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The break-even point for taking SS at 62, versus 67 is about 12-years. After that, one starts reaping the benefit of waiting. (Calculate the amount of SS at 62 x 5-years, divided by the amount of SS at age 67). Of course, there is also the 5-years spent in retirement versus working, but, that's another issue.
This entire thing with SS boggles me. What is the quality of life at 62, then at 67? I just don't know, who knows the answers to the future? I guess it depends a lot on your genetics.
You're right, to the best of my feeble understanding, why bother to file.
Sort of the quandary I'm in. I'll still be working although p/t but with rest of my earlier 2016 wages, at least 1/2 my checks will be withheld if I filed at 62 for May.
Why bother with all the paperwork until you need to?
Quote:
Originally Posted by JIMANDTHOM
You're right, to the best of my feeble understanding, why bother to file.
Sort of the quandary I'm in. I'll still be working although p/t but with rest of my earlier 2016 wages, at least 1/2 my checks will be withheld if I filed at 62 for May.
it all boils down to 2 pro reasons for filing and not seeing a check and one con issue for filing when you know that you will only give it back .
pro----- you are held harmless if medicare is more then the cola. if you did not file and were on medicare this year you got increased from 104.50 to almost 160 a month for 2016 .
filing and not actually seeing any money would have kept you at 104.50 since you are protected against increases if they are more then the colas.
pro- no spousal benefits can be had until you file,so your spouse can collect off your record if they have no work record or they get an adder to their own if you file and 1/2 your full is more then their full .
you could be giving up extra money . until i file my wife is not getting 4200.00 a year added to her own early benefit because that is the adder she gets in spousal benefit . but she does not see that until i file .. even though you are not seeing any money your are deemed filed and spousal benefits flow .
so those two reasons are why filing and not getting a check would be a good thing .
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con- the money you give back will not come back to you until your fra when you are recalculated .
if you didn't file and decide to stop working earlier you get the higher payments day 1 of filing without waiting until fra.
Last edited by mathjak107; 01-25-2016 at 03:26 AM..
This entire thing with SS boggles me. What is the quality of life at 62, then at 67? I just don't know, who knows the answers to the future? I guess it depends a lot on your genetics.
but no one says you have to spend less if you delay taking ss . you can spend more day 1 from savings and replace it later on with the bigger checks .
in fact the math says you can actually spend more early on while delaying because with an almost 70% bigger check at 70 vs 62 you have no sequence risk on ss while on your own investing you have lots of sequence risk and have to keep a lot more unspent money on hand to allow for those down markets . .
if you die ? well if a couple your spouse gets the bigger checks . if single ? well dead is dead , game over anyway .
what if i live is the bigger issue
Last edited by mathjak107; 01-25-2016 at 03:59 AM..
You ever have a conversation with a person…and you can't get them to see -- uh…they're wrong. It's a friendly work conversation but he can be stubborn at times…me too, though. A few of us were in a group. And everyone else got what I was saying -- but him. Who THINKS he's Mr. Soc Sec. expert because he's already filed, is collecting and still working.
I keep trying to tell him -- uh -- YOU are already AT your FRA!!! (dummy!) You're talking about one situation. I'm talking about another! So I ask him, if it's such a good idea, why didn't YOU file early at 62? 'He says "uh, well I din't need the money." That's when I tried to tell him…stupid…at your salary level you wouldn't have GOTTEN any early benefit, by the time they did the withholding.
(( I don't literally SAY 'stupid' and 'dummy'…I'm just thinking it)
I'm almost tempted to tell you to just give it up with your co-worker. I've had conversations with people exactly like this person, and you can argue with them 'til you're blue in the face, show them mountains of info to back up what you're saying, and it's as if they don't hear a word you say. Your co-worker already has his mind made up, and no amount of data (even if it's from ssa.gov) is going to change his mind.
So you decide: do you want to be right or do you want to be happy?
I would just run the numbers.
If the person was to die at say 82,
If the person collects at 62 and gets $1700/month.
If they keep working, they will not see a check for the first 4 years, BUT, they will see the money eventually
The reduced amount is put back in, after FRA
So for an end of life amount, it's still, 1700 x 12 x 20 = 408K
If the person puts off SS checks until 66, it's a monthly check of about $2275,
so it's 2275 x 12 x 16 = 437K
About $7000 more / year for 16 years
And the further past 82 the person lives the more that difference gap widens.
Another way of looking at it, by waiting until 66, they have "lost" (really lost) about 82K (4 years of 1700).
They get back that 82K in about 12 years, and past 12 years, it's all gravy
plus they have 4 years (62-66) of their full time salary in the bank.
Another consideration, if you take the early $1700, and you are married
And you die early, if your 1700 is more than her SS, your spouse is stuck with the 1700 for the rest of her life and not the 2275.
it is more complex then that because of spending down invested assets if you delay , spousal benefits , spousal benefit increases and medicare increases if you don't file .
it also depends how dependent you want to be on markets and interest rates if supporting yourself off your investments . delaying can reduce dependency over decades while only being more dependent for 8 years .
Another way of looking at it, by waiting until 66, they have "lost" (really lost) about 82K (4 years of 1700).
They get back that 82K in about 12 years, and past 12 years, it's all gravy
plus they have 4 years (62-66) of their full time salary in the bank.
But if you make so much money working from 62-66, that your entire 1,700 is withheld for later anyway…what was the point of filing. You didn't "lose" it for four years…because you didn't GET it during those for years anyway -- because you made to much salary. It was held and recalculated for you anyway. You might as well wait.
To me filing early and still working only works -- IF you don't make so much that your entire early SS check is withheld.
THEN you could say, well my check would have been 1,700 but because I made XX amount, some is withheld as so I only got -- say 1,000 -- of the 1,700.... the other 700 is withheld for later -- AND I'm still putting into SS from what I'm making now…THEN maybe it makes sense…because…
So from 62-62 you DID get 1K a month (now) -- AND you'll have a recalculated benefit at FRA/66, which will some what ameliorate or make up for the fact that you took it early. You've been rebuilding your kitty so to speak.
But if the entire early check is withheld -- and your not going to get the 1,700 to spend, save/invest early -- I don't see the point. You might as well wait.
Everyone's circumstances are different. I'm taking it at 62, regardless of the financial difference in taking it later on, and I really don't care about the numbers. I just know what the estimate will be, and that's good enough for me. I retired early at 56 from a university position in Texas, after 28 years, with the plan of working part-time, after having had enough of a very demanding, stressful job. Fortunately I do have that lifelong pension, and my health coverage is paid for as a retiree. But you never know. I had witnessed two women co-workers (I'm a female, divorced 15 years) die before they reached 65, soon after retiring, one at 59 who had a horrific multiple myeloma diagnosis soon after starting her state pension, and was gone at 61 and never saw a dime of her social security, and another gal who died from complications after a gall bladder surgery. Same story there. She had just applied for her SS benefits. Two years ago at 58 I went through five months of chemo for two types of low-grade, indolent lymphoma, and am now doing well. My health is fine otherwise. My first thought at diagnosis was, "Hell, what a bummer, I may never get to see my social security after all that money I put in!." You bet I'm taking it fall of 2017 at 62. And quitting my part-time job. Life is short, folks. So enjoy it now if you're able to.
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