Social Security age 70 or bust?

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ppro
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Social Security age 70 or bust?

Post by ppro »

Here I was, all set to delay ss until age 70. I had paid for a MAXIMIZEMYSS analysis prior to my retirement 2&1/2 years ago which, along with the prevailing wisdom espoused on Bogleheads, convinced me that this was the right decision. Then, after coming across numerous Boglehead references to opensocialsecurity.com, I went to the site and ran my numbers there. Now I'm not so sure.

When running the alternate test scenarios, it shows an annual SS reduction of ~ $2,600 and a present value reduction of only ~$27k over the expected lifetimes for me and DW for taking at 69 vs. 70, if I'm understanding that right. (The reductions for taking at age 68 and 67 are ~$60k and ~$97k, respectively.) For our situation, it doesn't seem to be much of a hit to take at 69 and have one year less of pulling from funds during the gap years. We are currently pulling approximately $35k to add to a non-cola pension, DW’s SS, and my spousal SS, to obtain our desired steady-state spending level just north of 6 figures, which would be totally covered if I started my benefit at 69.

My pension is 100% joint and survivor, with a popup provision to single life if I outlive DW. If DW outlives me (likely), the combination of the pension and the age 69 SS survivor benefit will provide her approximately 80% of our current spending level. That would be 82.5% if I wait until age 70, which isn't a very big difference in DW's financial comfort. If I survive DW, I would receive 100% of current spending level, due to pension popup.

So it seems in our case, waiting until age 70 doesn't add that much compared to pulling another year of gap funding from modest mid-6 figure portfolio.

Apologies for the long-winded post, but I want to know if I'm missing something. Is it only a $27k hit over our remaining expected lifetimes for taking at age 69? I'm sure the short answer is "everyone's situation is different." But my mantra has been wait until age 70, no matter what, because that is what the smart people do.
If it's relevant, we have a paid off house, 2 very serviceable cars, no other debt. Thanks for reading.
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JoeRetire
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Re: Social Security age 70 or bust?

Post by JoeRetire »

ppro wrote: Thu Aug 29, 2019 9:17 amApologies for the long-winded post, but I want to know if I'm missing something. Is it only a $27k hit over our remaining expected lifetimes for taking at age 69? I'm sure the short answer is "everyone's situation is different." But my mantra has been wait until age 70, no matter what, because that is what the smart people do.
We all get to decide if we are happy walking away from $27k or not. It's only money, but it's not clear what you get in return for giving it away. Do you need your benefits earlier for some reason?

If you haven't already, you might want to play with the tool's Advanced Options and see what happens if you outlive your expected lifetimes. The financial risk is always in the case where you live longer than expected, not in dying sooner.
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Re: Social Security age 70 or bust?

Post by Sandtrap »

Based on your information, it seems you have a decision between "six" or "a half a dozen".
As you say, there's not much difference at this point given SS's place in your overall financial position.
At this point, waiting until 70 "just because you want to" is a good enough reason as well.

So. . . . make the call that feels the best to you and you can live with without doing an "if only" later on.

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Re: Social Security age 70 or bust?

Post by smitcat »

ppro wrote: Thu Aug 29, 2019 9:17 am Here I was, all set to delay ss until age 70. I had paid for a MAXIMIZEMYSS analysis prior to my retirement 2&1/2 years ago which, along with the prevailing wisdom espoused on Bogleheads, convinced me that this was the right decision. Then, after coming across numerous Boglehead references to opensocialsecurity.com, I went to the site and ran my numbers there. Now I'm not so sure.

When running the alternate test scenarios, it shows an annual SS reduction of ~ $2,600 and a present value reduction of only ~$27k over the expected lifetimes for me and DW for taking at 69 vs. 70, if I'm understanding that right. (The reductions for taking at age 68 and 67 are ~$60k and ~$97k, respectively.) For our situation, it doesn't seem to be much of a hit to take at 69 and have one year less of pulling from funds during the gap years. We are currently pulling approximately $35k to add to a non-cola pension, DW’s SS, and my spousal SS, to obtain our desired steady-state spending level just north of 6 figures, which would be totally covered if I started my benefit at 69.

My pension is 100% joint and survivor, with a popup provision to single life if I outlive DW. If DW outlives me (likely), the combination of the pension and the age 69 SS survivor benefit will provide her approximately 80% of our current spending level. That would be 82.5% if I wait until age 70, which isn't a very big difference in DW's financial comfort. If I survive DW, I would receive 100% of current spending level, due to pension popup.

So it seems in our case, waiting until age 70 doesn't add that much compared to pulling another year of gap funding from modest mid-6 figure portfolio.

Apologies for the long-winded post, but I want to know if I'm missing something. Is it only a $27k hit over our remaining expected lifetimes for taking at age 69? I'm sure the short answer is "everyone's situation is different." But my mantra has been wait until age 70, no matter what, because that is what the smart people do.
If it's relevant, we have a paid off house, 2 very serviceable cars, no other debt. Thanks for reading.
You also should consider the affect it may or may not have on Roth conversions and the ability to spend down the RMD's early.
Maximizing SS without calculating the affects it has on other accounts may leave you will less than a full answer - it certainly does in our case.
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Re: Social Security age 70 or bust?

Post by ppro »

My biggest concern is spending down our modest nest egg, especially if there is a market turndown.
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Re: Social Security age 70 or bust?

Post by Sandtrap »

ppro wrote: Thu Aug 29, 2019 9:28 am My biggest concern is spending down our modest nest egg, especially if there is a market turndown.
With this input. . . . wait.
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ppro
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Re: Social Security age 70 or bust?

Post by ppro »

Sandtrap, I'll have to ponder that nugget, as counterintuitive it is to me. Thanks.
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Re: Social Security age 70 or bust?

Post by JohnFiscal »

smitcat took the words out of my mouth before I could reply.

I've used the MMSS software in the past (even reporting a bug for case of more than 10 years difference in spouses' ages) and I find Kotlikoff (program author) a font of information on social security. And at one time I was interested in "maximizing" my social security.

But maximizing "one thing" at the possible expense of "another thing" is not fully optimizing your entire situation. The best tool that I have personally used is the i-ORP (discussed here at Bogleheads) which optimizes the drawdown of all considered retirement accounts (taxable, IRA, Roth, etc) as well as considering taxes and social security. Consideration of SS is not "automatic" in the optimization...you must manually enter the year at which you elect to draw benefits, but once this is done the program presents you with optimized draw from all accounts to give you an optimized (maximized in this case) annual discretionary income. It considers the combined effect, and the interaction between, income from SS, RMDs, draws from taxable resources as well as possible additional draws from retirement accounts. This is the true "optimal" distribution. Simply "maximizing" social security is misleading without considering the interaction with other types of accounts. To test various ages of SS simply change the input age, run, then compare the result for disposable income.

In my own case (YMMV) there is little real difference in my optimized disposable income whether I take social security at 66 or up to 70. The difference between the extreme cases (66 v. 70) is only about $1,000 per year [edit to clarify... $1,000 per year of retirement, not "year" from 66 to 70]. But on the other hand, by delaying I leave my spouse a greater SS benefit should I pre-decease her. That counts for a lot. (and that is something that i-ORP does not and cannot consider... you must enter the expected length of retirement, but should you die "sooner" the program (nor any others I have seen) does not take this into account as for the survivor. If you instead try to enter a shorter life span then the entire distribution of resources is recalculated, and should you live longer than the entered value then you will run out of dough. I have investigated this scenario on my own with my Excel models and found that my "early death" was a more critical case for my spouse/widow than my "living too long and using up all the dough". I bought an additional 10 year term life policy as a consequence of this exercise.)

I have actually found the same result for Roth conversions. There is little real difference whether I do these or not.
Last edited by JohnFiscal on Thu Aug 29, 2019 10:03 am, edited 1 time in total.
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Re: Social Security age 70 or bust?

Post by JohnFiscal »

OTOH, I feel your pain... the loss of actual cash assets paid out while waiting to collect SS. Based on my own experience that (in my case) there is little difference in "income" annually regardless of when I take SS you might consider how worthwhile is it to leave your survivor a potentially larger benefit (perhaps they have their own benefit that's larger, in which case this is a non-issue).
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Re: Social Security age 70 or bust?

Post by David Jay »

Because my wife’s SS payment is small (she claimed @62), she will get a big bump up (to 50% of my PIA) when I file. So there is only a few thousand difference between claiming at 68 and 70. I lean towards waiting to age 70 (for the maximum survivor’s benefit) but I have the flexibility to claim earlier if the situation changes.
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ppro
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Re: Social Security age 70 or bust?

Post by ppro »

Johnfiscal, smitcat, that is a lot of very useful information. For some reason I haven't done much deep diving on the overall picture, with respect to various tax scenarios, apart from playing with spreadsheets. I will explore iorp. In no case will I begin my benefit before age 69 due to survivor benefit.
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Re: Social Security age 70 or bust?

Post by SGM »

We read Kotlikoff and decided on a file and suspend/ restricted application with DW taking a spousal benefit at her full retirement age. She delays her own until 70. I took my SS at 70. We both valued the longevity insurance should one or both of us live longer than the average projections.

We had large tax deferred accounts and did not want to take our large RMDs at age 70 1/2. We don't need the RMDs as we have other income streams. We are saving a lot in taxes by not taking RMDs. If we took RMDs and didn't spend them then we would have more taxable dividends and capital gains to deal with throughout both our lifetimes.

When one person inevitably outlives the other in a marriage, the survivor is taxed as a single person. This would be a large tax hit for the survivor. Also our IRMAA premiums will be a little bit lower because we do not take out RMDs. Also our taxable account generates fewer dividends than if we didn't do Roth conversions.

Also we have a legacy motive and it is better to inherit Roth accounts than traditional IRAs.
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Re: Social Security age 70 or bust?

Post by delamer »

Remember that benefits are increased in a monthly basis when you delay, so you could literally split the difference and claim at age 69 1/2.
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Re: Social Security age 70 or bust?

Post by JoeRetire »

ppro wrote: Thu Aug 29, 2019 9:28 am My biggest concern is spending down our modest nest egg, especially if there is a market turndown.
But money is fungible.

How much of the future "their" money are you willing to give away, so that you won't have to spend quite as much of "your" money if there is a market turndown?

If you are really that close to the limit such that it might be beneficial to have SS benefits now, you are probably a good candidate for maximizing your SS income by delaying.
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Re: Social Security age 70 or bust?

Post by JoeRetire »

JohnFiscal wrote: Thu Aug 29, 2019 9:51 amBut on the other hand, by delaying I leave my spouse a greater SS benefit should I pre-decease her. That counts for a lot.
And clearly matters for overall optimization. Optimizing your own benefits at the expense of your spouse's benefits isn't optimization, at least not for me.
I have investigated this scenario on my own with my Excel models and found that my "early death" was a more critical case for my spouse/widow than my "living too long and using up all the dough". I bought an additional 10 year term life policy as a consequence of this exercise.)
Interesting.
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Re: Social Security age 70 or bust?

Post by JoeRetire »

delamer wrote: Thu Aug 29, 2019 10:27 am Remember that benefits are increased in a monthly basis when you delay, so you could literally split the difference and claim at age 69 1/2.
You certainly could as long as you don't care. And you could throw a dart at a calendar to choose the date.
If you think there is a way to optimize, then neither of these randomizing methods would likely yield desirable results.

When you don't care where you are going, then any path will suffice.
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Re: Social Security age 70 or bust?

Post by JW-Retired »

ppro wrote: Thu Aug 29, 2019 9:17 am My pension is 100% joint and survivor, with a popup provision to single life if I outlive DW. If DW outlives me (likely), the combination of the pension and the age 69 SS survivor benefit will provide her approximately 80% of our current spending level. That would be 82.5% if I wait until age 70, which isn't a very big difference in DW's financial comfort. If I survive DW, I would receive 100% of current spending level, due to pension popup.

Apologies for the long-winded post, but I want to know if I'm missing something.
IMO, you left out a vital something which is your Federal & state tax situation. How much less will SS be taxed compared to your pension and RMD money? Sounds like your pension will be pretty good, so maybe the full 85% of your SS will be Federally taxed..... but 15% never is. In addition, practically all states don't tax SS at all.

For me it works out my total tax rate on SS income is 1/3rd less than that on my pension/RMD. What state do you live in?
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ppro
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Re: Social Security age 70 or bust?

Post by ppro »

JW, we live in Ohio. No State tax on SS. Pension is taxed.
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Re: Social Security age 70 or bust?

Post by delamer »

JoeRetire wrote: Thu Aug 29, 2019 10:41 am
delamer wrote: Thu Aug 29, 2019 10:27 am Remember that benefits are increased in a monthly basis when you delay, so you could literally split the difference and claim at age 69 1/2.
You certainly could as long as you don't care. And you could throw a dart at a calendar to choose the date.
If you think there is a way to optimize, then neither of these randomizing methods would likely yield desirable results.

When you don't care where you are going, then any path will suffice.
My understanding is that the OP sees either 69 or 70 as a viable option — meaning each has pluses and minuses, and neither is optimal.

Claiming at 69 1/2 hardly means “throw(ing) a dart.”
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Re: Social Security age 70 or bust?

Post by JohnFiscal »

JoeRetire wrote: Thu Aug 29, 2019 10:38 am
I have investigated this scenario on my own with my Excel models and found that my "early death" was a more critical case for my spouse/widow than my "living too long and using up all the dough". I bought an additional 10 year term life policy as a consequence of this exercise.)
Interesting.
This was probably a special instance, due to my wife being 11 years younger than me. It was possible for her to be younger than the min age to collect survivor benefits and I still could be dead. That left a "hole" in annual income (viewed on an plot of years in Excel) that needed to be filled. The min age for survivor benefits (without children) is 60 and there's just too much of a hit to the benefit taking it that young.

So, special instance in my case but I would encourage everyone to check out the effect of an "early" death of one partner versus the other.
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Re: Social Security age 70 or bust?

Post by JoeRetire »

delamer wrote: Thu Aug 29, 2019 11:09 am
JoeRetire wrote: Thu Aug 29, 2019 10:41 am
delamer wrote: Thu Aug 29, 2019 10:27 am Remember that benefits are increased in a monthly basis when you delay, so you could literally split the difference and claim at age 69 1/2.
You certainly could as long as you don't care. And you could throw a dart at a calendar to choose the date.
If you think there is a way to optimize, then neither of these randomizing methods would likely yield desirable results.

When you don't care where you are going, then any path will suffice.
My understanding is that the OP sees either 69 or 70 as a viable option — meaning each has pluses and minuses, and neither is optimal.

Claiming at 69 1/2 hardly means “throw(ing) a dart.”
Why of course it does! It means throwing a dart at the months between 69 and 70.

If your theory of claiming strategies is "it doesn't matter", then any any day in between 69 and 70 is equally fine.
If instead your theory tells you that "later is better" or "earlier is better", then it's not possible for any day in between 69 and 70 to be optimal.
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Re: Social Security age 70 or bust?

Post by JoeRetire »

JohnFiscal wrote: Thu Aug 29, 2019 11:28 am
JoeRetire wrote: Thu Aug 29, 2019 10:38 am
I have investigated this scenario on my own with my Excel models and found that my "early death" was a more critical case for my spouse/widow than my "living too long and using up all the dough". I bought an additional 10 year term life policy as a consequence of this exercise.)
Interesting.
This was probably a special instance, due to my wife being 11 years younger than me. It was possible for her to be younger than the min age to collect survivor benefits and I still could be dead. That left a "hole" in annual income (viewed on an plot of years in Excel) that needed to be filled. The min age for survivor benefits (without children) is 60 and there's just too much of a hit to the benefit taking it that young.
It sounds like a very smart solution to me!
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Re: Social Security age 70 or bust?

Post by delamer »

JoeRetire wrote: Thu Aug 29, 2019 11:46 am
delamer wrote: Thu Aug 29, 2019 11:09 am
JoeRetire wrote: Thu Aug 29, 2019 10:41 am
delamer wrote: Thu Aug 29, 2019 10:27 am Remember that benefits are increased in a monthly basis when you delay, so you could literally split the difference and claim at age 69 1/2.
You certainly could as long as you don't care. And you could throw a dart at a calendar to choose the date.
If you think there is a way to optimize, then neither of these randomizing methods would likely yield desirable results.

When you don't care where you are going, then any path will suffice.
My understanding is that the OP sees either 69 or 70 as a viable option — meaning each has pluses and minuses, and neither is optimal.

Claiming at 69 1/2 hardly means “throw(ing) a dart.”
Why of course it does! It means throwing a dart at the months between 69 and 70.

If your theory of claiming strategies is "it doesn't matter", then any any day in between 69 and 70 is equally fine.
If instead your theory tells you that "later is better" or "earlier is better", then it's not possible for any day in between 69 and 70 to be optimal.
I don’t have a theory.

The OP sees advantages to both 69 and 70, so I suggested that 69 1/2 would be a reasonable compromise given his concerns.
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Re: Social Security age 70 or bust?

Post by GerryL »

There are two ways of looking at delaying SS:
1) Getting the most money out of the system
2) Longevity insurance

I chose the latter. No math required.
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Re: Social Security age 70 or bust?

Post by Vanguard Fan 1367 »

ppro wrote: Thu Aug 29, 2019 9:28 am My biggest concern is spending down our modest nest egg, especially if there is a market turndown.


That is my concern also which is why I want to wait till 70 to collect the Social Security. Things are rocking and rolling with the market today but who knows what happens in 10 to 25 years. Hopefully Uncle Sam will pay out my increased benefits then.
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Re: Social Security age 70 or bust?

Post by Big Dog »

OP:


$27k is $27k. And that is why the rec is age 70, as it is a complex math problem. Whether that longevity insurance is worth it to you, only you can decide.

But cash if fungible, so spending down your bank account now and waiting is no different than collecting SS earlier and spending down your bank account later. (Mike captures that in the PV)

The other thing is that you can always wait, and if say, when you hit 68 the market tanks, you could file then and there. OTOH, if the market is still booming when you hit 69, wait....

I'm a big fan of Mike Piper's open social security....did you also click on the Advanced tab and change the mortality tables?
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Re: Social Security age 70 or bust?

Post by dbr »

I agree with above reply. As someone else said it is really half vs six of. If the market crashes run out and grab your SS.

As pointed out, the value of longevity insurance is not in the calculations. For people who want to manage that risk delaying SS is a very good tool.
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Re: Social Security age 70 or bust?

Post by GAAP »

ppro wrote: Thu Aug 29, 2019 9:34 am Sandtrap, I'll have to ponder that nugget, as counterintuitive it is to me. Thanks.
If spending down is potentially an issue, that means that you have a greater need to rely upon SS and need the safety of the extra SS income.
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Re: Social Security age 70 or bust?

Post by willthrill81 »

I'm not personally interested in a likely vain attempt to maximize our SS benefits. I'm much more interested in maximizing the monthly benefit of the best longevity insurance out there (i.e. deferring SS benefits until age 70).
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Re: Social Security age 70 or bust?

Post by abuss368 »

Sandtrap wrote: Thu Aug 29, 2019 9:23 am Based on your information, it seems you have a decision between "six" or "a half a dozen".
As you say, there's not much difference at this point given SS's place in your overall financial position.
At this point, waiting until 70 "just because you want to" is a good enough reason as well.

So. . . . make the call that feels the best to you and you can live with without doing an "if only" later on.

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Re: Social Security age 70 or bust?

Post by jj »

SGM wrote: Thu Aug 29, 2019 10:26 am
We had large tax deferred accounts and did not want to take our large RMDs at age 70 1/2. We don't need the RMDs as we have other income streams. We are saving a lot in taxes by not taking RMDs. If we took RMDs and didn't spend them then we would have more taxable dividends and capital gains to deal with throughout both our lifetimes.

When one person inevitably outlives the other in a marriage, the survivor is taxed as a single person. This would be a large tax hit for the survivor. Also our IRMAA premiums will be a little bit lower because we do not take out RMDs. Also our taxable account generates fewer dividends than if we didn't do Roth conversions.

Also we have a legacy motive and it is better to inherit Roth accounts than traditional IRAs.
You are not taking your RMDs??? The R in RMD stands for required. Are these RMDs from a 401k of a job where you are still employed? I believe this is the only situation where you are not required to take distributions from your tax-deferred accounts.

I'm bemused by what you've written.
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Re: Social Security age 70 or bust?

Post by Beehave »

It's slightly more complex than it used to be, but the benefit between 69 and 70 still goes up a fixed amount every month, while the "cost" ofdelay goes up every month by that fixed amount. Putting it simply, the cost of the increase goes up every month.

I do not know if the numbers you've crunched are exactly correct, but the progression of cost vs benefit you describe makes perfectly good sense to me.

Whether it makes sense to delay or not depends, obviously, on personal circumstances. Based on your description of your situation, I'd say taking at 69 is very reasonable because you are delaying long to get most of the benefit and avoiding depleting retirement funds and only leaving the costliest portion of the possible increase on the table.
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Re: Social Security age 70 or bust?

Post by delamer »

jj wrote: Thu Aug 29, 2019 5:42 pm
SGM wrote: Thu Aug 29, 2019 10:26 am
We had large tax deferred accounts and did not want to take our large RMDs at age 70 1/2. We don't need the RMDs as we have other income streams. We are saving a lot in taxes by not taking RMDs. If we took RMDs and didn't spend them then we would have more taxable dividends and capital gains to deal with throughout both our lifetimes.

When one person inevitably outlives the other in a marriage, the survivor is taxed as a single person. This would be a large tax hit for the survivor. Also our IRMAA premiums will be a little bit lower because we do not take out RMDs. Also our taxable account generates fewer dividends than if we didn't do Roth conversions.

Also we have a legacy motive and it is better to inherit Roth accounts than traditional IRAs.
You are not taking your RMDs??? The R in RMD stands for required. Are these RMDs from a 401k of a job where you are still employed? I believe this is the only situation where you are not required to take distributions from your tax-deferred accounts.

I'm bemused by what you've written.
I think SMG meant that they did Roth conversions to avoid RMDs.
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Re: Social Security age 70 or bust?

Post by Silk McCue »

jj wrote: Thu Aug 29, 2019 5:42 pm
SGM wrote: Thu Aug 29, 2019 10:26 am
We had large tax deferred accounts and did not want to take our large RMDs at age 70 1/2. We don't need the RMDs as we have other income streams. We are saving a lot in taxes by not taking RMDs. If we took RMDs and didn't spend them then we would have more taxable dividends and capital gains to deal with throughout both our lifetimes.

When one person inevitably outlives the other in a marriage, the survivor is taxed as a single person. This would be a large tax hit for the survivor. Also our IRMAA premiums will be a little bit lower because we do not take out RMDs. Also our taxable account generates fewer dividends than if we didn't do Roth conversions.

Also we have a legacy motive and it is better to inherit Roth accounts than traditional IRAs.
You are not taking your RMDs??? The R in RMD stands for required. Are these RMDs from a 401k of a job where you are still employed? I believe this is the only situation where you are not required to take distributions from your tax-deferred accounts.

I'm bemused by what you've written.
I’m bemused that you didn’t read between the lines to realize they decreased their tax deferred via spending and Roth conversions prior to SS such that they have no RMDs. They have no tax deferred balances.

This is a strategy used by many. We will leave enough in tax deferred to fund charitable for 15 years while more than consuming RMDs at 0% tax rate.

Cheers
TravelforFun
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Re: Social Security age 70 or bust?

Post by TravelforFun »

David Jay wrote: Thu Aug 29, 2019 9:59 am Because my wife’s SS payment is small (she claimed @62), she will get a big bump up (to 50% of my PIA) when I file. So there is only a few thousand difference between claiming at 68 and 70. I lean towards waiting to age 70 (for the maximum survivor’s benefit) but I have the flexibility to claim earlier if the situation changes.
Your wife won't get 50% of your PIA because she filed early.

My wife and I are doing the same thing. She filed at 62 and I filed for my spousal benefits at 66 (I'm 4 years older). I will file for my own benefits at 70 and she will file for spousal which is 1/2 of my PIA minus about $300.

TravelforFun
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Re: Social Security age 70 or bust?

Post by David Jay »

TravelforFun wrote: Thu Aug 29, 2019 6:22 pm
David Jay wrote: Thu Aug 29, 2019 9:59 am Because my wife’s SS payment is small (she claimed @62), she will get a big bump up (to 50% of my PIA) when I file. So there is only a few thousand difference between claiming at 68 and 70. I lean towards waiting to age 70 (for the maximum survivor’s benefit) but I have the flexibility to claim earlier if the situation changes.
Your wife won't get 50% of your PIA because she filed early.

My wife and I are doing the same thing. She filed at 62 and I filed for my spousal benefits at 66 (I'm 4 years older). I will file for my own benefits at 70 and she will file for spousal which is 1/2 of my PIA minus about $300.

TravelforFun
You are correct, the deduct for filing early will continue, dollar for dollar. I was not precise.

It is still a huge increase, that was the intent of my comment - that big bump in her benefit is the reason why age 70 is less beneficial than many.
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ppro
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Re: Social Security age 70 or bust?

Post by ppro »

OP here. So much info to digest. Great discussion. Still learning, but appears age 70 should be my default goal. As someone above said, "no math required" for max longevity insurance. Gonna go back to Open Social Security and try the advanced features for different mortality assumptions.
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Re: Social Security age 70 or bust?

Post by Wakefield1 »

willthrill81 wrote: Thu Aug 29, 2019 4:55 pm the best longevity insurance out there (i.e. deferring SS benefits until age 70).
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
generally outweighs the effect of more depletion of your retirement accounts provided you live long enough?
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Re: Social Security age 70 or bust?

Post by pondering »

My mom died at 70 1/2 and my dad died when he was 69.

What is your expectation for longevity?
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delamer
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Re: Social Security age 70 or bust?

Post by delamer »

TravelforFun wrote: Thu Aug 29, 2019 6:22 pm
David Jay wrote: Thu Aug 29, 2019 9:59 am Because my wife’s SS payment is small (she claimed @62), she will get a big bump up (to 50% of my PIA) when I file. So there is only a few thousand difference between claiming at 68 and 70. I lean towards waiting to age 70 (for the maximum survivor’s benefit) but I have the flexibility to claim earlier if the situation changes.
Your wife won't get 50% of your PIA because she filed early.

My wife and I are doing the same thing. She filed at 62 and I filed for my spousal benefits at 66 (I'm 4 years older). I will file for my own benefits at 70 and she will file for spousal which is 1/2 of my PIA minus about $300.

TravelforFun
With your claiming strategy, if you predecease your wife will her survivor benefit also be reduced because she filed early?

Or will it only reduce her spousal benefit?
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Re: Social Security age 70 or bust?

Post by azianbob »

TravelforFun wrote: Thu Aug 29, 2019 6:22 pm
David Jay wrote: Thu Aug 29, 2019 9:59 am Because my wife’s SS payment is small (she claimed @62), she will get a big bump up (to 50% of my PIA) when I file. So there is only a few thousand difference between claiming at 68 and 70. I lean towards waiting to age 70 (for the maximum survivor’s benefit) but I have the flexibility to claim earlier if the situation changes.
Your wife won't get 50% of your PIA because she filed early.

My wife and I are doing the same thing. She filed at 62 and I filed for my spousal benefits at 66 (I'm 4 years older). I will file for my own benefits at 70 and she will file for spousal which is 1/2 of my PIA minus about $300.

TravelforFun
You can still do this? I thought they changed the rules so you can't do this double dipping anymore, and whenever you file, you have to pick either your own benefit or get half of spouse's benefit ...
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Re: Social Security age 70 or bust?

Post by delamer »

azianbob wrote: Thu Aug 29, 2019 7:05 pm
TravelforFun wrote: Thu Aug 29, 2019 6:22 pm
David Jay wrote: Thu Aug 29, 2019 9:59 am Because my wife’s SS payment is small (she claimed @62), she will get a big bump up (to 50% of my PIA) when I file. So there is only a few thousand difference between claiming at 68 and 70. I lean towards waiting to age 70 (for the maximum survivor’s benefit) but I have the flexibility to claim earlier if the situation changes.
Your wife won't get 50% of your PIA because she filed early.

My wife and I are doing the same thing. She filed at 62 and I filed for my spousal benefits at 66 (I'm 4 years older). I will file for my own benefits at 70 and she will file for spousal which is 1/2 of my PIA minus about $300.

TravelforFun
You can still do this? I thought they changed the rules so you can't do this double dipping anymore, and whenever you file, you have to pick either your own benefit or get half of spouse's benefit ...
If you were born before Jan. 2, 1954, it still is available.
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Re: Social Security age 70 or bust?

Post by GerryL »

pondering wrote: Thu Aug 29, 2019 7:00 pm My mom died at 70 1/2 and my dad died when he was 69.

What is your expectation for longevity?
My longest-lived grandparents were ~76.
Both of my parents made it to about 86.
I'm aiming for 96, but my financial plan is calculated out to 100.
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Re: Social Security age 70 or bust?

Post by TravelforFun »

delamer wrote: Thu Aug 29, 2019 7:03 pm
TravelforFun wrote: Thu Aug 29, 2019 6:22 pm
David Jay wrote: Thu Aug 29, 2019 9:59 am Because my wife’s SS payment is small (she claimed @62), she will get a big bump up (to 50% of my PIA) when I file. So there is only a few thousand difference between claiming at 68 and 70. I lean towards waiting to age 70 (for the maximum survivor’s benefit) but I have the flexibility to claim earlier if the situation changes.
Your wife won't get 50% of your PIA because she filed early.

My wife and I are doing the same thing. She filed at 62 and I filed for my spousal benefits at 66 (I'm 4 years older). I will file for my own benefits at 70 and she will file for spousal which is 1/2 of my PIA minus about $300.

TravelforFun
With your claiming strategy, if you predecease your wife will her survivor benefit also be reduced because she filed early?

Or will it only reduce her spousal benefit?
My wife would receive 100 percent of my benefit amount after I passed and she'd reached her full retirement age.

TravelforFun
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Re: Social Security age 70 or bust?

Post by delamer »

TravelforFun wrote: Thu Aug 29, 2019 7:35 pm
delamer wrote: Thu Aug 29, 2019 7:03 pm
TravelforFun wrote: Thu Aug 29, 2019 6:22 pm
David Jay wrote: Thu Aug 29, 2019 9:59 am Because my wife’s SS payment is small (she claimed @62), she will get a big bump up (to 50% of my PIA) when I file. So there is only a few thousand difference between claiming at 68 and 70. I lean towards waiting to age 70 (for the maximum survivor’s benefit) but I have the flexibility to claim earlier if the situation changes.
Your wife won't get 50% of your PIA because she filed early.

My wife and I are doing the same thing. She filed at 62 and I filed for my spousal benefits at 66 (I'm 4 years older). I will file for my own benefits at 70 and she will file for spousal which is 1/2 of my PIA minus about $300.

TravelforFun
With your claiming strategy, if you predecease your wife will her survivor benefit also be reduced because she filed early?

Or will it only reduce her spousal benefit?
My wife would receive 100 percent of my benefit amount after I passed and she'd reached her full retirement age.

TravelforFun
So if you died before she reached her FRA, she wouldn’t get your full age 70 benefit?

I find this stuff confusing.
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Re: Social Security age 70 or bust?

Post by JoeRetire »

delamer wrote: Thu Aug 29, 2019 12:26 pmThe OP sees advantages to both 69 and 70, so I suggested that 69 1/2 would be a reasonable compromise given his concerns.
I understand that's what you recommended. Sorry, it makes no sense to me.
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Re: Social Security age 70 or bust?

Post by JoeRetire »

Beehave wrote: Thu Aug 29, 2019 5:45 pm It's slightly more complex than it used to be, but the benefit between 69 and 70 still goes up a fixed amount every month, while the "cost" ofdelay goes up every month by that fixed amount. Putting it simply, the cost of the increase goes up every month.

...only leaving the costliest portion of the possible increase on the table.
How is year 70 more costly than year 69?
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Re: Social Security age 70 or bust?

Post by JoeRetire »

jj wrote: Thu Aug 29, 2019 5:42 pmI'm bemused by what you've written.
I'm amused by your correct usage of the term bemused.
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Re: Social Security age 70 or bust?

Post by JoeRetire »

pondering wrote: Thu Aug 29, 2019 7:00 pm My mom died at 70 1/2 and my dad died when he was 69.

What is your expectation for longevity?
Were your parents in ill health early in their 60s? Are you in ill health, or do you have something genetic which leads you to expect a shorter than average lifespan?

My mom died at 86 and my dad is still around at 87. I'm planning our finances to handle a long life for both my wife and I.

If I'm wrong about myself, my wife will be well protected financially. If I am wrong about both myself and my wife, my children will inherit more than planned. Either way, it's all good, as we have plenty of money to live the lifestyle we prefer.
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Re: Social Security age 70 or bust?

Post by JoeRetire »

delamer wrote: Thu Aug 29, 2019 7:03 pm With your claiming strategy, if you predecease your wife will her survivor benefit also be reduced because she filed early?

Or will it only reduce her spousal benefit?
Unless she claims survivor benefits before her FRA, the survivor benefits will not be reduced.
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