The media is pushing people over 60 to not retire (states, relatives, retirees)
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interesting chart done by researcher michel kitces . there is a whole lot more to the equation then just the checks you give up that can really push the point of breaking even way out there .
it can reach a point that getting anything extra is a real long shot on your longevity by delaying . about the only advantage you may get unless one of you hits at least 90 is you are less dependent on the markets . .
bottom scale is the number of years it takes to get a head and by how much .
Last edited by mathjak107; 10-24-2015 at 02:12 PM..
My life expectancy is not based on when I take Social Security.
If I retire at 62, then I'm permanently penalized at a reduced payment of 70%, or $863.10/month Through age 85 I receive a total of $238,215
If I wait until 67, then I get $1233 and living to 85 is $266,328.
If I wait until 70, then I'd get 124% of my benefits or $1528.92 and until 85 works out to $275,205
Waiting until age 70 costs the SSA more money.
Clearly it is in the best interest of government to advocate taking Social Security at age 62, since SSA would pay less.
All of these payouts are worked out mathematically according to actuarial tables. Some beat the system some don't but it evens out. Break even age for collecting early or waiting till FRA or 70 is around 85 years of age. I am going to collect just shy of 64 soon and plan on working a job that will keep me around the allotted number of c. 16K. Then at 66 my FRA I will try to earn much more. I need a break from my current job and am relocating so it fits best in my plans.
it used to be actuarially fair but it no longer is that way .
longer life and lower interest rates have tilted the tables in many cases to delaying .
we have been adding one year of life every 4 years since 2000 .
a 65 year old woman has a 54% chance of seeing 85 , a man a 42% chance HOWEVER a couple has a 73% chance since either one can out live the other . in fact one of you seeing 90 is about 47% .
that is amazing odds , certainly those were not the ages ss was designed around decades ago .
the one big difference delaying does make is you can actually draw a higher income early on at 62
you have the guarantee for the most part that anything you overspend early on will be refilled later on when a check 76% bigger plus cola's kicks in .
you also do not need to keep so much powder dry to deal with sequence risk and worst case scenario's since withdrawals from 70 on will be lower .
someone who needs 60k inflation adjusted at 62 can see 22,500 from ss inflation adjusted and 37,500 from their portfolio .
delaying until 70 they get 39,600 from ss inflation adjusted an need only 20,400 from their portfolio .
while taking ss at 62 that is a 4.69% draw rate , but subtracting out laying out 8 years of money brings you to a 4.22% draw rate at 70 off the remaining blance .
you could actually draw more money and increase to the 4.69% rate you could have been drawing anyway if you took it at 62 .
I was hoping for an explaination of why the media is promoting (hyping) late retirement, not people's own stories of poor financial planning.
The answer to your query is 2 words....Social Security....If the government can convince you to stay in the work force longer and not collect ss early they stand the possibility of you dying and avoiding having to pay giving them more time to try to figure out how in the world they are going to pay ss to all of the baby boomers who paid in all of their lives to a now bankrupt ss till.
but far more people live past 70 and if a couple odds are one of them will live even beyond 85 giving them bigger checks. it would cost them more in the end if we all delayed . especially because spousal benefits would also jump .
break even based on ss is almost a slam dunk , it just gets harder when you figure your own portfolio being spent down in to the equation . but as far as ss expenditures it would cost them more if we all waited
it used to be actuarially fair but it no longer is that way .
longer life and lower interest rates have tilted the tables in many cases to delaying .
we have been adding one year of life every 4 years since 2000 .
a 65 year old woman has a 54% chance of seeing 85 , a man a 42% chance HOWEVER a couple has a 73% chance since either one can out live the other . in fact one of you seeing 90 is about 47% .
that is amazing odds , certainly those were not the ages ss was designed around decades ago .
There has got to be a peak on the age thing. And, I think, a reversal at some point. Maybe we won't see it. The world is just getting too populated for governments to keep up, health care will suffer. Agriculture advances won't be able to keep up and food quality will suffer. Obesity etc. I think ages will start to decrease at some point down the road.
My Mother lived till 91 though the last couple of years weren't pretty. Her Mother till 93, again the last few years were terrible. But both of them had substantially different lives than me. Totally different food, totally different lifestyle in terms of physical activity, far less exposure to toxins.
I hardly think that my life span will be the same. Its just not.
We are still seeing parent/grandparents deaths and lower average lifespans from thoxen generations general population acceptance for drinking and smoking, auto & consumer safety, etc, where medical tech could not do much to save them. Now we are gradually transferring to an age where the negatives of smoking and drinking, unsafe cars, etc have much less a factor on the more educated/affluent, that can also afford better health care, so the average lifespan increases, despite the less healthy over processed foods most eat, more sedentary TV watching lifestyle and greater general obesity in the US. I agree, we will likely see average lifespans drop when our children get older, but more individuals will hit record old age. The information is there, more than ever before. It's just ignored more, too.
Lucky is the man that can retire at 50 and live the lfe he wants! But most people would have to live a life they don't want to do that, or its not a choice at all. Never ever seen any "conventional wisdom " that stated the above. In fact, "conventional wisdom " normally is to find a vocation you enjoy and is fulfilling so work is not a chore at all, but a source of mental and/or physical exercise and social interaction, that also pays well and assures you a rich retirement on your terms.
I don't know, to each his own. I'm one of the many who would never have been able to retire at age 50, even if I had wanted to do so. At that age I figured I had 16 more years to go for full retirement. I'd have thought that was more the norm among working folks, although from reading this forum it seems that many retire relatively early- or those are the folks we hear from, maybe.
Actually, at age 50 I was downsized from the job I had at the time, and was lucky enough ( and skilled enough, there is that) to find another full time job at which I remained for the next 14 years, and retired from that job at age 64. I might have worked for another couple years at that job, but had a number of family and job-related reasons for retiring when I did. I started collecting SS at age 65, after I figured the break-even point with taking it a year before I was fully eligible didn't make that much difference, or so it seemed.
The way it looks, maybe it's more like lucky is the man who can retire, whatever his age?
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