Just filed for Social Security and feeling good

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$=WxTxI
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Re: Just filed for Social Security and feeling good

Post by $=WxTxI »

Mayacallie wrote: Fri May 10, 2024 6:35 pm I’m 68 and 6 months and just filed for benefits to commence next month. Until recently, I was going to wait until 70. I’m retired,and very financially comfortable. My benefit will be $3964 vs $4340 had I waited, thus only an 8.6% reduction. It would take almost 16 years to make up the difference in absolute dollars, but I would be over 95 before it would make up the difference at a modest 5% reinvestment rate. I’ve visited all of the social security sites, and reviewed the discussions here. Most urge waiting until 70. Survivor benefits are often pushed.
I’ve done the calculations many times before. With health unknowns and political uncertainty the gurus stopped making sense
Just wanted to say this is refreshing to see someone claim before 70.

I'd rather have a benefit start in my go-go years than closer to my slow-go years.

For reference we will each claim at 62.
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Mayacallie
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Re: Just filed for Social Security and feeling good

Post by Mayacallie »

Claudia Whitten wrote: Sun May 12, 2024 7:21 am
billaster wrote: Sat May 11, 2024 7:19 pm
Just filed for Social Security and feeling good
And think back on all those people in your 20s and 30s who told you Social Security would never be there for you.
I must have been hanging in the wrong crowd. No one ever talked to me about Social Security in my 20s and 30s or had an opinion to express about its longevity.

I think the bigger challenges at the OP's age (and presumably the age of most of those contributing to this discussion) are finding a community, remaining intellectually challenged and relevant, and keeping active through activities that don't really make you think about being active--they're just part of who you are. Frankly concerns other than when to take Social Security should so overwhelm your mind that the debate over whether to take at 67, 68, 69, or 70 (even 62) comes in at around 20 percent important. That's not completely unimportant, I admit, but in the grand scheme of things, it's quite unimportant. More important is whether you can live the kind of life that makes it more likely you will even live to "break-even" age. And that's actually no easy feat in older age.
Great comment on this thread, but along the same line- dollars are worth far more when we have the intellect and health to spend them.
Johm221122
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Re: Just filed for Social Security and feeling good

Post by Johm221122 »

Claudia Whitten wrote: Sun May 12, 2024 7:21 am Social Security should so overwhelm your mind that the debate over whether to take at 67, 68, 69, or 70 (even 62) comes in at around 20 percent important. That's not completely unimportant, I admit, but in the grand scheme of things, it's quite unimportant.
For Bogleheads probably but for the general population I would have to disagree. I've seen to many people in there later years after they can't work and collect Social Security suffer. Many people think Social Security is a pay raise in their later working years

But on the bright side I've seen people buy their first new car in there life when they started Social Security.
rule of law guy
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Re: Just filed for Social Security and feeling good

Post by rule of law guy »

JonFund wrote: Sat May 11, 2024 1:01 pm Congratulations, and thank you for sharing your social security story. Very timely, as I've been going through the same analysis as to when is the optimal time to start receiving SS benefits. I'm 67 and 6 months old, recently retired with two (2) pensions and an investment portfolio that generates more in dividends and interest than my pensions and (expected) social security combined. You're correct that you need to apply a present value discount factor to the analysis in order to get a true "break even" age. That breakeven age for me is around 87 years old, but even if I go out to 90-95 years, the difference in accumulated SS benefits is still a small portion of my overall retirement portfolio. My analysis has also included the impact on my total portfolio, including forecasted RMD taxes. Because the difference between taking it now versus at age 70 is so relatively small, I'm planning on starting to take it very soon.
I did a present value calculation at 62 that led me to take SS at 62. Most analyses I have seen dont take into account the time value of money.

as I recall my break even date (compared to starting at age 70) was 86. that seemed a long way off when I was 62!
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Deontic
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Re: Just filed for Social Security and feeling good

Post by Deontic »

Waiting until 70 allowed me to make multiple substantial Roth conversions in my 60s for the convenience of heirs. So the break-even analysis was not a factor.
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Re: Just filed for Social Security and feeling good

Post by mrmass »

goblue100 wrote: Sat May 11, 2024 8:10 pm
cosmos wrote: Sat May 11, 2024 7:35 pm
billaster wrote: Sat May 11, 2024 7:19 pm
Just filed for Social Security and feeling good
And think back on all those people in your 20s and 30s who told you Social Security would never be there for you.
Thankfully we all have faith and certainty that the esteemed and benevolent members of congress will not fail us in 2035... I, for one, sleep very well at night relying on the best and brightest America can offer.
I really don't want to get this thread locked, but I for one appreciate the sarcasm in this comment.
Haha. cosmos forgot the /s at the end of the comment.
chassis
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Re: Just filed for Social Security and feeling good

Post by chassis »

rule of law guy wrote: Sun May 12, 2024 11:46 am
JonFund wrote: Sat May 11, 2024 1:01 pm Congratulations, and thank you for sharing your social security story. Very timely, as I've been going through the same analysis as to when is the optimal time to start receiving SS benefits. I'm 67 and 6 months old, recently retired with two (2) pensions and an investment portfolio that generates more in dividends and interest than my pensions and (expected) social security combined. You're correct that you need to apply a present value discount factor to the analysis in order to get a true "break even" age. That breakeven age for me is around 87 years old, but even if I go out to 90-95 years, the difference in accumulated SS benefits is still a small portion of my overall retirement portfolio. My analysis has also included the impact on my total portfolio, including forecasted RMD taxes. Because the difference between taking it now versus at age 70 is so relatively small, I'm planning on starting to take it very soon.
I did a present value calculation at 62 that led me to take SS at 62. Most analyses I have seen dont take into account the time value of money.

as I recall my break even date (compared to starting at age 70) was 86. that seemed a long way off when I was 62!
Indeed this is the correct financial analysis for the age-of-claiming topic. Promoters of later claiming age are making non-financial arguments (fear of RMD taxes, fear of running out of money, justifying accessing cash for splurging, and other non-financial reasons).

From a strictly financial point of view, you are spot on.
chassis
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Re: Just filed for Social Security and feeling good

Post by chassis »

$=WxTxI wrote: Sun May 12, 2024 10:54 am
Mayacallie wrote: Fri May 10, 2024 6:35 pm I’m 68 and 6 months and just filed for benefits to commence next month. Until recently, I was going to wait until 70. I’m retired,and very financially comfortable. My benefit will be $3964 vs $4340 had I waited, thus only an 8.6% reduction. It would take almost 16 years to make up the difference in absolute dollars, but I would be over 95 before it would make up the difference at a modest 5% reinvestment rate. I’ve visited all of the social security sites, and reviewed the discussions here. Most urge waiting until 70. Survivor benefits are often pushed.
I’ve done the calculations many times before. With health unknowns and political uncertainty the gurus stopped making sense
Just wanted to say this is refreshing to see someone claim before 70.

I'd rather have a benefit start in my go-go years than closer to my slow-go years.

For reference we will each claim at 62.
Another great reason to claim before 70. The claimant may be deceased at age 69. Or 68. Or 67. Or...
trueson1
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Re: Just filed for Social Security and feeling good

Post by trueson1 »

Mayacallie wrote: Fri May 10, 2024 6:35 pm I’m 68 and 6 months and just filed for benefits to commence next month. Until recently, I was going to wait until 70. I’m retired,and very financially comfortable. My benefit will be $3964 vs $4340 had I waited, thus only an 8.6% reduction. It would take almost 16 years to make up the difference in absolute dollars, but I would be over 95 before it would make up the difference at a modest 5% reinvestment rate. I’ve visited all of the social security sites, and reviewed the discussions here. Most urge waiting until 70. Survivor benefits are often pushed.
I’ve done the calculations many times before. With health unknowns and political uncertainty the gurus stopped making sense
I did exactly the same as the OP but at 68. The numbers just weren't that persuasive to go to 70.
trueson1
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Re: Just filed for Social Security and feeling good

Post by trueson1 »

trueson1 wrote: Sun May 12, 2024 12:55 pm
Mayacallie wrote: Fri May 10, 2024 6:35 pm I’m 68 and 6 months and just filed for benefits to commence next month. Until recently, I was going to wait until 70. I’m retired,and very financially comfortable. My benefit will be $3964 vs $4340 had I waited, thus only an 8.6% reduction. It would take almost 16 years to make up the difference in absolute dollars, but I would be over 95 before it would make up the difference at a modest 5% reinvestment rate. I’ve visited all of the social security sites, and reviewed the discussions here. Most urge waiting until 70. Survivor benefits are often pushed.
I’ve done the calculations many times before. With health unknowns and political uncertainty the gurus stopped making sense
I did exactly the same as the OP but at 68. The numbers just weren't that persuasive to go to 70. I wanted to get things set on autopilot for my wife going forward in case I check out realy..
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cosmos
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Re: Just filed for Social Security and feeling good

Post by cosmos »

chassis wrote: Sun May 12, 2024 12:43 pm
$=WxTxI wrote: Sun May 12, 2024 10:54 am
Mayacallie wrote: Fri May 10, 2024 6:35 pm I’m 68 and 6 months and just filed for benefits to commence next month. Until recently, I was going to wait until 70. I’m retired,and very financially comfortable. My benefit will be $3964 vs $4340 had I waited, thus only an 8.6% reduction. It would take almost 16 years to make up the difference in absolute dollars, but I would be over 95 before it would make up the difference at a modest 5% reinvestment rate. I’ve visited all of the social security sites, and reviewed the discussions here. Most urge waiting until 70. Survivor benefits are often pushed.
I’ve done the calculations many times before. With health unknowns and political uncertainty the gurus stopped making sense
Just wanted to say this is refreshing to see someone claim before 70.

I'd rather have a benefit start in my go-go years than closer to my slow-go years.

For reference we will each claim at 62.
Another great reason to claim before 70. The claimant may be deceased at age 69. Or 68. Or 67. Or...
Been thinking about this too since I have no genetic history/family history to draw from on what that longevity may be.
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kramer
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Re: Just filed for Social Security and feeling good

Post by kramer »

Deontic wrote: Sun May 12, 2024 12:06 pm Waiting until 70 allowed me to make multiple substantial Roth conversions in my 60s for the convenience of heirs. So the break-even analysis was not a factor.
Yes, tax reasons are my main motivation, also, to wait until the January after my 69th birthday (Roth conversion plus 0% cap gains). Additionally, for the break even analysis, one should be using real rates on conservative investments and not nominal rates. At the moment that is roughly 2.2%. Real rates have surged in the last 2.5 years. The higher real rates become, the more attractive claiming earlier becomes.
EricGold
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Re: Just filed for Social Security and feeling good

Post by EricGold »

Mayacallie wrote: Sat May 11, 2024 5:31 am I’m of the camp that believes fear of RMDs is greatly exaggerated. If they really become onerous I’ll just join the QCD camp. I refuse to pay certain taxes now based on future unknowns
Of the many fair reasons to not wait until age 70 to claim, "I believe" is not one of them.

You made your choice and you are not asking for opinions or advice or providing any education, so other than not really understanding why you posted in the first place, all I can say is I hope it works out for you.
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Re: Just filed for Social Security and feeling good

Post by EricGold »

chassis wrote: Sun May 12, 2024 12:41 pm
rule of law guy wrote: Sun May 12, 2024 11:46 am I did a present value calculation at 62 that led me to take SS at 62. Most analyses I have seen dont take into account the time value of money.
Indeed this is the correct financial analysis for the age-of-claiming topic. Promoters of later claiming age are making non-financial arguments (fear of RMD taxes, fear of running out of money, justifying accessing cash for splurging, and other non-financial reasons).

From a strictly financial point of view, you are spot on.
Hmmm. I'm more inclined to say that claiming age is neutral for a single 'average' male but later is better for most females and couples. I am skeptical of NPV analyses that use historical stock market returns rather than mostly fixed income investments, at least for those who cannot or should not risk stock index volatility.

I'm curious -- would you say that a young professional who buys term life insurance is succumbing to a non-financial argument rooted in "fear of dying" ?
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Re: Just filed for Social Security and feeling good

Post by chassis »

EricGold wrote: Sun May 12, 2024 11:35 pm
chassis wrote: Sun May 12, 2024 12:41 pm
rule of law guy wrote: Sun May 12, 2024 11:46 am I did a present value calculation at 62 that led me to take SS at 62. Most analyses I have seen dont take into account the time value of money.
Indeed this is the correct financial analysis for the age-of-claiming topic. Promoters of later claiming age are making non-financial arguments (fear of RMD taxes, fear of running out of money, justifying accessing cash for splurging, and other non-financial reasons).

From a strictly financial point of view, you are spot on.
Hmmm. I'm more inclined to say that claiming age is neutral for a single 'average' male but later is better for most females and couples. I am skeptical of NPV analyses that use historical stock market returns rather than mostly fixed income investments, at least for those who cannot or should not risk stock index volatility.

I'm curious -- would you say that a young professional who buys term life insurance is succumbing to a non-financial argument rooted in "fear of dying" ?
Outline a quantified scenario. In other words put a few numbers into the discussion and let’s see how it calculates out.
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Re: Just filed for Social Security and feeling good

Post by Jack FFR1846 »

Vinny_in_NJ wrote: Sat May 11, 2024 12:44 pm
There is a CFP on YouTube that recently did 3 videos on RMDs with a $3M portfolio and the the outcome was shockingly low taxes in comparison to the amount of forced withdrawal and amount compared to the overall value of the portfolio. One of the videos was showing a widowed, 90 YO with $3M in a tIRA. He did the math and I tried to double check based on how I think taxes are done and my figures were about $400 higher ... I think he had capital gains which I didn't account for just did straight taxes - 0%, 10% 12% and 22% for all the money. Taxes weren't too scary with such a large RMD withdrawal!
If my spread sheet is correct, first year RMD is pre-tax savings over 25.6. With a $3M portfolio, that's a first year RMD of $115,384.62 (single rate). That alone puts the person into the first IRMAA bracket for paying Medicare penalties for parts B and D assuming no Roth conversions to drop that $3M down. If there's other income, it's not far from the second level. I don't know what the CFP's videos covered, but these are my own main concerns with similar (somewhat less) savings that I'm converting, keeping my MAGI just under the IRMAA first level.
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Re: Just filed for Social Security and feeling good

Post by dcabler »

rule of law guy wrote: Sun May 12, 2024 11:46 am
JonFund wrote: Sat May 11, 2024 1:01 pm Congratulations, and thank you for sharing your social security story. Very timely, as I've been going through the same analysis as to when is the optimal time to start receiving SS benefits. I'm 67 and 6 months old, recently retired with two (2) pensions and an investment portfolio that generates more in dividends and interest than my pensions and (expected) social security combined. You're correct that you need to apply a present value discount factor to the analysis in order to get a true "break even" age. That breakeven age for me is around 87 years old, but even if I go out to 90-95 years, the difference in accumulated SS benefits is still a small portion of my overall retirement portfolio. My analysis has also included the impact on my total portfolio, including forecasted RMD taxes. Because the difference between taking it now versus at age 70 is so relatively small, I'm planning on starting to take it very soon.
I did a present value calculation at 62 that led me to take SS at 62. Most analyses I have seen dont take into account the time value of money.

as I recall my break even date (compared to starting at age 70) was 86. that seemed a long way off when I was 62!
I always include Time Value of Money concepts in my own analysis, but it's also part of my overall portfolio withdrawal calculations as well and how I'm withdrawing from my portfolio before SS starts for each of us. And that includes additional withdrawals before SS actually starts (which effectively acts like an SS bridge) and takes into account potential benefits cuts at different points in time, as well as what happens if the spouse with the higher benefits passes first (me) at different points in time.

Looking at SS by itself using opensocialsecurity.com, we originally concluded that both waiting to age 70 was the right answer, but a year or so ago I went through another deep dive myself. In our case, because the additional withdrawals before SS starts comes from our duration matched TIPS, there is a bigger strain on that part of our portfolio before SS starts. The longer the wait, the larger the strain. After looking at the overall effect of different SS starting dates and potential benefit cuts on overall lifetime cash flow, different scenarios for me dropping before her, I concluded that having my wife start SS at around age 66 handled all of the potential scenarios I looked at the best, with only a minor effect on overall cash flow for a nominal situation where there are no cuts and we both live to the end of our planning period.

In other words, I think it's important not to analyze any one source of cash flow in retirement in isolation and it's important to look at some sort of sensitivity analysis of different choices one can make and different, but realistic, curveballs that can come our way. It's also important to revisit the analysis over time as well, to the degree that one can.

Cheers.
EricGold
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Re: Just filed for Social Security and feeling good

Post by EricGold »

Jack FFR1846 wrote: Mon May 13, 2024 6:28 am
Vinny_in_NJ wrote: Sat May 11, 2024 12:44 pm
There is a CFP on YouTube that recently did 3 videos on RMDs with a $3M portfolio and the the outcome was shockingly low taxes in comparison to the amount of forced withdrawal and amount compared to the overall value of the portfolio. One of the videos was showing a widowed, 90 YO with $3M in a tIRA. He did the math and I tried to double check based on how I think taxes are done and my figures were about $400 higher ... I think he had capital gains which I didn't account for just did straight taxes - 0%, 10% 12% and 22% for all the money. Taxes weren't too scary with such a large RMD withdrawal!
If my spread sheet is correct, first year RMD is pre-tax savings over 25.6. With a $3M portfolio, that's a first year RMD of $115,384.62 (single rate). That alone puts the person into the first IRMAA bracket for paying Medicare penalties for parts B and D assuming no Roth conversions to drop that $3M down. If there's other income, it's not far from the second level. I don't know what the CFP's videos covered, but these are my own main concerns with similar (somewhat less) savings that I'm converting, keeping my MAGI just under the IRMAA first level.
I cannot be bothered with YT videos, so I'll just say that the analysis better include all income streams. SS, for example. it would not be unusual for a person with a $3M tIRA to have waited until age 70 to claim SS. A $6,500 AIME is about a $43k a year SS benefit, so that single person has $150k a year taxable income if no other streams are present. They are already in the 24% marginal tax bracket. In fact, the person pays 23.5% effective tax on the tIRA fraction (compared to the case where the tIRA was in Roth)

I'm not getting into tIRA Vs Roth here, I'm only saying what the taxes are when RMD is in play
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Re: Just filed for Social Security and feeling good

Post by EricGold »

dcabler wrote: Mon May 13, 2024 6:31 am
In other words, I think it's important not to analyze any one source of cash flow in retirement in isolation and it's important to look at some sort of sensitivity analysis of different choices one can make and different, but realistic, curveballs that can come our way. It's also important to revisit the analysis over time as well, to the degree that one can.
ABSOLUTELY

DIY with a spreadsheet can get hairy. I consider myself an able SS hobbyist and you surpass me. I'm pretty sure that I am unable to make a Spreadsheet that reaches yours in complexity. It is also all too easy to forget to include a dependent variable or another. I'm going to try out the online version of Pralana when it comes out specifically for these inter-related scenarios.
Last edited by EricGold on Mon May 13, 2024 11:28 am, edited 1 time in total.
dcabler
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Re: Just filed for Social Security and feeling good

Post by dcabler »

EricGold wrote: Mon May 13, 2024 9:54 am
dcabler wrote: Mon May 13, 2024 6:31 am
In other words, I think it's important not to analyze any one source of cash flow in retirement in isolation and it's important to look at some sort of sensitivity analysis of different choices one can make and different, but realistic, curveballs that can come our way. It's also important to revisit the analysis over time as well, to the degree that one can.
ABSOLUTELY

DIY with a spreadsheet can get hairy. I consider myself an able SS hobbyist and you surpass me. I'm pretty sure that I am unable to make a Spreadsheet that reaches yours in complexity. It is also all too easy to forget to include a dependent variable or another. I'm going to try out the online version of Perlana when it comes out specifically for these inter-related scenarios.
Yep - I actually have last year's Pralana Gold on my laptop. The problem, as it always is, is trying to understand what somebody else's spreadsheet is doing vs. what your own is doing. If I'm going to spend that much time learning it, I might as well do it myself - as least as I'm still cognitively able to, that is.

Cheers.
MoreTaxes
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Re: Just filed for Social Security and feeling good

Post by MoreTaxes »

EricGold wrote: Mon May 13, 2024 8:44 am I cannot be bothered with YT videos, so I'll just say that the analysis better include all income streams.
I'll just say that it is your right to not watch a video while still posting about its hypothetical potential problems. But that's sort of like rejecting a journal paper submission without bothering to read it.
chassis
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Re: Just filed for Social Security and feeling good

Post by chassis »

EricGold wrote: Mon May 13, 2024 9:54 am
dcabler wrote: Mon May 13, 2024 6:31 am
In other words, I think it's important not to analyze any one source of cash flow in retirement in isolation and it's important to look at some sort of sensitivity analysis of different choices one can make and different, but realistic, curveballs that can come our way. It's also important to revisit the analysis over time as well, to the degree that one can.
ABSOLUTELY

DIY with a spreadsheet can get hairy. I consider myself an able SS hobbyist and you surpass me. I'm pretty sure that I am unable to make a Spreadsheet that reaches yours in complexity. It is also all too easy to forget to include a dependent variable or another. I'm going to try out the online version of Pralana when it comes out specifically for these inter-related scenarios.
No need to make a spreadsheet. RPM is already made. It’s a great tool. Give it a 30 minute test drive.
BalancedJCB19
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Re: Just filed for Social Security and feeling good

Post by BalancedJCB19 »

tennisplyr wrote: Sat May 11, 2024 7:43 am Being taking SS since 62 and have no regrets...didn't feel like waiting to mid 80s to breakeven.
I agree. I'm 60 and in fairly good shape and I still don't enjoy doing the things I enjoyed doing in my 40s. I'm pretty positive in my 80s I will not have the same energy I have now. I rather take a sure thing at 62 and do the things like travel and entertainment, instead of getting more money when I'm in my late 70s, early 80s (Break even age).

It seems like a lot of people on this forum either want to leave a legacy or have a lot of money after they die. I'm conservative with my investment and live pretty frugal, but I don't get this mindset. We are all going to leave this earth and statistically a lifespan of a typical American male is 76 on average.
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Re: Just filed for Social Security and feeling good

Post by z3r0c00l »

Only about 10 years away from the projected insolvency rate at which point, if nothing is done, payments would have to be reduced significantly. If I was in my 50s or 60s now, that prospect would be added to the calculus of when to start collecting. Personally plan to collect at 62 when the time comes assuming that is even possible in 20 years.
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turnberry72
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Re: Just filed for Social Security and feeling good

Post by turnberry72 »

I think Michael Kitces nailed the value of waiting: "Ultimately the decision to delay Social Security delivers the best results when there is either unexpected inflation, unusually longevity, or especially bad market returns, which are the 3 exact scenarios that traditional portfolios are least effective at managing, making the delaying of SS the ultimate and anti-fragile "triple hedge"".
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Tom_T
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Re: Just filed for Social Security and feeling good

Post by Tom_T »

BalancedJCB19 wrote: Tue May 14, 2024 6:32 am ...statistically a lifespan of a typical American male is 76 on average.
The average lifespan of a 60-year-old male is 82, not 76.
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Re: Just filed for Social Security and feeling good

Post by dcabler »

chassis wrote: Tue May 14, 2024 5:57 am
EricGold wrote: Mon May 13, 2024 9:54 am
dcabler wrote: Mon May 13, 2024 6:31 am
In other words, I think it's important not to analyze any one source of cash flow in retirement in isolation and it's important to look at some sort of sensitivity analysis of different choices one can make and different, but realistic, curveballs that can come our way. It's also important to revisit the analysis over time as well, to the degree that one can.
ABSOLUTELY

DIY with a spreadsheet can get hairy. I consider myself an able SS hobbyist and you surpass me. I'm pretty sure that I am unable to make a Spreadsheet that reaches yours in complexity. It is also all too easy to forget to include a dependent variable or another. I'm going to try out the online version of Pralana when it comes out specifically for these inter-related scenarios.
No need to make a spreadsheet. RPM is already made. It’s a great tool. Give it a 30 minute test drive.
I did.
And then I went back to my own spreadsheet.

Cheers.
Tom_T
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Re: Just filed for Social Security and feeling good

Post by Tom_T »

dcabler wrote: Tue May 14, 2024 7:23 am
chassis wrote: Tue May 14, 2024 5:57 am
EricGold wrote: Mon May 13, 2024 9:54 am
dcabler wrote: Mon May 13, 2024 6:31 am
In other words, I think it's important not to analyze any one source of cash flow in retirement in isolation and it's important to look at some sort of sensitivity analysis of different choices one can make and different, but realistic, curveballs that can come our way. It's also important to revisit the analysis over time as well, to the degree that one can.
ABSOLUTELY

DIY with a spreadsheet can get hairy. I consider myself an able SS hobbyist and you surpass me. I'm pretty sure that I am unable to make a Spreadsheet that reaches yours in complexity. It is also all too easy to forget to include a dependent variable or another. I'm going to try out the online version of Pralana when it comes out specifically for these inter-related scenarios.
No need to make a spreadsheet. RPM is already made. It’s a great tool. Give it a 30 minute test drive.
I did.
And then I went back to my own spreadsheet.

Cheers.
Agree. I've given RPM a "test drive" more than once, and hated it.
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Re: Just filed for Social Security and feeling good

Post by bradinsky »

My brother was diagnosed with cancer when he was 63. When he was diagnosed, I urged him to file for SS & he said he wanted to wait until 65, so his benefit wasn’t reduced. He died at 64 years & 6 months of age. You just never know when it’s your time.
EricGold
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Re: Just filed for Social Security and feeling good

Post by EricGold »

chassis wrote: Tue May 14, 2024 5:57 am
EricGold wrote: Mon May 13, 2024 9:54 am I'm going to try out the online version of Pralana when it comes out specifically for these inter-related scenarios.
No need to make a spreadsheet. RPM is already made. It’s a great tool. Give it a 30 minute test drive.
I realized that it will take time and effort to learn a tax planning software to the depth I want so I'm not going to trial multiple programs if I can help it. First up for me will be Pralana. I obviously did not do a deep dive into Pralana before choosing it as my first candidate but I wanted a web-based tool, and I liked the fact that the author has written a user manual and is reasonably approachable, and the program is now supported by both a user community and an independent website dedicated to it's promotion and education. The program is in transition from home-brew to full fledged commercial, which suits me just fine.
BalancedJCB19
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Re: Just filed for Social Security and feeling good

Post by BalancedJCB19 »

Tom_T wrote: Tue May 14, 2024 7:20 am
BalancedJCB19 wrote: Tue May 14, 2024 6:32 am ...statistically a lifespan of a typical American male is 76 on average.
The average lifespan of a 60-year-old male is 82, not 76.
Woopie! You have to know your family history. Not many make it to 70 let alone 82 in my family.

My bigger point is at 60 or over, your body may not cooperate and you may not want to do a lot of things you enjoyed when you are younger, but hey if you want to pile up all your money so the nursing home or hospital gets it, that's fine too.
Tom_T
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Re: Just filed for Social Security and feeling good

Post by Tom_T »

BalancedJCB19 wrote: Tue May 14, 2024 3:12 pm
Tom_T wrote: Tue May 14, 2024 7:20 am
BalancedJCB19 wrote: Tue May 14, 2024 6:32 am ...statistically a lifespan of a typical American male is 76 on average.
The average lifespan of a 60-year-old male is 82, not 76.
Woopie! You have to know your family history. Not many make it to 70 let alone 82 in my family.

My bigger point is at 60 or over, your body may not cooperate and you may not want to do a lot of things you enjoyed when you are younger, but hey if you want to pile up all your money so the nursing home or hospital gets it, that's fine too.
The nursing home or hospital is going to get your money anyway if that's the case, right?

Also, what if your spouse outlives you? You claim at 62, you're sticking her with a permanently lower survivor benefit.

Your point about family history/health is why SS claiming age is a personal decision. No argument there.
Vinny_in_NJ
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Re: Just filed for Social Security and feeling good

Post by Vinny_in_NJ »

Jack FFR1846 wrote: Mon May 13, 2024 6:28 am
Vinny_in_NJ wrote: Sat May 11, 2024 12:44 pm
There is a CFP on YouTube that recently did 3 videos on RMDs with a $3M portfolio and the the outcome was shockingly low taxes in comparison to the amount of forced withdrawal and amount compared to the overall value of the portfolio. One of the videos was showing a widowed, 90 YO with $3M in a tIRA. He did the math and I tried to double check based on how I think taxes are done and my figures were about $400 higher ... I think he had capital gains which I didn't account for just did straight taxes - 0%, 10% 12% and 22% for all the money. Taxes weren't too scary with such a large RMD withdrawal!
If my spread sheet is correct, first year RMD is pre-tax savings over 25.6. With a $3M portfolio, that's a first year RMD of $115,384.62 (single rate). That alone puts the person into the first IRMAA bracket for paying Medicare penalties for parts B and D assuming no Roth conversions to drop that $3M down. If there's other income, it's not far from the second level. I don't know what the CFP's videos covered, but these are my own main concerns with similar (somewhat less) savings that I'm converting, keeping my MAGI just under the IRMAA first level.
I followed the video and did the math myself, it came out not too bad for someone who had $3 M in a tIRA. There was other income as well so not just IRA money. I posted a link to the video in this thread if you care to watch.
BalancedJCB19
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Re: Just filed for Social Security and feeling good

Post by BalancedJCB19 »

Tom_T wrote: Tue May 14, 2024 4:04 pm
BalancedJCB19 wrote: Tue May 14, 2024 3:12 pm
Tom_T wrote: Tue May 14, 2024 7:20 am
BalancedJCB19 wrote: Tue May 14, 2024 6:32 am ...statistically a lifespan of a typical American male is 76 on average.
The average lifespan of a 60-year-old male is 82, not 76.
Woopie! You have to know your family history. Not many make it to 70 let alone 82 in my family.

My bigger point is at 60 or over, your body may not cooperate and you may not want to do a lot of things you enjoyed when you are younger, but hey if you want to pile up all your money so the nursing home or hospital gets it, that's fine too.
The nursing home or hospital is going to get your money anyway if that's the case, right?

Also, what if your spouse outlives you? You claim at 62, you're sticking her with a permanently lower survivor benefit.

Your point about family history/health is why SS claiming age is a personal decision. No argument there.
My wife is 4 years older than me, so the break even date will put her in her 80s. She does have longevity in her family, but there is no guarantee that social security will not be able to pay the full amount by then, so I rather take it while I can. Also, I plan to take less out of my IRA so I can leave money in there for her to grow. She may be getting less in her check, but it's not an all or nothing, she will still be getting a check.
Tom_T
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Re: Just filed for Social Security and feeling good

Post by Tom_T »

BalancedJCB19 wrote: Tue May 14, 2024 5:23 pm
Tom_T wrote: Tue May 14, 2024 4:04 pm
BalancedJCB19 wrote: Tue May 14, 2024 3:12 pm
Tom_T wrote: Tue May 14, 2024 7:20 am
BalancedJCB19 wrote: Tue May 14, 2024 6:32 am ...statistically a lifespan of a typical American male is 76 on average.
The average lifespan of a 60-year-old male is 82, not 76.
Woopie! You have to know your family history. Not many make it to 70 let alone 82 in my family.

My bigger point is at 60 or over, your body may not cooperate and you may not want to do a lot of things you enjoyed when you are younger, but hey if you want to pile up all your money so the nursing home or hospital gets it, that's fine too.
The nursing home or hospital is going to get your money anyway if that's the case, right?

Also, what if your spouse outlives you? You claim at 62, you're sticking her with a permanently lower survivor benefit.

Your point about family history/health is why SS claiming age is a personal decision. No argument there.
My wife is 4 years older than me, so the break even date will put her in her 80s. She does have longevity in her family, but there is no guarantee that social security will not be able to pay the full amount by then, so I rather take it while I can. Also, I plan to take less out of my IRA so I can leave money in there for her to grow. She may be getting less in her check, but it's not an all or nothing, she will still be getting a check.
Your story definitely shows that one size does not fit all when it comes to SS.
MnD
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Re: Just filed for Social Security and feeling good

Post by MnD »

We are following the suggestion of opensocialsecurity.com with her filed at 62 and myself filing at 70.

If a few years down the road we find that we could use the income and don't feel comfortable withdrawing the difference from portfolio, I wouldn't rule out myself filing prior to 70. The "penalty" versus the optimum net present value by me filing "somewhat" earlier isn't very significant.

There are some genuinely bad claiming strategies but the OP filing at 68.5 instead of 70 isn't one of them.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
Billionaire
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Re: Just filed for Social Security and feeling good

Post by Billionaire »

Good for you! A relative of mine was adamant that everybody should collect when they are 70. I disagreed and provided some backup. The relative died at the age of 73. :shock:
lstone19
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Re: Just filed for Social Security and feeling good

Post by lstone19 »

Billionaire wrote: Tue May 14, 2024 6:47 pm Good for you! A relative of mine was adamant that everybody should collect when they are 70. I disagreed and provided some backup. The relative died at the age of 73. :shock:
But is the relative regretting the decision? I doubt it. But it seems some people base their decision to start SS early on the regret they won't be feeling if they die early.
MoreTaxes
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Re: Just filed for Social Security and feeling good

Post by MoreTaxes »

Tom_T wrote: Tue May 14, 2024 7:25 am
dcabler wrote: Tue May 14, 2024 7:23 am
chassis wrote: Tue May 14, 2024 5:57 am
EricGold wrote: Mon May 13, 2024 9:54 am
dcabler wrote: Mon May 13, 2024 6:31 am
In other words, I think it's important not to analyze any one source of cash flow in retirement in isolation and it's important to look at some sort of sensitivity analysis of different choices one can make and different, but realistic, curveballs that can come our way. It's also important to revisit the analysis over time as well, to the degree that one can.
ABSOLUTELY

DIY with a spreadsheet can get hairy. I consider myself an able SS hobbyist and you surpass me. I'm pretty sure that I am unable to make a Spreadsheet that reaches yours in complexity. It is also all too easy to forget to include a dependent variable or another. I'm going to try out the online version of Pralana when it comes out specifically for these inter-related scenarios.
No need to make a spreadsheet. RPM is already made. It’s a great tool. Give it a 30 minute test drive.
I did.
And then I went back to my own spreadsheet.

Cheers.
Agree. I've given RPM a "test drive" more than once, and hated it.
Amen.

RPM is a pile of cruft a mile high. It looks like it was created 10 years ago and added to without ever re-writing, and with little thought into providing a proper interface for the user. The README's two (!) introductions are redundant and a poor design choice. Two explanations of the same thing is substantially worse than one. Also, it does not make sense to have a jumble of instructions both in hover comments and in columns L-Z. Detailed instructions should not be in the spreadsheet at all -- there should be a manual. The input area is cluttered not just with instructions but also a bunch of outputs. In a big tool, organization matters. The inputs tab should be for inputs. Not for inputs and outputs. I could go on.
BalancedJCB19
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Re: Just filed for Social Security and feeling good

Post by BalancedJCB19 »

Tom_T wrote: Tue May 14, 2024 5:43 pm
BalancedJCB19 wrote: Tue May 14, 2024 5:23 pm
Tom_T wrote: Tue May 14, 2024 4:04 pm
BalancedJCB19 wrote: Tue May 14, 2024 3:12 pm
Tom_T wrote: Tue May 14, 2024 7:20 am

The average lifespan of a 60-year-old male is 82, not 76.
Woopie! You have to know your family history. Not many make it to 70 let alone 82 in my family.

My bigger point is at 60 or over, your body may not cooperate and you may not want to do a lot of things you enjoyed when you are younger, but hey if you want to pile up all your money so the nursing home or hospital gets it, that's fine too.
The nursing home or hospital is going to get your money anyway if that's the case, right?

Also, what if your spouse outlives you? You claim at 62, you're sticking her with a permanently lower survivor benefit.

Your point about family history/health is why SS claiming age is a personal decision. No argument there.
My wife is 4 years older than me, so the break even date will put her in her 80s. She does have longevity in her family, but there is no guarantee that social security will not be able to pay the full amount by then, so I rather take it while I can. Also, I plan to take less out of my IRA so I can leave money in there for her to grow. She may be getting less in her check, but it's not an all or nothing, she will still be getting a check.
Your story definitely shows that one size does not fit all when it comes to SS.
Thanks Tom! I think that was trying to say, but not that articulate. lol. Have a good day!
EricGold
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Re: Just filed for Social Security and feeling good

Post by EricGold »

lstone19 wrote: Tue May 14, 2024 8:49 pm
Billionaire wrote: Tue May 14, 2024 6:47 pm Good for you! A relative of mine was adamant that everybody should collect when they are 70. I disagreed and provided some backup. The relative died at the age of 73.
But is the relative regretting the decision? I doubt it. But it seems some people base their decision to start SS early on the regret they won't be feeling if they die early.
Exactly. And the family is not regretting (from a money POV) the savings. The only money loss here is that the break-even age was not reached. Such is the nature of life insurance
soccerrules
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Re: Just filed for Social Security and feeling good

Post by soccerrules »

stan1 wrote: Sat May 11, 2024 12:10 pm Predicting the year of one's death 15-20 years in advance is fraught with uncertainty. I guess there are some optimistic optimizers who assume they will live past their mid-80s.
Im in my late 50's and my parents are in their mid 80's. One for sure is not living, has been barely alive for the last 3+ years. The other is of sound mind but has limited mobility (stairs are very difficult as is walking more than 50 yds)

Many BH'rs will run out of health and time before they run out of money.
Don't let your outflow exceed your income or your upkeep will be your downfall.
Tom_T
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Re: Just filed for Social Security and feeling good

Post by Tom_T »

If the goal is maximizing lifetime benefits, then one can play the game of guessing how long one will live. If the goal is to maximize the annual benefit (for longevity insurance, and/or so that a spouse gets a higher survivor benefit), that is a different calculation because you don't really care about the lifetime total. It's a personal decision, as we say all the time. I've had many relatives who have died anywhere from age 35 to 101. There's no rhyme or reason.
donaldfair71
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Re: Just filed for Social Security and feeling good

Post by donaldfair71 »

Tom_T wrote: Sat May 11, 2024 1:21 pm
Vinny_in_NJ wrote: Sat May 11, 2024 12:44 pm
chassis wrote: Sat May 11, 2024 11:55 am
Mayacallie wrote: Sat May 11, 2024 5:31 am
celia wrote: Sat May 11, 2024 12:22 am
+1

OP, I hope your future RMDs (after your tax-deferred accounts have continued to grow) don't push you into higher tax brackets. Many people here use the years between retirement and the starting RMD year to do Roth conversions to shift assets from tax-deferred to Roth. It can also be used to level out your MAGI (and taxes) each year instead of having low MAGI for a few years followed by many more years of higher MAGI (and taxes).
I’m of the camp that believes fear of RMDs is greatly exaggerated. If they really become onerous I’ll just join the QCD camp. I refuse to pay certain taxes now based on future unknowns
Another excellent myth, busted. The much feared tax bomb related to RMDs is a nothing burger in the grand scheme of things, over the long term.
There is a CFP on YouTube that recently did 3 videos on RMDs with a $3M portfolio and the the outcome was shockingly low taxes in comparison to the amount of forced withdrawal and amount compared to the overall value of the portfolio. One of the videos was showing a widowed, 90 YO with $3M in a tIRA. He did the math and I tried to double check based on how I think taxes are done and my figures were about $400 higher ... I think he had capital gains which I didn't account for just did straight taxes - 0%, 10% 12% and 22% for all the money. Taxes weren't too scary with such a large RMD withdrawal!
Keep in mind that if you die, your spouse will be paying a much higher tax rate as a single person. Being in the 12% bracket now or later doesn't sound like a big deal for a couple, but what if "later" is 22% instead of 12%?
This last part impacts my wife and me, as we will both be getting pensions.

We could both:

A. Choose a Survivor Benefit
B. Not Choose a Survivor Benefit

A. Delay SS
B. Not Delay SS

Spend from Deferred accounts (including traditional) while we delay
Not Delay and not spend as much

All of these really have 2 sets of considerations: Before one of us dies and after one of us dies.

No survivor benefit, the full pensions likely subsidize our entire spending but spends very little in assets = High RMDs but only 1 pension stream at first death.

Survivor benefit, the partials mostly cover while we spend out of retirement accounts = Lower RMDs but 2 pensions taxed at first death.

Good problems to have, but still very difficult in attempting to make a good decision. Will likely just end up seeking a "Good enough" decision when we get there.
chassis
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Re: Just filed for Social Security and feeling good

Post by chassis »

The RPM model handles SS claiming age analyses very well, and easily.
Jeepergeo
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Re: Just filed for Social Security and feeling good

Post by Jeepergeo »

Mayacallie wrote: Fri May 10, 2024 6:35 pm I’m 68 and 6 months and just filed for benefits to commence next month. Until recently, I was going to wait until 70. I’m retired,and very financially comfortable. My benefit will be $3964 vs $4340 had I waited, thus only an 8.6% reduction. It would take almost 16 years to make up the difference in absolute dollars, but I would be over 95 before it would make up the difference at a modest 5% reinvestment rate. I’ve visited all of the social security sites, and reviewed the discussions here. Most urge waiting until 70. Survivor benefits are often pushed.
I’ve done the calculations many times before. With health unknowns and political uncertainty the gurus stopped making sense
Congratulations! Enjoy the extra cash. It sounds like the perfect solution for you and that is all that really matters.

And that 8.6%? It is not really a reduction, but rather it is an unrealized increase in a future stream of payments that would only potentially pay off 16 years down the road. Your approach sounds much better so you can use the money now.
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celia
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Re: Just filed for Social Security and feeling good

Post by celia »

soccerrules wrote: Wed May 15, 2024 9:50 am
stan1 wrote: Sat May 11, 2024 12:10 pm Predicting the year of one's death 15-20 years in advance is fraught with uncertainty. I guess there are some optimistic optimizers who assume they will live past their mid-80s.
Im in my late 50's and my parents are in their mid 80's. One for sure is not living, has been barely alive for the last 3+ years. The other is of sound mind but has limited mobility (stairs are very difficult as is walking more than 50 yds)

Many BH'rs will run out of health and time before they run out of money.
We're in our 70s now with parents who died in their 90s, some with cognitive decline, which I don't see anyone mentioning. A lot of our decision to start SS at 70 while doing Roth conversions in our 60s was that I might not be mentally able to remember what RMDs are or how to do our taxes or make financial decisions. So, many things have been simplified and automated. I'm so glad we converted and QCD-ed away our pre-tax accounts before RMDs would have kicked in. (I was lucky to be able to do a huge conversion while working when the stock markets declined 50%--because the taxes were "on sale" [when the share prices were lower].)

Tom_T wrote: Tue May 14, 2024 7:20 am
BalancedJCB19 wrote: Tue May 14, 2024 6:32 am ...statistically a lifespan of a typical American male is 76 on average.
The average lifespan of a 60-year-old male is 82, not 76.
When calculating REMAINING life expectancy, one needs to remember that their life expectancy increases the longer they live. Think of the life expectancy for everyone born the same year as you. Then put all those people on a bell curve with a hump around the average life expectancy. The left edge of the curve is for year 1 with older ages going to the right. When you get to the location of your current age, you have now outlived all those who died before you. You are still in the pool of the living on the right and your (still unknown) life expectancy is somewhere on the right. Repeat that every few years. Your life expectancy just keeps growing the longer you live.
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.
gips
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Re: Just filed for Social Security and feeling good

Post by gips »

:annoyed
chassis wrote: Sun May 12, 2024 12:41 pm
rule of law guy wrote: Sun May 12, 2024 11:46 am
JonFund wrote: Sat May 11, 2024 1:01 pm Congratulations, and thank you for sharing your social security story. Very timely, as I've been going through the same analysis as to when is the optimal time to start receiving SS benefits. I'm 67 and 6 months old, recently retired with two (2) pensions and an investment portfolio that generates more in dividends and interest than my pensions and (expected) social security combined. You're correct that you need to apply a present value discount factor to the analysis in order to get a true "break even" age. That breakeven age for me is around 87 years old, but even if I go out to 90-95 years, the difference in accumulated SS benefits is still a small portion of my overall retirement portfolio. My analysis has also included the impact on my total portfolio, including forecasted RMD taxes. Because the difference between taking it now versus at age 70 is so relatively small, I'm planning on starting to take it very soon.
I did a present value calculation at 62 that led me to take SS at 62. Most analyses I have seen dont take into account the time value of money.

as I recall my break even date (compared to starting at age 70) was 86. that seemed a long way off when I was 62!
Indeed this is the correct financial analysis for the age-of-claiming topic. Promoters of later claiming age are making non-financial arguments (fear of RMD taxes, fear of running out of money, justifying accessing cash for splurging, and other non-financial reasons).

From a strictly financial point of view, you are spot on.
Thanks for this, my spouse is 7 years younger and will have a much smaller benefit. Seems like that would change the breakeven calculation.
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celia
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Re: Just filed for Social Security and feeling good

Post by celia »

chassis wrote: Sun May 12, 2024 12:41 pm
rule of law guy wrote: Sun May 12, 2024 11:46 am
JonFund wrote: Sat May 11, 2024 1:01 pm . . .
I did a present value calculation at 62 that led me to take SS at 62. Most analyses I have seen dont take into account the time value of money.

as I recall my break even date (compared to starting at age 70) was 86. that seemed a long way off when I was 62!
Indeed this is the correct financial analysis for the age-of-claiming topic. Promoters of later claiming age are making non-financial arguments (fear of RMD taxes, fear of running out of money, justifying accessing cash for splurging, and other non-financial reasons).

From a strictly financial point of view, you are spot on.
I disagree. If someone has a life-shortening illness, you don't think they should consider that when deciding when to take SS?

If someone has $10M in assets and is thus free to live without SS (which could be seen as "noise"), why should they waste their time doing an analysis? (The value of the time spent on an analysis could be worth more than the extra SS money they might receive.)

If someone is Single and has enough to support herself for the rest of her life and will give all her assets to charity after she dies, why should she do an age-of-claiming analysis (other than possibly maximizing her estate for the charities)?
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.
chassis
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Re: Just filed for Social Security and feeling good

Post by chassis »

celia wrote: Wed May 15, 2024 1:11 pm
chassis wrote: Sun May 12, 2024 12:41 pm
rule of law guy wrote: Sun May 12, 2024 11:46 am
JonFund wrote: Sat May 11, 2024 1:01 pm . . .
I did a present value calculation at 62 that led me to take SS at 62. Most analyses I have seen dont take into account the time value of money.

as I recall my break even date (compared to starting at age 70) was 86. that seemed a long way off when I was 62!
Indeed this is the correct financial analysis for the age-of-claiming topic. Promoters of later claiming age are making non-financial arguments (fear of RMD taxes, fear of running out of money, justifying accessing cash for splurging, and other non-financial reasons).

From a strictly financial point of view, you are spot on.
I disagree. If someone has a life-shortening illness, you don't think they should consider that when deciding when to take SS?

If someone has $10M in assets and is thus free to live without SS (which could be seen as "noise"), why should they waste their time doing an analysis? (The value of the time spent on an analysis could be worth more than the extra SS money they might receive.)

If someone is Single and has enough to support herself for the rest of her life and will give all her assets to charity after she dies, why should she do an age-of-claiming analysis (other than possibly maximizing her estate for the charities)?
I hear you.

Any hypothetical scenario can be created. OP specified neither $10m in assets nor illness.
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