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then it really doesn't matter if there is no tomorrow then does it.not taking it early is a decision you will never regret then.
I'm with you on waiting if you can, BUT, your observation here leaves out those who have "just enough" funds but would like to leave a little cash for their children.
these discussions are for people with choices and the ramifications of those choices.
no one is leaving out anyone except those with no choices.
not having the money to lay out while waiting or having to file early is no choice.
typically couples even those with just enough can have more money for heirs waiting as the life expectancy for at least one is well in to the 80's but the gamble is they may be the couple that is untypical and both die early.
one question no one can answer is how long will i live.
if you want the definitive answer as to leaving the most for heirs ,waiting to take ss coupled with buying laddered immediate annuities coupled with you or a spouse living well into your eighties will win every time.
but without knowing when you or your spouse will die no one with the choice is exluded or included since no one knows.
life is always about trade offs. the trade off for many is if they file early they typically need to keep more cash for spending in bonds or cash instruments than those who file later once those who file later start collecting.
i cut my dependancy on my portfolio wthdrawals at 70 by waiting . at the same time i am able to invest that money in to the equity side speeding the refilling process up possibly by years.
i will drop from needing about 80k a year from my portfolio if i take ss at 62 to needing only 60k a year from savings by waiting until 70. that 20k a year can be left to grow in my equities bucket without needing to be converted to cash through the years.
in fact i can up that amount comitted since i am not as dependant on my portfolio at that point and having more secure guaranteed income means i don't need to keep as much powder dry for bad markets and sequencing .
it takes a lot more money held in reserve to guarantee an unbroken income stream since you need to insure against the worst of times causing that stream to fail..
it is all about how long will you or a spouse live rather than selecting one method over another as to which will yield more for heirs. but if you go by statistics a couple waiting until 70 will have more for heirs even spending down for 8 years from savings..
Last edited by mathjak107; 04-06-2014 at 03:47 AM..
these discussions are for people with choices and the ramifications of those choices.
no one is leaving out anyone except those with no choices.
not having the money to lay out while waiting or having to file early is no choice.
typically couples even those with just enough can have more money for heirs waiting as the life expectancy for at least one is well in to the 80's but the gamble is they may be the couple that is untypical and both die early.
one question no one can answer is how long will i live.
if you want the definitive answer as to leaving the most for heirs ,waiting to take ss coupled with buying laddered immediate annuities coupled with you or a spouse living well into your eighties will win every time.
but without knowing when you or your spouse will die no one with the choice is excluded or included since no one knows.
life is always about trade offs. the trade off for many is if they file early they typically need to keep more cash for spending in bonds or cash instruments than those who file later once those who file later start collecting.
i cut my dependency on my portfolio withdrawals at 70 by waiting . at the same time i am able to invest that money in to the equity side speeding the refilling process up possibly by years.
i will drop from needing about 80k a year from my portfolio if i take ss at 62 to needing only 60k a year from savings by waiting until 70. that 20k a year can be left to grow in my equities bucket without needing to be converted to cash through the years.
in fact i can up that amount committed since i am not as dependant on my portfolio at that point and having more secure guaranteed income means i don't need to keep as much powder dry for bad markets and sequencing .
it takes a lot more money held in reserve to guarantee an unbroken income stream since you need to insure against the worst of times causing that stream to fail..
it is all about how long will you or a spouse live rather than selecting one method over another as to which will yield more for heirs. but if you go by statistics a couple waiting until 70 will have more for heirs even spending down for 8 years from savings..
Aargghh. Try examining this from the perspective of a single person with children with an average Social Security benefit and sufficient funds to provide basic living expenses for an average life expectancy. Her goal is to leave a small inheritance to her children. This individual clearly has a choice.
She needs to decide, given her goal, whether she should begin living off of her retirement funds and delay claiming her Social Security benefits. She needs to consider that the withdrawal of the funds are fully taxable whereas the Social Security benefit is not. She needs to consider whether she should begin accelerating the depletion of her nest egg and hope that she will live the "average" life expectancy in order to recapture the lost funds through the delayed credits. She should also consider that their are proposals to change the formula used to calculate Social Security benefits that would effectively boost the monthly benefit to low wage earners while reducing the benefit to average - high wage earners. Most importantly, she needs to consider whether delaying her benefit will adversely impact other areas of concern such as Medicare premiums, Medical Assistance for Long Term Care, property taxes, etc.
I'm not saying the average retiree should choose to accept earlier benefits, but there are many factors that should be considered and one should not assume that it is always in the retirees' best interest to delay claiming their benefit.
The chart only shows the effect of working longer to a limited degree. What it doesn't show is the extra $$ you'll have if you work longer and hold off SS. In my case the difference is like $500 a month if I just wait 4 years, till 66 to retire. That's $6000 a year. That's not a small piece of change.
The chart only shows the effect of working longer to a limited degree. What it doesn't show is the extra $$ you'll have if you work longer and hold off SS. In my case the difference is like $500 a month if I just wait 4 years, till 66 to retire. That's $6000 a year. That's not a small piece of change.
Then the question becomes is an additional $6k/yr worth giving up four years of your retirement life? What's it worth to have to go four more years getting up at a certain time every weekday morning, commuting a certain distance every day, having duties and responsibilities that must be performed every day, and not being able to travel more than a specified period of time because you need to return to your job by such-and-such date (among other limitations)? There is no right or wrong answer; it comes down to individual choice. (And of course, what other financial resources one has.)
Coincidentally, I had this exact choice when I was deciding whether to take early retirement at 54. The only difference was that I would have had to work just one more year, not four, in order to increase my pension by $6k/yr. For me, it was an easy decision.
The chart only shows the effect of working longer to a limited degree. What it doesn't show is the extra $$ you'll have if you work longer and hold off SS. In my case the difference is like $500 a month if I just wait 4 years, till 66 to retire. That's $6000 a year. That's not a small piece of change.
for many the thought of working longer isn't even in the equation. for those with choices it isn't a matter of when to retire as much as when to collect. i intend to retire at 63 but collect at 66 or 70... i will lay it out from savings and replace what i spent later on with the bigger payments.
you have to pay it either way. however while an early filer is protected under the hold harmless rules a person delaying is not.
so if medicare increases are actually more than the ss increase an early filer only pays up to the ss increase. the delayed person gets hit with the entire increase out of pocket.
so far it really has not been anything to worry about one way or another.
After reading the chart on post number 1, it makes the decision easy. Collecting at 62 is the only answer. According to the chart the break even doesn't happen till age 80. (this is the same numbers I came up with when I made my own spread sheet).Since no male in my family has lived past 78 it would be a safe bet to start at 62.
Starting at 62 allows me to cook my savings for another 5 years. The interest alone will be as much as my benefit. My wife started at 62 with a $12,500 SSI and mine will be $14,000 next year. (wear the $7500 on the chart came from is a mystery).
Since I have been retired fully for 5 years now, I have come to understand expenses better as a retired person. I spend much less now then I did the first year of retirement. If this continues (and I expect it will except for medical expenses) then maintaining the same income will work out just fine.
then it really doesn't matter if there is no tomorrow then does it.not taking it early is a decision you will never regret then.
You didn't think about what I said, that's fine. I won't try to explain it again.
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