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I don't see why. I would have to spend a lot of money every year to defer SS. For example, my SS is about $17k now and would be about $20k if I started getting it at age 66. So I think I would have to spend about $35k of my savings to increase my SS by $3k a year.
But yet your own plan has you plunking down $200k, all at once, gone forever, for a non inflation indexed $13,200 a year. 200/35 =5.714. 5.714 x $3k a year = 17,142/yr. ALL YOUR own numbers. So you think it makes more sense to spend $200k all at once for a fixed $13,200 instead of the same amount gradually over 6 years (if you delayed to 70) for an income of $17,142 inflation adjusted??? I don't understand your logic.
Why do so many people that know they have less financial training and experience, think they understand more about this than all the financial gurus that all say the same thing over and over. (And I don't mean anyone on this forum) If you can afford to delay and live off your savings to delay taking SS, it is ALWAYS the more financially sound choice. Regardless of if you don't understand it, it is. Do you tell the team of surgeons that say you need an organ transplant to live, "No, I feel fine at the moment, so I'd rather wait"?? Same thing.
Last edited by Perryinva; 07-15-2016 at 12:17 AM..
But yet your own plan has you plunking down $200k, all at once, gone forever, for a non inflation indexed $13,200 a year. 200/35 =5.714. 5.714 x $3k a year = 17,142/yr. ALL YOUR own numbers. So you think it makes more sense to spend $200k all at once for a fixed $13,200 instead of the same amount gradually over 6 years (if you delayed to 70) for an income of $17,142 inflation adjusted??? I don't understand your logic.
There are not many absolutes in the realm of retirement planning, but I believe this is one example. No person should ever, ever, ever buy an SPIA until they have first delayed SS benefits as long as possible (until age 70). I cannot think of a single instance where this advice would not be sound.
It is not difficult to make the comparison, which you have done above. Any person with at least a 5th grade education should be able to illustrate this trade off for their own situation.
Most people do not wait until age 70 to start getting SS. Maybe we don't feel confident that SS won't be decreased? And we might feel that all the money we get by collecting earlier offsets the increases later.
Buying a fixed immediate annuity is like buying a pension. Pensions don't usually grow with inflation, afaik.
I think I would feel better not taking anything out of my savings (except to buy annuities), and having a definite income for life.
I think that $100k has to be annuitized, because it's in a TIAA account. Maybe as a compromise I would buy another $50k annuity from a different company.
I had definitely planned on buying FI annuities, and have read a lot about them, that they are a pretty good deal.
Yes I have also read that everyone should delay SS until age 70, but the fact is almost no one follows that advice. Maybe the numbers are better if you wait, but most people seem to feel safer getting it earlier.
Figure that you will live to be 100, and die on your 100th birthday.
Your 550K goes into a money market at 1% (we're just rounding things out, here)
You will live 35 years.
550K/35 = 15,700. But if you get 1%, you can actually draw 17,500 the first year and give yourself a 1000 raise every year until you die.
17K from Social Security; $17,500 of your own money = $34,500 with an annual raise of $1000.......About the same as you figured, but with zero risk. Zero. Unless you live to be 110 years old.
Now, with all the figuring and planning and allotting done by all those financial planners, why is their plan so superior to yours?
The only difference as far as I can see is that with their plan they get fees from now to eternity.
Oh, and someone gets to fight over your money. That's gonna happen anyway because very few people live to be 100. But you never know.
What a great simple post that puts every single dollar in the OP's pocket instead of $3k right off the top into someone else's pocket plus a thousand here and few hundred there and everywhere for other fees and expenses.
What a great simple post that puts every single dollar in the OP's pocket instead of $3k right off the top into someone else's pocket plus a thousand here and few hundred there and everywhere for other fees and expenses.
True. If I didn't mind spending my savings, maybe I would do it. And it goes to show it doesn't always make sense to trust the experts. They often recommend something complicated and expensive, that is no better than good old common sense.
..........I don't want to take anything from the principle, at least until 10 years from now. With my plan, I don't think I have to.
Also, he allocated $5,000 every year for medical expenses, but that seems like too much.
I hear what you are saying about principle. I really do. That's what everyone says.
But, why not? It's your money. You should use it to your best advantage to relieve yourself from stress. I have seen people (with my own eyes) do without necessities and comfort in order to save the principle.
Spend some time thinking about it.
5000 for medical expenses could be right, but it sounds high.
They will take Medicare right out of your Social Security check. Part B is about 105/month.
Buy a supplement to make sure out-of-pocket expenses are kept low - that'll cost you about 150/month.
Prescription medications can get expensive. I don't know anything about that, though, since I don't have to take anything.
So, yeah. With Medicare and insurance it comes to 250/month, or $3,000/year.
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