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Old 04-01-2016, 04:07 PM
 
Location: North West Arkansas (zone 6b)
2,672 posts, read 2,012,930 times
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Quote:
Originally Posted by TheShadow View Post
It's definitely not "insane" to collect at 62. Everyone's circumstances are different. You collect a smaller amount at 62, but for a longer period of years, and it breaks even somewhere around your average life expectancy. For folks with health issues, or family health histories indicating they probably aren't going to make it to 80, why should they delay if they don't need to? Also for folks who are comfortable and not worried about receiving the max amount monthly it is sort of a toss-up since you break even anyway, assuming you live that long. For some taking SS at less than FRA allows them to leave their investments alone for a longer period to allow them to grow. Some take it early to make extra principle payments on their house and get it paid off early, saving interest. Not a big deal at today's interest rates, but if they go up again it might make sense. For me, it's not about necessity but I will probably take mine at 62 so that I will have the extra income for more travel money while I am still young enough to enjoy traveling.
allowing the retirement funds to continue growing sounds nice as long as you can get it.

I'm currently invested in high dividend paying stocks and feel like I have too much stock market exposure. I will begin reevaluating my portfolio mix more frequently but glad I still have some growth stocks such as Google to keep the portfolio growing outside of the compounded interest from the reinvested dividends.
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Old 04-01-2016, 04:19 PM
 
7,801 posts, read 4,389,547 times
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How much do you need? I mean, I expect to be on sort of a fixed income budget at some point; I'll either have my beach house or be in some 55+ community and my monthly pension/IRA payout/SS will be enough along with whatever supplement I need from savings. What's the advantage of waiting longer in order to get more when I'm even older? I suppose if you plan to leave it all to heirs, you might want to wait longer to collect more to leave more, but mine - if any - is going to animal rescue.


What IS the break-even calculation?
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Old 04-01-2016, 05:00 PM
 
Location: Yavapai County
746 posts, read 482,783 times
Reputation: 928
Quote:
Originally Posted by AZDesertBrat View Post
This is exactly why this guy lost ANY sympathy he might have had from me a long time ago. Like him I lived on little for a long time but no matter how little/much I made I managed to save. The BEST thing I ever did was go to work for Walmart six years ago. I started out at only $8 hour, part time...33 hours...for 4 1/2 years, found a small but comfy place to live and worked my tail off. I am now full time...34 hours/haha...but my wage has gone up considerably and continues to go up every year. I have some really great bennies as well which probably makes it more, I just don't see the actual cash sometimes. I DO love my quarterly bonuses and I have a TON of paid time off if I choose to use it. The thing is that nothing happens without effort and motivation.


It took me five years to save up to buy my house and then I only used half of that to cover everything to do it. I am now adding money back into the account that I used and it's a good feeling to be able to do that. I did have my retirement under control till my ex decided he just didn't want to be married anymore and pulled the rug right out from under me. It didn't stop me though and it shouldn't stop anyone else either IF THEY REALLY WANT something. If I can do it anyone can do and I stand by that. Oh yeah, I also paid off my car and while the payments were pretty low it's still a relief to have that done. That money goes back into the savings account so still another monthly payment...to myself!


I never started a job with the idea that "this is all there is". I had 'ambitions' to go higher, make more money and do better, with every single one of them. If my employer didn't co operate I found a better one! This guy just has no "want to" and that's all there is to it. Or wants it handed to him. Yes, because of circumstances I will be working till I either die or simply cannot do it anymore but until then I'll continue to work my butt off, live a decent life and blame nobody but ME if it doesn't work out. But it will. I would give a lot to be able to retire and still live 'the good life' but accepted, long ago, that it's just not going to be. I won't let it depress me though and it's hard to feel sympathy for a healthy guy who just won't do it.
Great, inspiring post!
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Old 04-01-2016, 06:52 PM
 
Location: NC Piedmont
3,911 posts, read 2,879,340 times
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Quote:
Originally Posted by otterhere View Post
How much do you need? I mean, I expect to be on sort of a fixed income budget at some point; I'll either have my beach house or be in some 55+ community and my monthly pension/IRA payout/SS will be enough along with whatever supplement I need from savings. What's the advantage of waiting longer in order to get more when I'm even older? I suppose if you plan to leave it all to heirs, you might want to wait longer to collect more to leave more, but mine - if any - is going to animal rescue.


What IS the break-even calculation?
The break even calculation is figuring out when you will have received the same amount in SS benefits if you start at one date versus another. If you wait, you get bigger checks but you miss a bunch of checks that you would have receivied if you started earlier, so it takes a while to catch up. For most people, break even is late 70s so if live into your 80s you will be getting bigger checks at that point because you delayed and maybe end up with a lot bigger total if you live a really long time.
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Old 04-01-2016, 09:09 PM
 
Location: RVA
2,165 posts, read 1,266,382 times
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Quote:
Originally Posted by otterhere View Post
How much do you need? I mean, I expect to be on sort of a fixed income budget at some point; I'll either have my beach house or be in some 55+ community and my monthly pension/IRA payout/SS will be enough along with whatever supplement I need from savings. What's the advantage of waiting longer in order to get more when I'm even older?
I guess unless one sees a generated income and expense spreadsheet with inflation assumptions, one may not realize that you WILL need more in tomorrow's dollars just to live the same as today. A larger SS check means a larger COLA portion of yournincome,mtaxed at a lower rate than withdrawal from a tIRA. It is also not for larger check JUST later, but a larger income your whole life. IF you live to a much older age,mthe larger guaranteed income is easier to budget to than hopin your savings will still be there to supplement it. If you have so much money that no matter what happens, your retirement is the same, then great! No need to plan or worry. But the rest of us 99% can always use more for whatever. If you have so little that delaying is not an option, then again, delaying is not for you.

But for plenty of people in the middle, using your saving to live off, in order to delay taking SS, allows a larger income right from the beginning, BECAUSE once the larger SS checks come in, you don't need to touch your savings to maintain the same income, or the amount is far far less than you would be twking out to have a lower income, and compensating for inflation. It is recovering unmolested for a longer leriod of time, during which you don't nmed it except for emergencies, unusual purchases, or inheritance.

I can collect $24k at 62. Or $43k at 79 according to SSA (in age 62 dollars), but those checks in age 70 dollars could be anywhere from $48k to $52k depending on COLA. So Lets assume a low 1% inflation and I get $48k if I delay to 70,of which I only pay taxes on 80% of. So 20% or $9600 is free, taxed on $38400, so actual income is 38400. If I were to collect at 62, I would only be getting $27k at 70. So SS after taxes is 21600, plus difference needed from tIRA is 38400 - 21600 = 17200,'after taxes, or another $23k just to have the same amount.

So now I'm 70, and drawing an inflation increased $23k/yr to break even. Or zero if I delayed SS.
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Old 04-01-2016, 10:05 PM
 
445 posts, read 281,862 times
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Reach the beach, I have appreciated your posts on this thread. Not allowed to rep you again, so will say it this way.
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Old 04-02-2016, 12:53 AM
 
26,104 posts, read 28,506,784 times
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Quote:
Originally Posted by freemkt View Post
Q: Why do poor people have kids they can't afford?

A: Who else is going to support them in their old age?
Except poor people usually have poor kids. It's the cycle of poverty. Poor adult children can't support their parents.
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Old 04-02-2016, 01:15 AM
 
26,104 posts, read 28,506,784 times
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Quote:
Originally Posted by InchingWest View Post
Employment: It was darn near impossible not to find it when boomers were growing up and wages always went up, not only in nominal terms, but in real inflation adjusted terms. Quality of life in this country hit it's peak during your time, and probably before I hit adulthood. If you're upper middle age now you pretty much had to do something to sabotage yourself to end up unemployed for long (which lets admit, a lot of tatted up and pierced young people are in fact doing to themselves).
Nope, sorry. This just isn't true. The labor force participation rate today is about what it was in the late 1970s. You didn't live through the economy of 1973-1983. It wasn't that great. The recession of 1973-74 was pretty bad and the one from 1981-1982 was almost as bad as what we had in 2008 with unemployment over 10% and double digit inflation to go with it. Inflation was much higher throughout the 1970s and 1980s than it is today. Granted, I think today's inflation rate is understated, but inflation back then was still higher.

Quote:
Originally Posted by InchingWest View Post
[Energy was cheaper for you starting out.
Depends on the time period, but for much of it, it wasn't. And today's cars are much more efficient than they were back then, especially if you buy a sensible one instead of one of those ridiculously oversized trucks or SUVs.

Quote:
Originally Posted by InchingWest View Post
Overall Quality of Life seems better in any previous generation. I wish "Leave it to Beaver" could be found in this day and age. We have less free time, everything seems dirtier and there's trash all over. People are less friendly and far less respectful of others, in general.
Trash all over? In some ways yes and others, no. It's actually better today in many ways than it was in the past. Newspapers used to fly all over the place. Nowadays, nobody buys them, so that eliminates a lot of the trash right there. Air pollution....way down since the 1980s because of cleaner technology. Health care? it's a rip off, but it has advanced over the last 20-30 years. We could spend a lot less on it if we would eat healthier and get some exercise. Then we wouldn't need so many darn drugs. Quality of life was better in the sense that there weren't so many overweight/obese people. Also, we didn't have a 40% out of wedlock birth rate that traps people in poverty or semi-poverty, so in that sense, quality of life was better. Once again, this is something we can fix if we (collectively) make more of an effort to learn how to have positive relationships. I'm not sure if people really have less free time, either.

There's no question, though, that education and health care were much cheaper in the past. Health care costs are easier to control than most people will admit. 70% of our health issues are from unhealthy lifestyle choices. Education costs are tougher. But if people are strategic and avoid the degrees that don't have good prospects, most can come out of school without an insane load of debt. But I will admit that even for GenXers like myself, you could still be somewhat aimless and get away with it to a degree that just isn't possible today. But the silver lining is that being focused is actually a good thing in the long run.

Quote:
Originally Posted by InchingWest View Post
I don't have sympathy for boomers who complain about money or who are not in a position to retire. Those who blew it did it to themselves in the vast majority of cases.
In general, I agree with this assessment. Boomers and GenXers embraced the hippie attitude of "just worry about today and tomorrow will magically work out the way we want". That didn't happen for the vast majority of people who adopted that attitude. But at the same time, the past wasn't quite as rosy as you make it out to be.
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Old 04-02-2016, 03:32 AM
 
71,589 posts, read 71,751,865 times
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Quote:
Originally Posted by ReachTheBeach View Post
The break even calculation is figuring out when you will have received the same amount in SS benefits if you start at one date versus another. If you wait, you get bigger checks but you miss a bunch of checks that you would have receivied if you started earlier, so it takes a while to catch up. For most people, break even is late 70s so if live into your 80s you will be getting bigger checks at that point because you delayed and maybe end up with a lot bigger total if you live a really long time.
the real problem is that there really is so much more in the break even calculation so if folks are not well informed they do not really have the full picture .

the real calculation has to include the fact that you may be spending down invested assets that are now gone forever and no longer able to generate income , you have to count the checks you did not get , if spousal benefits are going to be used then waiting from 62 to fra means your spouse gets no adder to their benefit if they filed .

in our case my wife gets 4200.00 a year added to her benefit when i file and the longer i delay the longer she does not get the adder .

you are not covered under medicare's hold harmless law so you get the full increase rather then be limited to just cola amounts .

this year saw those who delayed filing go from 104.50 to i think around 159.00 or so a month .

all that can push break even well out in to the 80's .

on the other hand the calculations do not take in to account any spousal benefits you get delaying .

even though i am delaying to 70 we will be filing restricted application which is still an option for us and i will be getting 1/2 my wifes full benefit while delaying .

markets are likely to be below average for the next 8-10 years because valuations are so high so delaying may be the better deal for us vs spending down those assets .

there is a lot to consider on both sides of the equation but when you can argue both for and against both sides equally then you understand it enough to make a good decision .
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Old 04-02-2016, 06:21 AM
 
Location: NC Piedmont
3,911 posts, read 2,879,340 times
Reputation: 6291
I have a gift for over simplification. Fortunately, mathjak does not and often fills in the gaps... (and it won't let me rep you again yet)

One more possible over simplification - it won't make all that much difference for most people. There is a "good problem" with the way they calculate the amounts in that the life expectancy they use (the idea is they try to make it come out the same on average by using life expectancy as the break even point) isn't adjusted higher because you have made it past 62 and in reality it should be (people who die young bring the average down and those people aren't in the pool anymore). So you have a slightly better than even chance of making it past the break even point and collecting more by delaying. But slightly less than half the people who delay will not live to the break even point and actually lose some money. And most of the people who do make it past the break even point won't live a whole lot longer. The big what if scenario is if you live into your 90s; then it can be a really big difference.
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