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Old 04-07-2016, 01:55 AM
 
Location: RVA
2,165 posts, read 1,266,382 times
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Nice analysis BD. I would have reworded it to say "max expenses coverable" in stead of just expenses. Also, since we didnt see the spreadsheet, what did you use for the cola rate? Simple analysis like this is exactly what I referred to in other posts. If you so feel, run this again with all the same assumptions, except she works to 64, (two more years), with a modest increase in SS, and natural eliminated withdrawal from savings at the same time. Assume a modest 4%/yr increase in savings to $108000, but no contributions. I'd bet that delaying to 70 is now possible and considerably rosier.
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Old 04-07-2016, 02:30 AM
 
71,584 posts, read 71,730,589 times
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interesting article from michael kitces looking at delaying from many angles

https://www.kitces.com/blog/how-dela...money-can-buy/
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Old 04-07-2016, 06:53 AM
 
Location: NC Piedmont
3,911 posts, read 2,878,614 times
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Quote:
Originally Posted by Perryinva View Post
Nice analysis BD. I would have reworded it to say "max expenses coverable" in stead of just expenses. Also, since we didnt see the spreadsheet, what did you use for the cola rate? Simple analysis like this is exactly what I referred to in other posts. If you so feel, run this again with all the same assumptions, except she works to 64, (two more years), with a modest increase in SS, and natural eliminated withdrawal from savings at the same time. Assume a modest 4%/yr increase in savings to $108000, but no contributions. I'd bet that delaying to 70 is now possible and considerably rosier.
I am going out on a limb here to say someone with finances as described that is retiring at 62 is likely doing it because continuing to work is difficult at best. The math and logic likely supports what you suggest if working is possible. Delaying retirement is a very different discussion (IMO anyway) than delaying SS payments.
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Old 04-07-2016, 08:18 AM
 
Location: Idaho
1,454 posts, read 1,155,024 times
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Quote:
Originally Posted by mathjak107 View Post
the 4% safe withdrawal rate is based on INCREASING each year by the rate of inflation to keep the spending constant .
mathjak107,

I simplified my calculations by NOT taking into account inflation or keeping all values at today's dollar for all future calculations with the assumption that:

1. The saving is invested to keep up with inflation so that the spending rate (say 4%) is effectively constant.
2. SS payment is COLA adjusted so that the payment is effectively constant
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Old 04-07-2016, 08:19 AM
 
Location: In The Pacific
986 posts, read 1,178,839 times
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I didn't analyze anything and or planned for my retirement. I also didn't like the thought of working until 65 or up to my 70s and just maybe kick the bucket in between. I took an early retirement out of necessity due to my health and decided to retire at age 49 and I knew full well what my starting meager monthly pension would be until my other pensions kicked in 11 yrs later at age 60 and 62.
We moved to the Philippines, our roots where the cost of living was still affordable with my meager pension, but it was sufficient.
18 yrs later, everything worked it self out, ever since I started to collect my other pensions at age 60, my reserves military pension and 62 my meager SSA, I'm now 67 yrs old. Our retirement lifestyle has been wonderful here overseas since we became permanent residents and we're now financially stable without anymore worries concerning our finances for our future. We have no intentions of returning to the U.S., except for on vacations once in a while as long I'm still able to travel, because those long flights are murder on my lower back.
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Old 04-07-2016, 05:35 PM
 
Location: Baltimore, MD
3,745 posts, read 4,217,509 times
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Wow! Thanks, BellaDL.

I think I'm going to have to run these numbers myself, substituting my numbers for yours. Or, more likely, having one of my sons run the numbers when he is visiting. (I know, how ridiculous is that?!)

After my initial excitement I noticed that you used $1300/month at age 62 for an average social security check. Unfortunately, that's not close. The average social security check is about $1300 at Full Retirement Age, and it is less than $1200 for women. I searched for over an hour this morning and I could NOT nail down the current average benefit for a retiree who is claiming benefits at her FRA. It appears that over 40 percent of women claim at 62 and another 20 percent or so claim before they reach 66. I'm pretty sure someone could determine the average benefit at FRA given those variables but it's not worth the time and effort.

If we accept $1300 as the average retirement benefit (FRA) then the early 62 benefit will actually be $975, as there is a 25% reduction (not the old 20% reduction) for us Boomers.

Nevertheless, I found your initial calculations to be a real eye opener. I'm almost afraid to run my own numbers.

OTOH, it looks like my next Side Hustle could be helping retirees obtain Public Benefits. (Who knew that my former job as a poverty attorney would come in handy one day? LOL )
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Old 04-07-2016, 06:01 PM
 
Location: RVA
2,165 posts, read 1,266,382 times
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Actually, the overall average of all SS checks is $1300. Not the average at FRA. The average at FRA is higher because the percentage of people taking SS at 62 is by far the largest percentage. $1300 is probably around the average for collecting at 64 or so.
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Old 04-07-2016, 06:23 PM
 
Location: Baltimore, MD
3,745 posts, read 4,217,509 times
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Quote:
Originally Posted by Perryinva View Post
Actually, the overall average of all SS checks is $1300. Not the average at FRA. The average at FRA is higher because the percentage of people taking SS at 62 is by far the largest percentage. $1300 is probably around the average for collecting at 64 or so.
No doubt it may be a tad higher than $1300 but I don't think it's much more...well, for women, anyway. I scribbled down $1,163.45 for women and $1,504.49 for men but I can't remember if that was at age 66. I think it was. But - as noted, 41-42% of the women filed at 62 with a total of about 61-62% filing by the age of 65 and those would have been included in that 66 figure.

I actually found a median figure for a medium wage earner in one of the Chief Actuary's presentations, that would probably be closer to what I'm searching for.

Sooner or later I'm going to find that number! If not, I'll get a ballpark figure.

(I know it's not terribly important but I am an information geek, so... )
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Old 04-07-2016, 08:08 PM
 
6,884 posts, read 7,281,254 times
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Quote:
Delaying retirement is a very different discussion (IMO anyway) than delaying SS payments.
No doubt about it those are two different things.

I discuss this with a couple of coworkers -- one who's 67 waited until his age 66 FRA, another who's 73 now and took it early at 65, and who are still working full time. The 67 year old who'll be 68 this year says he's couldn't wait to start collecting, meaning he was chomping at the bit. He's a bird-in-the-hand guy, and wanted "his money." You just can't convince him that waiting could be better. Taxation or not, they just won't even consider that waiting MIGHT have been better. One is making 70K a year. Another, is making about 150K a year, collecting ANOTHER pension, AND getting Soc Sec. You should see their eyes gleam when they talk about collecting their Soc Sec.

Last edited by selhars; 04-07-2016 at 08:25 PM..
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Old 04-08-2016, 02:20 AM
 
Location: RVA
2,165 posts, read 1,266,382 times
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My wife was the same. She retired at 56, 7 years ago, started immediately to collect her small teachers pension. No amount of math, tables, or articles could convince her to even delay either pension or SS to her FRA, regardless that I showed her I would have to work an additional year to make up the difference. She wanted it ASAP, and SS at 62, period. Both her parents, neither particularly healthy, still lived to 88, and her father told her that he wished he had waited to collect, as he also filed at 62, convinced he would be dead by 72. Most definitely a bird in the hand type. And she refuses to invest it. It sits in a 1% AMEX savings. It's HER money to do with as she wants. She takes some out to pay taxes due on it, vacation extras, like that. But happy wife, happy life, is what really matters, and she is the one that earned it.
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