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Post by yogibearbull on Nov 13, 2022 14:20:08 GMT
My wife and I are taking SS at age 65 because: 1) My calculation show very little difference between age 62 to 70. 2) 65 is a good compromise number 3) I use SS to pay Medicare and taxes. 4) If you are retired and getting SS at age 62 to 65, it will likely raise your ACA(health care) monthly payment. Without it, you may pay almost nothing if you know what to do. After re-reading this entire post, I’m leaning towards taking SS at 65 also, when I sign up for Medicare. Our income is still high even in retirement (great “problem” to have), and I’ll just direct most of it to the IRS instead of paying huge estimated tax payments. Fortunately, we don’t “need” the money, but it’s always nice to have more income! Win Another consideration: If you take Social Security BEFORE the FRA, there are limitations of how much you can earn from work and there are related reductions in the SSA payments. No such restrictions for retirement AT/AFTER the FRA. Rules are tricky and complicated. In general, I am for taking it earlier. As Social Security payments cannot be inherited, it is really take-earlier-or-potentially-lose-forever. So lot of breakeven type analyses go out of the window (the same for most insurance - either you need it, or don't). One benefit of taking it before 65 is that Medicare signup is then very simple - automatic. You get the Medicare Card in the US Mail and you can just keep it, or decline it if still covered by work group health insurance (but not retiree health coverage; that one tripped me).
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Post by Fearchar on Nov 13, 2022 16:12:53 GMT
One of my "co-workers" retired a few years ago and started taking SS before reaching FRA. I retired last year, but did not start collecting SS.
We were both hired back as high priced contractors. But he rants and complains about the wage limitation for collecting SS and announces that he'd rather quit than face the penalty.
Okay, so he quits. Management then considers me Golden and asks me what it'll take for me to continue on.
So, for highly marketable professionals, collecting SS early is just a distraction.
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Post by Chahta on Nov 13, 2022 16:31:02 GMT
It has nothing to do with investing. SS is paid monthly. It doesn't matter if you spend it or save it. Waiting for a higher benefit is a simple math problem of when you will recover the early dollars received by waiting for a larger benefit.
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Post by Deleted on Nov 13, 2022 16:45:44 GMT
One of my "co-workers" retired a few years ago and started taking SS before reaching FRA. I retired last year, but did not start collecting SS. We were both hired back as high priced contractors. But he rants and complains about the wage limitation for collecting SS and announces that he'd rather quit than face the penalty. Okay, so he quits. Management then considers me Golden and asks me what it'll take for me to continue on. So, for highly marketable professionals, collecting SS early is just a distraction. If he has not reached age 70, he can suspend his SS payments, and they will apply as delayed.
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Post by yogibearbull on Nov 13, 2022 17:12:12 GMT
Fearchar , I hope that you at least added your potential Social Security benefits (that you would have missed before your FRA) to your keeping-price . I also raised this point thinking that win1177 could easily continue as medical consultant post-retirement.
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Post by ECE Prof on Nov 13, 2022 17:19:13 GMT
One of my "co-workers" retired a few years ago and started taking SS before reaching FRA. I retired last year, but did not start collecting SS. We were both hired back as high priced contractors. But he rants and complains about the wage limitation for collecting SS and announces that he'd rather quit than face the penalty. Okay, so he quits. Management then considers me Golden and asks me what it'll take for me to continue on. So, for highly marketable professionals, collecting SS early is just a distraction. If he has not reached age 70, he can suspend his SS payments, and they will apply as delayed. They also asked me to teach two classes for the salary of graduate students. Why would I do that? My replacement take-home pay was almost the same as it was before retirement. The reason was: I was sending 25% (maximum allowed) to SRA before retirement. Since my income was sufficient to make a living, why would I need the torture of grading all those stupid home works and test papers?
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Post by saratoga on Nov 13, 2022 17:36:05 GMT
I may teach a course per year at a nominal pay for a while. TA grades most papers. One main compensation is I can keep my current office.
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Post by liftlock on Nov 17, 2022 20:54:21 GMT
The only ones who get it in 12 years are the ones with hardly or no savings + must use all their SS to live on. Someone who saves and invest SS, the break point is further. I suspect the vast majority Social Security income is spent on basic living needs - food, shelter, utilities, and health care etc. I imagine a small portion of the population are investing and saving it. It is true that some wont live until age 82. It is also true that some will live beyond 82. Some might find this calculator informative: www.longevityillustrator.org
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Post by retiredat48 on Nov 18, 2022 4:26:04 GMT
I posted the following on another thread:
-----------------------------------------
An anecdote...Near the end of my career, I had the "oldest GE employee", named John, who worked for me. Even CEO Jack Welch new of him and his 55 years at GE.
Turns out, he fibbed his age by a year and started at age 15. Then, GE had a rule must retire at age 65. All did. But as John approached age 65, fed gvt mandated you could not force such people to retire. He had run hundreds of calculations and was ready to retire at 65.
But then he delayed a year, realizing if he worked he could get more in SS et al. He was not spending any time doing any "work." His wife was calling me, begging to get John to retire. His health was becoming questionable. He wouldn't retire.
Finally at age 70 he retired. He died three months later!
Sad story...but all those calculations, for naught.
During the sixties, the average GE worker who retired collected a pension for 18 months. Yes, 18 months. We live longer now folks, but what about the "quality of life?" The body genes were not designed to live the long lives of today.
So in your eighties you pass the break-even point and collect more money. So what, money to leave to your kids?, as you may be bedridden, or simply "very old." Careful of the "old-age-is-great" kool-aide. Think about it.
R48
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Post by FD1000 on Nov 18, 2022 4:41:57 GMT
The only ones who get it in 12 years are the ones with hardly or no savings + must use all their SS to live on. Someone who saves and invest SS, the break point is further. I suspect the vast majority Social Security income is spent on basic living needs - food, shelter, utilities, and health care etc. I imagine a small portion of the population are investing and saving it. It is true that some wont live until age 82. It is also true that some will live beyond 82. Some might find this calculator informative: www.longevityillustrator.org The ones who don't have enough must take SS at age 62, and their saving are small. They don't have an option. We are discussing the ones who have options, and saving above the median. Then, you have the ones who have more than enough, they have all the options.
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Post by chang on Feb 7, 2023 14:23:07 GMT
I recently noticed that Fido has several articles on Social Security strategies; for example: Should you take Social Security at 62? (You have to be signed in to read it.) Surprisingly, most of the articles that discuss the pros and cons of starting SS at 62 / 65 / 67 (FRA) / 70 etc. do not take into account the benefit of taking SS early and investing the payouts. I continue to conclude that I should start SS at age 62, even though I don't need the money, because: - It's my money, and I like to see my money in my account and not the government's
- A bird in the hand is worth two in the bush
- I plan to invest the money in the same manner as the rest of my portfolio, and hopefully it will grow faster than the increase associated with delaying SS
- The "break-even" ages that I have seen (between taking SS at age 62 vs. 70) seem to be in the early 80s. I think our discretionary spending (vacations, etc.) will be a lot higher during the ages of 65-80 than 80-95. So, frankly, I'd rather see money flowing in during the key years between 62-70, so we will feel free to spend that "extra" money any way we want to. (Or just invest it.)
I expect that the payouts vs. age have been actuarially calculated to be a statistical wash. Hence, I think the most important factor is probably how long do you think you will live? If I was confident that I'll will live to 100, then I'd probably wait until 70. If I thought I could go at any time, then I'd take it at 62. However, I have no firm belief either way; hence, I think it really doesn't matter when I take it. Add to that that it's my money (point #1) and I think I can invest it with a reasonable degree of competence (point #3), I don't see why I should wait until after age 62.
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Post by Chahta on Feb 7, 2023 15:28:01 GMT
I recently noticed that Fido has several articles on Social Security strategies; for example: Should you take Social Security at 62? (You have to be signed in to read it.) Surprisingly, most of the articles that discuss the pros and cons of starting SS at 62 / 65 / 67 (FRA) / 70 etc. do not take into account the benefit of taking SS early and investing the payouts. I continue to conclude that I should start SS at age 62, even though I don't need the money, because: - It's my money, and I like to see my money in my account and not the government's
- A bird in the hand is worth two in the bush
- I plan to invest the money in the same manner as the rest of my portfolio, and hopefully it will grow faster than the increase associated with delaying SS
- The "break-even" ages that I have seen (between taking SS at age 62 vs. 70) seem to be in the early 80s. I think our discretionary spending (vacations, etc.) will be a lot higher during the ages of 65-80 than 80-95. So, frankly, I'd rather see money flowing in during the key years between 62-70, so we will feel free to spend that "extra" money any way we want to. (Or just invest it.)
I expect that the payouts vs. age have been actuarially calculated to be a statistical wash. Hence, I think the most important factor is probably how long do you think you will live? If I was confident that I'll will live to 100, then I'd probably wait until 70. If I thought I could go at any time, then I'd take it at 62. However, I have no firm belief either way; hence, I think it really doesn't matter when I take it. Add to that that it's my money (point #1) and I think I can invest it with a reasonable degree of competence (point #3), I don't see why I should wait until after age 62.
If SS is not needed to live on, tax consequences are not too severe, there will be no earned income to lower benefits until FRA then I say take it early. A bird in the hand as you say. Also who knows what Congress will do with benefits in 3 or 4 years. More news articles are talking about the 10 year life left.
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Post by chang on Feb 7, 2023 15:33:34 GMT
Chahta That's what I meant by #2 "A bird in the hand" - I'd prefer to minimize the regulatory and solvency risk of having SS impaired (or worse) in the future.
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Post by Mustang on Feb 7, 2023 15:51:18 GMT
I recently noticed that Fido has several articles on Social Security strategies; for example: Should you take Social Security at 62? (You have to be signed in to read it.) Surprisingly, most of the articles that discuss the pros and cons of starting SS at 62 / 65 / 67 (FRA) / 70 etc. do not take into account the benefit of taking SS early and investing the payouts. I continue to conclude that I should start SS at age 62, even though I don't need the money, because: - It's my money, and I like to see my money in my account and not the government's
- A bird in the hand is worth two in the bush
- I plan to invest the money in the same manner as the rest of my portfolio, and hopefully it will grow faster than the increase associated with delaying SS
- The "break-even" ages that I have seen (between taking SS at age 62 vs. 70) seem to be in the early 80s. I think our discretionary spending (vacations, etc.) will be a lot higher during the ages of 65-80 than 80-95. So, frankly, I'd rather see money flowing in during the key years between 62-70, so we will feel free to spend that "extra" money any way we want to. (Or just invest it.)
I expect that the payouts vs. age have been actuarially calculated to be a statistical wash. Hence, I think the most important factor is probably how long do you think you will live? If I was confident that I'll will live to 100, then I'd probably wait until 70. If I thought I could go at any time, then I'd take it at 62. However, I have no firm belief either way; hence, I think it really doesn't matter when I take it. Add to that that it's my money (point #1) and I think I can invest it with a reasonable degree of competence (point #3), I don't see why I should wait until after age 62.
I would add a #5 to the list: Beneficiaries cannot inherit social security.
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Post by archer on Feb 7, 2023 16:35:33 GMT
I plan to start SS when I am 68. At that time my SS income will cover 100% of living expenses except for years of major expense, such as a new car every 10 years or so, and a new roof before I die. I expect SS will not be as beneficial to younger people as time goes on but for those who have reached FRA I am confident benefits will not be cut, at least not until baby boomers are no longer a major player in voting power. I could die at anytime but I come from long lived stock so chances are I will go well past break even age. I hope to leave an ample retirement for my kids who came of age in what I believe to be a tougher financial environment of higher education costs and pay scale that hasn't kept up with the cost of living increases.
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Post by Majick on Feb 10, 2023 22:44:35 GMT
FWIW...Fyi: What is the Best Age to Claim Social Security? Read the answers to this question and several other Social Security questions in the latest book: Social Security Made Simple: By Mike Piper CPA Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less on Amazon. approx $5/Kindle to $15 Paperback Mike Piper also has a free monthly email newsletter: Oblivious Investor : obliviousinvestor.com
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Post by retiredat48 on Feb 11, 2023 1:03:22 GMT
I recently noticed that Fido has several articles on Social Security strategies; for example: Should you take Social Security at 62? (You have to be signed in to read it.) Surprisingly, most of the articles that discuss the pros and cons of starting SS at 62 / 65 / 67 (FRA) / 70 etc. do not take into account the benefit of taking SS early and investing the payouts. I continue to conclude that I should start SS at age 62, even though I don't need the money, because: - It's my money, and I like to see my money in my account and not the government's
- A bird in the hand is worth two in the bush
- I plan to invest the money in the same manner as the rest of my portfolio, and hopefully it will grow faster than the increase associated with delaying SS
- The "break-even" ages that I have seen (between taking SS at age 62 vs. 70) seem to be in the early 80s. I think our discretionary spending (vacations, etc.) will be a lot higher during the ages of 65-80 than 80-95. So, frankly, I'd rather see money flowing in during the key years between 62-70, so we will feel free to spend that "extra" money any way we want to. (Or just invest it.)
I expect that the payouts vs. age have been actuarially calculated to be a statistical wash. Hence, I think the most important factor is probably how long do you think you will live? If I was confident that I'll will live to 100, then I'd probably wait until 70. If I thought I could go at any time, then I'd take it at 62. However, I have no firm belief either way; hence, I think it really doesn't matter when I take it. Add to that that it's my money (point #1) and I think I can invest it with a reasonable degree of competence (point #3), I don't see why I should wait until after age 62.
I would add a #5 to the list: Beneficiaries cannot inherit social security. chang, Mustang,........... .Excellent analysis Chang.
Excellent point #5, Mustang. Note if you die at age 70, heirs may rightfully ask why you left a couple hundred thousand on the table!To Chang...I have posted about INSURING the risk of a long life. That is, you take SS early and use SOME of the proceeds to buy longevity insurance. For instance for a reasonable sum, you can insure that if you live to age 85 or 90, you will receive a very high annual payment, if you live that long. By age 70 you will have accumulated excess money and have fully insured the risk of living too long. R48
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Post by chang on Feb 11, 2023 7:11:14 GMT
I have posted about INSURING the risk of a long life. That is, you take SS early and use SOME of the proceeds to buy longevity insurance. For instance for a reasonable sum, you can insure that if you live to age 85 or 90, you will receive a very high annual payment, if you live that long. By age 70 you will have accumulated excess money and have fully insured the risk of living too long. Can you expand on what you mean by "longevity insurance"?
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Post by saratoga on Feb 11, 2023 7:39:55 GMT
Mustang: I would add a #5 to the list: Beneficiaries cannot inherit social security.
Your spouse can inherit it (if you have a spouse).
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Post by bobfl on Feb 11, 2023 14:35:34 GMT
I have always been overly cautious about protecting my wife if I die. I concluded the longer we wait, the more SS she gets if I die. And the less she has to worry about investments. So we just assumed we would start both at 70, unless something happened where we needed the money. Time flew by and we didn't miss the income from SS. Now we are getting so much money, it is hard to believe. SS now pays all bills. That makes investments a hobby, not required.
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Post by Mustang on Feb 11, 2023 18:38:13 GMT
Mustang: I would add a #5 to the list: Beneficiaries cannot inherit social security. Your spouse can inherit it (if you have a spouse). She has here own social security. I have read that a spouse can get up to 80% but I'm not sure how that works when she has her own. When I wrote that I was thinking about our kids.
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Post by yogibearbull on Feb 11, 2023 18:55:41 GMT
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Post by bobfl on Feb 11, 2023 18:58:19 GMT
Mustang: I would add a #5 to the list: Beneficiaries cannot inherit social security. Your spouse can inherit it (if you have a spouse). She has here own social security. I have read that a spouse can get up to 80% but I'm not sure how that works when she has her own. When I wrote that I was thinking about our kids. AARP says, "Social Security will not combine a late spouse's benefit and your own and pay you both. When you are eligible for two benefits, such as a survivor benefit and a retirement payment, Social Security doesn’t add them together but rather pays you the higher of the two amounts."
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Post by richardsok on Feb 11, 2023 19:13:16 GMT
WAIT a minute, bob. (ONLY "the higher of the two amounts"?)
Suppose I've been paying into SS all my life since I was 16 and took benefits at age 65. Suppose I married late in life to an immigrant woman. For the first few years she did not work. Then at age 52 she got a good job and started paying into SS and quit at 62.
Obviously MY SS is greater than hers --- but does that mean she accrues no additional credits for HER ten years of working?
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Post by bobfl on Feb 11, 2023 19:24:34 GMT
WAIT a minute, bob. (ONLY "the higher of the two amounts"?) Suppose I've been paying into SS all my life since I was 16 and took benefits at age 65. Suppose I married late in life to an immigrant woman. For the first few years she did not work. Then at age 52 she got a good job and started paying into SS and quit at 62. Obviously MY SS is greater than hers --- but does that mean she accrues no additional credits for HER ten years of working? That is what I always read. When I determine her income, if I die, I always just count my SS. If she is in a senior home, I tell her to add the LTHC benefits, add my SS, then take the rest from the dividends, then if that doesn't cover the $12,500 per month bill, start selling holdings to make up for the difference. Of course I can only base that on today's income.
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Post by saratoga on Feb 11, 2023 19:45:31 GMT
Mustang, a spouse can inherit 100% of her/his deceased partner's SS if that is larger than her/his own SS. This is the baseline. There are circumstances where you do not get 100%. If spouse inherits SS, the spouse forfeits own SS. This situation is very important since women typically live longer and have much smaller SS. So, maximizing SS could be a great gift of yours for your spouse' financial security. I tend to believe that grown-up children should work for their own financial well being - in principle.
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Post by Capital on Feb 11, 2023 19:52:27 GMT
Technically behind the scenes what occurs is that the surviving spouse continues to receive his/her benefit. In addition the surviving spouse receives a survivor benefit equal to the difference between their lessor benefit and the greater benefit of the deceased spouse. In the end all it means is that no matter which spouse passes first the survivor receives the greater of the two benefits being received during their joint lives. Well I beat this one up a bit too spouting out stuff that everybody else has said. FWIW - I'm taking mine at 70 because my spouse is 8.5 years younger than I. My benefit will be close to $1k larger per month than her benefit. She will need the extra money once I'm gone. Folks in her family live into the middle to late 90s.
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Post by steelpony10 on Feb 11, 2023 20:16:57 GMT
Capital, A fellow cradle robber. My wife will use the extra money to keep her next man in style because she saved so much on me.
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Post by retiredat48 on Feb 12, 2023 4:21:25 GMT
I have posted about INSURING the risk of a long life. That is, you take SS early and use SOME of the proceeds to buy longevity insurance. For instance for a reasonable sum, you can insure that if you live to age 85 or 90, you will receive a very high annual payment, if you live that long. By age 70 you will have accumulated excess money and have fully insured the risk of living too long. Can you expand on what you mean by "longevity insurance"? Here is a post I made on another forum: --------------------------------------------------- Gee, when I retired at age 48, I planned to age 88, because I was potentially running out of money, then. Our fallback was to call the kids and tell them to come and get us! So, which is it, 30 years or to age 100? Don't fret...there is a way to do both! The solution: INSURE THE BACKSIDE RISK VIA LOW COST LONGEVITY INSURANCE. That is, you can buy annuities for very low cost that kick in if you live past, let's say, age 85. They pay income for life. So if you live to be 105, no concern. The Wall Street journal had an article, 9 April, on how to do this...called How to Create a Pension (With a few catches). For instance, a 65 year old man buying a regular annuity can get a payout for life of $6950 per $100,000 annuity. However, if you buy now, the same amount policy, that begins at age 85 payouts, you get $63,900 per year. Hey, now we're talking. So if you are concerned your wife will live to be 105, get a longevity annuity for her...or both of you. Yes, you give up some principal, but then you may only have to plan for your portfolio to last 20 years, (instead of 30)at which point the annuity payments kick in. Currently, you can tailor-make these to fit your needs, with 45 years out being the longest start time. And remember States have annuities insured to varied limits, usually $100,000 or slightly more, so a default by the company is not disaster to you. Good luck, all. R48
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Post by archer on Feb 12, 2023 6:42:54 GMT
THe delayed annuity can be good for heirs also, even if doesn't have beneficiaries. Should you need LTC, it can help protect your PF, or until LTC is needed, the extra income can be used as an advance bequeathment.
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