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Old 03-10-2016, 01:37 PM
 
Location: Eastern Washington
14,228 posts, read 44,887,015 times
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Quote:
Originally Posted by V8 Vega View Post
I retired and started getting SS at 62 as soon as you can. Never regretted it. I had to buy health insurance until 65 and I started on Medicare.
I read somewhere that if I live to 80 I will have gotten as much from SS as if I had waited to 66 my full payment age.

I also have been very thrifty all my life and now my financial adviser says I should spend more, and I just can't.
SS rates are adjusted by age so that, yes, you get the same amount of money total if you live to your actuarial life span, but no more. At least that's my understanding. If you live longer, waiting till 70 is a somewhat better deal because you get more money in your later years.

Without knowing exactly when one is going to die, it's not possible to say which strategy will actually work better for a particular individual.
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Old 03-10-2016, 02:40 PM
 
71,511 posts, read 71,674,131 times
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it used to be actuarial neutral in the old days but today with a 73% chance someone in a 65 year old couple will see 85 it is not anymore . almost 1/2 (47%) will have someone in that couple make it until 90 .you can see an after inflation return of 5% . that rivals a balanced portfolio with no risk
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Old 03-10-2016, 02:48 PM
 
3,373 posts, read 3,782,718 times
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Quote:
Originally Posted by selhars View Post

They pushed up the FRA and did it decades ago so gave a generation a heads up…yet the file and suspend rule change was changed just months ago, and will go into place in just a few weeks.
What IS the file and suspend rule?
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Old 03-10-2016, 03:05 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,923,045 times
Reputation: 6716
Quote:
Originally Posted by Vision67 View Post
If you have been frugal for your whole life, it's hard to change the habit.

When I retired, I realized that I actually don't need to withdraw anything from my savings.

Here's a billionaire who still buys his clothes in a thrift store:

Billionaire Ikea owner Ingvar Kamprad saves money by buying second hand clothes - Business Insider

"I don’t think I’m wearing anything that wasn’t bought at a flea market,” the 89-year-old said in a documentary to be aired on Sweden's TV4. "I want to set a good example."
Sure - some people live like that. My late FIL was "thrifty" when he was young - and a miser when he got old. He forced his miserly habits on my late MIL. Their house was over 80 degrees all summer - and well under 70 all winter. It was dark all year because my FIL kept turning the lights off. G-d forbid my MIL would spend $100 on Christmas presents for the grandkids - or spend $15 going out to lunch with her friends (lunch was often cheap bologna sandwiches at home). Note that my FIL wasn't poor. He had a pension - SS - and died with over $1 million in investments. I thank him for the money my husband and I inherited - but sheesh . Robyn
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Old 03-10-2016, 03:25 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,923,045 times
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Quote:
Originally Posted by eastcoastguyz View Post
My wife and I have been doing retirement planning. She talks about wanting to retire before we are eligible to receive full benefits. Which means living off our retirement savings and holding out until age 70 to get the max benefit from Social Security.

All my life I have saved money and invested. I'm thinking about it, and I think it is going to feel strange having our entire savings decline until we start taking Social Security benefits.

Have any of you actually done this? Did it bother you psychologically to see your savings statement become less and less over the years even though you had enough money to live on? How did you feel when you finally started taking the max social security? Was it a relief or it wasn't a big deal for you?

Having done this plan, how do you feel about it? Did you feel you still have enough money past age 70? Any regrets in this type of plan?
It would bother me psychologically. Assuming a 2-3% return on your investments from the time you retire until you get to age 70 - how much of your original savings would you have left at age 70? Note that unless you move - your normal daily expenses should stay about the same. Except for health care costs (which may go up or down - a lot - depending on what kind of coverage you have now - whether you'll retire before age 65 - Medicare age - and what Medicare at age 65 will look like for you). Also - you have to figure in various possible/likely capital expenses. Like a new car/new roof/new refrigerator/similar over the years.

My husband and I retired quite a few years ago - and have never spent a dollar in principal. Although I think we will probably start to do so in our 70's (I am 68 and my husband will be 71 soon).* We did start taking SS at age 62 - although that only covers about 20% of our annual expenses. Robyn

*We'll be spending more money because we still like to travel - and - the older we get - the more I like to go "first class". The backpacking I did in my 20's hasn't worked for a while . Also - if we stay in our current house - think I need a new kitchen. My husband spent his first SS check on a new set of golf irons - and I may spend my first RMD from my IRA on a new kitchen .
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Old 03-10-2016, 03:27 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,923,045 times
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Quote:
Originally Posted by mathjak107 View Post
we are doing it now . lots of folks are but you need to make sure you have the funds to stop working and delay . if you don't comfortably have lots left over then either you can't afford to stop yet or you can't afford to delay . you do not want to spend down to much as life is filled with emergency's and unexpected expenses .
Agreed - I have seen too many seniors driving on bald tires. For some reason - people think the car they have when they retire will last forever and they'll never need new tires. Robyn
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Old 03-10-2016, 03:40 PM
 
1,580 posts, read 823,810 times
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Quote:
Originally Posted by borninsac View Post
What a great statement you made that is definitely food for thought for many who read here. Thanks for your wisdom.
I agree. As a single woman living alone, who will have about $1,000.00 a month for SS, I hope I do not live to be 85 because I will be working until then if I do. That's going to be difficult give my health issues already, in my 50's.
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Old 03-10-2016, 03:51 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,923,045 times
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Quote:
Originally Posted by AnnaLee2 View Post
If you saved for retirement, the money was earmarked to be spent for retirement. I hope you aren't running into a problem like mine. I find myself denying myself something simple and cheap just because it isn't important to my survival. Watching every penny over many years made me sick in the head about $5 purchases. Meanwhile, each year so far, I have continued to save part of pension and SS income and haven't touched my retirement saving except to pay taxes on some of it in advance of RMD.
Since I don't know anything about you - I can't say if the problem is in your pocketbook - or your head. I suspect the latter (at least to some extent) from the way you describe the issue. Keeping in mind that I'm not a shrink - and have no financial credentials whatsoever - here's what I would suggest. Set up a separate bank account. "AnnaLee's Fun Money Account". And fund it with whatever you know you can comfortably afford to spend on whatever your heart desires in any given year. Whether it's $500 or $1000 or $5000. And then spend it. Or maybe you might save money in the account for a year or two and do something like go on cruise (if that would be something you'd like).

I have told this story before - but I'll tell it again. Like I said - my late FIL was a miser. My late MIL inherited about $100k many years ago from one of her aunts. She asked me to invest it. I did - in conservative stuff like CDs (which actually used to pay pretty high rates). In a brokerage firm where she had a check book. I always kept about $10k there in cash. The money was in her name only - and I always encouraged her to spend it on whatever her heart desired. My late FIL always vetoed whatever my MIL wanted to spend the money on - and - being of a different generation than I am - she allowed him to browbeat her and did what he told her to do. After some years - there was $200k+ in the account. My late MIL never spent a penny of it. The first check written on the account - 101 - was for her funeral expenses . My FIL inherited the money - and - since he was a miser - my husband and his siblings wound up with pretty much all of it in the end.

I think there's a pretty big middle ground between being miserly and spending beyond one's means. It's the "sweet spot" we should all be looking for. Both before and after retirement. Robyn
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Old 03-10-2016, 04:05 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,923,045 times
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Quote:
Originally Posted by GeoffD View Post
My numbers don't work if I retired at 62. I have a contingency plan where I could do it if disaster struck where I could not work but it would require lifestyle changes I'm not willing to give up.

I'm still mulling over which resources I'm going to spend in the 4 1/2 years I'm self-funding 100% of my retirement until age 70. Part of me wants to draw down my IRA/401(k) account as much as possible since that could very well be used against me in means testing for Medicare by the time I get there.
Medicare "means testing" is based on income - not assets. And it doesn't matter for the most part where the income comes from. A non-Roth IRA distribution or SS or investment income in a taxable account. All is included in modified adjusted gross income for purposes of determining any Medicare surcharges based on income.. Reckon that could change in the future - but that would be a very small % possibility IMO. Simply because there's a lot more tax reporting of income than assets. And it's easier for the government to keep track of it. Robyn
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Old 03-10-2016, 04:18 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,923,045 times
Reputation: 6716
Quote:
Originally Posted by dbsteel View Post
I always though the idea of "saving for retirement" was so you could retire and enjoy life a little bit. What is the point of saving a million bucks and not spending it down.... isn't that the idea? There is no chance of me living off SS while my nest egg continues to grow

I don't think its as stressful as you think spending it down early. My projection for SS benefits for me and my wife based on the "calculators" is roughly $6600 per month if I wait till 67 to collect.... and if I wait to 70 it is saying more like $8600..... 20 years from now, in future inflated dollars. Even if that's an over estimate, say $5000 and $7000 respectively. That's a pretty good "raise", after which I could back way off on the 401K if I was using it to bridge the gap. The jump in SS from 65 to 70 is huge, and if its "running out of money" you are worried about, it won't happen. And my wife gets a better benefit if I pass.
If you use the same inflation numbers for something like Medicare - you'd probably be talking about $30k/year for Medicare. OTOH - I don't think the inflation numbers you're looking at are realistic. Note that 20 years is a long time. Robyn
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