Could this be good reason for taking social security sooner than later?

ed slott trains a group of tax adviser's that operate through out the country . they are basically accountants trained under ed and are retirement specialists . for anyone interested ,you can check your area on ed's site .

ed , himself is the master of retirement tax planning . i have read his books and he has pretty good ideas and concepts . most of ed's idea's have to be implemented way before .

since we don't know what we don't know we generally don't know about these things until it is to late to do much about our structure .

odds are if one's adviser didn't tell them about how to do such things as manipulate life insurance to make forever taxed retirement money in ira's in to never taxed money , rising glide paths or about over funding life policy's there is a pretty good chance the adviser may not be as well schooled in this half as you thought .
 

SS payouts are based upon an actuarial table. So it will really end up paying you the same amount regardless of when you take it. The key is what will be your expenses? How much additional will you need to cover the difference? Do you have enough in assets to draw down from over a long period of time? If not, you might need to wait until a later age to narrow that gap.
 
No , it is not even steven anymore and has not been for a long time. Today a 65 year old couple has a 74% chance of one of them seeing 85. In fact the 50% point is around almost 90 today for a 65 year old couple. Being a couple greatly alters things. But even singles are living longer. We have been adding 1 more year of life every 4 years since 2000.

Those are not odds i would want to bet against. Odds are pretty good the benefit of delaying for a couple will be greater.

But the bottom line is really , if you are dependent on generating your income from ss and your portfolio do you want to bet more on the whims of the markets and interest rates or bet more on your own longevity and what amounts to a gov't bond. We rather bet on markets and rates for just 8 years instead of decades so we are delaying
 

I took my SS at age 62 partly because of the uncertainty of how long I'd live. I had a sister who planned to wait until age 65 and she died at age 62. We had a similar heart ailment. Another reason is because I planned to (and do) save/invest my SS. According to my calculations, in 9 years (my SS break even age), the earnings from my investments will provide me with $568 more a month than if I'd waited until age 66 to collect and $135 more a month than if I'd waiting until age 70 to collect. Truth be told for reason #1, I never would have waited until age 70. As I've said in another thread however, unless there's a major illness, catastrophe or I have to move, I won't need to take distributions (other than RMDs) because my pension and SS provide more than enough income. I have come across articles by some "experts" who think outside the box and do recommend taking it early.
 
I suspect I'll be taking it next year when I turn 62. Between my pension and SS, I'll be able to let my retirement savings grow. The following year my wife turns 62 and she'll likely do the same. Will be having my financial planner run some numbers early next year.
 
I rather have money to spend when I am able at 62, than having more money but being unable to spend it because I am crippled at 66.
 
Dennis: I am a proponent of taking SS early and I did so. I figured I'd waited long enough since I retired at age 50, also wasn't sure with my health issues at the time that I'd make it to 66 or 70. My oldest sister, who had a similar condition decided to wait until full retirement age but she died at age 63. According to what I have read by financial "experts" who also say take it early (a contrarian view in the financial advisor world), good reasons for taking SS early are:
1. You don't expect to have longevity based upon current health issues and/or family history.
2. You don't need it so will take it early and invest it. (What I have been doing).
3. You really need the money to live on...couldn't pay your rent, bills and eat without having that income.

That being said, financial "experts" also say that if you have a retirement nest egg and are able to draw on it until full retirement age and feel you have a good chance of living that long, take withdrawals from your nest egg first. You will get a much higher SS benefit by waiting. One of the downsides to taking SS AND withdrawing that much money (or any decent amount) on a monthly basis is that with both coming in, you will undoubtedly pay more in taxes, unless the nest egg you draw from is a Roth. Here is a refreshing article I posted in another thread that gives a realistic view on when to take SS. There' are also charts showing how much an individual can expect to receive based upon what age he/she starts benefits and the total amounts one would receive by age 75 and age 90 depending on if taken earliest, at full retirement age or latest (70). https://personal.vanguard.com/us/insights/article/social-security-timing-082013?opentranscript=true
 
tax wise delaying can be excellent .

the tax gods give us a gift . we can draw up to 22k tax free from our retirement money TAX FREE and up to 40k at as little as a 4.50% effective tax rate just using standard exemptions and deductions . that is money you deducted at as high as the rates of your peak earning years . throw in some roth income , tax free money from the zero capital gains bracket's and cash set a side and you can have a 100k plus income and pay very little tax .all while your ss increases at 6% a year from 62 to fra and about 8% after that point .

unless you have a pension or other income sources , by delaying ss you can spend down up to 8 years of retirement money you already deducted , at very low or even no tax , while reducing potentially high tax rates on rmd's .

remember ss is only taxed up to 85% of it. rmd's are taxed on 100% .

if a couple the odds of one in a couple seeing 90 is almost 50% today. that can give one of them a real return of 5% after inflation . that rivals a balanced portfolio under the better conditions only the ss return has no sequence risk at all .

while yes you have to lay out the assets from 62 to 70 the fact is you will draw less from savings with an almost 80% bigger check with cola's for decades . that results in generally not only a higher spending rate but bigger balance for heirs .

so there are a lot of advantages to delaying but the big one for us is we cut dependency on markets a lot . our draw goes from 3.50-3.75% all the way down to 2.50% once ss kicks in .

if you wanted to buy a commercial annuity for the amount of money you lay out from 62 to 70 there is nothing better than delaying ss . the amount you get , the inflation adjusting , the passing on to a spouse , is far better than what you could ever buy .

no one should ever buy an annuity before delaying ss . it makes no sense.

but delaying is not for everyone . in fact most folks do not have that choice . you can't delay ss while having no other income if laying out the money for 8 years leaves you dangerously low . that would be a poor idea .

so delaying is only for those with choices .

quite frankly it boils down to whether you want market risk more or longevity risk more .
\
the big advantage to longevity risk is a couple gets two horses with one bet . market risk stays the same regardless so there is no edge if a couple ..
 
IMO the less financial resources you have the more it makes sense to delay SS as long as you can, even up to age 70.

I took it at 62 because it allows me to leave money in a tax deferred IRA instead of taking withdrawals and paying taxes on that money. Also, because my health is not the greatest so my chances of getting back what I paid in are iffy even with taking it early.

It's definitely not a one size fits all, each person needs to perform an analysis and determine what is best for them.
 
taking ss early or late when you have the choice is very difficult because so much is linked to retirement incoime . in your case longevity is one issue but depending on income taking ss for tax reasons may be not a good idea .

as i said above , you can pull up to 22k out of ira's and 401k's tax free and up to 40k with as little as 4.50% tax if you are delaying and have little other income sources .

if you could pull that much money out at those rates compared to when rmd's kick in that is a tax saving of a life time , not to mention spending down the rmd' money while growing an ss check .

lots of folks think backwards and lose this great tax gift by filing early only to get hammered at rmd time .. the trade off is also rmd's are taxed on 100% , ss only a max of 85% ,
 
IMHO, it's best to have multiple sources of income during retirement. I would recommend taking SS at a time that best allows for a person to the best combination of income sources. So.. I would not recommend draining one's retirement accounts early and being nearly completely dependent on SS at age 70 for income. Nor would I recommend taking SS early, and having a very large investment portfolio but a relatively small SS payment. Obviously, there are a lot of in between places here where taking SS will provide the best overall combination of retirement income.

Also, if one falls into that group that can collect on a spouse's SS account while letting one's own payment grow in the years from age 66 to 70, that is another reason where waiting may be good and a bit less painful.

It's a very individual decision.

For me, one thing to consider is that I do not have LTC insurance as I find the current policy benefits somewhat limited while the ability to raise premiums, as I get more likely to use the insurance, seems to be unlimited. So, for me taking SS at 70 seems a good way to help offset some LTC costs, albeit I will need other sources also. And, if I don't require LTC, I can spend most of the money on women and booze, and waste the rest.:D
 
as i mentioned above not everyone has the option to delay. you need either a source of income in the mean time or the assets to safely delay. it is a poor idea to spend down to far delaying and leaving yourself to low
 
Brookswood said:
IMHO, it's best to have multiple sources of income during retirement. I would recommend taking SS at a time that best allows for a person to the best combination of income sources. So.. I would not recommend draining one's retirement accounts early and being nearly completely dependent on SS at age 70 for income. Nor would I recommend taking SS early, and having a very large investment portfolio but a relatively small SS payment. Obviously, there are a lot of in between places here where taking SS will provide the best overall combination of retirement income.

Also, if one falls into that group that can collect on a spouse's SS account while letting one's own payment grow in the years from age 66 to 70, that is another reason where waiting may be good and a bit less painful.

It's a very individual decision.

For me, one thing to consider is that I do not have LTC insurance as I find the current policy benefits somewhat limited while the ability to raise premiums, as I get more likely to use in health insurance, seems to be unlimited. So, for me taking SS at 70 seems a good way to help offset some LTC costs, albeit I will need other sources also. And, if I don't require LTC, I can spend most of the money on women and booze, and waste the rest.:D
Click to expand...

i think of our ltc coverage as i do my health and auto insurance . i pay each year for the coverage whether i am likely to need it or not .

my co-worker who is 55 fell off a ladder painting . he broke his hip and during hip surgery he had a stoke and is now paralyzed in a snf . his family was impoverished by it .

so i don't look at it as paying for something off in the future . my payments are for each year . in 64 years i have never ever had even a fraction of the bills for my healthcare as i paid for my health insurance . whatever i paid in was for each years coverage , not for when i most likely will need it off in the future .

so if they raise my ltc premiums more than i want to pay , then i am done with the policy , but regardless all i paid for was the coverage i already got
 
mathjak107 said:
tax wise delaying can be excellent .

the tax gods give us a gift . we can draw up to 22k tax free from our retirement money TAX FREE and up to 40k at as little as a 4.50% effective tax rate just using standard exemptions and deductions . that is money you deducted at as high as the rates of your peak earning years . throw in some roth income , tax free money from the zero capital gains bracket's and cash set a side and you can have a 100k plus income and pay very little tax .all while your ss increases at 6% a year from 62 to fra and about 8% after that point .

unless you have a pension or other income sources , by delaying ss you can spend down up to 8 years of retirement money you already deducted , at very low or even no tax , while reducing potentially high tax rates on rmd's .

remember ss is only taxed up to 85% of it. rmd's are taxed on 100% .

if a couple the odds of one in a couple seeing 90 is almost 50% today. that can give one of them a real return of 5% after inflation . that rivals a balanced portfolio under the better conditions only the ss return has no sequence risk at all .

while yes you have to lay out the assets from 62 to 70 the fact is you will draw less from savings with an almost 80% bigger check with cola's for decades . that results in generally not only a higher spending rate but bigger balance for heirs .

so there are a lot of advantages to delaying but the big one for us is we cut dependency on markets a lot . our draw goes from 3.50-3.75% all the way down to 2.50% once ss kicks in .

if you wanted to buy a commercial annuity for the amount of money you lay out from 62 to 70 there is nothing better than delaying ss . the amount you get , the inflation adjusting , the passing on to a spouse , is far better than what you could ever buy .

no one should ever buy an annuity before delaying ss . it makes no sense.

but delaying is not for everyone . in fact most folks do not have that choice . you can't delay ss while having no other income if laying out the money for 8 years leaves you dangerously low . that would be a poor idea .

so delaying is only for those with choices .

quite frankly it boils down to whether you want market risk more or longevity risk more .
\
the big advantage to longevity risk is a couple gets two horses with one bet . market risk stays the same regardless so there is no edge if a couple ..
Click to expand...
Mathjak: That's good to know about the percentages. But if one is charitable and has his/her RMDs sent directly to a charity, those distributions will be tax free. Of course, if one is getting a huge RMD, that may not be desirable. I never checked to see if part can be sent to charity and the other to the individual and still have that person get the charitable tax free benefit on the donation portion. Since only a small portion of my investments is in a traditional IRA, I will have donations sent directly to one of my charities. It will amount to only a small annual increase in what I've been donating these past few years and I usually raise it every year anyway. My RMDs start later this year so I may ask that question when I call to make the arrangement.
 
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When to retire? The number one goal is to have enough to live comfortably after you retire. For many that makes early retirement impractical.
The extra years between age 62 and your full retirement age increase the amount of social security you'll get. But it also gives extra years to add to your 401k or IRAs. Also more years to pay off your mortgage or other debts.
That said, your health and family situation also has to be considered.
 
I see a lot of talk about taking Soc. Sec. at 62 or 70 but we are focused on FRA at 66-1/3. DH (recently turned 60) has Parkinsons but this will probably be the last year he CAN work. It is our plan for him to apply for the Long Term Disability Insurance he has been paying for all these years and apply for Federal Disability until FRA. Is it possible to do that or do they make you take Soc. Sec. at 62?

If he can qualify for Fed. Disability we will be fine but our financial advisors have said we have enough to take us to 66-1/3 if we need to do that but it will put a big dent in our savings. We both had a parent who died young and one who lived into their nineties so...crap shoot! Guess we focus on living those extra years and hope for the best.
 
SS and timing are often hotly debated topics. I might suggest charting specifically what you would receive at 62, FRA (full retirement age) and a couple years beyond FRA, just so you know. Also, Now that accumulation is over, and you are about to begin decumulation, do you have a suitable way to measure the risk/return on where your money is currently being managed/stored? I know there may be other opinions, but sometimes keeping all your eggs in one basket can be catastrophic in a down market. In the interest of staying on topic, I will limit my sharing to just this. Being informed and knowing your options, to me, is a great starting point!
 
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