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Post by win1177 on Aug 8, 2023 13:20:50 GMT
Hey everyone! Retired end of last year, age 64 but turning 65 this fall. Have a pretty large portfolio, more than my wife and I will ever need, so we do “not” need Social Security. Been reading a lot about whether to take SS earlier, say this fall (age65), or at full retirement (66 and 8 months), or wait until 70. Answers are “all over the place”, some say take it NOW, others say wait until age 70, etc., etc.
I do have some health issues: type II diabetes that is very well controlled (hemoglobin A1C is 5.4 on oral meds), HTN, and had a single vessel angioplasty in 2019. Exercise daily, mainly fast walking 6 miles. Heart issues are “great” according to my cardiologist, he says “I wish all my patients were like you, exercising all the time, etc.”. So that plays into my decisions “somewhat”. But, a year ago watched my brother in law retire at age 62, healthy, suddenly died two months later. He NEVER drew any SS. So that’s in the back of my mind.
If I take SS, will invest it, maybe use a portion for trips, etc. When did you take SS, and why? If you are NOT taking it yet, why? Thanks!
Win
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Post by yogibearbull on Aug 8, 2023 13:33:21 GMT
Couples have more options - one can take early, the other can delay.
If you don't need Social Security, that makes the decision easier.
Normally, I am in the earlier-the-better camp. Most of the Social Security benefits die with one, so there is little that carries over (except for some survivor benefits).
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Post by retiredat48 on Aug 8, 2023 15:32:09 GMT
win1177,...long story short: You should absolutely take SS as soon as you stop working...eg now. If you invest it, breakevens (compared to delaying) on fair analysis are into age 80's. Note one absolute data point: If you take SS now, investing it, and you die at age 70, you will be ahead of the game by minimum $100,00, and likely much more. The person waiting to age 70 has zero. Best wishes... R48
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Post by nobhead on Aug 8, 2023 15:35:32 GMT
win1177, In your position, I think the question is why "not" to take it as soon as possible.
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Post by steelpony10 on Aug 8, 2023 18:45:08 GMT
win1177 , Run it up to the family maximum or age 70. In our case we lived on CEF income until we got within $100 a month of the family max which for me was around age 66. With a handicapped adult child your wife should get about 1/2 of your SS because, unless things have changed, there are special (different) rules for that situation. Your adult child should get half of your SS losing the other benefits. Maybe consulting the appropriate professional is a good idea.
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Post by gman57 on Aug 8, 2023 19:10:56 GMT
I took it at 63, I had a certain amount per month I wanted and hit that at 63. I'd take it asap if I had to do over. My brother took it at 62 but only got to collect a couple years before his passing. My neighbor was going to wait until 70. He always talks about getting that 8% a year raise. He said they're healthy. They thought they were but his wife was just diagnosed with breast cancer. His life changed dramatically in one month as can anyone's. I don't know what he's going to do now but it's going to be a rough road with chemo etc... in their future. He doesn't need it but I've always told him to take it asap because "stuff happens". A bird in the hand...
ADD: Having said that, I read something about a disabled child. That could change my thinking if I had to provide for future long term care. I'd have to reevaluate and understand benefits as they apply to my situation.
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Post by catdog on Aug 8, 2023 21:32:07 GMT
I took it at 62. Wanted to wait until full retirement age or even until 70. Wife said no. Got diagnosed with COPD shortly after taking SS. The future looked more cloudy after that. Glad I took it at 62 wife is smart.
Catdog
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Post by racqueteer on Aug 8, 2023 22:33:35 GMT
Win, in your case, it's found money. Take it while you're healthy enough to use it productively. Take a nice vacation often. Invest it if you so desire. Use it to convert traditional IRAs to Roth IRAs. Cover expenses while other stuff goes into a Trust. Whatever. Tomorrow isn't promised to anyone.
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Deleted
Deleted Member
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Post by Deleted on Aug 8, 2023 22:50:39 GMT
I can tell you I took my SS at FRA while my spouse took 1/2 of mine 2 years early but what we did has little to do with anyone else. It has been my observation that what ever one decides, given a few years, one adjusts to the point where, in hindsight, it appears to have been the right decision. One of those self full filling prophecies. For you, it sounds rather inconsequential and not worthy of any stress. Good luck.
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Post by mnfish on Aug 9, 2023 11:09:53 GMT
I quit working full time at 55, took SS at 62 and never looked back. My brother passed suddenly at 59 and other friends also passed prior to FRA. A quick spreadsheet comparing letting a $500k account grow @ 4% for 5 years vs spending 4% a year waiting for 25% more helped with my decision. In my case, in 10 years (age 72) I would have $100k more. Waiting would have produced $200k more after 20 years. No males in my family have made it to age 82.
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Post by liftlock on Aug 9, 2023 17:44:40 GMT
I claimed full Social Security benefits at age 68, when my spouse reached full retirement age at 66 and became entitled to unreduced spousal benefits on my work record. Spousal benefits do not grow by deferring them beyond one's full retirement age. Only benefits earned on one's own work record will grow by deferring them beyond full retirement age.
Prior to reaching full retirement age my spouse filed for retirement benefits on her own work record, which allowed me to file a restricted application for spousal benefits on her work record. This gave us some modest income prior to reaching our full retirement ages, but I believe these claiming strategies are no longer available.
Prior to making our claiming decisions, I did some calculations to determine the probability of receiving lifetime benefits based on claiming benefits at different ages. For singles, the maximum probable lifetime benefit was maximized by a male claiming benefits at age 68, and by a female by claiming benefits at age 70. There was a modest reduction in life time benefits when claiming benefits at earlier ages. There are those who argue that claiming benefits early makes sense due to the risk of dying young. However, the probability of dying young is largely offset set by the probability of living beyond ones normal life expectancy.
Married couples have more challenging claiming decisions. Married couples have a 50% change that one spouse will life to age 90. Deferring benefits until age 70 by the higher earning spouse will maximize the benefits available to the surviving spouse. However, it rarely makes sense for both spouses to defer benefits to age 70. It generally makes sense for the lower earning spouse claim early, since doing so does not improve benefits to the surviving spouse. In addition, a married couple can maximize lifetime benefits by maximizing the number of years that both spouses receive benefits while they are alive.
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Post by retiredat48 on Aug 9, 2023 18:02:05 GMT
liftlock,...Hi. Would be interested in: --did your analysis assume all SS payments taken early would be saved/invested (rather than spent)? --If yes, what annual rate of investment return did you assume? Thanks in advance... R48
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Post by liftlock on Aug 9, 2023 20:39:43 GMT
liftlock ,...Hi. Would be interested in: --did your analysis assume all SS payments taken early would be saved/invested (rather than spent)? --If yes, what annual rate of investment return did you assume? Thanks in advance... R48 R48, I never looked at that or attempted to quantify the time value of money. Benefits received earlier in life would be worth more than benefits received later in life. Higher COLAs resulting from deferring benefits would offset some of that. Then there is the impact on portfolio withdrawals. Claiming early would reduce the need to withdraw funds from an investment portfolio early on. Deferring benefits would increase cash flow and reduce the need to withdraw as much from an investment portfolio once benefits start. I can post my spreadsheet if someone wants to look at it or attempt to quantify the time value of money.
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Post by Mustang on Aug 9, 2023 21:20:11 GMT
My first retirement was at 46. My second at 60. And my last from a part-time job at 68. I took social security at 62 even though I didn't need it and invested it. Why? Because my heirs cannot inherit social security. They can inherit my investments.
I know people like to try to calculate breakeven but that is really a meaningless calculation. At birth average life expectancy is around 74. For those who reach 73 the average is around 80. But that means half die before 80. Whether an individual falls above or below the line is unknown. Even otherwise very healthy people can be dead a few months later from accidents or illness. A friend,71, had never smoked a day in his life. He thought he had pulled a muscle in his shoulder from heavy lifting and went to the doctor. It turned out to be lung cancer. Two months later he was dead. My brother was waiting until full retirement age. At 66 he was diagnosed with colon cancer. They removed 8" of his colon. They believe they got it all and that it hadn't yet spread to other organs. I had a heart attack at 65. It took two heart procedures and three stents to get me back on my feet. I had a series of strokes (4) when I was 70. The doctor said I was lucky. They were in a part of the brain that isn't used. I'm still here and doing fine but that in no way means I will make 80.
Average life expectancy and spreadsheets might work for large populations but not for individuals. Each individual must assess their own individual needs when making the decision on when to take social security. Breakeven analysis only works for half the population.
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Post by yogibearbull on Aug 9, 2023 21:35:05 GMT
An important point by Mustang may be missed - that life-expectancy uses 50% survival rate. So, 50% of the stated population may die BEFORE the life-expectancy age; only the other 50% may continue on.
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Post by win1177 on Aug 9, 2023 22:14:39 GMT
Thanks everyone for the responses so far! Essentially all the men in my family have died in their 60’s and early 70’s, so I’m leaning towards claiming earlier. Have a fairly strong history of coronary artery disease, as well as strokes, so that is causing me to consider earlier rather than later.
One thing holding me back is my wife is still working (age 64), so me filing will kick us up to a higher income/ more taxes. All of what I collect will be invested, or spent on trips/ fun stuff, so we’re VERY fortunate in that we do NOT need the money. I’m leaning towards starting it somewhere between 65 to FRA, which is about 66 and 7 months, if I remember correctly.
Win
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Post by Capital on Aug 9, 2023 23:01:50 GMT
I am in a particular situation myself. I am 8.5 years older than my wife. Folks in her family tend to live into their late 90s. If I had taken my benefit at 62 and she at 70, her benefit would have exceeded mine by a small amount. That cannot happen now since I am 66. I am also going to work until age 70 to pay tuition and would be taxed greatly on my SS if I drew it now. While deferred credits are not allowed for a spousal benefit, they do accrue to the survivor benefit. Therefore, when I begin taking my benefit at age 70 it will in all probability be drawn from her age 62 to her age 97 == 35 years. Needless to say, we look at her probable lifespan for taking my benefit and my probable lifespan for taking her benefit.
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Post by retiredat48 on Aug 10, 2023 0:05:26 GMT
For those concerned of living a long time, and funding the backside of life, the new way is called taking "longevity insurance." Wall Street Journal just had another article on it. You basically buy an annuity at age 65 that doesn't start paying until age 85 (if the person lives that long).. Payouts are very generous for a modest sum. Far better than the somewhat larger SS payments of waiting to age 70. You essentially take your SS early, and buy longevity insurance using first two years monies. Then all is great!! I don't have time to post now about this subject. Would do later if an interest.
Edit to add: From WSJ article titled "Little-known tax break helps retirees": "A 65 y/o could buy a $200,000 QLAC without a death benefit that would start monthly payouts of $11,175/month at age 85." Scale this down to your needs. Further, this can now be done within an IRA deducting the $200,000, reducing your RMDs for the future.
So if you buy for your spouse, paying $50,000 at age 65, you get $2704/month at age 85. Nice boost to current SS income or pension or portfolio yield etc.
R48
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Post by yogibearbull on Aug 10, 2023 0:17:56 GMT
Secure 2.0 raised the QLAC limit to $200K. The QLACs are the longevity insurance (or, deferred income annuity/DIA) bought within the IRAs, 401k/403b.
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kent
Ensign
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Post by kent on Aug 10, 2023 14:22:59 GMT
I will take the SSN at 64, this will help on the Medicare enrollment. I heard a few nightmares if you try to join Medicare at 65. Also I don't need SSN at 62. My 2 cents!
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Post by steelpony10 on Aug 10, 2023 15:48:02 GMT
kent, Your Medicare part A card is sent to you at 65, free from the Feds. You get your own part B and D as supplemental insurance to this which you pay for. SS is a separate deal 62-70.
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Post by yogibearbull on Aug 10, 2023 15:58:52 GMT
I think that only if one is signed up to take Social Security BEFORE 65 (i.e. early), then the Medicare Card is sent automatically when 65. Otherwise, one has to apply for Medicare in the short window around 65 - Medicare signup is via Social Security Office. If you want to delay Medicare for any reason, you just inform Medicare/Social Security.
Popular Medicare Advantage (Part C) signup is AFTER one has regular Medicare, i.e. it is really a switch from Medicare to Medicare Advantage.
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Post by Capital on Aug 10, 2023 16:45:26 GMT
I think that only if one is signed up to take Social Security BEFORE 65 (i.e. early), then the Medicare Card is sent automatically when 65. Otherwise, one has to apply for Medicare in the short window around 65 - Medicare signup is via Social Security Office. If you want to delay Medicare for any reason, you just inform Medicare/Social Security. Popular Medicare Advantage (Part C) signup is AFTER one has regular Medicare, i.e. it is really a switch from Medicare to Medicare Advantage. I signed up for Medicare at 65. I did so on the SSA.gov website using my login for that site. I began the enrollment process about 3 months prior to turning 65. It went just fine. Once I had my Medicare Card, I was able to sign up in the Medicare.gov website. From there I was able to sign up for my Medicare Advantage coverage. I have my Medicare Premium automatically deducted from my checkbook monthly on about the 20th. The process was very easy for me.
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Post by yogibearbull on Aug 10, 2023 17:13:16 GMT
I have posted on this before. My Medicare signup was VERY MESSY. I had to physically go the local SSA Office multiple times to drop off this or that document. As my employer wasn't a participant in the SSA system, the SSA Office had absolutely NO records for me beyond the initial issue of the Social Security Card a few decades ago. To them it looked like I vanished and just fell from the sky - OK, I can laugh about it now. As I get no Social Security, I get billed for Medicare - it started out as quarterly billing, but then became monthly billing. Then, my wife's SSA signup online was a breeze! Her Medicare is deducted from her Social Security payments. After it was all done with bad and good experiences, I kind of became a SSA/Medicare "expert".
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Post by bigseal on Aug 10, 2023 18:53:01 GMT
Win1177,
We took SS two years before reaching FRA. Wanted to start receiving it rather than waiting and regretting it later. Most of that money has been going to charities because we have more money than we can spend thanks to Uncles Warren and Charlie. I see no compelling reason for you to wait given your financial situation. Enjoy it while you are still healthy.
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Post by anitya on Aug 10, 2023 19:09:25 GMT
What information were you required to give when applying for Medicare? What documents were you required to upload to apply? Did you have to estimate your modified taxable income for the year in which you turned 65? Thanks. Edit: As Yogi replied to my post, I removed the quoted previous posts to make the post size smaller but no edit to my text.
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Post by yogibearbull on Aug 10, 2023 20:11:08 GMT
anitya, Medicare & Social Security get the tax data directly from the IRS. Medicare uses that from 2 years prior, but if there are filed amendments, or a more recent tax filing showing major changes, one can file an appeal. Most of the data used during signup is for personal and ID information and some related documentation (lots for me, none for my wife). This is because between the IRS and Social Security offices, they already have LOTS of data on us.
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Post by notgamblingwithmoney on Aug 10, 2023 23:42:26 GMT
My wife took hers first at 62, while I waited for my FRA (66 and 2 months). When I took mine, my wife applied for spousal benefits. Since she claimed early she got a reduced spousal benefit. Hope that helps.
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Post by Capital on Aug 11, 2023 0:38:08 GMT
What information were you required to give when applying for Medicare? What documents were you required to upload to apply? Did you have to estimate your modified taxable income for the year in which you turned 65? Thanks. Edit: As Yogi replied to my post, I removed the quoted previous posts to make the post size smaller but no edit to my text. I just applied for Medicare. I do not remember any questions. The screens were already available because SS knew my birthday. I did not upload or mail any documents to apply for Medicare. Medicare sent me a letter telling me what my premium was and why there was an increase. They were right so I had nothing to appeal. They do not use the current year income, they use the income from your tax return filed two years prior.
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Post by anitya on Aug 11, 2023 1:12:49 GMT
Capital, "Medicare sent me a letter telling me what my premium was and why there was an increase." I need some context. Increase from what if that is the first time you were told what your premium was? Thanks.
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