Collect Social Security at 62 or 66? (ignorant, insurance, cost, return)

[ipoetry]

Originally Posted by TuborgP

Moderator cut: quote removed
I think you miss what I am talking about when I say means testing. It for some can be critical to when you take SS at 62 or 70. At 70 you will get a higher amount on paper which along with other income will you a higher income compared to age 62. However that higher income could put you over the means testing threshold and result in a reduced SS payment thus throwing off your original calculations about when it would be best to take it. Also you will at age 70 1/2 have mandatory 401/403 draw downs which will add to your potential over means tested income. Much to consider for many of us. I never mentioned anything about SS being alive and well etc but only how the current context of evaluating could change and it would be to late to go back and change it.

I'm 62 and I'm waiting to collect. There is currently no means testing in place, only yabbering by political hopefuls. If there was to be any changes in the SS system, it would become known months, maybe a year in advance. Plenty of time to jump in and apply for benefits. I wouldn't let the what-ifs influence your plans.

[TuborgP]

Originally Posted by ipoetry

I'm 62 and I'm waiting to collect. There is currently no means testing in place, only yabbering by political hopefuls. If there was to be any changes in the SS system, it would become known months, maybe a year in advance. Plenty of time to jump in and apply for benefits. I wouldn't let the what-ifs influence your plans.

You are missing the point, your benefits go up each year and by the time you are 70 you are maxed out and unless you want to give money back your planning is changed. It is not a matter of political yapping but of defiict reality beyond the politics. Yes we don't know how it will play out but some of us, obviously not all still like the Boy Scout motto of BE PREPARED in this case it is managing SS benefits. In other forums other topics. Not again I am 64 and within two years of the 66 decision point and 6 within the planned for 70 action point. In the world of retirement planning not a long time. While not specific to this thread it also impacts managing other assets.

[akck]

I decided to run my numbers through the 62 vs. 66 options. For me, taking SS at 62 means I'll be able to save 4 years of withdrawal from an IRA which can continue to be invested. When I combine my investment earnings with my SS at age 62, I find I can go 30 years before it hits the break-even point at a 4.6% return. Also, when all is said and done, I'll still have a sizable investment at the end to pass on.

[oddstray]

Originally Posted by highcotton

It truly is absolutely amazing to me how most people can go through their lives and not save any significant amount of money for their retirement. 99.999% have some excuse (99.998% are lame excuses) why they don't have any savings. I expect to live off dividends and interest alone from dedicated retirement savings for over 15 years (from my retirement age at mid 50s until age 70 when I expect to start taking SS benefits) and never touch the principal amount. Did I plan for the future and retirement? You bet your ass I did! Will my SS benefit ever be needed? No, but I will start taking it...at age 70.

You were fortunate enough to earn enough to have considerable investments and savings. So am I. This is not true for many people, so cut 'em some slack!

[nicet4]

Originally Posted by Asheville Native

I waited until 66 (retired at 55) because I calculated the break even point at 75, but more so for the benefits my wife would received if she survives me based on my earnings, vs hers. She is 4 years younger than I am, plus her earnings record is less for the simple reason she was a stay at home mother.

Now at 62, she is collecting, but based on my earnings as 50% of mine exceeds what hers would be. If she survives me (being younger and female a possibility) she will receive my full (age 66) amount. My waiting to 66 really provides more for her if she survives me.

That is exactly why I will not collect before full retirement. It isn't just about me.

[HappyTexan]

And for each it's different. There is no right or wrong answer. There is no wrong or right time to apply for SS.

[vermonter16]

Just was browsing the news and found this article.

Retire without quitting your job - 1 - retirement planning - MSN Money

[highcotton]

http://finance.yahoo.com/news/how-to-outsmart-social-security.html

[nicet4]

Originally Posted by highcotton

http://finance.yahoo.com/news/how-to-outsmart-social-security.html

Excellent article!

Shoven and Slavov based their study on Americans who turn 62 this year. Women in this group are expected to live to age 85.5 and men, 83.0.

Let's assume I will receive $2,000/mo at my full retirement age of 66.



If I had started to collect at 62 I could expect $1,500*12*21=$378,000.

At 66 I could expect $2,000*12*17=$408,000.

At age 70 I could expect $2,640*12*13=$411,840.

But I am 64, I enjoy working and the way I feel now I know I won't have any problem working for another 1 year and 9 months.

My wife is 1 year 4 months younger than I am and as I said a few posts back my big goal is to leave her with the maximum she can get if I were to die first. To me that is the only thing that matters.

The way I understand it she is entitled to 50% of my full retirement benefit if she holds off until she is 66 at which time I will be 67 and 4 months. Is that correct?

Please bear with me.

Assume I retire at 67 and 4 months I will have a benefit of $2,186 and she will receive $1,000 if she starts to collect when she is 66. Am I right so far?

Now what happens if we both started to draw benefits when I was 67 4 mo and she was 66 and I died a couple years later. She would lose her benefit and pick mine up but would she receive $2,186 or would it drop back to $2,000 since she started collecting at 66?

If she receives the higher benefit then I will work, or at least try to, until I am 70.

If she would drop back to $2,000 then the best thing for me would be to start collecting at 66 while continuing to work to 70 banking all my benefits which would reach $96,000 not counting any interest.

Over a 15 year period she could draw $533/mo supplementing her $2,000 benefit.

What happens to her spousal benefit if she wait to retire at say 67? Is it still 50% of what I would have received at 66 or is it 50% of what I would have been entitled to at at 67?

[texdav]

Tose assuntio chart make no mentio of your use of teh moeny at 62. Some can actaully make some at elast on a protion. Its like why I could retire at 52 while others can't. For me those ten eyars ebfore SS were great years I wouldn't seell for quite abite additonal income.Everybodies situation is different.