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I was always going to play it by ear . If markets really tanked i would take it earlier. But the more i worked with the numbers the more i liked delaying and not being held hostage as much by the markets
I think in the end, based on the math, taking ssn at 70 vs 62 is just as much a gamble as what the markets are going to do/not do as now we are betting on the highly variable/unknowable...how long will one live? Waiting to take ssn at 70, based on the numbers/analysis I've seen, one reaches break-even point at 82 yo vs taking ssn at 62. And given the average lifespan of a man is 77.4 yo and a woman is 82.2 yo, it's a bit of a long shot actually for most men to come out ahead delaying ssn. With that said, I hope you beat those odds.
you average life expectancy is well off for 65 year old's . average life expectancy is very different when you calculate from birth rather then from older ages as well as different if a couple with two bets in the race .. a 90 year old couple still has a 47% chance one of them will still be alive . that is very different then looking at singles from birth . we have been adding 1 more year of life every 4 years since 2000.
an 85 year old woman has a 54% chance of being alive , an 85 year old man 42% and an 85 year old couple a whopping 73% chance one of them will be alive since you have two horses in the race and either can out live the other . don't forget that average life expectancy only means that is the 50% point where you stand as much chance dying as living and going on .
there is an excellent chance if a couple one of you will go on to enjoy that extra money at age 85 . in fact we don't see a drop below the 50% point for a couple until age 90 today where there is a 47% chance one of you will be alive . .
as far as both being the same risk , they both carry risk but different risk .
you either are betting on markets and rates taking financial risk or betting on your longevity . take your pick , which one are you more comfortable betting on ?
i am more comfortable with the odds one of us will be alive to enjoy a 70% bigger ss check and be less market dependent vs betting the ranch on the markets or rates .
Last edited by mathjak107; 03-07-2016 at 03:23 AM..
I think that make a lot of sense to delay. From 62-FRA your return is somewhere north of 5%, from FRA to 70 the return is 8%. You can't expect those guaranteed returns in the market. The problem is there are many people in my shoes, where living entirely off my savings for that length of time will bring the balances to uncomfortably low figures.
Until breakeven those 6% gains are not actual gains since you are giving up checks. They would only be true gains if you were not giving up those checks in exchange for the growth in ss . You typically need 22-24 years to reach zero return when you figure lost checks and spending invested assets. but once you reach that point the 69% bigger check plus additional colas does create a bigger return fairly quick.
by age 90 you are seeing an actual 5% real return . that is after inflation and is on par with a balanced portfolio return historically, only it is guaranteed in the form of ss. in fact odds are you will not see a 5% real return from a balanced portfolio for quite a while .
that can be an incredible deal . .
Last edited by mathjak107; 03-07-2016 at 05:06 AM..
I think that make a lot of sense to delay. From 62-FRA your return is somewhere north of 5%, from FRA to 70 the return is 8%. You can't expect those guaranteed returns in the market. The problem is there are many people in my shoes, where living entirely off my savings for that length of time will bring the balances to uncomfortably low figures.
True so maybe a point somewhere in between. Let's say at FRA the probability gives you the best chance to enjoy without undue stress and complete control of ones finances.
Quote:
Originally Posted by mathjak107
Until breakeven though those 6% gains are not actual gains since you are giving up checks
That is something each of us has to decide. It is a hard decision but one that has to be made by the individuals. I am not sure exactly when I plan on taking SS but I know it will not be at 62 even though I will not be working. I am fairly sure it will not be at 70 either. For us I am thinking somewhere in between. It maybe at FRA or just before or after it. I tell people that only they can decide when to do that when they ask me my opinion but I let them know they have choices.
True so maybe a point somewhere in between. Let's say at FRA the probability gives you the best chance to enjoy without undue stress and complete control of ones finances.
That is something each of us has to decide. It is a hard decision but one that has to be made by the individuals. I am not sure exactly when I plan on taking SS but I know it will not be at 62 even though I will not be working. I am fairly sure it will not be at 70 either. For us I am thinking somewhere in between. It maybe at FRA or just before or after it. I tell people that only they can decide when to do that when they ask me my opinion but I let them know they have choices.
with a pension you are not as dependent on the whims of markets so you have the luxury of taking it earlier or delaying and everything in between . it is a good place to be where you have a guaranteed income stream in place and do not need to be 100% dependent on yourself for generating that income .
All true. And until I'm there at 65, and really know where my saved balance is going and what are real expenses are after a few years of retirement, I just won't know when I'll file until then. On paper,maccording to the calculators, I can go to 70. It SHOULD be plenty, and a no brainer, but at 58, that seems like a very long time to wait!
I'm not sure when I'll take mine either, it may not be up to me with my job situation. My ideal movie is to get to 65, Medicare eligible, and then see where we are. If I were to guess somewhere between 65 and FRA is when I'll file. There is something very enticing about a guaranteed higher check for life without even going into the possible tax ramifications of a smaller check and income needed to subsidize the shortfall.
with a pension you are not as dependent on the whims of markets so you have the luxury of taking it earlier or delaying and everything in between . it is a good place to be where you have a guaranteed income stream in place and do not need to be 100% dependent on yourself for generating that income .
Bada Bing!
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