U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 03-14-2016, 08:42 AM
 
1,973 posts, read 1,304,292 times
Reputation: 3389

Advertisements

Quote:
Originally Posted by Robyn55 View Post
I don't know what inflation rate is "baked into the cake" when it comes to the SS calculator. FWIW - year over year CPI hasn't been over 3% since 2011.

Also - it's impossible to predict whether the way SS benefits are calculated now will be the same 10-20-30 years from now. Especially for younger people who are many years younger than 62.

Medicare is even more of a black box. When it comes to a current Medicare beneficiary who is also drawing SS - annual increases in what you pay for Medicare are capped by the "hold harmless" rule. Which basically says your SS payments can't go down from one year to the next as a result of increases in Medicare premiums:

Hold Harmless Rule Protects Social Security From Medicare Premium Increases | Nolo.com

OTOH - the hold harmless rule doesn't apply if you're not taking SS. Whether it's because you haven't reached retirement age - or you're deferring SS from age 62 to a later age. The hold harmless rule also doesn't apply if you're subject to a "high income" Medicare surcharge.

Charges for Medicare are based on projections of what it will cost to keep the program sound from an actuarial point of view. This year - the increases in Medicare premiums that were necessary to accomplish this goal were 50% (mostly because there was no CPI increase in SS - which meant that the cost had to be spread among a relatively small pool of people who couldn't take advantage of the hold harmless rule). As a result of some last minute Congressional maneuvers - the increase was reduced to about 15%.

Some Retirees Pay Higher Medicare Premiums in 2016 - US News

IOW - everyone who wasn't drawing SS as of January 1 has to pay more for Medicare now/will pay more in the future. I suspect this won't be a one time event. And - the younger you are - the more likely you'll see things like this in the future.

Now I'm not saying that people on average are or will in the future be paying half their SS for Medicare. But I'm not saying it's impossible for future beneficiaries. Or even current beneficiaries if the "means testing" income limits are changed. Medicare costs are kind of out of control. And the only way to deal with the costs is by various cost-control measures and raising premiums.

What I think is most likely is that Medicare premiums will be high enough that most beneficiaries are going to notice them. "Ouch" (smaller or bigger "ouch" depending on individual circumstances). My husband and I are currently paying about 13% of our SS benefits to Medicare (smaller "ouch"). And my father (subject to a "higher income" surcharge) is paying 30% (bigger "ouch"). Even though we all had the benefit of the "hold harmless" rule. Robyn
Well.... I don't have a crystal ball. The best I can do is make some assumptions, and put some level of conservatism in it.
Reply With Quote Quick reply to this message

 
Old 03-14-2016, 08:50 AM
 
1,973 posts, read 1,304,292 times
Reputation: 3389
Quote:
Originally Posted by Perryinva View Post
Your arguments hold no water. Why on earth would your objective be to get the most out of SS in case you die? You'd be DEAD, so it doesn't matter if you lost money. You are dead, not of this earth, a past person (to paraphrase Monty Python)! If you HAVE to collect early to live, then thats a different story, but that is NOT what this discussion is about. Its about those that have enough savings to live comfortably off it while delaying SS, (and there are plenty out there, especially if you have a good pension), so that if you LIVE, you have a less risky, lower taxed, higher income vs BETTING that your savings will last you in totally unknown market conditions because with the significantly lower SS (you will have locked in for life) , you WILL need to draw on your savings to have the same after tax income, vs the other way around. The only possible loser in the delay scenario are your heirs, and if their inheritance is more important than your quality of life, then you have some screwed up priorities. The objective is not to have the most money left behind if you die early, it is to have the most INCOME over your while life, while you are alive! This is NOT possible for many people, I know that, and if you are one of them, then ignore this thread!

According to the financial calcs I used, by withdrawing 25% of my savings over 5 years (in an amount that would exceed my collect at 62 amount, plus travel and fun money) to delay to after FRA, I wouldn't have to touch my remaining savings EVER (besides the forced to take MRDs) until I'm 87! This works so well for us because we do have pensions, and I have over 35 years maxed out SS, so I need far less than the $24k/yr I Would get at 62, to live very comfortably, and even delaying to just 67 bumps me to $33k/yr, so I'd be banking most of that for 3 years until MRDs, then even more until inflation and medical costs rise to meet my "forced" income.

Does anybody really think that delaying to collect SS is more risky than the stock market??? I mean, I agree there is risk involved, but far less than compared to the stock market in a 5-7 year period.


This is my though exactly. Why is everyone so concerned about "losing money". Can't spend money when you are dead. My wife is younger, so it seems like the longer I wait, the better for her.


To me, SS is an insurance policy for me living long. If I don't, then I didn't need it. Too many people worried about what they left behind. Makes no sense.


So like I said in an earlier post, if you are getting by pretty easily without it..... wait as long as you can. But certainly don't if you are living like a pauper.
Reply With Quote Quick reply to this message
 
Old 03-14-2016, 08:57 AM
 
1,973 posts, read 1,304,292 times
Reputation: 3389
Quote:
Originally Posted by mathjak107 View Post
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 .
Exactly!


No one argues that if you wait till 70, and die at 70, you didn't collect anything. But you are dead.


But say I do live to 90..... waiting is FAR MORE in your pocket than "a few hundred a month".
Reply With Quote Quick reply to this message
 
Old 03-14-2016, 09:01 PM
 
Location: Eastern UP of Michigan
1,202 posts, read 681,982 times
Reputation: 1271
I always look forward to reading any SS thread----------thanks all for you viewpoints.
We are still trying to put an approximation on a filing year for my SS. But the conflict is as follows:


There is some pretty extreme longevity on both my parents side.
Jim will not receive any spousal SS benefit from me due to his Civil Service pension, if my math is right.


Don't know how to balance the above.
Reply With Quote Quick reply to this message
 
Old 03-16-2016, 04:11 PM
 
Location: Eastern Washington
14,217 posts, read 44,870,326 times
Reputation: 12787
Some of the plans on here, I'm not sure I'd go along with. If one has just SS and 401K money, I'm not sure using up half the 401K money before applying for SS is entirely a sound plan. If you use up half the money, it's definitely gone. SS may or may not pay you what you expect now, 5 or 10 years in the future. Just sayin'.

My general plan is to live almost entirely on my pension, which will be about 40% of my current income - I don't spend my entire income. 401K and IRA money would be held in reserve for any major house repairs, stuff like that. I consider these to be "strategic reserves" so not something I want to use for ordinary expenses.

Of course, people who don't have a pension, and that seems to be most anymore, can't use this plan.
Reply With Quote Quick reply to this message
 
Old 03-16-2016, 05:54 PM
 
Location: RVA
2,164 posts, read 1,264,175 times
Reputation: 4451
Again, it's not what you have saved, or wanting to have more in reserve later on, etc. It's all about income vs expenses and how much you want left behind. The money is not "definitely gone"! You USED it for what you saved it FOR! To assure you a less stressful retirement, finance wise. You don't come out ahead if you die younger with a bigger amount saved and a smaller COLA adjusted annuity. Your heirs do, but since you're dead, you sure don't! You DO come out ahead if you live longer and have the opposite. You must think about the retirement phase of life where (as Matt puts it) intelligent decumulation replaces maximizing savings FOR that future. It should be a very different ballgame. It's very catch-22. If you have low expenses (live simply, low COLA area, house paid off), yet have a lot of income (relative to expenses) maybe a pension and good SS, then its easy to delay your SS with a small amount of savings until say 68-70, when your expenses and health are low and good. The higher SS EASILY allows you to rebuild what it cost you, the longer you live..if you die before you collect, then it doesn't matter if PART of you savings is gone. If you live longer, you come out ahead both in absolute income AND by having a far better chance of markets averaging higher over time. Even if you are one that is scared or doesn't trust the market and only put your money in "safe" things like CDs, the rates of CDs are tied to those very same markets, and are paying SQUAT now, so the chances of them increasing in rate, increases with time. If its more important to make sure that you leave more to your heirs than spending it on yourself (and there are plenty of people that live that), then delaying may not be for you.

If you are so wealthy that your SS doesn't matter to your income, then its even easier to not take it til later, so the point is moot. If you are of a lower income that you can't afford to delay, because you need the money NOW to live, then delaying is moot.

I agree that it is likely not a huge percentage of future retirees that this strategy is valid for. If spending what you want from savings to live the way you want does not leave enough, then you simply STOP when you get to that point and file. Any delay is future money at a lower taxed rate later in life.

The common theme that keeps coming up is people want to get the MOST out of their SS, so they erroneously conclude that its better to take the bird in the hand rather than the two in the bush. IF you are in the financial situation where delaying is really just as easy as not, there is normally no income based reason not too.

"But I want the more income now, when I'm young enough to enjoy it, before I die!" The number one reason I keep seeing. So let me get this straight...rather than use the money you saved, specifically for retirement, to do those things that you wanted while you are young enough, you will use the smaller income NOW, guaranteeing a lower low taxed income layer in life if you LIVED, on the hopes that you will earn more from you savings.

"But I have to live to 82 to break even!" The second most common reason. Again, please explain to me why its more important to come out ahead if you DIE, rather than ahead if you LIVE?

All this is predicated on the assumption that you CAN afford to delay, live the way you wanted when you are more able (and guarantee a surviving spouse a higher income as a benefit). I daresay, can anyone show me anyone that is 85 and had delayed to collect (under the circumstances described above) that regretted it??? There are plenty that did regret takingnit early.

It's the entirely psychological "I want whats owed to me, and I'm tired of waiting for it".

Last edited by Perryinva; 03-16-2016 at 06:03 PM..
Reply With Quote Quick reply to this message
 
Old 03-16-2016, 07:46 PM
 
Location: Great State of Texas
86,093 posts, read 72,460,873 times
Reputation: 27565
Quote:
Originally Posted by dbsteel View Post
Exactly!


No one argues that if you wait till 70, and die at 70, you didn't collect anything. But you are dead.


But say I do live to 90..... waiting is FAR MORE in your pocket than "a few hundred a month".
That is assuming SS doesn't change the rules.

2030 is not that far away. And it's even sooner than that because they diverted more FICA money from the SS Trust Fund to the SSDI Trust Fund for a few years.
Reply With Quote Quick reply to this message
 
Old 03-17-2016, 03:25 AM
 
71,463 posts, read 71,629,249 times
Reputation: 49027
i would bet my last dollar at the 11th hour , like every thing else congress does , social security is refunded and all is well . they find billions for wars or aid with no problem .

even if they means test it by income , so what . they will adjust everyone across the board so the extra few years you may have gotten a few bucks more amounts to diddly when you are talking decades more at the lower level .

i alway say , better to bet on what was , what is and what stands a reasonable chance of continuing rather then the long shot "this time is different "

this time is different has been the most costliest words in the english language
Reply With Quote Quick reply to this message
 
Old 03-17-2016, 07:38 AM
 
Location: Great State of Texas
86,093 posts, read 72,460,873 times
Reputation: 27565
Quote:
Originally Posted by mathjak107 View Post
i would bet my last dollar at the 11th hour , like every thing else congress does , social security is refunded and all is well . they find billions for wars or aid with no problem .

even if they means test it by income , so what . they will adjust everyone across the board so the extra few years you may have gotten a few bucks more amounts to diddly when you are talking decades more at the lower level .

i alway say , better to bet on what was , what is and what stands a reasonable chance of continuing rather then the long shot "this time is different "

this time is different has been the most costliest words in the english language
Well the SS Trust Fund has never run out of money to fund itself before.
So there is no past history of how they fixed it.
Reply With Quote Quick reply to this message
 
Old 03-17-2016, 07:48 AM
 
71,463 posts, read 71,629,249 times
Reputation: 49027
they will fix it . my opinion is you can almost set your watch to that fact . something as crucial to the american way of life as ss will not end up being cut or eliminated . that would be political suicide .

they may take it back by taxing it more or having us pay more in to medicare put that will be across the board regardless when you filed .
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top