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I hope that when I am 70, 75, 80 I am still able to work. I have no plans to retire. Still, we plan for retirement becuase it is the smart thing to do. A question that I would have is, are we required to sign up for Social Security at age 70 or is it 71 and a half? I know that I will need to start taking disbursements from my 403B when I hit those numbers. Lets say that I am working though and do not want to sign up for Social Security. Do I have to anyway? Can you delay it till you are 80?
Your benefit increases for each month that you delay, up to age 70. You are not required to sign up at 70, but your benefit does not increase further if you do wait past 70. If you wait til 80 (for example) to claim, I think that you also lose the money you would have received between 70 and 80, but there may (or not) be some provision for recovering this -- I am not sure about filing retroactively once you're past 70.
Short answer -- there is no benefit to waiting past 70 even if you keep working (edit -- see my next post, below, for an exception to this), and there may be a significant loss.
Last edited by Hamish Forbes; 04-02-2014 at 01:39 PM..
My thoughts were toward having a greater benefit if I can continue to keep working. Also I am under the impresion that if you take it while you are working that your employment can reduce your benefit. Is that the case?
The benefit offered is way less than I would need to maintain my lifestyle. When I am 70 our home would have been paid off for some time. Cost of living would be much less than it is now I would think. Still, lets say that I am still working at that time, is there a benefit to not getting it?
The penalty for taking SS while still working applies only if you claim SS before your so-called "Full Retirement Age." I don't know how old you are now, but my guess is that your FRA is 66 or 67. If you claim SS after FRA and keep working, there is no penalty.
Usually, there is no increased benefit for delaying your claim past age 70, whether you work or not. One exception would be if your new earnings at (for example) age 75 exceeded the lowest earnings in your highest 35 year earning history. For example, if you have only 28 years of good earnings on your record, working past age 70 in a high-paying job might increase your benefit. This is not because benefits increase by delaying claims past 70; rather, it is because you are increasing your "best 35 years" earnings base.
More about this on the social security website, which is really pretty good . . .
My thoughts were toward having a greater benefit if I can continue to keep working. Also I am under the impresion that if you take it while you are working that your employment can reduce your benefit. Is that the case?
The benefit offered is way less than I would need to maintain my lifestyle. When I am 70 our home would have been paid off for some time. Cost of living would be much less than it is now I would think. Still, lets say that I am still working at that time, is there a benefit to not getting it?
"Each year we review the records for all Social Security recipients who work. If your latest year of earnings turns out to be one of your highest years, we refigure your benefit and pay you any increase due. This is an automatic process and benefits are paid in December of the following year. For example, in December 2014, you should get an increase for your 2013 earnings if those earnings raised your benefit. The increase would be retroactive to January 2014."
In this way, working past 70 can -- depending on your earnings history -- increase your benefit.
"Each year we review the records for all Social Security recipients who work. If your latest year of earnings turns out to be one of your highest years, we refigure your benefit and pay you any increase due. This is an automatic process and benefits are paid in December of the following year. For example, in December 2014, you should get an increase for your 2013 earnings if those earnings raised your benefit. The increase would be retroactive to January 2014."
In this way, working past 70 can -- depending on your earnings history -- increase your benefit.
Your last sentence is correct.
However, one must remember that wages earned earlier in life are adjusted and many times are higher than earnings earned after age 70
whle the chart does not figure investing the early ss money , pfau did run numbers with the closest guaranteed inflation adjusted alternatives and found TIPS to be about the closest investment. pfau says "TIPS is the most comparable investment to consider here, and as I check today, 5-year TIPS offer a real yield of 0.03%, 10-year TIPS are 0.6%, and even 30-year TIPS are only 1.29%."
anything else would not be guaranteed and have risk of loss or be prone to being crushed eventually by inflation.
So what is being said is - that if someone took that early SS $60K (8 x $7500) and invested it in say Fidelity or Vanguard ... it's a bad idea?
TIPS in mutual funds have risks that holding individual TIPS don't.
After a decade of making good money in TIPS I did lose money last year. (mutual funds). I want to share this so people don't blindly buy TIPS. The money I made was far more than I lost but it is not risk free money. I dumped them in August and have done much better with a balanced fund and some equity funds. I know there is still risk but in the long run it should work out better.
We plan on collecting social security at age 62. My husband's Dad died at age 60 and my husband has many health problems. In his case it makes no sense to wait. I have a pension so the social security will be fun money so I will collect at age 62 also. Or I will use it to pay for health insurance, that is really where all the "fun" money is going, not so fun. Every situation is different, there is not a one size fits all.
Appreciate the link and article, knowledge is power even if you make a different decision.
So what is being said is - that if someone took that early SS $60K (8 x $7500) and invested it in say Fidelity or Vanguard ... it's a bad idea?
no that is not what is said at all.
what is said is despite what some think odds are social security is pretty much a riskless bet.
the only thing you can really match to it as a comparable investment which is near zero risk and has inflation adjustments are TIPS.
THEY GENERATE ABOUT 1/2 OF WHAT THE INCREASES IN SS GIVE YOU.
the sad truth is most folks ,especially retirees are to gun shy and don't have the pucker factor to be good equity investors.
usually the ones who do you run in to on the financial forums but for the most part they are the exceptions and the masses are quite poor at it so you need to think in terms of apples to apples in risk and volatility.
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