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Old 06-01-2014, 09:45 PM
 
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Social Security: Why Taking Benefits at 62 Is Smarter Than You Think

I also add that if you don't spend all your SS, you could invest it and extend the points A and B further to the right... I never understood why the media seems so aggressive in convincing people to take SS so late... Maybe they are trying to save a system by helping you to die off early and not collect a dime....
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Old 06-01-2014, 10:30 PM
 
10,824 posts, read 8,084,160 times
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Quote:
Originally Posted by evilnewbie View Post
I also add that if you don't spend all your SS, you could invest it and extend the points A and B further to the right...
I'm adding 8% a year to my SS 'annuity' by waiting until 70 to file. If I could find an investment that guaranteed that rate of return, I'd consider filing now.

Since I don't currently need the income and have no family history or current health problems to make me think I'll expire prematurely, I'm better off waiting. I don't worry much about the future but I have a healthy respect for the ravages of inflation and hope the 32% increase from delaying SS will offset it somewhat.

Everyone's needs and wants are different. I've never known anyone to start taking SS early and invest the income. Not saying it's a bad idea, just saying it doesn't happen. If any posters here are doing so, more power to you.
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Old 06-01-2014, 11:05 PM
 
Location: Los Angeles area
14,018 posts, read 17,769,401 times
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Quote:
Originally Posted by evilnewbie View Post
Social Security: Why Taking Benefits at 62 Is Smarter Than You Think
... I never understood why the media seems so aggressive in convincing people to take SS so late... Maybe they are trying to save a system by helping you to die off early and not collect a dime....
All the arguments about advantages and disadvantages of taking SS benefits at various ages notwithstanding, I think you're wrong about there being a conspiracy to encourage people to collect later so that more will die before the collection start point.

It is a wash for SS. People die at all ages. Some people die at 61 and 11 months and don't collect a dime either. In terms of the total amount of money an individual can collect over a long lifetime, that would be maximized by filing at 70 and living to 100 or beyond. But some people may file at 70 and only live a year or two.

Arguments for delaying SS generally revolve around not being destitute in extreme old age. I filed at 62. If I live to 78 or 79 or beyond, SS "wins". If I die at 76 or 77, I "win". It's sort of a crap shoot in the sense that none of us knows for sure how long we will live. And I don't really care about personally maximizing my lifetime return from SS anyway.
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Old 06-01-2014, 11:11 PM
 
10,824 posts, read 8,084,160 times
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Originally Posted by Escort Rider View Post
Arguments for delaying SS generally revolve around not being destitute in extreme old age. I filed at 62. If I live to 78 or 79 or beyond, SS "wins". If I die at 76 or 77, I "win". It's sort of a crap shoot in the sense that none of us knows for sure how long we will live.
Also, if one starts collecting at 62 but invests the income, as suggested by the OP, and then dies at say, 76, without cashing in the investment, does s/he "win"?
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Old 06-01-2014, 11:31 PM
 
Location: Los Angeles area
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Originally Posted by biscuitmom View Post
Also, if one starts collecting at 62 but invests the income, as suggested by the OP, and then dies at say, 76, without cashing in the investment, does s/he "win"?
Good illustration of the difficulty of sorting through all the mental gymnastics which surround all these discussions. I would say if the goal was to leave something to heirs, whether individuals or charities, then that person "won". If not, then no.
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Old 06-02-2014, 12:16 AM
 
Location: VT; previously MD & NJ
2,230 posts, read 1,362,793 times
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Quote:
Originally Posted by evilnewbie View Post
Social Security: Why Taking Benefits at 62 Is Smarter Than You Think

I also add that if you don't spend all your SS, you could invest it and extend the points A and B further to the right... I never understood why the media seems so aggressive in convincing people to take SS so late... Maybe they are trying to save a system by helping you to die off early and not collect a dime....
Media looks at dollars only. They ignore the person's lifespan. Or health. Or other savings/investments.
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Old 06-02-2014, 01:54 AM
 
71,946 posts, read 71,997,171 times
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Quote:
Originally Posted by evilnewbie View Post
Social Security: Why Taking Benefits at 62 Is Smarter Than You Think

I also add that if you don't spend all your SS, you could invest it and extend the points A and B further to the right... I never understood why the media seems so aggressive in convincing people to take SS so late... Maybe they are trying to save a system by helping you to die off early and not collect a dime....
most folks are awful investors left to their own devices as well as grow far to conservatiuve as they reach retirement age to do much good investing the early ss money.

it would never make sense either from an investment standpoint to take a virtually risk free investment like ss and trade it for almost the same return in a high risk investment.

there are also spousal benefit ploys you can use by delaying like restricted application or file and suspend that can add more income to the mix then you can investing.

there are huge ramifications on survivor benefits by filing early,.

deciding when to take ss should never be based on what if i die?

the real question should be what if i live.

dead is dead , game over in case you didn't get the memo.

planning for living is what life is really about.

Last edited by mathjak107; 06-02-2014 at 03:14 AM..
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Old 06-02-2014, 02:59 AM
 
71,946 posts, read 71,997,171 times
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my opinion is i would change the heading to A POOR SS ANALYSIS.

not differentiating between a married couple and single is a big flaw in the article.

the article fails to answer the most important question.

WHAT IF I OR MY SPOUSE LIVE? dying is never an issue,DEAD IS DEAD .


there is also flawed data in that article:
--------------------------------------------------------------------------------------------------------------------------------------------------------
quote:

"But here's the thing that's important, if not a bit morbid, to keep in mind: According to the latest data, the average lifespan of an American is 79.8 years old. And for men, it's only 77.4 years compared to 82.2 years for women. Thus, based on age alone, and particularly for males, it's probably not as smart as you might at first think to hold out for larger Social Security checks."

-----------------------------------------------------------------------------------------------------------------------------------------------------------

while 77.4 for men may be the average life expectancy from birth it is not the average life expecancy once you live until at least 65 when those ages change drastically..

for a man it is 82 ,for a woman it is 84 and for a couple it is 86.

FOR A COUPLE WE ARE TALKING ALMOST A 10 YEAR DIFFERENCE .


THAT IS ONLY THE MID-POINT TOO! THAT IS WHERE 1/2 WILL GO ON TO EVEN OLDER AGES.

there are also some benefits they missed in the article to waiting.

one is you need less savings or you can spend more money up front in the early years from savings then you typically could by taking ss early.

yep , spend more early on while you are still healthy and younger.

YOU CAN TAKE A HIGHER SAFE WITHDRAWAL RATE BY WAITING.

why?

because you can really spend down savings more early on since you will refill whatever you excessively spent down once ss kicks in with a check almost 2x the amount of 62 once colas are figured.

your dependancy on savings will drop drastically at 70 if you wait. you can invest far more aggressively if you want since you are less dependant on withdrawing that money from savings later on.

you get to refill right around the time spending has been shown to naturally taper down.

while one of you may die ,if a couple odds are the other one will go on quite a while longer. you have two horses in the same race with just one bet.

if you think of ss as longevity insurance you may want to plan around only 25 years worth of savings instead of the traditional 30 plus years like you would if you had taken ss early.

taking ss early can leave a younger wife in a real bind as her survivor benefits can be slashed by 48% if the husband filed at 62 , died and she has to file at age 60.

spousal benefit manipulations can add as much as 100k to the amount of income one can add .

there is sooooo much more involved and it is a far more complex choice then most folks imagine but they look at nothing more than the wrong question which is what if i die.


the bigger issue of waiting is taxes. the higher income when combined with required minimum distributions can trigger all kinds of nasty tax events.

getting ss taxed, medicare surcharges and amt tax penaltys all can come in to play.

many folks will run their savings down way to far trying to sustain life until later if they defer ss so they shouldn't wait.

like i said this stuff gets awfully complex..

but the real question to ask yourself is not what if you or your spouse die , ask yourself what if one of you lives?

Last edited by mathjak107; 06-02-2014 at 03:45 AM..
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Old 06-02-2014, 03:36 AM
 
71,946 posts, read 71,997,171 times
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Quote:
Originally Posted by ansible90 View Post
Media looks at dollars only. They ignore the person's lifespan. Or health. Or other savings/investments.
they ignore all the factors i mentioned above as well.
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Old 06-02-2014, 03:38 AM
 
71,946 posts, read 71,997,171 times
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Quote:
Originally Posted by biscuitmom View Post
Also, if one starts collecting at 62 but invests the income, as suggested by the OP, and then dies at say, 76, without cashing in the investment, does s/he "win"?
actually yes they do win if they die as an investor. . ss is insurance not an investment. the ss is gone as far as heirs go. . the investment money is still there for heirs to utilize .

Last edited by mathjak107; 06-02-2014 at 03:48 AM..
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