Posted on 09/01/2014 7:52:57 AM PDT by shove_it
Summary
When should I start Social Security? How will I receive the highest annual income? How will I receive the highest cumulative income? When will I be able to retire?
Every year, more than 2 million people turn 62. Many of those people will wonder, "When should I start receiving Social Security benefits?"
The earliest age of eligibility is 62. The benefit increases each year you delay starting, until age 70, after which point there is no additional increase.
When should I start - age 62 or age 70?
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(Excerpt) Read more at seekingalpha.com ...
Yep. That was the tie-breaker for me.
Thanks for posting the entire article!
One more thing to consider for those who don’t need the money and are considering waiting. TAKE IT ANYWAY - invest it, grow it and when you turn 70 you can pay back the exact amount SS gave you, keep what you earned and grew all those years and then qualify for the higher age 70 payment you would have received had you waited.
If you sign up and get to the very last paragraph you see this:
For me, the right question is, "Which alternative allows me to retire sooner?"
So in taking SS at 62 he isn't aiming for maximum expected return versus his expected lifespan. He's trying to hit a goal of how much he needs to retire and quit then.
(I did sign up through the temporary email service at mailinator.com, but they seem to be filtering out mailinator addresses so I had to use one of mailinator's alternate domains to sign up.)
I don’t want it.
There’s one very good reason to wait as long as you can, particularly if you’re going to have to rely upon Social Security to finance a fair portion of your basic lifestyle. Of course, that usually means working longer.
The reason is that Social Security payments are, at least to an extent, inflation protected. While that doesn’t matter much if inflation continues at 2-4%, it could matter a great deal if inflation starts running 8-10% for several years running.
Most retirees invest their other financial assets relatively conservatively and those assets won’t rise with inflation (although they might earn higher interest), so Social Security could be the one asset that keeps you from having to reduce your standard of living significantly following an extended inflationary period.
It’s either that or invest in riskier assets like real estate, common stocks, and precious metals, all of which should end up higher following an inflation binge.
So, if at 62 Social Security is already a significant part of your retirement income, be aware that it could be most of your income after an inflation binge and that the rest of your assets probably won’t have kept pace.
The main arguments for taking it early are: 1) you’re in poor health and are either unable to work, or likely to not live long, or both, or 2) you’re male...we just don’t seem to make it out of the 70’s that often, and it’s in the 80’s and 90’s that this would be likely to be most important.
That 8% increase in benefits every year is significant, but you have to live a long time to make up waiting until 70 to start collecting. As I said though, it’s the one financial asset that is most likely to have a decent inflation factor built into it, so if you don’t need it, or can work a bit longer even part time to sustain your living standard without collecting SS, I’d consider it if you’re healthy and expect to live for years in retirement.
And face it, if you work longer and don’t collect and then die at 66, missing four years of SS payments is the least of your worries. If you hate your job, that’s also a consideration, of course.
Ping for later
If one is eligible for spousal survivor benefits, they should claim that before age 62. That way you can draw that until 66 or 70 and then draw on your own SS. Once you turn 62 you are locked in on you own.”
But if you draw spousal benefits at 62 or before, you lock in at that rate. When you turn 70 and want to take our own, you have to take the rate you locked in at.
OOPS! Wrong info... you can collect for up to a year, change your mind, pay back what you collected to that point and be eligible for the higher amount that the year bought you.
I really doubt this is permitted by Social Security (taking it at 62 and paying it all back at 70 as though you never got it in the first place), though I could be wrong. It doesn’t make sense though because first of all you’d be paying taxes on a good portion of it since you’d apparently be living on other income, and few investments will return the percentage that Uncle Sam takes away.
Basically, though, I doubt SS will let you do it anyway.
I think I will retire at 70 or 72.
There is one wrinkle that people waiting should be aware of. If you’re planning to wait on your own SS until age 70, you can still draw your spousal benefit without impacting your own future benefit, but your spouse has to be at full retirement age (66 for today’s retirees) and I believe you might have to be also.
Say you’re 67 and your spouse turns 66. She declares her intent to file for SS, but then simultaneously defers her benefit. By declaring, she makes you eligible for her spousal benefit which is half of her age 66 benefit.
So, you then file for her spousal benefit and collect a thousand or so per month until you’re 70 at which time you can switch over to your own full 70-year-old benefit (if it’s higher than what you’ve been getting as a spousal benefit.)
Your spouse can take SS anytime after 66 without impacting the strategy. It gives you several thousand dollars extra a year until you’re 70 without having to claim your own, so you can let your future payments on your own SS continue to grow at 8% per year.
I procrastinated on this for a couple of years before checking on it and was relieved to find that you can’t use it until your spouse is 66, and as I said, I believe you have to be also, but I’m not sure on that. The Social Security website will have that info though, if you dig for it.
This only works out if your full age-70 benefit is higher than your spousal benefit however.
See my post #88. I was mistaken. I read that somewhere but after posting decided to check SS website:
http://www.ssa.gov/retire2/withdrawal.htm
You can do that for a year so everyone should know that they can change their mind.
My viewpoint is that the government benefits if you wait and what is good for the government is never good for us.
I don’t think they will do away with SS but they will inflate it away. The check that maybe covered your bills when you retired won’t cover an Obamacare bandaid 10 years hence.
Retire from your paycheck job, take your benefits, and start a cash business. Obama and Holder have demonstrated that there is no longer rule of law in America. If our voting laws mean nothing and our laws governing our borders mean nothing, then our IRS laws are meaningless. Act accordingly.
I think I will retire at 70 or 72.”
Same here. I have a small business which allows me to work as much or as little as I want. But working at all, if I took the SS at 62 I would hit the 14,500 earned income allowed and would be taxed out the gazoo.
So I will wait until 66 and take the SS because then I can work as much as I want and not add to my tax burden. Also the SS will be higher.
Bet the rent, that is exactly what will be happening.
You and everyone else please keep in mind that all that FICA money paid has gone to pay someone else’s SS and Benefits not yours or mine.
The real problem is Demographics and that when all the Baby Boomers finally hit the system there will be about 1 to 1.5 ratio of taxpayers to fund that.
The argument on when to take SS is mute one as far as I am concerned. At 62 I think you take it and get all you can before benefits are cut as they may end up being.
A popup appeared preventing me from reading the site. The only way to get rid of it was to “register.” No thanks.
Guess you’re not using a pop-up blocker, huh?
If you’re nearing retirement age - say 50 or over - it’s well worth checking out two free social security calculators on the internet -
http://www.aarp.org/work/social-security/social-security-benefits-calculator.html
http://individual.troweprice.com/public/Retail/Retirement/Social-Security-Tool
Once you hit 60 or so you get inundated with invitations to retirement seminars. Many of them throw out figures as to how many different ways there are to claim social security. Yes, a financial adviser can provide that information, but you can do some of your own research, including using those two free calculators.
These free calculators will cover techniques like spousal benefits and “file and suspend”.
My husband and I will also be looking to minimize taxable income between retirement and age 70 so that we can convert some of our conventional IRAs to Roth IRA at a 15% tax bracket.
By the way, had you read this thread you might have noticed the entire article posted a couple times.
I made a lot of bucks and invested wisely. SS is about 45% of my income due to the fact that I limit the withdrawals from my accounts to preserve and even grow capital.
I have no debt and have a US median income, you have to plan and adjust that plan yearly.
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