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Old 09-13-2015, 04:15 PM
 
Location: Retired
648 posts, read 499,136 times
Reputation: 1057

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I wrote an email to Social Security. They tell me the "estimator" is correct. The weird benefit distribution as a function of age, is due to the way "delayed retirement credits" are calculated. This leads me to conclude, it is better to collect social security at age 66, than age 67 (the worst) or 68 or 69. Based on a birthday in early November.

Part of the response:

From: SSA.Comments@SSA.gov [mailto:SSA.Comments@SSA.gov]
Sent: Friday, September 11, 2015 10:35 PM
To: Hawkins, Matthew SIK
Subject: [External] mhawkins\Response\6345186\Evans, C. WBDOC 10543\

Thank you for contacting the Social Security Administration.

The behavior you observe in the calculator is how delayed retirement credits are actually applied in real cases under current law.

A delayed retirement month is not credited until the following January. For example, if you reach full retirement age in February 2012, and you start benefits in February 2013, you have earned eleven delayed retirement credit months, ten of which are in 2012 and one of which is in 2013.

The ten credits you earn in 2012 are applied to your initial benefit and the one credit you earn in 2013 will be applied to your benefit starting in January 2014.
The Online Calculator produces an estimate similar to the estimate provided on your Social Security Statement. Assuming you correctly entered all the information required, the estimate generated is reasonably accurate.
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Old 09-13-2015, 06:46 PM
 
10,824 posts, read 8,081,485 times
Reputation: 17034
Quote:
Originally Posted by Graywhiskers View Post

The benefit increases at a 7.3% annual rate from 63.5 to 70 years old, not 8%. Note, there is only a 1.3% increase in the benefit going from age 66 to age 67!

There is a 12.5% benefit increase going from age 69 to age 70. So either the social security calculator has errors, or the 8% yearly increase is an inaccurate representation of the real situation. There seems to be a poor return in working past age 66, unless one goes all the way to 70.
Yes, mine was erratic as well, it's been awhile since I ran the numbers but I kept the figures and mine went like this:

3.7% increase between 66(FRA) and 67
7.2% increase between 67 and 68
7.8% increase between 68 & 69
11.2% increase between 69 and 70

34.2% increase between 66 and 70.

I'll be 67 next month and retired 4 years but am delaying SS until 70 because that works best for DH & me. We have healthy corporate pensions so don't need the income now and we're converting IRAs to Roth in the meantime so don't need the extra taxes.
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Old 09-14-2015, 11:25 AM
 
Location: Grove City, Ohio
10,142 posts, read 12,407,945 times
Reputation: 13992
Quote:
Originally Posted by ilovemycat View Post
The reason you are not getting the 8% per year delayed retirement credit is because you started at age 63.5. You only are due delayed retirement credits by "delaying your retirement"! Past your FRA date!

So, if you go back and first start with your FRA and then put in age 70, you will see the 8% increases. But, not if you begin to collect at FRA.

I would assume the increases you are seeing are COLA's. Try this link: You can separately put in different retirement dates and use today's dollars, future dollars and also change the earnings.

Quick Calculator
Wow, was that estimator off for me by $600 less than what my actual statements estimate I will receive and thank goodness for that.
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Old 09-14-2015, 11:37 AM
 
7,983 posts, read 11,679,160 times
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So how does not having (ever) had a spouse change this?
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Old 09-14-2015, 11:43 AM
 
Location: Retired
648 posts, read 499,136 times
Reputation: 1057
Quote:
Originally Posted by Giesela View Post
So how does not having (ever) had a spouse change this?
Not having a spouse would not change anything. Use the "estimator" to get a ballpark of your benefit. People say if anything, it gives a somewhat low value.
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Old 09-14-2015, 11:44 AM
 
Location: NC Piedmont
3,911 posts, read 2,886,041 times
Reputation: 6291
Quote:
Originally Posted by Graywhiskers View Post
Not having a spouse would not change anything. Use the "estimator" to get a ballpark of your benefit. People say if anything, it gives a somewhat low value.
I read something that said they used a calculation that tended to be on the low side on purpose.
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Old 09-14-2015, 05:41 PM
 
29,819 posts, read 34,912,438 times
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I know how this discussion always goes down the path of how to maximize life time SS return and so infrequently does it focus on maximizing later in life income. I also know the conventional wisdom around here is that other than medical cost retirement becomes less expensive as we age and the amount we spend for non medical can decrease. We are now looking at and trying to decide somethings about the next stages of retirement as we age and yes perhaps become less mobile etc etc etc. However in the process we are looking at CCRC and visited a place today that was just awesome. Old established community providing services to the elderly and a new still not open facility. Not cheap by any stretch be so well designed with options to buy or rent. Amenities( pool, gym clubs, four restaurants etc) and of course on site Assisted Living, Memory Care, Nursing and Rehab facilities with independent fee schedules but guaranteed space for residents. New Hospital satellite center almost done next door and both are with a new planned community with multiple style housing bike/walking trails etc and backing up to a bay. Absolutely beautiful and the flats for sale are architecture show cases. Again not cheap but what it shows is that as we hit our 70's and start to plan for the next stages Maximum current and moving forward income will dictate many of our choices. This scenario isn't for all but who knows at age 62 what our perspective moving forward will be in 10-15 years just like did we really maximize our planning for retirement at age 40? Being able to lock in a secure comfortable and fun glide path through our later stages of life could be priceless. On site medical care if needed along with transportation, etc etc are options many of us may want to have options for. In summary I am glad I am waiting til 70 for my full SS. Yes, I know many/most don't have these options so no need to let me know that.
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Old 09-15-2015, 07:05 AM
 
13,981 posts, read 7,452,675 times
Reputation: 25550
Quote:
Originally Posted by ReachTheBeach View Post
What is your break even date? It is usually late 70s.
For me, the break even between collecting at FRA and collecting at 70 is age 81. That doesn't account for COLA. I'm 1958 with FRA at 66 years 8 months.

If you make it to age 65, you have a 50/50 chance to make it to age 85. My father made it to 85. My mother is 83. I have to plan to live that long.
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Old 09-15-2015, 12:31 PM
 
Location: NC Piedmont
3,911 posts, read 2,886,041 times
Reputation: 6291
Quote:
Originally Posted by GeoffD View Post
For me, the break even between collecting at FRA and collecting at 70 is age 81. That doesn't account for COLA. I'm 1958 with FRA at 66 years 8 months.

If you make it to age 65, you have a 50/50 chance to make it to age 85. My father made it to 85. My mother is 83. I have to plan to live that long.
Same year for me, Dad just turned 86 and I think mom is 82. The other thing your calculation doesn't count is no longer having the money you spent from IRA instead of taking SS. The compounding interest on that adds up to take it further. OTOH, taking IRA withdrawals without SS allows you to pay the least possible tax on the money put away pre tax. It's all so complicated. I think I will collect around FRA, but not sure. Lots of stuff could still happen in the next few years. We are in the historically safe zone (changes would probably only affect people younger than us) but you never know...
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Old 09-16-2015, 08:28 AM
 
Location: Summerville, SC
142 posts, read 132,886 times
Reputation: 68
COLA is but a minor part of the calculus. If it's granted at all, it will be at most 2% -- that's about $30 to $35 net based on typical monthly checks. Not much to ride home about.

Also, don't forget to factor in the increased Medicare Part B premiums. You're skipping monthly checks to build up Delayed Retirement Credits while paying for Medicare Premiums out of pocket. Your Gubmint wipes out most of that DRC advantage and pins the entire increase on a small percentage seniors.
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