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OK I'm back and have looked at my notes. Does anyone have a link that I can use to give me my estimated benefits at any point in time? In other words at 65 1 month, 65 and 2 months etc? I had it at one point and here is what my notes/statement says:
Early benefit at 62: $1,658/month
FRA 66/10: $2,336
Age 70: $2,928
My notes (from a link I can no longer find obviously) says if I file at 65 my benefit will be approx $2,050, at 65/1 $2,063 and 65/2 $2,076. That's where I got my $13/month increase.
This SSA calc will give you the % to reduce your FRA amount for any month prior to 66/10.
So a $13/mo increase for each month delayed. Far different than what you posted. So delaying a year is $157/mo increase as suppositioned. And the amount per month gained increases each year that you delay! So essentially a $1900 a year annuity for just under $20000. Impossible to beat.
So my FRA amount is $2,336. If I file at 65 I get 87.8% of that or $2,051. At 65 and 1 month the figure is $2,062 (88.3% of $2,336). Again only $11 month more, lower than my original figure I had posted. Not sure I understand the comment that $13/month is "far different than what you posted" It is exactly what I posted, now I'm seeing +$13 was actually too high.
So let's say I wait until my 66th birthday, withdrawing $24,612 from my IRA to make up the difference (2,051 x 12). Now my benefit at 66 jumps to $2,205 an increase of $154 per month but it took me a year of withdrawing from my retirement account to get there. To make up my $24,612 (not even factoring in the money that $24,612 could generate in investment returns) I need 159.8 months ($24,612 divided by $154) or 13.3 years just to break even, and that is not even getting to FRA. But of course from 66 until death I will have an additional $154/month and that total payout difference is impossible to calculate for obvious reasons, we don't know when we will die. Still it just sounds like it takes an awful long time to recover just by delaying one year.
Last edited by DaveinMtAiry; 09-03-2016 at 11:36 AM..
As discussed earlier the difference between filing at 62 and 63 is not an 8% increase, it is 5%. It increases slightly from that point on, 8% increases do not kick in until FRA.
ss calculates the increase percentages off different base amounts so they seem different but they actually are pretty close . all percentage increases pre fra are calculated of the early 62 amount . after fra all percentage increases are off your fra amount
I believe that 8% increase is on top of annual COL adjustments. Most investors these days would froth at the mouth over an investment that returns a real (not nominal) 8% per annum.
Partially correct. The increases stay approximately the same depending on WHEN your 35 years (if at max deduct for the last 35) end. If I retire at 62 with 40 years of max SS deduct or work until 65 for 43 years of max deduct, my FRA goes unchanged either way.
For DIMA: you originally posted you saw only a $13/mo increase for a years delay. It is an $11 or $13/mo increase for a months delay, bot a year. That is the basis for my comment. Also, as I've said, all SSA number are in TODAYs dollars, not what you will get shen you are 62 or 65, which increases by a COL increase every year. Again, even taking your more pessimistic estimate, if you think you can get a lifetime $1850/yr COLA compensated annuity, with survivor benefits for one year time based payments of $24612, (you keep your $24612, only drawing down and making the "annuity payments" per month, unlike a real annuity where you give them the full lum sum up front.) you are sadly mistaken. Someone here was looking to fund their delaying of SS with an annuity. Made no sense for the same reason.
If you are looking to maximize COLA income for some savings, there is NO better annuity available. If you can't afford an annuity, then the discussion is mute.
I believe that 8% increase is on top of annual COL adjustments. Most investors these days would froth at the mouth over an investment that returns a real (not nominal) 8% per annum.
no , increases are not compounded , they are based off the base amount . your 62 amount pre fra always is the base and your fra amount after fra becomes the base .
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