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Old 04-08-2016, 07:36 AM
 
Location: Eastern UP of Michigan
1,202 posts, read 682,799 times
Reputation: 1271

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We've generally had 2 plans we are operating under.


Plan #1 had been for me to keep working, although part/time about 20- 25 hours per week, and draw down from a "bucket" of 30K or so. When that bucket was empty, then I would start to draw.


Plan #2 would involve Jims mom passing, her small remaining estate being settled, selling our house and packing the car and moving back to the UP of Michigan. I would apply once we were settled in.


His mom was wonderfully physically healthy except for a serious progressive dementia, and receiving wonderful care in a well regarded care center. Well in the last month, it looks like plan #2 will be happens first. You never know what is going to come your way.


On a side note, thank god for LTC. She was certified eligible last fall, but they pay from time of admittance for the affliction, even if she still able to do enough of the ADLS at time of admittance. Her reimbursement check was for around 90K and still left about 2+ years of payment left.
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Old 04-08-2016, 08:40 AM
 
Location: SoCal
13,235 posts, read 6,335,450 times
Reputation: 9854
My view is do not delay at taking it if it prevents you from retiring. The sooner you retire the better chance you have of collecting it till your 90s. People here who wrote they regretted taken it at 62 when they got to their 90s, but they might not be here to regret that decision if they didn't retire at 62.
My philosophy is try to live well and healthy longer. I hate to end up with lots of money and end up in nursing home in my 90s.

Last edited by NewbieHere; 04-08-2016 at 09:58 AM..
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Old 04-08-2016, 09:45 AM
 
Location: RVA
2,167 posts, read 1,266,787 times
Reputation: 4460
Personally, I found that "article" rather naive, as he liked to say about references to delay articles, with a distinct tone of a younger person nowhere near retirement or understanding sequence risk, and financial vulnerability of older people. His desired intent, however tongue in cheek to live to 150 proves that. Really, Kitces, et all are naive? IF I could get a guaranteed 7% return every year, with inflation fixed at a low value for my entire retirement, then it WOULD be a no brainer to collect ASAP, and everyone would agree. But that is in no way reality. If dreams were horses, we'd all be riding. The fact that he espouses HIS analysis as proven fact and undebateable also shows immaturity and naÔveity. Bottom line is it always depends on your circumstances, required income and amounts saved. He references his assumptions that for instance, SS is only taxed at 85%, yet no actual use of the fact is made on later income levels. The less you need SS, and the less impact on your savings delaying costs you, the greater the benefits of a larger guaranteed income only taxed at 85% are.

The allure of collecting vs delaying is immense. I personally don't know if I could makes it past say 68, where the enticement of those now quite large checks, only taxed at 85%, allowing me to not take fully taxed dollars out of the IRA, may be overwhelming. If one has saved and planned their savings for the future, it is very hard when the future is here, to not scratch that itch. Income sequencing is only fully appreciated when the sequence is realized. Before that point,mit is based on many assumptions that are constantly changing based on inflation, markets, health, etc.

I know my calcs all show I want to reduce my RMDs as much as possible, for the first 7-8 years at least, because I do not want or need that income at that time in my life, increasing my tax rate across the board. By spending down some RMD eligible savings to collect a 70% larger reduced tax income from SS, has dual benefits.

Nope, that piece did nothing to disprove anything I've already proven to myself. Its my own inate human weakness that may drive me to collect before 70, not his pseudo facts and figures.
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Old 04-08-2016, 10:34 AM
 
2,786 posts, read 3,966,932 times
Reputation: 3006
I am turning 65 this month. I am seriously thinking about collecting next year at 66. I am still working part time (about $25K a year) but would quit that. Still get a pension though and wife has been on SS disability for 2 years . I don't really want to wait to 70 though
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Old 04-08-2016, 10:40 AM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
Being eight years in retirement and within two years of claiming at 70 I realize a very important consideration that rarely gets considered is: What are you going to do with the money?

I know from previous discussions on this and other topics that there are a number of forum members retired and still in the accumulation stage or have or planning to buy a second home etc. Money used for additional asset or wealth creation can change the equation. I am not talking about taking early and investing the money only but perhaps most importantly waiting and letting your age 70 income exceed your lifestyle cost. At that point you are no longer drawing down for the norm. You may be increasing considerably your investments and savings which is important to some forum members.

FireCalc can give a great long term perspective. It helped me considerably in determining our filing decisions.
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Old 04-08-2016, 11:43 AM
 
2,296 posts, read 1,561,711 times
Reputation: 2737
Quote:
Originally Posted by mathjak107 View Post
that is our feeling too . i rather take on more longevity risk delaying at these valuations then more market and interest rate risk
For a single person, are you saying it might make more sense to take it earlier?
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Old 04-08-2016, 11:51 AM
 
Location: Central Massachusetts
4,800 posts, read 4,848,939 times
Reputation: 6379
Quote:
Originally Posted by Rogarven View Post
I am turning 65 this month. I am seriously thinking about collecting next year at 66. I am still working part time (about $25K a year) but would quit that. Still get a pension though and wife has been on SS disability for 2 years . I don't really want to wait to 70 though
I would agree in your circumstances. I honestly don't advocate taking at 62 unless it is needed and on the other hand I don't advocate waiting until 70. I mean that for those who have reached the upper 50s and up. The real important aspect is to not wait too long but also not take too early. Depending on assets and how they are allocated a person or family need to consider the reasons for both aspects. Take into consideration taxes if taken now or later and how they affect your portfolio and spending and saving habits.

Quote:
Originally Posted by TuborgP View Post
Being eight years in retirement and within two years of claiming at 70 I realize a very important consideration that rarely gets considered is: What are you going to do with the money?

I know from previous discussions on this and other topics that there are a number of forum members retired and still in the accumulation stage or have or planning to buy a second home etc. Money used for additional asset or wealth creation can change the equation. I am not talking about taking early and investing the money only but perhaps most importantly waiting and letting your age 70 income exceed your lifestyle cost. At that point you are no longer drawing down for the norm. You may be increasing considerably your investments and savings which is important to some forum members.

FireCalc can give a great long term perspective. It helped me considerably in determining our filing decisions.
TuborgP you could leave some to me ( ) Just teasing.

In the above I believe that our heirs will be able to benefit from our income stream as it is generated and we will still be able to spend our savings towards our pursuit of happiness. All bets are off if something unforeseen happens. Yet you can plan for those to happen and even prepare somewhat but you cannot live in fear that it will happen. Then you end up miserable and old and with assets you didn't spend and could have.

All I put out this article because it rings of some truths and it also rings a bit hollow with some of it's assumptions. As someone pointed out assuming an annual earnings of 7.3% is a bit much especially in this market. We are due for a course correction. I hope that it don't completely crash but we will have to weather the storm regardless. How we do that will depend on our nerves and our resolve.

I also do not want anyone to think I advocate anything here except that you need to discuss this with your families. We also need to discuss it here and do that continually. We have new folk here and sometimes a new point of view opens the discussion to allow everyone here to make a choice and decision as to this aspect of their lives. If you are under 55 it might not be high on your radar. If you are in your 20s it certainly is not part of your life to think this far ahead. But how we who are in that range of taking or not think this through on here might give them new ideas as to how to fix the problem and hopefully make those ideas happen.
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Old 04-08-2016, 11:53 AM
 
Location: Sinkholeville
1,496 posts, read 1,432,202 times
Reputation: 2322
I'd rather enjoy 16 years of retirement than only 8.....(62 vs 70, and until 78).


Assuming in both cases I die at 78 (older than my parents and siblings did)
I could retire modestly at 62 or waste the best of my golden years seeking more gold until 70.


My Dad retired from the military early at 46, and died before 64, enjoying 18 years retired in Florida.
I'll follow his example and get it while I can.


Life is too short to worry about leaving someone a bigger inheritance.
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Old 04-08-2016, 12:11 PM
 
Location: NC Piedmont
3,911 posts, read 2,879,340 times
Reputation: 6291
Quote:
Originally Posted by ChuteTheMall View Post
I'd rather enjoy 16 years of retirement than only 8.....(62 vs 70, and until 78).


Assuming in both cases I die at 78 (older than my parents and siblings did)
I could retire modestly at 62 or waste the best of my golden years seeking more gold until 70.


My Dad retired from the military early at 46, and died before 64, enjoying 18 years retired in Florida.
I'll follow his example and get it while I can.


Life is too short to worry about leaving someone a bigger inheritance.
You are confusing delaying retirement with delaying filing for SS. This is about making the decision about whether or not to pay yourself completely out of your savings without filing for SS for a few years before filing because in the long run (assuming there is a long run) you could end up with a bigger income stream. There are lots of caveats and so it may or may not work out. When to retire is another discussion.
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Old 04-08-2016, 12:12 PM
 
13,909 posts, read 7,411,228 times
Reputation: 25410
My dad made it to 85. My mom is about to turn 84. I have to plan to get to 90 and expect to make at least 85.

My plan is to stop working at age 65 1/2 and defer collecting Social Security until age 70. That way, I know for certain I will have an inflation-protected income stream to keep a roof over my head and food on the table for the rest of my life regardless of what kinds of nutty things happen to my investment portfolio.

I could have one of those "life happens" events where that plan vaporizes and I have no choice but to start collecting at age 62. It's not what I want to happen but it's certainly one of several contingency plans.
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