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Old 03-12-2016, 06:21 AM
 
672 posts, read 837,449 times
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Quote:
Originally Posted by gentlearts View Post
I know how you feel. We do not have pensions, and were forced to take SS early, because we both lost our jobs from downsizing. We have a nest egg, but are afraid to spend any of it, because we don't know how long it will need to last. We are pretty comfortable on SS plus hubby's PT job, unless some big expense comes along.

Those of you who hold out for age 70, are losing a lot of money in the 8 years of eligibility between 62 and 70 in order to make a few hundred more a month.

But those "few hundred a month" could make a big difference. That "few hundred" = about $3600 a year. Give or take 20 years= $72000. No small peanuts in my book. Especially if you don't have a pension.
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Old 03-12-2016, 06:24 AM
 
672 posts, read 837,449 times
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I do want to add that if you need the money at 62 then obviously it's the smartest move for you. I was just bringing out that to save a few hundred a month can really add up and make a difference to someone.
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Old 03-12-2016, 06:51 AM
 
71,465 posts, read 71,652,652 times
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Quote:
Originally Posted by gentlearts View Post
I know how you feel. We do not have pensions, and were forced to take SS early, because we both lost our jobs from downsizing. We have a nest egg, but are afraid to spend any of it, because we don't know how long it will need to last. We are pretty comfortable on SS plus hubby's PT job, unless some big expense comes along.

Those of you who hold out for age 70, are losing a lot of money in the 8 years of eligibility between 62 and 70 in order to make a few hundred more a month.
a few hundred more ? for us it is 32k vs 54k , plus colas on that difference . does that sound like a small difference ? the difference between 62 and 70 is a 69% bigger check plus colas for everyone . that does not even include any spousal benefits along the way if you are eligible . our difference will be even greater since we can file restricted application earlier and i will file for 1/2 my wifes at 67-10 months while letting my own go to 70 .. just that difference between 62 and 70 can be more then most americans even get from ss a year .

Last edited by mathjak107; 03-12-2016 at 07:08 AM..
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Old 03-12-2016, 07:14 AM
 
Location: Coastal Georgia
37,088 posts, read 45,594,679 times
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Quote:
Originally Posted by saralvr View Post
But those "few hundred a month" could make a big difference. That "few hundred" = about $3600 a year. Give or take 20 years= $72000. No small peanuts in my book. Especially if you don't have a pension.
Hello? 8 years at $2000. a month is a LOT of money you aren't getting.
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Old 03-12-2016, 07:18 AM
 
71,465 posts, read 71,652,652 times
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correct but we are comparing not getting that money for only 8 years and even spending down invested assets delaying vs getting a 69% bigger check plus spousal benefits , plus colas potentially for 2 decades or more , especially if a couple . you would have to have stellar market outcomes from a balanced portfolio taking it at 62 to match the real return from ss once you start to approach the upper 80's . .

the ss gives you that regardless of market outcomes and that is where its value is . to get a similar outcome you have to count on markets and rates and take on more market risk if you file early vs taking on longevity risk and less market risk by delaying .

the choice is yours , which risk do you prefer ? i don't mean you as in you , but you , in the general decision making process for everyone .

you either have to take on more market and interest rate risk or more longevity risk to try to get the same results . there is no alternative .

breakeven once you figure the checks and invested assets being spent down can take 22 years but from that point on the extra return you get multiply's very quickly . by age 90 you can see a 5% real return after inflation is subtracted out , there is almost a 50% chance of someone in a couple seeing that age (47%) . by 95 if you make it that jumps to 6% which is equal to the long term average real return of being 100% equity's from what is basically a gov't bond . .

Last edited by mathjak107; 03-12-2016 at 07:43 AM..
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Old 03-12-2016, 07:46 AM
 
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Mathjak - I seem to recall at one time you were in favor of taking SS at 62. Then a meeting with a new (or enhanced) team at Fidelity perhaps prompted your rethinking of that strategy. Forgive me if I've missed it, but what changed your mind?
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Old 03-12-2016, 07:54 AM
 
71,465 posts, read 71,652,652 times
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markets suck!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

having gotten hit with a downturn day 1 of retirement and having even our conservative portfolio fall multiple 6 digits my wife wants to be less dependent on markets and rates .

she was a widow and already had a pile of investments dropped in her lap which ended up taking a beating back in 2000 so she is more gun shy then i am .

but i do agree with her . i rather bet on our longevity as a couple then on the outlook the markets have over the next bunch of years .

every time historically the cape ratio has been in the 80-100% range of high valuations the market averages over the next 8-15 years has been below average . we are still in that high range . the cape is useless in predicting shorter term moves but it is spooky how it has always been right on the money going out 8 years or more .

there is no question higher valuations lead to lower then average returns and lower valuations lead to higher then average returns over the following 8-15 years .

throw in the fact it can be many years before rates come up and delaying ss seems to be the best route for someone retiring today ..

others may have different valuations when they finally retire so the outcome may be different then it shows today .
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Old 03-12-2016, 08:37 AM
 
Location: Idaho
4,620 posts, read 4,456,526 times
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(I have not read the whole thread yet, but I surely will.)

mathjack107 - are you suggesting that one live off their 401(k)/403(b) money until they turn 70? This is what a fee-only financial planner I met with a few months ago suggested, but like others, I'm not so sure about spending down my nest egg.
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Old 03-12-2016, 08:39 AM
 
Location: Los Angeles area
14,018 posts, read 17,726,438 times
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Quote:
Originally Posted by saralvr View Post
But those "few hundred a month" could make a big difference. That "few hundred" = about $3600 a year. Give or take 20 years= $72000. No small peanuts in my book. Especially if you don't have a pension.
Quote:
Originally Posted by gentlearts View Post
Hello? 8 years at $2000. a month is a LOT of money you aren't getting.
Yes, Saralvr's arithmetic is correct as far as it goes. However from that $72,000 we would have to subtract the total money NOT received between ages 62 and 70. Sure, in the long run (if we live long enough) we come out ahead by waiting until 70. No one disputes that basic fact, as far as I am aware. So waiting is a kind of longevity insurance.

However, I view the choice as more of a wash in generalized terms. That is, the difference is not all that great unless you live a REALLY long time. So it's sort of a philosophical issue.
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Old 03-12-2016, 08:42 AM
 
71,465 posts, read 71,652,652 times
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it depends on your overall situation including the resources you have .

in our case the first few years we will not be living off our ira's. we have cash set a side for at least 2 years with no tax liability . we may get a aca subsidy since i am not 65 as well as do some roth conversions if i can stay in the 15% bracket .

others may want to spend down ira money first since you can take 22k out tax free as a couple and 40k and pay as little as 5% in tax if you have no other income while delaying
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