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Old 04-21-2016, 03:53 PM
 
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you are correct because while more comes out of your portfolio for 8 years ,much less comes out potentially for decades when you delay
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Old 04-21-2016, 04:02 PM
 
2,811 posts, read 1,005,259 times
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Quote:
Originally Posted by ReachTheBeach View Post
BTW, that is also my FRA so we are likely close in age and distance from retirement. I am thinking of retiring at 63.5 or 64 depending on how things go. 63.5 has been my target for over 20 years because I was planning to use COBRA to bridge to Medicare. ACA allows for more flexibility in my thinking but my family is bigger and more expensive than I thought when I made those plans. Anyway, I am still not sure if I am missing something or if I am not explaining it well, but I don't think there is an "extra drop" in the 401k from delaying. I think it is roughly the same drop but it just happens sooner.
Yes sounds like we are same age. I'm sure I'll be retiring at 62. It's just two of us so not as expensive as your case. My concern is the extra cash I would have to put out from 66.8 to 70 from my 401k. I realize it will be made up in the long term from a higher SS check, but while I have come to term with how much my 401k will drop in getting to FRA and I'm fine with that. Having to cover 3.2 more years will take some more and might drop my 401k level where I may not be comfortable with.

I have done many calculations with fire calc and others and even my own spreadsheets and if I make FRA between pension and SS it would cover our expenses comfortably and enough 401k to not have to worry.

We shall see what happens I have 4 more years to go and I'm sure many more calculations lol
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Old 04-21-2016, 05:39 PM
 
13,935 posts, read 7,422,661 times
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Quote:
Originally Posted by selhars View Post
GeoffD…
...I know your decision is years off. DO you have any idea how far down you'd feel comfortable spending your own money, while you wait for 70?

(if not to a dollar amount, then a percentage)

I also have thought about tapping my ow none to delay to 70…but how far down is the question.
For example, I can't go so low I wouldn't be able to buy in to a CCRC. OR go into nursing facility as private pay for a few years.
So I wouldn't feel comfortable going below 300K for example (in today's dollars)
If everything goes according to plan, a 4 1/2 year bridge to age 70 would be 30% of my investable assets. That's assuming a burn rate that is about 25% more than I spend now. I'd be able to sustain that burn rate once I start collecting Social Security assuming a 5% draw down.

It's a very conservative plan since it assumes my portfolio does no better than track inflation. The optimistic part is that it assumes I'll be employed with no breaks in employment for the next 7 1/2 years saving and investing at my current rate.
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Old 04-21-2016, 05:58 PM
 
Location: RVA
2,172 posts, read 1,268,333 times
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Quote:
Originally Posted by ReachTheBeach View Post
Well I am not Geoff, but I have been considering the same question. Here is what I keep coming up with. At the break-even point, if you have spent the same amount of money you should have an account balance of about the same with a couple of caveats.....

EDIT - just realized I did not answer the question. The above logic convinces me it would be okay to go lower than I might if I didn't have that plan. Going a step further with oversimplification, if this takes me to a balance so low that a future CCRC might be tough to swing; I probably never really could have afforded it unless I change my spending. If delaying causes your balance to go too low, I think it reveals the problem rather than causing it.

Bada bing. Exactly my same thought process. A higher fixed income will get you in a better CCRC than a savings will.
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Old 05-17-2016, 03:05 PM
 
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Well, I am counting the days till Aug, when I will hit 62 and collect my soc. sec. Living on less than $2000 a month, I am managing just fine and always have. Keep in mind, I have no 'baggage' either but always looking, haha. Calif is not cheap but you have to be a great shopper like me. Hey, when you have a great sense of planning, it can work for you. Nothing in checking, nothing in saving but always manage..Keep stress at a good level, it all works out..Bankruptcy is a good way out too. You cant get blood out of a stone, is that the saying..Oh well..
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Old 06-06-2016, 08:19 PM
 
199 posts, read 110,859 times
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I made a spreadsheet using 2015 benefit amounts. Can't know any benefit increases, but with that said:

If I live to be age 78, I'll have collected the same amount of money whether I started drawing at age 62 or started drawing at age 66 and 4 months (my FRA).

If I live to be age 80, I'll have collected the same amount of money whether I started drawing at age 62 or started drawing at age 70.

If I live to be age 82, I'll have collected the same amount of money whether I started drawing at age 66 and 4 months or started drawing at age 70. This amount exceeds by 30 thousand the amount I'd have at age 82 if started drawing at age 62.
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Old 06-07-2016, 12:17 AM
 
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I don't know anyone who has -- or plans -- to wait until 70.
Of course that's just my circle at my income and socio-economic level.

My co workers who are 66-and change -- who are still working obviously -- are over the moon, smiling ear-to ear -- and rubbing their hands like a money grubber -- they can't contain themselves when they talk about how much they're bringing in now that they can work and not have their Soc Sec withheld.

When I ask them if they had to wait to 67 to get to that point…then they hesitate and say, "well I on't know about that." (even though they'll likely work past 67)

As a person who does have to wait to 67 -- I have to say I resent the fact that my FRA is 67, And I'll have to work to 68 to really get the same "boon' that they do. It is what it is and there's nothing I can do about it. But I really do feel scr weed.
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Old 06-07-2016, 03:08 AM
 
13,935 posts, read 7,422,661 times
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Quote:
Originally Posted by sylvianfisher View Post
I made a spreadsheet using 2015 benefit amounts. Can't know any benefit increases, but with that said:

If I live to be age 78, I'll have collected the same amount of money whether I started drawing at age 62 or started drawing at age 66 and 4 months (my FRA).

If I live to be age 80, I'll have collected the same amount of money whether I started drawing at age 62 or started drawing at age 70.

If I live to be age 82, I'll have collected the same amount of money whether I started drawing at age 66 and 4 months or started drawing at age 70. This amount exceeds by 30 thousand the amount I'd have at age 82 if started drawing at age 62.
Put 4% inflation into that spreadsheet and see what happens. Because of COLA adjustments, the math changes quite a bit. Anybody here remembers double digit inflation and a stagnant stock market. Your retirement portfolio wouldn't come close to tracking inflation under those conditions. Social Security is the best insurance you can have against inflation. It's a huge advantage to defer collecting for as long as you can.
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Old 06-07-2016, 03:19 AM
 
71,688 posts, read 71,801,099 times
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Quote:
Originally Posted by selhars View Post
I don't know anyone who has -- or plans -- to wait until 70.
Of course that's just my circle at my income and socio-economic level.

My co workers who are 66-and change -- who are still working obviously -- are over the moon, smiling ear-to ear -- and rubbing their hands like a money grubber -- they can't contain themselves when they talk about how much they're bringing in now that they can work and not have their Soc Sec withheld.

When I ask them if they had to wait to 67 to get to that point…then they hesitate and say, "well I on't know about that." (even though they'll likely work past 67)

As a person who does have to wait to 67 -- I have to say I resent the fact that my FRA is 67, And I'll have to work to 68 to really get the same "boon' that they do. It is what it is and there's nothing I can do about it. But I really do feel scr weed.
well now you now someone delaying until 70. me!

with the odds of someone in a couple seeing 90 at almost a coin toss (47%) v that equates to a 5% real return after inflation .

that is what you see if you are lucky from a balanced portfolio if things go well and taking on that volatility as well as the risk .this 5% real return is from what amounts to a gov't bond .

even a 4% real return if you only live to your 80's is likely better then most folks get investing later in life . remember , real returns are after we subtract out inflation .

the problem in retirement with investing on your own while spending down is not only do you need a certain return from the investments which can be difficult and nerve racking enough but that average return has to be in a favorible order of gains and losses . you can have a decent average return but if the losses are up front you will do poorly .

sequence of return risk is the biggest risk retirees have , it isn't the amount of the return . that is the number 1 reason we are delaying . it cuts our sequence risk and performance risk down possibly for decades .

so you have two obstacles to overcome investing on your own vs delaying ss .



Last edited by mathjak107; 06-07-2016 at 03:52 AM..
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Old 06-07-2016, 04:49 AM
 
Location: Central Massachusetts
4,800 posts, read 4,851,516 times
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I am with Selhars in that I don't know anyone with the exception of you. You are going to be one of the 5%ers that do. It might become more common in future generations but.... for the current crop of baby boomers entering retirement age the vast majority will file for and receive SS at FRA or younger. In fact I think the number is somewhere near 50% taking SS at 62 and that really takes out a huge chunk. Most of it depends on socio-economic status and the fact that a lot of people live paycheck to paycheck. Even those that save something in retirement accounts see themselves not able to live to the ripe old age of 99.
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