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No I think and read in some people's opinions/ analyst writings that they leave out the use of the money accumulated from 62 till FRA or 70. In all honesty I'm just a simple working man that figured out awhile ago that for me there is way more to life than worrying , over calculating and fretting over getting the vey last dime you can. If I would have worked two more years ( I'm in my mid fifties ) I could have maxed out my final average salary at work and had a larger pension but I figured I had enough of a pension and wanted to enjoy life rather than work a few more years transporting State prison inmates all over The state .
For simplification say at 62 I can draw 1500 for 58 months until FRA at 66 and 10 months . That means if I don't spend any I have 87,000 ( minus taxes, plus gains) .
Instead I wait to 66 /10 month and collect 2000 a month . So I have given up the 87,000 and withdrawn 87,000 from my accounts to make up for not taking SS at 62 . So I'm now down 174,000 if I figure correct ? I then collect at FRA a monthly 2,000 instead of 1500 . I have to live another 31.3 years to break even ... Don't think I will win that bet .
That is what I meant when I wrote about drawing down assets instead of taking early ...if I'm looking at it incorrectly someone please point it out to me ...
are you sure about your numbers? I get 1650 at 62 and almost 25k plus colas at 66.
1500 and 2k seem low, especially with colas .
in fact I get almost double at 70 what I would get at 62.
We took ours early because we don't trust the
gov'mint.
I really think ss will be reduced for a number
of retirees regardless of when you take it.
Keeping my taxables in their accounts IRA etc.
NO , we are okay. we were just seeing if his break even point he was figuring was correct.
the biggest issue with taking it early is if you are married. the survivor benefits may be cut well below what the surviving spouse needs.
many take it early because they need the money and can't wait. but if that's the case the devastation a surviving spouse can see in their survivor benefits can be very painful.
I'm really trying to learn here about the benefit of drawing my savings and waiting to FRA of 66/10 months . Given the numbers I have it seems I'm giving up 87,000 and using 87,000 waiting to 66/10 months for FRA to draw full SS ? Is it not going to take me a long time to just break even ? And if I do wait and pass away before I reach 66 and 10 months, my spouse and or kids are short 174,000 ? maybe I'm looking at it incorrectly ?
what you have is a view of it that is basically old school, that is when will i break even..
today the view is we want to draw as much as we can while we are healthy and mobile and do and spend as much as we can for all the things we want to do through retirement. but we also want the greatest odds on our side of not running out of money before we run out of time.
if i wait i can spend alot more money from savings at a higher withdrawal rate while i wait to collect at 66 or 70 than i could draw taking the money at 62 and doing my own investments. ..
why?
the reason is because of the fact the money coming in from my own investments is not safe,secure or consistant and will be subject to the whims of interest rates and markets.
because of that all the rules of the game that apply to finding a safe withdrawal rate apply. you have to leave enough slack in what you draw to allow for bad markets , bad sequences and extended down turns.
that means i may only get to spend 3 or 4% of the money i grow on my own.
because the ss is guaranteed as long as my myself or my spouse are alive i don't have to keep as much poweder dry for the lean market years.
i get to spend more early on and right through retirement and my success rate will not fall like it would if i tried to pull as much on my own from my investments.
you can see this better in a calculator like firecalc. the odds of running out of money before you run out of time diminish alot with the guaranteed ss vs your own brew.
it is like portfolio success rates go up alot when annuities are added into the mix and the higher ss acts like an annuity .
if you picture the markets as a wave of peaks and valleys the more you are able to fill in the valleys with safe ,secure consistant income the shallower the valleys become.
you do not need as much in gains to come back and you don't have to worry about extended down turns a few years in a row as much. the higher that income level filling in those valleys the greater your chances of not over spending down in those drops.
if you feel you don't need that much anyway than take it at 62 since you are not interested in the biggest bang for the buck, nothing wrong with that .
Last edited by mathjak107; 10-22-2013 at 04:13 PM..
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