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Old 04-12-2016, 06:47 AM
 
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The problem is that planning for the statistic can have devastating consequences if you are wrong .

That is why we use insurance. Everything we insure is statistically tiny. But if it is us it happens to the consequences can be terrible.

That is why we have fire insurance , life insurance at young ages , insure our car against catastrophic liability suits ,etc.

All very small chances it is us but terrible outcomes if it is.

I certainly rather plan to long then to short.

Our only reason for delaying ss is so we can cut dependancy down on the markets. It is the best annuity money can buy.

You could never purchase an inflation adjusted annuity that kicked in at 70 for what it cost you to delay.

To my wife having a bigger pay check not based on markets is a good thing

Last edited by mathjak107; 04-12-2016 at 06:57 AM..
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Old 04-12-2016, 07:22 AM
 
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So are most of the people who wait to they are seventy to collect, working or retired from age 62-70?
The point is not what MOST people are doing but what works for YOU--
Income needs, risk tolerance, health, relationship status, personal attitude, location, tax profile---all of those and more are factors which influence any person's decision...Not to mention any Black Swans that might present themselves...

If you are looking for "rule of thumb" or other math factoids that make your decision for you, I don't think you are likely to find it because people can look at the same information and disagree as to the better choice...

I know my husband retired (no pension) at 65 and we live off savings predominantly with my small teacher's pension and about the same amount of spousal benefits this year (later than I could have because of our tax profile). Now he filed/suspended and is waiting until 70 based on advice of our financial advisor. BUT in some ways I wish he would take the SS--he is past FRA--and not draw from savings even though I keep being told we have adequate resources...
I am just totally not used to using savings to live on---have always read and felt that drawing from principal is a death knell for financial wellbeing...so there is a strong psychological factor to being retired that affects my state of mind...I find that my enjoyment is colored by the financial rearrangement more than I thought possible.
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Old 04-12-2016, 07:26 AM
 
Location: NC Piedmont
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Originally Posted by mathjak107 View Post
The problem is that planning for the statistic can have devastating consequences if you are wrong .
I agree with you. I don't think the statistic will make much difference to you or me if you said it appears likely that at least one person out of a couple retiring with means beyond SS will live past 90 instead of saying almost 50% will. But some people reading are chin scratching and we are selling them on planning (I hope).
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Old 04-12-2016, 07:46 AM
 
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My dad lived to be over 90. My mom, a smoker since her teens with COPD because of it, still lived til 82. She had one sister who didn't smoke who lived past 95. Her other brothers/sisters smoked and died earlier--most from COPD. Since I have never smoked and have no serous health issues I anticipate going to at least 90 and likely beyond.

My husband's parents were mid 70s and 90 when they died--and his father's earlier death from cancer likely caused by poor medical oversight and exposure to toxic chemicals from his working in early oil fields...while he has some health issues (high BP/diabetes II) he is basically in great health...I think when he was in his 50s, he really thought he might not make 65 but now that he has passed that and isn't seeing his health deteriorate ( even if his golf game might not be as good as at 40), he is beginning to believe he can have a longer lifespan... Thus willing to wait til 70--because if you do the payout period for delay runs 8-9-10 yrs, depending on the difference between FRA amount and increased premium.

Of course since we drive to FL and back several times a year, I am wondering how likely we might have serious traffic accident which would wipe out expectations and render planning moot--
Old adage: man proposes; God disposes...
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Old 04-12-2016, 07:46 AM
 
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If I would retire at age 62 and collect $1300 a month in Social Security I would not have to pull that money out of savings and investments. By age 70 I would have collected $124,800 in benefits.

If I wait until 70 to collect but still retire from a full time job at age 62 I would have to come up with an additional $1300 a month out of my savings and investments to come up with the cash to fund my needs. By age 70 I would have pulled out about $124,800 in EXTRA cash to fund my lifestyle.

If I live to age 85, I will earn $700 more a month in SS benefits waiting until 70 to collect for 15 years. That is $126,000. So it is a wash.
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Old 04-12-2016, 07:55 AM
 
Location: NC Piedmont
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It is supposed to be a wash as far as total dollars paid to recipients on average. But "on average" means about half will get less and about half will get more. If you are in the "more" group, delaying so you are getting a higher rate puts you in the "even more" group.
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Old 04-12-2016, 09:04 AM
 
71,490 posts, read 71,674,131 times
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If I would retire at age 62 and collect $1300 a month in Social Security I would not have to pull that money out of savings and investments. By age 70 I would have collected $124,800 in benefits.

If I wait until 70 to collect but still retire from a full time job at age 62 I would have to come up with an additional $1300 a month out of my savings and investments to come up with the cash to fund my needs. By age 70 I would have pulled out about $124,800 in EXTRA cash to fund my lifestyle.

If I live to age 85, I will earn $700 more a month in SS benefits waiting until 70 to collect for 15 years. That is $126,000. So it is a wash.
i think there is a 69% difference between 62 and 70 so that is 2197.00 a month plus colas on that difference .

so i show 900 a month plus cola's .. that is 10,800 a year plus colas difference .

figuring 70 to 85 is 162k plus colas which even at a 2% average cola can be a huge difference over 15 years

on the other hand the risk is that those 15 years may be like the last 15 years and that 124,800 you spent down may average little after inflation growth if it was invested .

if you are married and one off you made it until 90 there is a huge difference in dollars gained .

the real deal is are you more comfortable with market and interest rate risk or longevity risk ? i am more confident with our longevity risk as a couple then i am on the outlook for markets from these high valuations .
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Old 04-12-2016, 09:12 AM
 
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here are some charts from kitces that include investing the difference . there is a big jump after break even in delaying which is risk free and has no sequence or market risk


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Old 04-12-2016, 09:16 AM
 
Location: USA
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I plan on quitting work at 63-64 and not drawing until FRA of 66. I have a specific account to fund those years, along with other accounts for later in life. My SS will more than pay for my retirement needs.


My family lives until close to 100. I have no spouse or children so I only have to worry about myself.


Now someone is going to ask about medical insurance until I turn 65. Well, I have never used medical insurance my whole adult life (I did go to a dermatologist once when I had shingles, but that's it). I intend to do without medical insurance until Medicare at 65 (I can hear your gasps of horror). I figure by the time I hit the 63-64 mark, Obama care fines and all that nonsense will have been abolished.
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Old 04-12-2016, 09:17 AM
 
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Originally Posted by mathjak107 View Post
Considering most folks in america have little retirement savings, not working and delaying is not going to be a choice most folks have. You need the resources to lay out the money while not runnng dangerously low. They would likely need a pension that covers things to delay ss.

This is one of those times having money may not buy happiness but it does buy choices.
Bada Bing! There is a whole marketing world competing for some seniors and they offer a lot of choices.
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