to roughly 10% of our financial assets when the younger one was 62. (There’s a 5-year age gap between us.) That was some years ago, and our assets have risen in the meantime thanks to the bull market and one of us continuing to work part time (not for financial reasons).
In my example earlier in the thread, it could be 30%... and that's a assuming you don't hit a big bear market during those 8 years you delay.

Someone with $1 million could pull $40,000 a year from that, and get $40,000 (as a couple) when pulling SS at 62.

If instead they delayed, they'd have to pull $80,000 a year from the $1 million... That's a 8% withdrawal rate which could be very stressful during turbulent market times (Don't ALL years feel turbulent?).

Yes, if pulling an extra $350,000 from your portfolio for the 8 years from 62-70 is only 10% of your $3.5 million portfolio, it's easier to stomach. And even easier if you do during a bull market, not a bear market.

If it's 20%-30%-40% of your portfolio, it's not as easy is all I'm saying.
And there are risks on both sides. If you do spend down your portfolio in anticipation of SS benefits and you get significantly lower SS benefits than you counted on, that's a risk. If you don't spend down 'enough' or at all, then you may not have 'optimized' your lifetime spending (e.g. spending is likely more fun in your 50s and 60s than in your 70s and 80s). The consequences of the latter seem likely to be less severe to me though, and that's largely the route we're taking.
Here's another possible scenario. If there is a means test enacted at some future date, would it be to my advantage to spend some my portfolio between 62 and 70? I'm currently 61, so this is something I'm thinking about this year.

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willthrill81
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Re: Social Security -- Take it at 62, 67 or 70

Post by willthrill81 » Mon Aug 12, 2019 12:07 pm

JediMisty wrote:
Mon Aug 12, 2019 12:03 pm
willthrill81 wrote:
Mon Aug 12, 2019 9:24 am
HomerJ wrote:
Mon Aug 12, 2019 9:19 am
22twain wrote:
Mon Aug 12, 2019 6:49 am
HomerJ wrote:
Sun Aug 11, 2019 1:50 pm
My point is that heavily spending down your portfolio, and depending on the SS program to NOT change could entail some risk.
What counts as “heavily spending down”?

In our case, the SS benefits foregone by both of us waiting from age 62 to 70 amount to roughly 10% of our financial assets when the younger one was 62. (There’s a 5-year age gap between us.) That was some years ago, and our assets have risen in the meantime thanks to the bull market and one of us continuing to work part time (not for financial reasons).
In my example earlier in the thread, it could be 30%... and that's a assuming you don't hit a big bear market during those 8 years you delay.

Someone with $1 million could pull $40,000 a year from that, and get $40,000 (as a couple) when pulling SS at 62.

If instead they delayed, they'd have to pull $80,000 a year from the $1 million... That's a 8% withdrawal rate which could be very stressful during turbulent market times (Don't ALL years feel turbulent?).

Yes, if pulling an extra $350,000 from your portfolio for the 8 years from 62-70 is only 10% of your $3.5 million portfolio, it's easier to stomach. And even easier if you do during a bull market, not a bear market.

If it's 20%-30%-40% of your portfolio, it's not as easy is all I'm saying.
And there are risks on both sides. If you do spend down your portfolio in anticipation of SS benefits and you get significantly lower SS benefits than you counted on, that's a risk. If you don't spend down 'enough' or at all, then you may not have 'optimized' your lifetime spending (e.g. spending is likely more fun in your 50s and 60s than in your 70s and 80s). The consequences of the latter seem likely to be less severe to me though, and that's largely the route we're taking.
Here's another possible scenario. If there is a means test enacted at some future date, would it be to my advantage to spend some my portfolio between 62 and 70? I'm currently 61, so this is something I'm thinking about this year.
That's a possibility, but I certainly wouldn't change my strategy on that alone.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

mptfan
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Re: Social Security -- Take it at 62, 67 or 70

Post by mptfan » Mon Aug 12, 2019 2:09 pm

dknightd wrote:
Mon Aug 12, 2019 11:34 am
The reality is you will not know when was the best to time to claim your benefit.
You will after you are dead. When that happens, you can check back in and let us know if you made the right decision.
:D

RustyShackleford
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Re: Social Security -- Take it at 62, 67 or 70

Post by RustyShackleford » Mon Aug 12, 2019 2:54 pm

cbeck wrote:
Sat Aug 10, 2019 8:58 pm
It is, in my opinion, a huge mistake to view SS as an investment and do break-even analysis, etc. The purpose of the SS annuity is to prevent me from being old and poor, which would be a disaster. Now I delayed my SS until age 70, because I could afford to "buy" more annuity in this way. My standard of living did not suffer between retirement and age 70. So, even if I were to die tomorrow, my retirement plan would have succeeded, i.e. I was never poor. Now that I have increased the one income source that I cannot outlive I have increased confidence that I will not end up poor, which in itself is extremely valuable to me. Since I have a wife, I know that I have gone a long way to protect her from old age poverty also, something I appreciate every day.
BINGO ! (With the caveat of the sentence I have italicized).

dcb
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Re: Social Security -- Take it at 62, 67 or 70

Post by dcb » Mon Aug 12, 2019 3:00 pm

HomerJ wrote:
Wed Aug 07, 2019 9:15 pm
RustyShackleford wrote:
Wed Aug 07, 2019 4:53 pm
But here's the thing: if you do not live past that break-even age, you don't care - you're dead.
I'm not going to want to spend a large chunk of my own money in my 60s.

If I die at 69, there will be a bunch of things I will not have done with my kids and my wife. I may not care when I'm dead, but I will care for the month before I am dead, lying in hospice wishing I had taken the money and done stuff with the wife, kids, and grandkids while I was still healthy.
While you lie in bed dying you might also think about how you could have left your wife a monthly soc. sec. check double that of the pitifully small amount based on taking soc. sec. at age 62.

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Re: Social Security -- Take it at 62, 67 or 70

Post by RustyShackleford » Mon Aug 12, 2019 3:08 pm

tibbitts wrote:
Sun Aug 11, 2019 9:29 am
Longevity insurance can be important, but that aspect of social security is by definition a long time away when you're trying to decide what do at age 62. And the more time that's involved before you can claim that aspect of your benefits, the more likely SS is likely to change the terms of your contract.
In all this talk of potential reduction of benefits as a "fix" for Social Security, and this arguing for taking benefits early, it seems to me that two possibilities are ignored:

1. The likelihood that there's a lot of advance warning of impending benefits reductions - like the deficit suddenly becoming desperately important again (like it stopped being about 1-1/2 years ago) and a lot of talk in Congress of the need to cut "entitlements". This warning time could give delayers a chance to file earlier than they'd been intending to.

2. The possibility that such benefits reductions could apply retroactively to those already receiving benefits. So that filing earlier in order to avoid such benefit reductions didn't really help.

BigJohn
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Re: Social Security -- Take it at 62, 67 or 70

Post by BigJohn » Mon Aug 12, 2019 3:39 pm

RustyShackleford wrote:
Mon Aug 12, 2019 3:08 pm
2. The possibility that such benefits reductions could apply retroactively to those already receiving benefits. So that filing earlier in order to avoid such benefit reductions didn't really help.
Question.... I thought the current law if unchanged would cut both existing and future benefits by the same percentage. Is this correct or are already claimed benefits legally protected from cuts right now?

FWIW, I’m 63, widowed and planning to defer until 70 for the guaranteed 8% per year increase in longevity insurance payment. In my mind, planning a strategy now based on if/how/when Congress changes SS seems like shooting in the dark. Just like my Roth conversion analysis, I’ve based it on existing law and will adjust my strategy if/when the new laws becomes clear. Yes, a hindsight analysis on both might say I could have done better but you can’t drive looking in the rear view mirror. So, I make the best decision I can right now, move forward and don’t look back.

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willthrill81
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Re: Social Security -- Take it at 62, 67 or 70

Post by willthrill81 » Mon Aug 12, 2019 3:44 pm

BigJohn wrote:
Mon Aug 12, 2019 3:39 pm
RustyShackleford wrote:
Mon Aug 12, 2019 3:08 pm
2. The possibility that such benefits reductions could apply retroactively to those already receiving benefits. So that filing earlier in order to avoid such benefit reductions didn't really help.
Question.... I thought the current law if unchanged would cut both existing and future benefits by the same percentage. Is this correct or are already claimed benefits legally protected from cuts right now?
Under current law, everyone would be equally affected. There would be no 'grandfathering in' of people already receiving benefits.
BigJohn wrote:
Mon Aug 12, 2019 3:39 pm
FWIW, I’m 63, widowed and planning to defer until 70 for the guaranteed 8% per year increase in longevity insurance payment. In my mind, planning a strategy now based on if/how/when Congress changes SS seems like shooting in the dark. Just like my Roth conversion analysis, I’ve based it on existing law and will adjust my strategy if/when the new laws becomes clear. Yes, a hindsight analysis on both might say I could have done better but you can’t drive looking in the rear view mirror. So, I make the best decision I can right now, move forward and don’t look back.
Since you're treating SS as longevity insurance and making Roth conversions, deferring until age 70 will very likely best achieve those goals, regardless of whether benefits are cut by approximately 2035 or not.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

lstone19
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Re: Social Security -- Take it at 62, 67 or 70

Post by lstone19 » Mon Aug 12, 2019 3:57 pm

dcb wrote:
Mon Aug 12, 2019 3:00 pm
While you lie in bed dying you might also think about how you could have left your wife a monthly soc. sec. check double that of the pitifully small amount based on taking soc. sec. at age 62.
But what if your spouse has the larger benefit so after you die, your benefit just ends (since the survivor gets the largest of the two)?

Our situation is we will have almost identical PIAs but since my wife is 16 months older than me, her FRA is four months younger than mine so she ends up with the slightly larger age 70 benefit. I'm retired, she's still working for another year or two (to somewhere between age 64 and 65).

Since I'm retired, I have been looking at what happens if I start mine at 62 while she waits until 70. If I understand it right, regardless of who dies first, the larger benefit continues and the smaller one ends. Or another way to look at it is my benefit (the smaller one) only pays while both of us are alive while hers (the larger one) continues while either of is alive. So it then becomes a question of how to get the best value out of that smaller benefit. Things said here as well as my own quick calculation says we both need to live until I'm a few months beyond 80 before it would have been better for me to wait until 70 to start collecting.

Start collecting mine at 62 and at age 70 there's more in the retirement accounts but less monthly income. Wait for both until 70 and there's less in the retirement accounts but more monthly income so post-70 retirement account drawdown is slower. So it really comes down to do we want that value in the income stream or in the assets. If I start at 62 and we both live past 80, then we'll know we made the wrong choice (assuming nothing else changes). If one of us dies before 80, then the other will know we made the right choice. If I wait until 70 and one of us dies a month later, the other will be cursing the retirement assets we spent while waiting and now have no additional monthly income to show for it. Anyway, about six months before I have to make any sort of decision.

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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire » Mon Aug 12, 2019 5:02 pm

lstone19 wrote:
Mon Aug 12, 2019 3:57 pm
Since I'm retired, I have been looking at what happens if I start mine at 62 while she waits until 70.
Put your numbers in https://opensocialsecurity.com/ and you'll find out exactly what happens.

Play with the Advanced Options and you can see exactly what happens in cases where you live a long life or a short life.

lstone19
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Re: Social Security -- Take it at 62, 67 or 70

Post by lstone19 » Mon Aug 12, 2019 5:13 pm

JoeRetire wrote:
Mon Aug 12, 2019 5:02 pm
lstone19 wrote:
Mon Aug 12, 2019 3:57 pm
Since I'm retired, I have been looking at what happens if I start mine at 62 while she waits until 70.
Put your numbers in https://opensocialsecurity.com/ and you'll find out exactly what happens.

Play with the Advanced Options and you can see exactly what happens in cases where you live a long life or a short life.
I have. Having me claim at 62 provides the highest expected return for normal mortality. It's really comes down to how long we expect to live vs. the "worst" case (in terms of money needs) situation of we both get lucky and live a long time.

dcb
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Re: Social Security -- Take it at 62, 67 or 70

Post by dcb » Mon Aug 12, 2019 5:16 pm

lstone19 wrote:
Mon Aug 12, 2019 3:57 pm
dcb wrote:
Mon Aug 12, 2019 3:00 pm
While you lie in bed dying you might also think about how you could have left your wife a monthly soc. sec. check double that of the pitifully small amount based on taking soc. sec. at age 62.
But what if your spouse has the larger benefit so after you die, your benefit just ends (since the survivor gets the largest of the two)?

Our situation is we will have almost identical PIAs but since my wife is 16 months older than me, her FRA is four months younger than mine so she ends up with the slightly larger age 70 benefit. I'm retired, she's still working for another year or two (to somewhere between age 64 and 65).

Since I'm retired, I have been looking at what happens if I start mine at 62 while she waits until 70. If I understand it right, regardless of who dies first, the larger benefit continues and the smaller one ends. Or another way to look at it is my benefit (the smaller one) only pays while both of us are alive while hers (the larger one) continues while either of is alive. So it then becomes a question of how to get the best value out of that smaller benefit. Things said here as well as my own quick calculation says we both need to live until I'm a few months beyond 80 before it would have been better for me to wait until 70 to start collecting.

Start collecting mine at 62 and at age 70 there's more in the retirement accounts but less monthly income. Wait for both until 70 and there's less in the retirement accounts but more monthly income so post-70 retirement account drawdown is slower. So it really comes down to do we want that value in the income stream or in the assets. If I start at 62 and we both live past 80, then we'll know we made the wrong choice (assuming nothing else changes). If one of us dies before 80, then the other will know we made the right choice. If I wait until 70 and one of us dies a month later, the other will be cursing the retirement assets we spent while waiting and now have no additional monthly income to show for it. Anyway, about six months before I have to make any sort of decision.
Have you considered taking your soc. sec at some age between62 - 64 and for your wife to apply for spousal benefits at her FRA. She would then receive half of your PIA until age 70 at which time she would apply for her own benefits. I am not sure what the procedures are for this scenario today, but it was pretty simple some 10 years ago when we did it.

lstone19
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Re: Social Security -- Take it at 62, 67 or 70

Post by lstone19 » Mon Aug 12, 2019 5:20 pm

dcb wrote:
Mon Aug 12, 2019 5:16 pm
Have you considered taking your soc. sec at some age between62 - 64 and for your wife to apply for spousal benefits at her FRA. She would then receive half of your PIA until age 70 at which time she would apply for her own benefits. I am not sure what the procedures are for this scenario today, but it was pretty simple some 10 years ago when we did it.
If you're suggesting what I think you're suggesting, didn't they close off that option for those born after 1954 or some date like that? If so, we are too young for that option.

dcb
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Re: Social Security -- Take it at 62, 67 or 70

Post by dcb » Mon Aug 12, 2019 5:47 pm

lstone19 wrote:
Mon Aug 12, 2019 5:20 pm
dcb wrote:
Mon Aug 12, 2019 5:16 pm
Have you considered taking your soc. sec at some age between62 - 64 and for your wife to apply for spousal benefits at her FRA. She would then receive half of your PIA until age 70 at which time she would apply for her own benefits. I am not sure what the procedures are for this scenario today, but it was pretty simple some 10 years ago when we did it.
If you're suggesting what I think you're suggesting, didn't they close off that option for those born after 1954 or some date like that? If so, we are too young for that option.
You are correct. My mistake.

palaheel
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Re: Social Security -- Take it at 62, 67 or 70

Post by palaheel » Mon Aug 12, 2019 7:06 pm

JoeRetire wrote:
Mon Aug 12, 2019 10:27 am
palaheel wrote:
Mon Aug 12, 2019 9:27 am
Using opensocialsecurity.com, I'm 65, wife is 64 and will be taking spousal benefits. Our optimum strategy is to file when I'm 68 and 8 months.

If I assume a 9% reduction in 2034, the optimum strategy changes to age 66 and 9 months.
So that's "significant" for you?
Yes, two years of my life is significant to me. I get no benefit if I work an extra two years.

I can believe that a reduction doesn't affect some people, but it does affect some of us.
Markets crash. Markets recover. Inflation takes your money FOREVER.

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#Cruncher
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Re: Social Security -- Take it at 62, 67 or 70

Post by #Cruncher » Mon Aug 12, 2019 7:54 pm

HomerJ wrote:
Mon Aug 12, 2019 9:59 am
If the change in benefits happens before you turn 62 or after you turn 70, there is indeed no difference.
This is only half right, Homer. If the cut occurs before age 62, there is indeed no effect on the relative values of claiming at different ages. But there is an effect if the cut occurs after age 70. This can be seen by examining the extreme case of a hypothetical 100% reduction occurring the month after one turns 70. If one claimed at 62, one would have 8 years and 1 month of a small benefit. But if one waited to claim until age 70, one would get just one month of the large benefit. So claiming at age 62 would obviously be the better choice.

The same effect would occur to a lesser extent with any size benefit cut. You can play with my spreadsheet from this post to see the effect of benefit reductions occuring at different times on the relative values of claiming at two different ages.

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Re: Social Security -- Take it at 62, 67 or 70

Post by RustyShackleford » Mon Aug 12, 2019 7:57 pm

willthrill81 wrote:
Mon Aug 12, 2019 3:44 pm
BigJohn wrote:
Mon Aug 12, 2019 3:39 pm
Question.... I thought the current law if unchanged would cut both existing and future benefits by the same percentage. Is this correct or are already claimed benefits legally protected from cuts right now?
Under current law, everyone would be equally affected. There would be no 'grandfathering in' of people already receiving benefits.
I don't understand why this is even under discussion then, as far as being a factor in favor of taking benefits earlier.

JoeRetire
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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire » Mon Aug 12, 2019 8:01 pm

lstone19 wrote:
Mon Aug 12, 2019 5:13 pm
JoeRetire wrote:
Mon Aug 12, 2019 5:02 pm
lstone19 wrote:
Mon Aug 12, 2019 3:57 pm
Since I'm retired, I have been looking at what happens if I start mine at 62 while she waits until 70.
Put your numbers in https://opensocialsecurity.com/ and you'll find out exactly what happens.

Play with the Advanced Options and you can see exactly what happens in cases where you live a long life or a short life.
I have. Having me claim at 62 provides the highest expected return for normal mortality. It's really comes down to how long we expect to live vs. the "worst" case (in terms of money needs) situation of we both get lucky and live a long time.
What ages did you use for normal mortality?

So you get to decide if you care more about your highest return should you die early or live only a normal mortality, or if you care more about having more should you live a long time.

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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire » Mon Aug 12, 2019 8:05 pm

palaheel wrote:
Mon Aug 12, 2019 7:06 pm
Yes, two years of my life is significant to me. I get no benefit if I work an extra two years.
You get two years of salary.
I can believe that a reduction doesn't affect some people, but it does affect some of us.
The reduction (if it happens) would affect everyone. It wouldn't always change the optimal filing plan. Believe it.

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Re: Social Security -- Take it at 62, 67 or 70

Post by willthrill81 » Mon Aug 12, 2019 8:07 pm

RustyShackleford wrote:
Mon Aug 12, 2019 7:57 pm
willthrill81 wrote:
Mon Aug 12, 2019 3:44 pm
BigJohn wrote:
Mon Aug 12, 2019 3:39 pm
Question.... I thought the current law if unchanged would cut both existing and future benefits by the same percentage. Is this correct or are already claimed benefits legally protected from cuts right now?
Under current law, everyone would be equally affected. There would be no 'grandfathering in' of people already receiving benefits.
I don't understand why this is even under discussion then, as far as being a factor in favor of taking benefits earlier.
HomerJ explained why in this post.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire » Mon Aug 12, 2019 8:08 pm

RustyShackleford wrote:
Mon Aug 12, 2019 7:57 pm
willthrill81 wrote:
Mon Aug 12, 2019 3:44 pm
Under current law, everyone would be equally affected. There would be no 'grandfathering in' of people already receiving benefits.
I don't understand why this is even under discussion then, as far as being a factor in favor of taking benefits earlier.
Because there are a few cases where an across the board reduction at exactly the right year of a person's life would change the optimal claiming plan.

It wouldn't change anything for most people, just some.

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Re: Social Security -- Take it at 62, 67 or 70

Post by MJS » Mon Aug 12, 2019 8:16 pm

BigJohn wrote:
Mon Aug 12, 2019 3:39 pm

FWIW, I’m 63, widowed and planning to defer until 70 for the guaranteed 8% per year increase in longevity insurance payment.
You may already be doing this, but for others.... The recommended strategy (including Mike of Open Social Security) for those who have been widowed is to :
At age 60, you could claim a widow(er) benefit while allowing your own retirement benefit to grow until 70.
Or, you could claim your own retirement benefit at 62 while allowing your widow(er) benefit to grow until full retirement age.
https://obliviousinvestor.com/social-se ... -benefits/

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Re: Social Security -- Take it at 62, 67 or 70

Post by BigJohn » Mon Aug 12, 2019 9:05 pm

MJS wrote:
Mon Aug 12, 2019 8:16 pm
BigJohn wrote:
Mon Aug 12, 2019 3:39 pm

FWIW, I’m 63, widowed and planning to defer until 70 for the guaranteed 8% per year increase in longevity insurance payment.
You may already be doing this, but for others.... The recommended strategy (including Mike of Open Social Security) for those who have been widowed is to :
At age 60, you could claim a widow(er) benefit while allowing your own retirement benefit to grow until 70.
Or, you could claim your own retirement benefit at 62 while allowing your widow(er) benefit to grow until full retirement age.
https://obliviousinvestor.com/social-se ... -benefits/
I agree, my benefit was larger so it's growing until I'm 70 while collecting the widower benefit until then.

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Re: Social Security -- Take it at 62, 67 or 70

Post by Johnnie » Tue Aug 13, 2019 12:22 pm

Here's how I handle anwering the longevity question:

First, do you have a specific reason to believe you won't "beat" the break even average? Like, all four grandparents died young*, or other close relatives did so, or your own health is compromised for various reasons, or you've been on the beer-and-cigarette diet for 40 years, etc.

Second, can you afford to wait, perhaps using "Cut-Throat's famous 'Delay Social Security to age 70 and Spend more money at 62'" method to equalize income before and after age 70?

If the answer is "No specific reason to think I'll kick prematurely" and "Yes I can afford to wait," then the answer is "Wait."

I guess that puts me in the "treat it like longevity insurance/annuity" camp. :happy

~~~~~~~~~~~

BTW, I do plan to use that SS "bridge fund" method to equalize income between the time I stop working and claim at 70. I'm not really a "bucket" fan, but my favorite part about this is the arithmetic that lets you determine the size of your "permanent" portfolio after deducting cash for the CD ladder (or other near-cash account) that comprises your SS "bridge." IOW, if you have $1.5m and the " bridge" will cost $200k, base your long term distribution plan on a $1.3m portfolio.

Also, my "bridge" fund will include a bit more to pay taxes on the big Roth conversions I plan during those bridge years of no taxable income from work or SS.

~~~~~~~

*That qualification always makes me think of Heinlein's "Time Enough for Love," which begins with an experiment by a billionaire dying young of some fluke disease: He creates a foundation to pay people whose grandparents all lived to 100 to marry each other and make babies. In the first generation the experiment produces a "sport," a mutation that causes the baby who grows up to be the man known as Lazarus Long to not age at all; he's about age 900 as the story begins. :P
"I know nothing."

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Re: Social Security -- Take it at 62, 67 or 70

Post by You Know What I Mean » Tue Aug 13, 2019 8:34 pm

Johnnie wrote:
Tue Aug 13, 2019 12:22 pm
Here's how I handle anwering the longevity question:

First, do you have a specific reason to believe you won't "beat" the break even average? Like, all four grandparents died young*, or other close relatives did so, or your own health is compromised for various reasons, or you've been on the beer-and-cigarette diet for 40 years, etc.

Second, can you afford to wait, perhaps using "Cut-Throat's famous 'Delay Social Security to age 70 and Spend more money at 62'" method to equalize income before and after age 70?

If the answer is "No specific reason to think I'll kick prematurely" and "Yes I can afford to wait," then the answer is "Wait."

I guess that puts me in the "treat it like longevity insurance/annuity" camp. :happy

~~~~~~~~~~~

BTW, I do plan to use that SS "bridge fund" method to equalize income between the time I stop working and claim at 70. I'm not really a "bucket" fan, but my favorite part about this is the arithmetic that lets you determine the size of your "permanent" portfolio after deducting cash for the CD ladder (or other near-cash account) that comprises your SS "bridge." IOW, if you have $1.5m and the " bridge" will cost $200k, base your long term distribution plan on a $1.3m portfolio.

Also, my "bridge" fund will include a bit more to pay taxes on the big Roth conversions I plan during those bridge years of no taxable income from work or SS.

~~~~~~~

*That qualification always makes me think of Heinlein's "Time Enough for Love," which begins with an experiment by a billionaire dying young of some fluke disease: He creates a foundation to pay people whose grandparents all lived to 100 to marry each other and make babies. In the first generation the experiment produces a "sport," a mutation that causes the baby who grows up to be the man known as Lazarus Long to not age at all; he's about age 900 as the story begins. :P
Great reference to Heinlein's "Time Enough for Love," a book I enjoyed very much a long time ago!

By the way, I have been using an approach similar to Cut-Throat's before I read his excellent post. He expressed the benefits very clearly.

In my opinion, that approach should not be confused with the "bucket strategy" that repeatedly transfers between buckets. The big "bridge fund" in the delayed SS strategy never gets replenished.

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Re: Social Security -- Take it at 62, 67 or 70

Post by willthrill81 » Wed Aug 14, 2019 3:53 pm

Johnnie wrote:
Tue Aug 13, 2019 12:22 pm
If the answer is "No specific reason to think I'll kick prematurely" and "Yes I can afford to wait," then the answer is "Wait."
:thumbsup
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Re: Social Security -- Take it at 62, 67 or 70

Post by bradpevans » Wed Aug 14, 2019 7:01 pm

I’m curious if this would be informative:
Price out SPIA at age 62 such that payout = your SS benefit at 62
Do this for 63 to 70, adjusting the premium each year such that the payout = SS amount

What type of returns would you need to keep up with the SPIA payment?

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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire » Wed Aug 14, 2019 7:54 pm

bradpevans wrote:
Wed Aug 14, 2019 7:01 pm
I’m curious if this would be informative:
Price out SPIA at age 62 such that payout = your SS benefit at 62
Do this for 63 to 70, adjusting the premium each year such that the payout = SS amount

What type of returns would you need to keep up with the SPIA payment?
What would be the point? As a way to decide whether or not to start SS at 62?
If that's the case, how would you adjust your SPIA experiment to account for increased survivor benefits?

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Re: Social Security -- Take it at 62, 67 or 70

Post by willthrill81 » Thu Aug 15, 2019 3:17 pm

bradpevans wrote:
Wed Aug 14, 2019 7:01 pm
I’m curious if this would be informative:
Price out SPIA at age 62 such that payout = your SS benefit at 62
Do this for 63 to 70, adjusting the premium each year such that the payout = SS amount

What type of returns would you need to keep up with the SPIA payment?
Insurance companies are investing SPIA premiums into secure bonds, so getting a return equal to that that they can is very easy. In fact, it's very plausible that you could earn a higher return than they can with CDs.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Social Security -- Take it at 62, 67 or 70

Post by Rus In Urbe » Thu Aug 15, 2019 7:41 pm

willthrill81 » Sat Aug 10, 2019 3:28 pm

tibbitts wrote: ↑Sat Aug 10, 2019 3:10 pm
celia wrote: ↑Sat Aug 10, 2019 2:43 pm
Rus In Urbe wrote: ↑Fri Aug 09, 2019 2:44 pm
I'm retiring in Dec at age 64. I'd always assumed I'd go with conventional wisdom and wait until 70 to maximize---we don't "need" the money to live on.

However, yesterday I met with a terrific advisor (no fee and no he didn't sell me anything) and we spent an hour crunching numbers and looking over my individual situation (a few details in brief, my spouse on RMDs and SS; our SS is roughly equal; I have set aside five years of post-tax CDs to get me to RMD time).

Without getting too much into the weeds, it turns out the very best for us if I take SS at 65. Not what I was expecting at all.
Did the advisor consider doing Roth conversions before you start SS? The time between when you stop working and when you take SS is an ideal time to do conversions as it give you more space in your usual tax bracket.
Well, sort of, but realistically most people are going to be converting at 22% or 24% federal. The only way you can get at all excited about converting is if ... here it comes ... you believe that current law will apply and tax rates will revert to higher levels (maybe even higher levels than before.) So, you can't simultaneously get excited about converting and then assume your SS payments won't be cut in 15 years or so. And if you do believe that SS will be cut, then you're likely to claim SS sooner and maybe as a result be able to convert less.
The other factor that is frequently overlooked is the widow(er) potentially being suddenly thrust into a higher tax bracket due to RMDs. This could be especially pronounced if one spouse is significantly older than the other and even more so if the older spouse also has a reduced life expectancy (e.g. an older man and a younger woman). The widow(er) could be pushed into a significantly higher tax bracket for many years with little recourse other than QCDs. As such, doing Roth conversions in the 24% bracket while expecting them to be taxed at 22% if MFJ could easily come out ahead in the end.
Yes, yes and yes....
Plugged in the numbers.
Took Roths into account.
Took life expectancies into account (such as one can).
Played out other scenarios that might happen and statistical chances of it...
And, yep, given my best guesses on some of the known unknowns, 65 is the best time for me.

Like I said, I've come to the conclusion that these discussions about the "best age" to take SS are, ultimately, inconclusive because, really, you've got to plug in all your own numbers and individualize your own "risks" and "assumptions." The results can be surprising----or not. But the "best" time is not always 62 or 70 . . .
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Re: Social Security -- Take it at 62, 67 or 70

Post by tibbitts » Thu Aug 15, 2019 8:13 pm

Rus In Urbe wrote:
Thu Aug 15, 2019 7:41 pm
willthrill81 » Sat Aug 10, 2019 3:28 pm

tibbitts wrote: ↑Sat Aug 10, 2019 3:10 pm
celia wrote: ↑Sat Aug 10, 2019 2:43 pm
Rus In Urbe wrote: ↑Fri Aug 09, 2019 2:44 pm
I'm retiring in Dec at age 64. I'd always assumed I'd go with conventional wisdom and wait until 70 to maximize---we don't "need" the money to live on.

However, yesterday I met with a terrific advisor (no fee and no he didn't sell me anything) and we spent an hour crunching numbers and looking over my individual situation (a few details in brief, my spouse on RMDs and SS; our SS is roughly equal; I have set aside five years of post-tax CDs to get me to RMD time).

Without getting too much into the weeds, it turns out the very best for us if I take SS at 65. Not what I was expecting at all.
Did the advisor consider doing Roth conversions before you start SS? The time between when you stop working and when you take SS is an ideal time to do conversions as it give you more space in your usual tax bracket.
Well, sort of, but realistically most people are going to be converting at 22% or 24% federal. The only way you can get at all excited about converting is if ... here it comes ... you believe that current law will apply and tax rates will revert to higher levels (maybe even higher levels than before.) So, you can't simultaneously get excited about converting and then assume your SS payments won't be cut in 15 years or so. And if you do believe that SS will be cut, then you're likely to claim SS sooner and maybe as a result be able to convert less.
The other factor that is frequently overlooked is the widow(er) potentially being suddenly thrust into a higher tax bracket due to RMDs. This could be especially pronounced if one spouse is significantly older than the other and even more so if the older spouse also has a reduced life expectancy (e.g. an older man and a younger woman). The widow(er) could be pushed into a significantly higher tax bracket for many years with little recourse other than QCDs. As such, doing Roth conversions in the 24% bracket while expecting them to be taxed at 22% if MFJ could easily come out ahead in the end.
Yes, yes and yes....
Plugged in the numbers.
Took Roths into account.
Took life expectancies into account (such as one can).
Played out other scenarios that might happen and statistical chances of it...
And, yep, given my best guesses on some of the known unknowns, 65 is the best time for me.

Like I said, I've come to the conclusion that these discussions about the "best age" to take SS are, ultimately, inconclusive because, really, you've got to plug in all your own numbers and individualize your own "risks" and "assumptions." The results can be surprising----or not. But the "best" time is not always 62 or 70 . . .
I'm guessing that for the majority of people the results are between 62 and 70 and not either extreme. It might be interesting to see a distribution of the results, although obviously it would include many variations for each person as they test changes to assumptions.

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Re: Social Security -- Take it at 62, 67 or 70

Post by Frioss » Fri Aug 16, 2019 6:06 am

JoeRetire wrote:
Wed Aug 14, 2019 7:54 pm
bradpevans wrote:
Wed Aug 14, 2019 7:01 pm
I’m curious if this would be informative:
Price out SPIA at age 62 such that payout = your SS benefit at 62
Do this for 63 to 70, adjusting the premium each year such that the payout = SS amount

What type of returns would you need to keep up with the SPIA payment?
What would be the point? As a way to decide whether or not to start SS at 62?
If that's the case, how would you adjust your SPIA experiment to account for increased survivor benefits?
The point is there is value in having that SS money to leave to your estate if you die after 62 but before the break even point. To completely ignore that is disingenuous when trying to make a fair comparison of when to take SS.

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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire » Fri Aug 16, 2019 6:09 am

Frioss wrote:
Fri Aug 16, 2019 6:06 am
JoeRetire wrote:
Wed Aug 14, 2019 7:54 pm
bradpevans wrote:
Wed Aug 14, 2019 7:01 pm
I’m curious if this would be informative:
Price out SPIA at age 62 such that payout = your SS benefit at 62
Do this for 63 to 70, adjusting the premium each year such that the payout = SS amount

What type of returns would you need to keep up with the SPIA payment?
What would be the point? As a way to decide whether or not to start SS at 62?
If that's the case, how would you adjust your SPIA experiment to account for increased survivor benefits?
The point is there is value in having that SS money to leave to your estate if you die after 62 but before the break even point. To completely ignore that is disingenuous when trying to make a fair comparison of when to take SS.
As I wrote, if the point is an attempt to compare the value of taking SS money early to an SPIA, it would be disingenuous to ignore the survivor benefit value of delaying. If you want to make a fair comparison...

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Re: Social Security -- Take it at 62, 67 or 70

Post by oldcomputerguy » Fri Aug 16, 2019 6:44 am

dcb wrote:
Mon Aug 12, 2019 5:16 pm
Have you considered taking your soc. sec at some age between62 - 64 and for your wife to apply for spousal benefits at her FRA. She would then receive half of your PIA until age 70 at which time she would apply for her own benefits. I am not sure what the procedures are for this scenario today, but it was pretty simple some 10 years ago when we did it.
The OP should be very careful following this course. The law has changed since you filed. If you were younger than age 62 on January 1, 2016, and you file for spousal benefits today, the SSA will "deem" that you have also filed for your own benefits. See Deemed Filing
"I’ve come around to this: If you’re dumb, surround yourself with smart people; and if you’re smart, surround yourself with smart people who disagree with you." (Aaron Sorkin)

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Re: Social Security -- Take it at 62, 67 or 70

Post by Frioss » Fri Aug 16, 2019 8:26 am

JoeRetire wrote:
Fri Aug 16, 2019 6:09 am
Frioss wrote:
Fri Aug 16, 2019 6:06 am
JoeRetire wrote:
Wed Aug 14, 2019 7:54 pm
bradpevans wrote:
Wed Aug 14, 2019 7:01 pm
I’m curious if this would be informative:
Price out SPIA at age 62 such that payout = your SS benefit at 62
Do this for 63 to 70, adjusting the premium each year such that the payout = SS amount

What type of returns would you need to keep up with the SPIA payment?
What would be the point? As a way to decide whether or not to start SS at 62?
If that's the case, how would you adjust your SPIA experiment to account for increased survivor benefits?
The point is there is value in having that SS money to leave to your estate if you die after 62 but before the break even point. To completely ignore that is disingenuous when trying to make a fair comparison of when to take SS.
As I wrote, if the point is an attempt to compare the value of taking SS money early to an SPIA, it would be disingenuous to ignore the survivor benefit value of delaying. If you want to make a fair comparison...
I'm just trying to get at the true break even point of taking SS early vs later so I can make a better informed decision. Comparing a SPIA to taking SS early doesn't even make sense. I could take SS early AND also do a SPIA and we would still be left with the same argument. And that argument is that there is still value in having more money if I die before the break even age. No one's ignoring the fact that if you live long enough you will come out ahead if you delay taking SS. But you need to add the cost of that value to delaying SS in order to find the true break even point.

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Re: Social Security -- Take it at 62, 67 or 70

Post by SandysDad » Fri Aug 16, 2019 8:37 am

If you will be on ObamaCare before 65 don't forget to calculate your MAGI and the effect on it!

Also, as others have stated look at RMD's and taxation.

I would buy a copy of Mike Pipers book and apply his knowledge. Social Security Made Simple. And use the open social security calculator others mentioned.

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Re: Social Security -- Take it at 62, 67 or 70

Post by vested1 » Fri Aug 16, 2019 9:17 am

Frioss wrote:
Fri Aug 16, 2019 8:26 am
JoeRetire wrote:
Fri Aug 16, 2019 6:09 am
Frioss wrote:
Fri Aug 16, 2019 6:06 am
JoeRetire wrote:
Wed Aug 14, 2019 7:54 pm
bradpevans wrote:
Wed Aug 14, 2019 7:01 pm
I’m curious if this would be informative:
Price out SPIA at age 62 such that payout = your SS benefit at 62
Do this for 63 to 70, adjusting the premium each year such that the payout = SS amount

What type of returns would you need to keep up with the SPIA payment?
What would be the point? As a way to decide whether or not to start SS at 62?
If that's the case, how would you adjust your SPIA experiment to account for increased survivor benefits?
The point is there is value in having that SS money to leave to your estate if you die after 62 but before the break even point. To completely ignore that is disingenuous when trying to make a fair comparison of when to take SS.
As I wrote, if the point is an attempt to compare the value of taking SS money early to an SPIA, it would be disingenuous to ignore the survivor benefit value of delaying. If you want to make a fair comparison...
I'm just trying to get at the true break even point of taking SS early vs later so I can make a better informed decision. Comparing a SPIA to taking SS early doesn't even make sense. I could take SS early AND also do a SPIA and we would still be left with the same argument. And that argument is that there is still value in having more money if I die before the break even age. No one's ignoring the fact that if you live long enough you will come out ahead if you delay taking SS. But you need to add the cost of that value to delaying SS in order to find the true break even point.
IMHO the break even calculation is what makes no sense. I suppose the allure of using it as an argument is that it takes a subjective decision and gives it an objective conclusion. However, SS benefits aren't received as a lump sum, they are income that is spent, in most cases in order to cover living expenses. Those who say they will take it early and invest it rarely do so, and often fail to factor in taxation and Medicare deductions from the total benefit, as well as predicting an overly optimistic percentage of future gain. I haven't heard of anyone who has saved all of their SS income so that they can point to it right before they die and say "Look at how much I got!"

The best strategy is to determine your expenses in retirement as compared to your total after tax income before making a decision. Future RMD's, survivor benefits, and a guarantee of ever increasing fixed income in retirement need to be projected and incorporated in a total plan. Taxation of SS is more favorable in most States because it isn't taxed, and better on the federal level because you get a minimum of a 15% break on the gross amount of SS benefits. In that regard, the larger the SS benefit the greater tax savings as long as you factor other income into total taxation.

I'm the only one in my family or circle of friends who has delayed taking benefits. It's been an uphill battle because most often I am questioned as to why I would want to do so. I don't even have to bring it up because everyone wants to talk about when to file, and most are incredulous when you tell them you haven't yet, that is unless they are in the financial industry and understand all the different options. The questioning comes less often when they ask how much I would receive right now after years of delaying, and then compare it to what they are receiving. Judge not, lest ye be judged.

It is my opinion that if you are married and can afford it, you should likely delay, but it all depends, once again, on your ability to maintain your lifestyle during the delay with an eye to taxes, and income needed to meet expenses, including discretionary/travel. The reasons to do this have been detailed ad nauseam, and only apply to a segment of the population. To each his own, you will get no criticism from me over your decision. I only wish that feeling was reciprocal.

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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire » Fri Aug 16, 2019 1:02 pm

Frioss wrote:
Fri Aug 16, 2019 8:26 am
Comparing a SPIA to taking SS early doesn't even make sense.
We are in agreement on that point.
And that argument is that there is still value in having more money if I die before the break even age.
Of course there is always value in more money. More is better. But the only question is if you are better off having more money now, or even more money later plus more money for your survivor.
But you need to add the cost of that value to delaying SS in order to find the true break even point.
Okay.

https://www.kitces.com/blog/how-delayin ... y-can-buy/

"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!"

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Re: Social Security -- Take it at 62, 67 or 70

Post by willthrill81 » Fri Aug 16, 2019 4:07 pm

JoeRetire wrote:
Fri Aug 16, 2019 1:02 pm
"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!"
That quote from Kitces is spot on and, under current law, compelling enough to me to justify deferring as long as we can.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire » Fri Aug 16, 2019 7:56 pm

willthrill81 wrote:
Fri Aug 16, 2019 4:07 pm
JoeRetire wrote:
Fri Aug 16, 2019 1:02 pm
"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!"
That quote from Kitces is spot on and, under current law, compelling enough to me to justify deferring as long as we can.
And current interest rate conditions make delaying particularly compelling for the higher earner. Frankly, there are very, very few cases I can imagine where the higher earner should start before 70.

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Re: Social Security -- Take it at 62, 67 or 70

Post by smitcat » Sat Aug 17, 2019 7:26 am

JoeRetire wrote:
Fri Aug 16, 2019 7:56 pm
willthrill81 wrote:
Fri Aug 16, 2019 4:07 pm
JoeRetire wrote:
Fri Aug 16, 2019 1:02 pm
"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!"
That quote from Kitces is spot on and, under current law, compelling enough to me to justify deferring as long as we can.
And current interest rate conditions make delaying particularly compelling for the higher earner. Frankly, there are very, very few cases I can imagine where the higher earner should start before 70.
"Frankly, there are very, very few cases I can imagine where the higher earner should start before 70."
The vast majority start before 70 - not even 5% wait till 70.
The reason is they need the income....simple.
What would definitely be best for people to do is not always possible due to their history and decisions made prior to claiming.
Saving at a decent rate allows choices.

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Re: Social Security -- Take it at 62, 67 or 70

Post by BigJohn » Sat Aug 17, 2019 7:58 am

smitcat wrote:
Sat Aug 17, 2019 7:26 am
The vast majority start before 70 - not even 5% wait till 70.
The reason is they need the income....simple.
What would definitely be best for people to do is not always possible due to their history and decisions made prior to claiming.
Saving at a decent rate allows choices.
No doubt there are many who can't afford to wait. However, there are also a fair number who have choices, can afford to wait but choose not to because of either the "time to start getting my money back" or "SS will be broke soon so I better start now" emotions. There are several in this discussion and I know several from work who fall into this category.

Baring a know significant health issue, I think Kitces quote is spot on for most any single and the high earner in MFJ couples who can possibly afford to wait without a major lifestyle hit.

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Re: Social Security -- Take it at 62, 67 or 70

Post by smitcat » Sat Aug 17, 2019 8:47 am

BigJohn wrote:
Sat Aug 17, 2019 7:58 am
smitcat wrote:
Sat Aug 17, 2019 7:26 am
The vast majority start before 70 - not even 5% wait till 70.
The reason is they need the income....simple.
What would definitely be best for people to do is not always possible due to their history and decisions made prior to claiming.
Saving at a decent rate allows choices.
No doubt there are many who can't afford to wait. However, there are also a fair number who have choices, can afford to wait but choose not to because of either the "time to start getting my money back" or "SS will be broke soon so I better start now" emotions. There are several in this discussion and I know several from work who fall into this category.

Baring a know significant health issue, I think Kitces quote is spot on for most any single and the high earner in MFJ couples who can possibly afford to wait without a major lifestyle hit.
"choose not to because of either the "time to start getting my money back" or "SS will be broke soon so I better start now" emotions. There are several in this discussion and I know several from work who fall into this category."
I agree with this 100%.

"However, there are also a fair number who have choices,"
If you check the statistics - there is a very low % who have this choice.

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Re: Social Security -- Take it at 62, 67 or 70

Post by JoeRetire » Sat Aug 17, 2019 9:30 am

smitcat wrote:
Sat Aug 17, 2019 7:26 am
"Frankly, there are very, very few cases I can imagine where the higher earner should start before 70."
The vast majority start before 70 - not even 5% wait till 70.
The reason is they need the income....simple.
I agree that few delay until 70.
I disagree that the vast majority need the income early.

The most popular age to start benefits is 62. I believe that's often due to the "I want mine as soon as I can get it" philosophy, rather than actual need. That was certainly the case for several members of my extended family.
What would definitely be best for people to do is not always possible due to their history and decisions made prior to claiming.
Saving at a decent rate allows choices.
Agreed. It's not always possible. That's one of the very, very few cases where the higher earner should start early, assuming they are forced to retire before 70.

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Re: Social Security -- Take it at 62, 67 or 70

Post by smitcat » Sat Aug 17, 2019 11:46 am

JoeRetire wrote:
Sat Aug 17, 2019 9:30 am
smitcat wrote:
Sat Aug 17, 2019 7:26 am
"Frankly, there are very, very few cases I can imagine where the higher earner should start before 70."
The vast majority start before 70 - not even 5% wait till 70.
The reason is they need the income....simple.
I agree that few delay until 70.
I disagree that the vast majority need the income early.

The most popular age to start benefits is 62. I believe that's often due to the "I want mine as soon as I can get it" philosophy, rather than actual need. That was certainly the case for several members of my extended family.
What would definitely be best for people to do is not always possible due to their history and decisions made prior to claiming.
Saving at a decent rate allows choices.
Agreed. It's not always possible. That's one of the very, very few cases where the higher earner should start early, assuming they are forced to retire before 70.

"The most popular age to start benefits is 62. I believe that's often due to the "I want mine as soon as I can get it" philosophy, rather than actual need. That was certainly the case for several members of my extended family."
The most popular age to take SS is when you retire and/or lost your job - that is why most people take it as early as possible.

"I disagree that the vast majority need the income early"
Looking at the typical persons and household savings when many folks lose their job and/or retire I think you will find that more than half do not have enough resources to fund anything substantial. The relationship between poor savings and preparations for retirement and/or loss of job late in life and taking SS as early as possible is real for most folks.

BigJohn
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Re: Social Security -- Take it at 62, 67 or 70

Post by BigJohn » Sat Aug 17, 2019 2:05 pm

smitcat wrote:
Sat Aug 17, 2019 8:47 am
"However, there are also a fair number who have choices,"
If you check the statistics - there is a very low % who have this choice.
smitcat, I've seen stats on claiming age but never on how many had enough other resources to wait. I suspect part of the issue is defining "enough" as the comfort level with spending down taxable or IRAs is going to vary widely. If you have a link, please post as I' like to see the data. If it's based on some objective analysis of enough, then it's a valid point. If it's based on asking people if they have enough then I think that answer will be influenced by the claim early emotions I noted above so not really an independent variable.

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Chip Munk
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Re: Social Security -- Take it at 62, 67 or 70

Post by Chip Munk » Sat Aug 17, 2019 3:05 pm

dcb wrote:
Mon Aug 12, 2019 5:16 pm
Have you considered taking your soc. sec at some age between62 - 64 and for your wife to apply for spousal benefits at her FRA. She would then receive half of your PIA until age 70 at which time she would apply for her own benefits. I am not sure what the procedures are for this scenario today, but it was pretty simple some 10 years ago when we did it.
Several posts on this thread and other social security threads on this forum suggest the spouse with the higher PIA wait until age 70 to secure the largest possible survivor benefit, while the spouse with the lower PIA collects before age 70, possibly even as early as age 62.

In my case, DH has the higher PIA and is eligible to file a restricted application and could be receiving spousal benefits now. I'm still several months away from my FRA and I'm having a tough time accepting the idea of settling for less than my PIA, even though the Open Social Security calculator recommends this approach for scenarios where DH passes away at age 88 or earlier.

But there is another issue. If DH passes away before age 68, my survivor benefit would be less than what I would have received on my own record if I waited until age 70. So I'm thinking I should wait to file until DH is at least age 67, so that if he doesn't make it to 68, I would be in the 12-month window to withdraw my application, pay back all benefits we both received, and take the survivor benefit while I delay my own benefit until age 70. Does that make sense?

smitcat
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Re: Social Security -- Take it at 62, 67 or 70

Post by smitcat » Sat Aug 17, 2019 4:46 pm

BigJohn wrote:
Sat Aug 17, 2019 2:05 pm
smitcat wrote:
Sat Aug 17, 2019 8:47 am
"However, there are also a fair number who have choices,"
If you check the statistics - there is a very low % who have this choice.
smitcat, I've seen stats on claiming age but never on how many had enough other resources to wait. I suspect part of the issue is defining "enough" as the comfort level with spending down taxable or IRAs is going to vary widely. If you have a link, please post as I' like to see the data. If it's based on some objective analysis of enough, then it's a valid point. If it's based on asking people if they have enough then I think that answer will be influenced by the claim early emotions I noted above so not really an independent variable.
Just look up the amount of total savings the average person approaching or in retirement has available - quite easy to look up and very eye opening.
Or if you like ...you can look up the number of folks in retirement that live below the poverty level, and the number barely above the poverty level.

More than half of the folks take SS before FRA , less than 4% take it at 70.

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