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Old 09-05-2011, 10:44 AM
GLS GLS started this thread
 
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While much has been written about the pros and cons of taking social security (SS) payments early, i.e. before "full retirement age", I see little discussion about any rationale for delaying payments until 67, 68, or later.

Is anyone out there doing this? What are the advantages of accepting 8&3/4%(?) interest increase for future payments vs missing 12 or 24 months of payments after a full retirement age of 66? Is it a worthwhile tradeoff for tax avoidance if you are still working bringing in $50,000/yr after age 66?

 
Old 09-05-2011, 11:36 AM
 
Location: Los Angeles area
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I don't think there is any definitive answer to that question, because it is a roll of the dice, essentially. The older we are when we apply for Social Security retirement benefits, the greater the chance we will die soon thereafter and thus not collect very much (or die before applying and not collect anything). But if we are in good health and have longevity genes in our family, then we may decide to take a chance on living long enough to get past the break-even point and collect more money in the long run.

Your own point about taxation issues is an excellent one. If, after age 66, we continue to earn enough money to pay federal taxes on 85% of our Social Security (85% being the maximum taxable amount, as you probably know), then that is an argument for waiting until a later age to apply for SS (up to age 70, after which there is no further increase in the monthly benefit). You ask if that stategy is "worthwhile". Wouldn't that depend on each person's individual numbers? That is, the larger your particular SS benefit is, the greater the tax will be on 85% of it. Conversely, the more earned income you have over the trigger amount (I'll take your word that it's $50,000 a year), then the higher your tax bracket will be and the bigger the bite.
 
Old 09-05-2011, 05:57 PM
 
Location: Florida -
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Seems to me that the breakeven point for early retrement SS (age 62) was about 12-years (vs full retirement at 65). Since the new full retirement age is 66-67, I'm guessing the BEP is now about 15 years (not difficult to calculate).

I retired 3-years ago at 61/62SS and took the reduced early SS option. We've not had any noticeable financial difficulties because of that decision (other pension and SS). Further, when reflecting back on the past 3-years and considering that I could still be working another 2-3 years before being eligible for full SS, there is no doubt in my mind that it was the right decision.

We've taken several cruises and trips, been active in a number of ministries, played a lot of golf and have now moved to be closer to kids and grandkids. My wife's macular degeneration is getting worse now, but, we've done a lot of retirement things that we may not be able to do in another 2-3 years.

Last edited by jghorton; 09-05-2011 at 06:17 PM..
 
Old 09-05-2011, 06:57 PM
 
Location: High Cotton
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If you don't plan on dying until age 78 or after, wait until age 70 to take Social Security...if you don't absolutely have to have the money.

The annual increase between age 66 (full retirement age for most) and age 70 is simply too great to pass up from a financial/investment standpoint. That said, if you are one of those people that don't understand good finances and investing practices, or simply want 'it' NOW because money burns a hole in your pocket, then no amount of discussion will talk you into waiting...and receiving 32% less at age 66 versus waiting just 4 years until age 70 and receiving 32% more. It doesn't take a financial wizard to realize it's best to wait and let it grow at 8% per year...unless you [absolutely] need the money or plan on dying before breaking-even at age 78.
 
Old 09-05-2011, 07:58 PM
 
Location: Bar Harbor, ME
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I retired June 10. My wife does the accounts and figures tht most of the time we can save 2/3 of the SS payment i get every 4th wednesday. On the basis of that we will have a bundle, especially when she starts saving hers too in 2 years. By the time I reach 70, I will have ammased so much that I'd need to live pretty long to break even. And.... we will have a bundle of cash that could pay allow us to buy anything we want.
 
Old 09-05-2011, 08:21 PM
 
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Its bascially different for eveyrone and depends on when you wan to retire;now much other you bring in;what you want to do when and of course how SS might change.
 
Old 09-05-2011, 08:26 PM
 
Location: Los Angeles area
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There is another factor that I forgot about in my earlier post. Some people do not have any confidence that Social Security will be there for them a few years down the road, so they prefer to get as much as they can from it as soon as they can before it implodes. Personally, I do not share those doubts and I am convinced that Social Security will indeed be there for us for the foreseeable future. But different folks have different things on their minds.
 
Old 09-05-2011, 08:42 PM
 
Location: High Cotton
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Quote:
Originally Posted by Escort Rider View Post
There is another factor that I forgot about in my earlier post. Some people do not have any confidence that Social Security will be there for them a few years down the road, so they prefer to get as much as they can from it as soon as they can before it implodes. Personally, I do not share those doubts and I am convinced that Social Security will indeed be there for us for the foreseeable future. But different folks have different things on their minds.
That's nothing but an ignorant excuse they use to take Social Security early. There is no way any changes will be made that affect people 55 years old or older. And if by chance there is a change for those people (close to retirement age or older) it would only be based on retiree's assets, which is something that is an unknown by the government. Any changes that may come about will only take place after a long and drawn out debate in Congress and the change wouldn't be put into effect until a much later date. Again, the people (aged 62 or older) saying that they do not have any confidence that Social Security will be there for them down the road are simply using that as an ignorant excuse.
 
Old 09-05-2011, 09:03 PM
 
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Boy, someone has his knickers in a twist about this one. Geez...
 
Old 09-05-2011, 09:14 PM
 
Location: High Cotton
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Quote:
Originally Posted by brava4 View Post
Boy, someone has his knickers in a twist about this one. Geez...
I guess you're talking about that someone being me. Ignorance is one thing - reality and facts is another. Which is your pick?
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