Hmmm 62 or 65

Lon said:
I thought this discussion was about when to take SS, not other pensions or quality of life. In my case, I have other pensions, IRA's, & investments, but still glad that I took SS at age 62. I feel sorry for those that will have only SS when they retire.
Click to expand...

When to take SS depends on what other income and/or investments one might have. It all comes down to will there be enough to live the best quality of life possible for each of us.
 

Well, they will have their SS, but also have their 401K as well. But, both the amount of both can depend on how many years of working/contributing was done. There are a lot of people that can't/don't retire from a job, for one reason or another. Just like there are those that retire from the military and then those who serve their "hitch" and leave.
My wife works with a lady who has been working for the bank for 16 years and was looking very forward to retiring from that bank in 4 years. Unfortunately, the bank has decided to shut down the department, so, unless she takes a transfer, she will not see her 20 year retirement with this bank.
I knew a lady that worked for the County of Orange in So California. She was with them for 10 years and a person can retire from them after serving 10 years. Unfortunately, the County declared bankruptcy and she didn't receive a single penny of retirement pay from them.


Lon said:
I thought this discussion was about when to take SS, not other pensions or quality of life. In my case, I have other pensions, IRA's, & investments, but still glad that I took SS at age 62. I feel sorry for those that will have only SS when they retire.
Click to expand...
 
The days of people working their entire careers at one company are over... Things are too fluid.. Corporations have too much power over employees. I think I read that the average time in one job is 3-5 years
 

There really isn't a one-size-fits-all plan. Everyone should sit down with a financial planner and decide what makes the best sense for you, given your goals, health, age, income and investments. There are a lot of variables, and once you're locked into social security it won't change and doesn't reward extra work.
 
But, there are those that work City, County, State and Federal jobs that keep them for many years. Now, for private companies, this can be very true.

QuickSilver said:
The days of people working their entire careers at one company are over... Things are too fluid.. Corporations have too much power over employees. I think I read that the average time in one job is 3-5 years
Click to expand...
 
what if i die should never be the primary consideration for whether to take ss or not earlier .what if i live is the bigger question .

what if my spouse lives is the other question .

we are delaying because with the odds of one person in a couple living until 90 at almost 50% ( a coin toss ) that can mean a 5% real return , that is after after inflation , on what amounts to a gov't bond . there is a 74% chance one of us will see 85 and even at 85 the real return ends up being not to shabby .

but not only that , for us only 85% of it is taxed unlike our market income and most important that money has zero sequence risk .

but statistics mean little to us humans . we only have two choices . things work out as expected or they don't .

so while we are trying to delay to 70 it is not based on whether we die early or live longer . .

by delaying we will see our draw rate from our portfolio fall from 3.50% now to only about 2% once ss kicks in .

that means we are way less dependent on not only market returns but the sequence of those returns . for as long as one of us lives we will be drawing out less money from savings year after year , hopefully for decades of time .

because there is no sequence risk more can be spent and less powder has to be kept dry then when you are living off markets .

not only that but while delaying we can spend more then if we took ss early because we will refill later with checks 70% larger plus cola's .

over all delaying can have far more benefits then most folks realize.

survivor benefits are greater too . that can be very important to a spouse who is not only losing one ss check but now has to file taxes as single too .

what many do not realize is that once your draw rate drops from your portfolio because of the higher ss checks you no longer need to maintain as high of an allocation to equity's . that may ease your nerves greatly in a down market .

so when someone says take it early , what if you die , now you know the real question is what if i live ? but you need to have the assets to have choices to delay . i hate to see more then 25-30% of assets spent down delaying . if that is this case then you really can't afford to delay and do not have the option .

having money may not buy happiness but the one thing it does buy in life is choices .
 
Last edited:
Don't sweat the small stuff. Retire when you are financially and temperamentally ready - period.

There is no way to know which age is best without knowing how long you will live.
 
like i said dying early is really not much of a factor if you have a spouse because then she gets the bigger payment . if you both die , well dead is dead game over so dying is the least of the concerns compared to living so living is the biggest issue .

the biggest reasons for delaying are the 3 i mentioned above and none have to do with your life expectancy directly .

1- how dependent on markets and interest rates do you want to be for the rest of your life ? a 70% bigger check plus colas cuts draw drastically from your portfolio . that is our main reason for delaying .

2-survivor benefits for your spouse who loses one check and files single now with increased taxes . can she make due with not only a reduced benefit but a benefit that gets cut even more if she has to file before her fra .

3- do you want to be able to spend more early on since ss when you get it down the road has zero sequence risk and needs no dry power kept for poor markets . your own investing requires lots of dry powder since it is based on the worst outcomes to date .

as you see , the 3 biggest reasons are all about what you do know and is not directly tied in to how long you live .
 
We're taking social security at 62, based on recommendations from our financial planner. When they looked at the math, it seems that in our case, taking it early provides a real benefit since we wouldn't get any advantage from waiting until somewhere into our 70s.
I'll have to see if I can get my hands on the link to the original article in case anyone is interested.

View attachment 30713
 
i can't open that link .

one thing i will say about adviser's is you have to be very careful . many are well versed in the first 1/2 of the game , the accumulation stage but they are not well versed in the 2nd half , the decumulation stage .

most run on myth and old school thinking when it comes to how the 2nd half is played and what they tell folks to do is wrong and out dated based on what used to be thought . .

i read the study's of the likes of michael kitces , dr wade pfaue and bernstein and blanchette for up to the minute thinking .

then if your advisor differ's question them as to why . at least you will be able to test their knowledge and logic for doing what they do .

there are very few scenario's that would not be made better by delaying . an exception might be where you have a nice pension and are not spending down your portfolio . then taking ss early is fine .

but when spending down from assets to live there is rarely a scenario where earlier works out better .

basically you have to choose which one you prefer more . market and interest rate risk or longevity risk . we are more comfortable with longevity risk since we are two horses in the race with one bet .

https://www.kitces.com/blog/how-del...ong-term-investment-or-annuity-money-can-buy/


https://www.kitces.com/blog/the-asy...cial-security-benefits-as-the-ultimate-hedge/
 
mathjak107 said:
i can't open that link .

one thing i will say about adviser's is you have to be very careful . many are well versed in the first 1/2 of the game , the accumulation stage but they are not well versed in the 2nd half , the decumulation stage .

most run on myth and old school thinking when it comes to how the 2nd half is played and what they tell folks to do is wrong and out dated based on what used to be thought . .

i read the study's of the likes of michael kitces , dr wade pfaue and bernstein and blanchette for up to the minute thinking .

then if your advisor differ's question them as to why . at least you will be able to test their knowledge and logic for doing what they do .

there are very few scenario's that would not be made better by delaying . an exception might be where you have a nice pension and are not spending down your portfolio . then taking ss early is fine .

but when spending down from assets to live there is rarely a scenario where earlier works out better .

basically you have to choose which one you prefer more . market and interest rate risk or longevity risk . we are more comfortable with longevity risk since we are two horses in the race with one bet .

https://www.kitces.com/blog/how-del...ong-term-investment-or-annuity-money-can-buy/


https://www.kitces.com/blog/the-asy...cial-security-benefits-as-the-ultimate-hedge/
Click to expand...

Thanks, I'll check these out. Much appreciated. We're in the category of having a pension and some non-qualified savings that we can stretch. Not spending down the portfolio yet. As I talked to the advisor, he was clear that we'll look more closely at this next year when I turn 62, but he thinks there's an advantage for us, given our specific circumstances, of taking the payment early. I'll know more at the beginning of next year.
 
the work ups i have seen by what i call the amateurish financial planners in the retirement arena try to do a strictly numbers comparison without looking at the 3 big issues above .

in fact most do not even compute the break even point right .

to do it correctly if you delay and do not have a pension you will be spending invested assets down and lose that growth rate forever , you also have spousal benefits and adders that do not come in to play until the higher earner files .

figuring a balanced portfolio being spent while delaying can add years to break even . as an example of other things left out is my wife gets an adder of 4200.00 a year once i file since 1/2 my full is more then hers . so we can be looking at 22 years to break even so delaying ss unless you live until 90 is never about the money difference . the 3 main reasons i listed above are really the reasons you may want to delay .

here is a nice work up by micael kitces that looks at the actual real returns of delaying . as you can see once you get past break even real return compounding because of inflation adjusting becomes pretty high . by age 90 you are rivaling stocks . but break even can run 22 years once everything is included .

i-KmsGcPL.png


i-6dWGZkG.png
 
I am taking mine at 62, I am already semi-retired at 58 and doing pretty good with my pension and side jobs. I live a simple lifestyle which really stretches the dollars nicely. So I am taking it at 62 and I am never looking back. Mail box money, I love that idea. I do not count on living to an old age, of course I might have a different opinion as I get older. Heck I never thought I would be this age.
 
we all have our own preferences and needs . but you have to make sure the reasons you do take it early make sense .

in poll after poll in retirement forums the biggest regret most retirees have is taking ss to early . what you really do not want to do is stuff that ends up being silly like taking ss early and then spending money on annuity products which cost you more in the end and give you less then had you simply spent the same money delaying ss ..
 
There is no one right or wrong answer to when t take SS. If you need the money at 62 to put food on the table and pay the rent, then that's probably the best time to take it.

But, in reality each of us should have a plan for retirement of which SS is just one part. How SS fits into that plan should determine when you take it.

In my case, I'm delaying SS to 70. Why? Two reasons. One, my ancestors lived into their 90's so I should come out ahead in the very long run. Second, and more important, I do not have any type of LTC insurance and the current market for it is to costly, IMHO. So, I will use the extra SS money plus what I am saving by not buying LTC now to help cover those expenses if I need LTC in the future. If I don't need LTC, then I will spend the money on women and booze. Anything left after the women and booze I will waste.
 
the choices of when to take ss is really reserved for those who have the resources to have choices . obviously if you do not have the resources to delay it may not be an option .

i always say money may not buy happiness but it certainly does buy choices in life . the most uncomfortable feelings are when i have to do things because i have no choice.


just to play devils advocate , if you need long term care would your spouse be left living on fumes ?
what if markets suck and lag and you can't keep up with the inflation in long term care ?

worse yet , what if you need care earlier than you planned for ? my co-worker , age 55 , fell off a ladder painting . he broke his hip and wrist . he had a paralyzing stroke during hip surgery . his wife is now impoverished and living on medicaid .

what if markets fell by 40% and now you need long term care ?

all these things are potential mind fields when trying to self insure

.
 
I am waiting a few years to collect my SS at age 70. Presently collecting widow's pension and since it isn't a huge difference, waiting seems to be smart. I didn't sit down with a calculator but things I've read say it's worthwhile. I think it's a personal choice, whatever best suits your needs. Take it when you need it, wait if you can. Sit down and use the calculator if you need to, especially if your funds will be really limited.
 
we want to be less dependent on markets and rates so we are delaying . what we spend down reduces rmd's and the social security is taxed on only 85% of it . all big pluses without even considering what if we die . as far as we are concerned everything we do is based on what if we live
 
Brookswood said:
There is no one right or wrong answer to when t take SS. If you need the money at 62 to put food on the table and pay the rent, then that's probably the best time to take it.

But, in reality each of us should have a plan for retirement of which SS is just one part. How SS fits into that plan should determine when you take it.

In my case, I'm delaying SS to 70. Why? Two reasons. One, my ancestors lived into their 90's so I should come out ahead in the very long run. Second, and more important, I do not have any type of LTC insurance and the current market for it is to costly, IMHO. So, I will use the extra SS money plus what I am saving by not buying LTC now to help cover those expenses if I need LTC in the future. If I don't need LTC, then I will spend the money on women and booze. Anything left after the women and booze I will waste.
Click to expand...

many years ago money magazine did a feature story on us . i pretty much did all my own planning and investing so money magazine wanted to see if their team of pro's could inprove on my plan .

the only place we differed was in me self insuring LTC .

they were against it for so many reasons , especially the reasons i listed above .

they were right and i was wrong .

to self insure you really can't just say it , you need a plan to do that and like any insurance that money has to be available day 1 , safe and secure .

the chunk of dough we would have to set a side to cover 120-140k a year ,which is what it is in ny was an insane amount . that money realistically needs to be kept secure and available and that means low returns .
for the cost of just a small percentage of the long term gains on that money keeping it invested normally we got a fabulous partnership plan with the state . the perks after the insurance runs out are worth more than the 3 years insurance .

the problem was , we delayed taking the policy and in a years time i was diagnosed as diabetic even though through diet and exercise , no meds the levels are high normal we got surcharged 500 a year for me additional . so waiting is not always a good idea . our broker can't even get a policy written because he is over weight . they are so strict .

it isn't about nursing home care either . we have it just so we can stay out of one . we are covered for 6 years in home care , 3 years nursing home or 6 years assisted living . they pay half the nursing home rate for in home care and assisted living .
 
LMLB: The contrarian opinion is if you can take it at age 62 and invest well, you'll come out ahead or at least break even from income your investments generate. I took mine early for that reason plus not knowing if they would continue to up the age requirement or if I'd live to see 65 or 66. Also keep in mind that once you turn 65, Medicare payments will be taken directly out of your SS payments. Currently the lowest Medicare rate for many of us is $105 a month but according to your circumstance, may be more. That being said, here is the most comprehensive article I've read about when to take SS. I like that it's not one sided and gives specific examples of what you can expect when taking it at different ages. Hope this helps.
https://personal.vanguard.com/us/insights/article/social-security-timing-082013?opentranscript=true
 
in reality unless you have a pension that covers all expenses it is not a case of investing the ss money . it is more a case of leaving any money already invested as is and not spending it down to delay while living off ss. it would not make sense to pay tax on the ss , invest it and pay tax on liquidating assets to live to . so the more realistic way is you live off the ss and spend just that much less in invested assets ..

in my example above the chart figures a 6% return from a balanced portfolio being spent down .

the problem with investing is sequence risk . you have to keep so much powder dry just in case we have worst case scenario's that you cannot spend as high a draw investing vs delaying ss since delaying ss lets you spend more because it has no sequence risk.

we can spend more right now while delaying then we could if i took ss early and had to count on the markets and rates .

it all boils down to are you more comfortable with market risk or longevity risk ?

with two of us in the race with one bet longevity risk to us is the no brainer compared to markets , rates and black swans . if one of us makes it until 90 that is a 5% real return , after inflation , with zero risk .

that trumps tolerating the risk and volatility of a balanced portfolio for possibly less return . if we both die earlier-well game over dead is dead so we always view things from what if i live ?
 

You must log in or register to reply here.

Back
Top