When to take Pensions and Social Security

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Wedemeyer
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When to take Pensions and Social Security

Post by Wedemeyer »

Hello,

I am 51, and my girlfriend is 53. Soon to be fiancé / wife. We have $3.5M between us, invested in total (US+In'tl) market ETFs / funds, in taxable and tax-advantaged accounts. She has a pension and full social security and wants to retire from full time work at 55 from the current pension-employer, and work part time. I plan on working another 10 years through age 60, and retire at 61, salary ~$350,000 annually currently. She has options when to start the pension and social security. For her the options are:

Pension:
Start at age 55: receive $2,430 / month
Start at age 60: receive $3,240 / month
Start at age 65: receive $4,861 / month

Social Security:
Start at age 62: receive $2,181 / month
Start at age 67: receive $3,282 / month
Start at age 70: receive $4,144 / month

I'd take SS at age 70, $4,183 / month.

She's thinking about taking the earliest options above, but I'm not sure that's a good idea. We can easily cover our annual expenses on my salary and her part time work until I retire. Since we are already taking risk with the stock market, and since the above pension and social security are guaranteed, my sense is to delay the start dates and take the maximum amounts.

Please let me know your thoughts. Any insights are appreciated here.
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Watty
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Re: When to take Pensions and Social Security

Post by Watty »

vanbogle59 wrote: Mon Nov 22, 2021 3:24 pm https://opensocialsecurity.com/
+1

For figuring out when to start Social Security. When you are using this be sure that your Social Security estimate is based on retiring at a younger age, it defaults to assuming that you will keep working longer.

If she has a lump sum option to roll the pension into an IRA that you did not mention then that would be worth taking a hard look at especially if the pension is not adjusted for inflation.
Wedemeyer wrote: Mon Nov 22, 2021 3:18 pm We have $3.5M between us, invested in total (US+In'tl) market ETFs / funds, in taxable and tax-advantaged accounts.
With your retirements being so near you should really have a significant portion of your portfolio in bonds. For example the Vanguard 2030 fund is about 33% bonds.

https://investor.vanguard.com/mutual-fu ... olio/vthrx

What asset allocation to use depends on a lot of your details. There is a suggested format that you could use as a guideline for another post to ask what asset allocation you should use.

viewtopic.php?f=1&t=6212
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JoeRetire
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Re: When to take Pensions and Social Security

Post by JoeRetire »

Wedemeyer wrote: Mon Nov 22, 2021 3:18 pmPension:
Start at age 65: receive $4,861 / month

Social Security:
Start at age 70: receive $4,144 / month
Assuming normal life expectancy, and no lump sum pension availability, she should take her pension at 65 and social security at 70. As a single woman, she should maximize her lifetime benefits.

The answers might be different if you were married (but probably not).
Last edited by JoeRetire on Mon Nov 22, 2021 4:09 pm, edited 2 times in total.
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Onlineid3089
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Re: When to take Pensions and Social Security

Post by Onlineid3089 »

From what you've listed I'd say you're in the fortunate position where it will make absolutely no significant difference. Have her take them whenever it makes her feel warm and fuzzy.

For what it's worth, I'd probably have her hold off until you retire assuming your 350k salary is enough to comfortably make ends meet.
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Kenkat
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Re: When to take Pensions and Social Security

Post by Kenkat »

There is a very compelling case to be made for waiting to claim social security benefits until age 70. Benefits will increase substantially between 62 and 70, equating to a roughly 8% annual increase in benefits. So that would be the baseline advice on social security.

On the pension, it is likely that the options at 55, 60 and 65, as well as any lump sum if available, are all actuarially neutral, so your individual circumstances (lifespan, do you need the income, do you want to leave money for heirs) would dictate what might make sense there. When I’ve modeled different scenarios in planning type software, it tended to not matter all that much. Which makes sense - it’s actuarially neutral, right?

I am planning to retire next year and have been evaluating these same decisions. By all calculations, I have plenty to retire. If there is one risk that maybe worries me a bit, it’s the “sequence of returns risk”. This is a big market drop right when you start retirement. It is impactful because you are drawing down your portfolio during a time when it will take the maximum hit in terms of total dollars.

So my thinking on mitigating that risk is to defer a decision on the pension. If the market becomes rocky, begin the pension annuity payments at that time. If that does not occur, defer to 65.

You’d have to confirm that’s an option with the pension (it is for me), but adding an income stream at that point will reduce portfolio draw down, giving more time for recovery.

Overall, you sound like you are in great shape, just a matter of optimizing your decisions.
dbr
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Re: When to take Pensions and Social Security

Post by dbr »

This kind of problem can be analyzed using a retirement model that computes the range of outcomes for the different scenarios with potential returns and potential inflation as statistical variables. The models suggested are the one's that allow specification of income streams by amounts, dates started, inflation treatment, and so.

I refer people to www.firecalc.com as an example. Take a look at the tabs in FireCalc called "Other Income/Spending" and "Not Retired." There is also a tab for describing your portfolio though the program is limited in that it does not allow the portfolio to change at some point in time. If one prefers you might hire an hourly fee financial planner to do the modelling. There are various models available that either refer to historical data for returns and inflation of use Monte Carlo simulation.

The previous poster references a similar exercise and some considerations around it.
307068304
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Re: When to take Pensions and Social Security

Post by 307068304 »

Hi, we have a very similar situation except I plan on retiring earlier (54 now) and my wife already quit at 55 this year.
One thing you did not mention is the split between taxable and tax deferred accounts but if you are not planning to use any of these funds it’s less relevant.

Pension - I look at the pension as an available annuity that can you pull the trigger on at any time. The longer you wait the higher it will get. But then there is a question of taxes and RMDs. If you have high potential RMDs I would start withdrawing from taxable accounts first because unlike with pension the rules are not set by you and flexibility is limited. In our case we plan on drawing from tax deferred 401k/IRA accounts between our 58-60 and the need to start RMDs. We have a significant balance in taxable accounts where tax obligation will be less than on regular income.

Social security - is another annuity. Like in your case I earned the top of 4k plus and my wife 3k plus if we wait till 70. So the question is - what is your expense level between your 61 and 72. I personally recommend not touching anything but your tax deferred accounts unless the market really tanks and you can use the buffer of the pension as first defense, taxable account withdrawals as a second and social security as a last resort.

All of this assumes you plan on living past 90 given your current level of invested assets. You can play with this site https://engaging-data.com/visualizing-4-rule/ to see how would you do historically under the worst case scenarios.
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celia
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Re: When to take Pensions and Social Security

Post by celia »

How much do you jointly have in tax-deferred accounts?

I’m surprised no-one has asked that yet. If it is jointly over a million, you will want to plan on doing Roth conversions before RMDs start at age 72. (The account(s) can easily double TWICE between now and then, even without any further contributions, and increase the RMDs accordingly.) If this might apply to you (plural), you will want to delay SS, and quite possibly pensions, for as long as possible to enable Roth conversions in your lower tax brackets.

The worse thing you could do is live with low income (and taxes) during your early retirement years, only to have the RMDs after 72 push you into yet higher tax brackets for the rest of your lives.

See this thread for people who didn’t convert when it was easier to:
viewtopic.php?f=2&t=361732
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
mary1492
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Re: When to take Pensions and Social Security

Post by mary1492 »

I agree with her - take it at the earliest date. Clearly, all else being equal, the breakeven point will be at about age 75. However, receiving double the amount by waiting, it will likely move into a higher tax bracket.

Aside from that, we really don't know when we'll kick the bucket. If it happens to be sooner rather than later and she's chosen to wait on taking the pension and SS, she may receive nothing.
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celia
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Re: When to take Pensions and Social Security

Post by celia »

mary1492 wrote: Mon Nov 22, 2021 5:50 pm I agree with her - take it at the earliest date. Clearly, all else being equal, the breakeven point will be at about age 75.
Taking SS early means that less can be converted early, if you want to stay in the same tax bracket. And Roth conversions will make more of the SS be taxed (up to 85% of it).
Aside from that, we really don't know when we'll kick the bucket. If it happens to be sooner rather than later and she's chosen to wait on taking the pension, she may receive nothing.
That’s true for everyone who dies before 62. But once you’ve died, you don’t need SS.

Maybe OP/wife would rather have more tax-free money to leave to her heirs instead. In particular, when one of them dies, the survivor will have to start filing again as Single. But then, the space in each tax bracket for Singles is half of what it is for MFJ. Since the survivor would still have to take the same RMD (for both of them), s/he could easily be pushed into a higher tax bracket. This is another reason why OP/wife will want to do Roth conversions instead.

307068304 wrote: Mon Nov 22, 2021 4:57 pm If you have high potential RMDs I would start withdrawing from taxable accounts first because unlike with pension the rules are not set by you and flexibility is limited. In our case we plan on drawing from tax deferred 401k/IRA accounts between our 58-60 and the need to start RMDs.
If either you or the OP has “high potential RMDs”, I would start withdrawing from them for living expenses, if needed, and doing Roth conversions. The flexibility is not limited at all if you roll the 401K or any other employer tax-deferred account to a Rollover IRA (in case you change your mind and want to go back to work and have access to another retirement plan). And anything converted can still be withdrawn tax-free and spent (as long as you had a Roth account for at least 5 years and are over 59.5).
We have a significant balance in taxable accounts where tax obligation will be less than on regular income.
Most of us find that it is better over the long term to keep our Taxable Income (and taxes) somewhat level over our remaining lives than to have a few years of low income (unless you need ACA) followed by higher Taxable Income (and taxes) for the rest of our lives. To best figure this out, you should model your income from retirement year until you are both over 72 and run each year’s scenario through tax software. (You only need to run a scenario once even though it might apply to multiple years, eg, age 62-64, 65-69, 70-71, 72-99).
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
MandyT
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Re: When to take Pensions and Social Security

Post by MandyT »

You should consider the fact that income received while collecting SS can cause (more of) SS to be taxed. If the different options are actuarially neutral, she may be better off starting the pension right away to collect as much as possible before it interacts with SS taxation. Also, especially if the pension is not inflation-adjusted, money you receive sooner is worth more than money you receive later.

Once you are married, you will want to look at how marriage affects SS claiming strategies (Mike Piper's Open Social Security is excellent for this). Frequently, it's better to have one spouse claim early and the other claim late.
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JoeRetire
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Re: When to take Pensions and Social Security

Post by JoeRetire »

mary1492 wrote: Mon Nov 22, 2021 5:50 pm I agree with her - take it at the earliest date. Clearly, all else being equal, the breakeven point will be at about age 75. However, receiving double the amount by waiting, it will likely move into a higher tax bracket.
A higher tax bracket because her benefits are higher for life? That's a bad thing?
Aside from that, we really don't know when we'll kick the bucket. If it happens to be sooner rather than later and she's chosen to wait on taking the pension and SS, she may receive nothing.
Well, she wouldn't be around, right? So no regrets.
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CyclingDuo
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Re: When to take Pensions and Social Security

Post by CyclingDuo »

Wedemeyer wrote: Mon Nov 22, 2021 3:18 pm Hello,

I am 51, and my girlfriend is 53. Soon to be fiancé / wife. We have $3.5M between us, invested in total (US+In'tl) market ETFs / funds, in taxable and tax-advantaged accounts. She has a pension and full social security and wants to retire from full time work at 55 from the current pension-employer, and work part time. I plan on working another 10 years through age 60, and retire at 61, salary ~$350,000 annually currently. She has options when to start the pension and social security. For her the options are:

Pension:
Start at age 55: receive $2,430 / month
Start at age 60: receive $3,240 / month
Start at age 65: receive $4,861 / month

Social Security:
Start at age 62: receive $2,181 / month
Start at age 67: receive $3,282 / month
Start at age 70: receive $4,144 / month

I'd take SS at age 70, $4,183 / month.

She's thinking about taking the earliest options above, but I'm not sure that's a good idea. We can easily cover our annual expenses on my salary and her part time work until I retire. Since we are already taking risk with the stock market, and since the above pension and social security are guaranteed, my sense is to delay the start dates and take the maximum amounts.

Please let me know your thoughts. Any insights are appreciated here.
Her income streams...

The 55 pension and 62 SS combo is $55,332 per year when both are running concurrently.
The 60 pension and 67 SS combo is $78,264 per year when both are running concurrently.
The 65 pension and 70 SS combo is $108,060 per year when both are running concurrently.

Sounds like based on your income and being able to live off of it along with your desire to work another decade - there's no loss if she delays the start of both her pension and SS.

Looks like a win-win no matter when she starts those income streams. Our preference would be to delay since your income will cover your needs well for the next decade - not to mention, if she works part-time she will be bringing in an income stream.

Have you run the taxation scenarios for all of the options?

CyclingDuo
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307068304
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Re: When to take Pensions and Social Security

Post by 307068304 »

celia wrote: Mon Nov 22, 2021 6:28 pm
mary1492 wrote: Mon Nov 22, 2021 5:50 pm I agree with her - take it at the earliest date. Clearly, all else being equal, the breakeven point will be at about age 75.
Taking SS early means that less can be converted early, if you want to stay in the same tax bracket. And Roth conversions will make more of the SS be taxed (up to 85% of it).
Aside from that, we really don't know when we'll kick the bucket. If it happens to be sooner rather than later and she's chosen to wait on taking the pension, she may receive nothing.
That’s true for everyone who dies before 62. But once you’ve died, you don’t need SS.

Maybe OP/wife would rather have more tax-free money to leave to her heirs instead. In particular, when one of them dies, the survivor will have to start filing again as Single. But then, the space in each tax bracket for Singles is half of what it is for MFJ. Since the survivor would still have to take the same RMD (for both of them), s/he could easily be pushed into a higher tax bracket. This is another reason why OP/wife will want to do Roth conversions instead.

307068304 wrote: Mon Nov 22, 2021 4:57 pm If you have high potential RMDs I would start withdrawing from taxable accounts first because unlike with pension the rules are not set by you and flexibility is limited. In our case we plan on drawing from tax deferred 401k/IRA accounts between our 58-60 and the need to start RMDs.
Correction from307068304 -I meant tax deferred accounts of course, sorry about the mistake. As withdrawals from 401k are regular income, we prefer to have less in tax deferred accounts by the time we reach maximum SS age.

If either you or the OP has “high potential RMDs”, I would start withdrawing from them for living expenses, if needed, and doing Roth conversions. The flexibility is not limited at all if you roll the 401K or any other employer tax-deferred account to a Rollover IRA (in case you change your mind and want to go back to work and have access to another retirement plan). And anything converted can still be withdrawn tax-free and spent (as long as you had a Roth account for at least 5 years and are over 59.5).
We have a significant balance in taxable accounts where tax obligation will be less than on regular income.
Most of us find that it is better over the long term to keep our Taxable Income (and taxes) somewhat level over our remaining lives than to have a few years of low income (unless you need ACA) followed by higher Taxable Income (and taxes) for the rest of our lives. To best figure this out, you should model your income from retirement year until you are both over 72 and run each year’s scenario through tax software. (You only need to run a scenario once even though it might apply to multiple years, eg, age 62-64, 65-69, 70-71, 72-99).
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Re: When to take Pensions and Social Security

Post by tibbitts »

Kenkat wrote: Mon Nov 22, 2021 4:27 pm If there is one risk that maybe worries me a bit, it’s the “sequence of returns risk”. This is a big market drop right when you start retirement. It is impactful because you are drawing down your portfolio during a time when it will take the maximum hit in terms of total dollars.
SoR is a mixed bag. If you retire before 65, say at 60, you have a few years to do Roth conversions before IRMAA (and eventually RMDs.) And everybody will have a few years in fixed income, so you really want a huge market drop to allow you to make large (percentage) Roth conversions. Of course it would be nicer if you knew ahead of time that the drop would only last a couple of years.
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Re: When to take Pensions and Social Security

Post by aristotelian »

If you delay, you could use years 55-69 to do Roth conversions in a lower tax bracket. Actuarily the income from SS (and likely the pension) should be a wash whether you delay or not, so the tax impact on your 401k withdrawals could be the deciding factor.
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Re: When to take Pensions and Social Security

Post by aristotelian »

MandyT wrote: Mon Nov 22, 2021 6:44 pm You should consider the fact that income received while collecting SS can cause (more of) SS to be taxed. If the different options are actuarially neutral, she may be better off starting the pension right away to collect as much as possible before it interacts with SS taxation. Also, especially if the pension is not inflation-adjusted, money you receive sooner is worth more than money you receive later.
Then again, the pension is also likely taxable, and both will impact tax on 401k withdrawals/conversions, which argues for delaying as long as possible.
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Re: When to take Pensions and Social Security

Post by stan1 »

Behavioral aspects are real. She may like to have her own income (from the pension she earned) rather than getting an "allowance" from your salary. You and others may not see it that way, but she might especially if she has been financially independent herself for many years or had a negative financial experience with her previous spouse. Worth talking to her about and understanding where she's coming from.
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Re: When to take Pensions and Social Security

Post by Kenkat »

tibbitts wrote: Tue Nov 23, 2021 3:00 pm
Kenkat wrote: Mon Nov 22, 2021 4:27 pm If there is one risk that maybe worries me a bit, it’s the “sequence of returns risk”. This is a big market drop right when you start retirement. It is impactful because you are drawing down your portfolio during a time when it will take the maximum hit in terms of total dollars.
SoR is a mixed bag. If you retire before 65, say at 60, you have a few years to do Roth conversions before IRMAA (and eventually RMDs.) And everybody will have a few years in fixed income, so you really want a huge market drop to allow you to make large (percentage) Roth conversions. Of course it would be nicer if you knew ahead of time that the drop would only last a couple of years.
Yes, a 2020 type drop would work well; a 1966 type scenario? - I’d prefer to skip the Roth conversions if I can avoid that one. :wink:
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JoeRetire
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Re: When to take Pensions and Social Security

Post by JoeRetire »

stan1 wrote: Tue Nov 23, 2021 3:18 pm Behavioral aspects are real. She may like to have her own income (from the pension she earned) rather than getting an "allowance" from your salary. You and others may not see it that way, but she might especially if she has been financially independent herself for many years or had a negative financial experience with her previous spouse. Worth talking to her about and understanding where she's coming from.
More than just behavioral aspects.

IMHO, an unmarried couple should be looking out for their own individual finances first, and then their coupled finances last. Girlfriends (and boyfriends) are not entitled to spousal/survivor benefits from social security, for example. Most pension plans are the same in that respect.

If/when they get married, that's a different scenario.
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Dandy
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Re: When to take Pensions and Social Security

Post by Dandy »

Normally I would suggest delaying SS and pension to maximize the retirement income and reduce reliance on investments. That is what I did. I didn't take into account the growth of my TIRA and the subsequent large RMDs. I did some Roth conversions but not enough. I'm not complaining but it was a factor that I basically paid too little attention to.

Also, as far as when to take SS you usually have the higher earner wait until age 70 and the lower earner early. That is so if the higher earning spouse dies first the surviving spouse can get the higher SS payout--BUT I think the marriage has to be at least 10 years for that to happen. Something you might want to factor into the decision.
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Wedemeyer
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Re: When to take Pensions and Social Security

Post by Wedemeyer »

Really good feedback as always.

The behavioral is real, and we've both been around the block with money and significant others. We have really frank conversations on money and are mostly aligned in how we think about living, saving, spending etc. We'll keep our accounts separate, and figure out annual spending needs. We can easily work part time as needed to fill in any blanks.

For the pension I did an NPV analysis using a discount factor of 8% on the pension and the higher pension at 65 amount yields a significantly higher NPV if we make it into our 90s. We might as well bet on living longer.

We're leaning towards taking the pension at 65, her SS at 67, and mine at 70. Ill work through age 60, retire at age 61, she'll be 63, and we'll get nice bumps in annual income during the following decade. Again, we'll work part time as needed.

We need to get moving on the Roth conversions. I need to set up a Solo 401k for my side consulting gigs and transfer my traditional IRA and SEP IRA balances into the Solo401k to zero out the traditional and SEP, in order to take advantage of a back door Roth via the traditional IRA and avoid the pro rata taxation. She's already there with a $0 balance traditional IRA. We can each contribute $7000 annually via back door from traditional to Roth, if I understand this correctly. Sounds like we have enough runway to put a good amount away.
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Re: When to take Pensions and Social Security

Post by 3feetpete »

You are in an enviable position and can hardly go wrong as others have pointed out. Consider taking the pensions when one of you retires. The pensions probably are not adjusted for inflation so putting off those payments makes less sense than SS which is.
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celia
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Re: When to take Pensions and Social Security

Post by celia »

Wedemeyer wrote: Wed Nov 24, 2021 2:23 pm …We'll keep our accounts separate, and figure out annual spending needs…
If your intent is to keep assets before marriage as your own in case you want to leave them to your own side of the family, may I suggest that you not add any more money to those accounts after you marry. To make it ‘cleaner’ for everyone, you might open new accounts after marriage at a custodian that is new to both of you. All money earned after marriage should go there as well as new IRAs. (I have no ideas on handling pre-existing 401Ks unless the custodian permits transfers out while still working.)

In most states, the spouse is considered to be entitled to half the income earned while they are married. And when one spouse dies, the survivor is entitled to the money going into any retirement accounts during marriage (because the contributions were withheld from joint income).

But the tricky part here will be paying income taxes going forward unless you file Married filing Separate. That is because your pre-marriage taxable assets will still have taxes incurred on them. Technically, you should pay taxes on the pre-marriage taxable income (dividends, LTCG, Roth conversions of pre-marriage IRAs) from a withdrawal from a pre-marriage account instead of from joint taxable assets (shared with your new spouse). But once you calculate how much tax was due to your separate asset, you can move that much into the joint checking account to pay (or re-pay) the taxes owed.


And to clarify your assets and intentions, a pre-nup should be done. After my mom died, my dad had a pre-nup with the second wife and after she died, had another pre-nup with wife #3. This had nothing to do with distrusting anyone as he was very generous in paying for all the joint living expenses. But since he and his new wives had trusts, all estates were settled without any fights from anyone’s heirs. Everything was clear and he shared his updated trust with his ‘successor trustee’ children each time he married.
Last edited by celia on Thu Nov 25, 2021 1:10 am, edited 1 time in total.
chassis
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Re: When to take Pensions and Social Security

Post by chassis »

Wedemeyer wrote: Mon Nov 22, 2021 3:18 pm Hello,

I am 51, and my girlfriend is 53. Soon to be fiancé / wife. We have $3.5M between us, invested in total (US+In'tl) market ETFs / funds, in taxable and tax-advantaged accounts. She has a pension and full social security and wants to retire from full time work at 55 from the current pension-employer, and work part time. I plan on working another 10 years through age 60, and retire at 61, salary ~$350,000 annually currently. She has options when to start the pension and social security. For her the options are:

Pension:
Start at age 55: receive $2,430 / month
Start at age 60: receive $3,240 / month
Start at age 65: receive $4,861 / month

Social Security:
Start at age 62: receive $2,181 / month
Start at age 67: receive $3,282 / month
Start at age 70: receive $4,144 / month

I'd take SS at age 70, $4,183 / month.

She's thinking about taking the earliest options above, but I'm not sure that's a good idea. We can easily cover our annual expenses on my salary and her part time work until I retire. Since we are already taking risk with the stock market, and since the above pension and social security are guaranteed, my sense is to delay the start dates and take the maximum amounts.

Please let me know your thoughts. Any insights are appreciated here.
It has been said that Social Security payment options are actuarially neutral. That's one way to look at it - age of claiming doesn't matter.

Download and use the RPM spreadsheet. It will let you run some scenarios on your particular situation. For me it says age 62 claiming is best.

Take a pension lump sum, if offered. You can earn a better return on the money than the pension custodian will.
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celia
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Re: When to take Pensions and Social Security

Post by celia »

chassis wrote: Wed Nov 24, 2021 9:40 pm Download and use the RPM spreadsheet. It will let you run some scenarios on your particular situation.
I know of no tool (RPM or otherwise) that takes concurrent Roth conversions into account while waiting for age 70. Taking SS while doing Roth conversions will use up some of the space in your tax bracket that could be used for the conversion instead. In addition, more of the SS becomes taxed.
Take a pension lump sum, if offered. You can earn a better return on the money than the pension custodian will.
Not true for our pensions. Plus we see pensions as “guaranteed payments” that will continue long after our cognitive abilities are gone. :|
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Re: When to take Pensions and Social Security

Post by chassis »

@celia what is your expectation for your self-managed portfolio return (if you self-manage your portfolio)?
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Re: When to take Pensions and Social Security

Post by ChrisRx »

Not true for our pensions. Plus we see pensions as “guaranteed payments” that will continue long after our cognitive abilities are gone. :|
Is your pension COLA?
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Re: When to take Pensions and Social Security

Post by celia »

chassis wrote: Wed Nov 24, 2021 10:52 pm @celia what is your expectation for your self-managed portfolio return (if you self-manage your portfolio)?
I’m curious, why do you ask?

Since we don’t need any of our portfolio for living expenses, we can be more aggressive than most who are our ages. I plan for 10-20% growth each year.

FYI, the “@“ symbol does nothing on this forum. If you want someone to return to the thread for a question or comment you made, quote something of theirs like this:
chassis wrote: Wed Nov 24, 2021 10:52 pm what is your expectation for. . .
. . . When you are signed in, you can click on the quote symbol of any post (in the upper right corner of the post). That will put quote tags around the entire post and the poster will then be notified that someone quoted them. Most forum members will return to see what your comments were about what they said.

In this case, I only returned since I remembered a small item I wanted to add to a previous post.

A note about good forum etiquette, meant for all the newbies: when quoting someone, delete the part of the quote you are not commenting on. We try to not quote everything to prevent nested quotes from getting too long. :beer

ChrisRx wrote: Wed Nov 24, 2021 11:53 pm
Not true for our pensions. Plus we see pensions as “guaranteed payments” that will continue long after our cognitive abilities are gone. :|
Is your pension COLA?
Yes, both of ours are as well as SS. :D

ChrisRx, I wouldn’t have seen your post either since my name was not in your “quote” tag. You quoted a follow-on quote of mine, rather than my first quote of the post you were reading. Thank you for deleting unnecessary text that you weren’t commenting on.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
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4nursebee
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Re: When to take Pensions and Social Security

Post by 4nursebee »

I had to do a bit of a handwritten spreadsheet to understand SS in our situation. I did it for age 62, 66, 70, compared where the break even points were. There is some longevity in both our families. Break even is a long way off such that I do not blame anyone that takes it early. In our case we decided to wait for age 70 to help old age out the best. We can always turn it on if needed. By doing the analysis I wanted to take it away from the emotional to the factual.
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chipperd
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Re: When to take Pensions and Social Security

Post by chipperd »

Any health concerns for either or family history of health concerns?
I have not seen this asked or posted yet, but seems a relevant issue.
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JoeRetire
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Re: When to take Pensions and Social Security

Post by JoeRetire »

celia wrote: Thu Nov 25, 2021 2:27 amI plan for 10-20% growth each year.
Interesting plan. Good luck.
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Re: When to take Pensions and Social Security

Post by Parkinglotracer »

stan1 wrote: Tue Nov 23, 2021 3:18 pm Behavioral aspects are real. She may like to have her own income (from the pension she earned) rather than getting an "allowance" from your salary. You and others may not see it that way, but she might especially if she has been financially independent herself for many years or had a negative financial experience with her previous spouse. Worth talking to her about and understanding where she's coming from.
This is a great answer.

She may want to look at this like she could be financially independent at any moment and does not want to be dependent on anyone.

Also there are studies that people are much more likely to spend an annuity / Social Security deposited in your account vs money you have to withdraw from your savings ... these studies seems valid based upon my personal tightwad experience ... i would have her do whatever makes her "enjoy life the most"

as the saying goes .. being rich is having money and using the money to improve your life is prosperity ... therefore I will likely take SS at age 62 and spend it because I will be happiest that way ... in the big picture IF i live to my full life expectancy I will be giving up 90K or so ... but having the extra money now and having years of spending now and being willing to buy a round of drinks or hand the lady / guy working the drive thru a $5 tip will add joy to my life.

my advice:

live beneath your means, chose time over money, people over things, choose the path that adds joy to your and other's lives.


in james mcmurty's (songwriter) words - its a damm short movie, how did we ever get here?

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vanbogle59
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Re: When to take Pensions and Social Security

Post by vanbogle59 »

celia wrote: Mon Nov 22, 2021 5:34 pm The worse thing you could do is live with low income (and taxes) during your early retirement years, only to have the RMDs after 72 push you into yet higher tax brackets for the rest of your lives.
Right (more or less literally).
IOW, do whatever you want and forget about it. The potential "bad" outcomes are just dandy.

Another scenario decrying the horror of ending up in a higher tax bracket the rest of your lives.
It's like watching a B movie where everyone secretly wants to get bit by the vampire.
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