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Old 01-31-2017, 05:56 PM
 
6,615 posts, read 3,742,110 times
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Quote:
Originally Posted by Perryinva View Post
Congrats on retiring! Far more important than $20/mo! FWIW, your projected estimates will always be too high, until you have retired and have a zero or low year, unless you have over 35 years maxed out and you are 62. That's because the estimates assume the last years included me for all future years. So your age 70 estimate, the year you look at it working until say 62, assumes you will have that income from 62 until 70! Thats 8 years of higher incomes added to or replacing lower ones, at that moment in time. If you are 62 now, that $150/mo reduction is probably closer to what you will get, in age 62 dollars. People don't comllain about it much because they don't realize the "Age 62 dollar part" . If your estimate for filing at 70, at age 62 is showing $4000/mo, it could easily be $4300 when you get to age 70. But $4300 in age 70 dollars may translate to only $3850 in age 62 dollars.
If he claims SS NOW, the amount will be more than if he claims it next year....if he's not earning much income.

The estimate is close to accurate for claiming NOW. But the full retirement age estimates are based on the assumption that you continue to earn the same income you were making the prior year.

For an early retiree.

Mine decreased since last year. It will no doubt decrease again next year. I'm not working, any more.

When SS says to delay to take full retirement, it means WORK until then. If you're not earning the same higher income, it's not beneficial to delay. It costs you money. If you are earning only investment income, you are not paying FICA taxes...so that counts ZERO to SS. There is no reason to delay collecting SS.
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Old 02-01-2017, 06:19 AM
 
6,875 posts, read 7,273,507 times
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I don't know about that….
1) If a person "retires" and doesn't' work from age 65-67 -- no, their 'benefit' would not be the same as if they worked until 67. That shouldn't even be expected.

I think people 'forget' or just don't' think of it -- that the estimate is if you make that salary UNTIL you start benefits. If you stop work earlier, then of course the 'benefit' would be less than the estimate might show or project.

2) I do believe that delaying even if you don't work does technically increase the benefit, a. little. bit. Of course, whether a person thinks that 'little difference' is enough to make it worth waiting -- is up to him or her as an individual.

Again, it won't be as high as if you kept working.
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Old 02-01-2017, 10:37 AM
 
Location: Saint Johns, FL
1,192 posts, read 941,224 times
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I've been totally retired for about 20 months. I check my SS online statement on the first of the month like clockwork. The "amount you will receive if you retire today" figure goes up every single month. Usually about $120 or $130.

And the "if you wait till age 70" number changes about once or twice a year. And always goes up.
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Old 02-01-2017, 11:14 AM
 
Location: Central IL
15,207 posts, read 8,513,923 times
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Quote:
Originally Posted by Perryinva View Post
Congrats on retiring! Far more important than $20/mo! FWIW, your projected estimates will always be too high, until you have retired and have a zero or low year, unless you have over 35 years maxed out and you are 62. That's because the estimates assume the last years included me for all future years. So your age 70 estimate, the year you look at it working until say 62, assumes you will have that income from 62 until 70! Thats 8 years of higher incomes added to or replacing lower ones, at that moment in time. If you are 62 now, that $150/mo reduction is probably closer to what you will get, in age 62 dollars. People don't comllain about it much because they don't realize the "Age 62 dollar part" . If your estimate for filing at 70, at age 62 is showing $4000/mo, it could easily be $4300 when you get to age 70. But $4300 in age 70 dollars may translate to only $3850 in age 62 dollars.
I think this calculator will let you fill in years as zero for those situations where you're retired but not actually collecting SS - so it should be more accurate an estimate:

https://www.ssa.gov/oact/anypia/anypia.html
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Old 02-01-2017, 02:29 PM
 
Location: RVA
2,164 posts, read 1,265,106 times
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Quote:
Originally Posted by bpollen View Post
If he claims SS NOW, the amount will be more than if he claims it next year....if he's not earning much income.

The estimate is close to accurate for claiming NOW. But the full retirement age estimates are based on the assumption that you continue to earn the same income you were making the prior year.

For an early retiree.

Mine decreased since last year. It will no doubt decrease again next year. I'm not working, any more.

When SS says to delay to take full retirement, it means WORK until then. If you're not earning the same higher income, it's not beneficial to delay. It costs you money. If you are earning only investment income, you are not paying FICA taxes...so that counts ZERO to SS. There is no reason to delay collecting SS.
Sorry, but this is just plain wrong on all levels. I wouldn't want anyone to read this and think it is true. You Will ALWAYS COLLECT MORE BY DELAYING. PERIOD. The ESTIMATES are just that...ESTIMATES! All estimates are in todays dollars. That is spelled out. It is not the amount you will see on the check at the age you actually collect it. Naturally, if you are 62 TODAY and working, and decide to retire and collect starting ASAP, THEN the estimate will be very close. You have not worked much in 2017, so the estimate, assuming it includes all of 2016s income. However, the estimate for age 70, in 2025, would be off because it ASSUMES you are working until age 70. But even if you don't, it still goes up every month.

The calculator listed, or the one in SSAnalyze, give true numbers that can be adjusted to the inflation numbers YOU assume, and take in to account your salary for however many years you are still working and how many years have zeros. My only point was that IF you already have 35 years of maxed SS (which is something like 5% of all SS recipients) then the estimates are more accurate, because the possible increases are limited to current year increases limit differences, which, over 35 years, has a small impact. I consider $100/mo difference a small one, in an estimate. If you made in the $30k range per year inflation adjusted most of your life, but are making $60k the last years, then your estimates farther out will be WAY off.

Once you have an estimate that assumes zero income for subsequent years, it becomes more accurate. It will go down from the previous estimate where it assumed you made full salary for the subsequent year, but common sense should tell you that.

Last edited by Perryinva; 02-01-2017 at 03:23 PM..
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Old 02-01-2017, 03:47 PM
 
Location: Idaho
1,451 posts, read 1,153,447 times
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bpollen,

I am not a SS expert but I believe that some of the statements you made are incorrect: See my comments in blue below

Quote:
Originally Posted by bpollen View Post
If he claims SS NOW, the amount will be more than if he claims it next year....if he's not earning much income.

This is incorrect. SS payments for each person will either increase or stay the same but never decrease. For Volosong's case, his current estimate is $20 lower per month than the previous estimate simply because the previous estimate assumed that he would make the same income that he made in 2015 until the collection date. Since only part of his 2016 income was accounted in this new calculation, this low number ($4,056) was used to calculate the new estimate. There is no question that when the correct 2016 income amount is used, the new estimate will at least be the same or higher than the old one (if his 2016 income was higher than in 2015).

Since Volosong plans to retire in 2017, the actual SS payment will be lower than any current estimates. One always get less payment by claiming earlier and never get more by doing so.


The estimate is close to accurate for claiming NOW. But the full retirement age estimates are based on the assumption that you continue to earn the same income you were making the prior year.

This is correct.

For an early retiree.

Mine decreased since last year. It will no doubt decrease again next year. I'm not working, any more.

This is consistent with your previous statement that the estimates are based on the assumption that the person continues to work and make the same income until the collection time.

Your estimates will certainty decrease after you stop working. The estimates will become more accurate once the same zero future income amount is used. If you stopped working say in mid 2014, your 2015 estimates will be lower than the values in 2014 based on the lower 2015 income. Of course your 2016 estimates will decrease because they will be based on $0 income in 2015. For subsequent years, the estimates will not decrease and remain pretty accurate.

When SS says to delay to take full retirement, it means WORK until then. If you're not earning the same higher income, it's not beneficial to delay. It costs you money. If you are earning only investment income, you are not paying FICA taxes...so that counts ZERO to SS. There is no reason to delay collecting SS.

This is absolutely incorrect. SS office uses the highest 35 years of indexed earnings in a benefit computation. The zero income year value IS NEVER USED to replace any other income year in the calculation.

You always get less SS payment when you collect early. Of course one has to consider the trade off of not collecting SS now vs collecting more later, break even age vs. one own expected longevity etc. For some people like myself, there is a very good reason to delay collecting SS: it's simply the best annuity!
I would strongly suggest folks to plug in their actual income and expected future income to this calculator to get better estimates

https://www.ssa.gov/oact/anypia/anypia.html
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Old 02-02-2017, 04:22 AM
 
Location: Central Massachusetts
4,800 posts, read 4,844,519 times
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Quote:
Originally Posted by rjm1cc View Post
In the end they will pay you want you are due.

I would write to them and tell them that your wages from x employer are not posted. From your W2 you can get your employers tax ID. Also include your SS number and the amount of wages.

I would spend current assets now and postpone SS if you can. The increase in benefits are cheaper than buying an annuity.
Quote:
Originally Posted by volosong View Post
Different topic, but that's what my financial advisor says to do. I'm not sure I want to do that because once that 'nest egg' is gone, I won't be in a position to rebuild it or enough might not be left for when I really need it. Still weighing my options.
Volosong I brought both your response and rjm's original post that you replied to in hopes that it can explain to others your dilemma. It is really one of the hard choices we face. Our instinct is to first take the money offered and run. Even though we know that waiting will allow that income to grow substantially. It makes economic sense to do that if your nest egg will not last over 10 years as a steady stream of income. If you take your savings and can live on an income stream generated by monthly or annual payments and it lasts you beyond that time frame then it is a boon. You see your income does truly get bigger the longer you wait and by waiting you have done 2 things stretched your bottom dollar with increased payments and lowered your tax rate in future years while taking your RMD.
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Old 02-02-2017, 06:21 AM
 
Location: RVA
2,164 posts, read 1,265,106 times
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Yes, the "when it makes sense to delay" has been discussed extensively in other threads. The more one has saved and higher their non-SS income in retirement, the easier it is to understand the economics that delaying SS brings.

Mainly, the higher ones tax bracket, the faster delaying overcomes the "break even" as reducing taxes for someone in the 25-40% brackets has a larger impact on net income. Higher retirement income people already pay tax on 80% of their SS, but thats a bargain compared to the 100% they pay on withdrawals from tax deferred savings. If buying a $22k/yr COLA annuity for $200k in monthly installments over 8 years makes sense to one, and still leaves a substantial nest egg, then delaying simply becomes a longevity bet, just like any annuity.

If someone is in the 10 or 15-% bracket in retirement, then as much as $40k income from savings does not affect tax paid on SS. And the first roughly $20k is tax free overall, just like their SS already is. So there is no tax gain advantage trading RMD income for increased SS income. So couple that with the loss of a major portion of the nest egg, which took much more effort and hardship to grow in the first place on a lower income, and it is psychologically and economically difficult to delay unless one is working, in addition to the longevity issue.
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Old 02-02-2017, 12:35 PM
 
Location: Idaho
4,621 posts, read 4,460,757 times
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Quote:
Originally Posted by golfingduo View Post
Volosong I brought both your response and rjm's original post that you replied to in hopes that it can explain to others your dilemma. It is really one of the hard choices we face. Our instinct is to first take the money offered and run. Even though we know that waiting will allow that income to grow substantially. It makes economic sense to do that if your nest egg will not last over 10 years as a steady stream of income. If you take your savings and can live on an income stream generated by monthly or annual payments and it lasts you beyond that time frame then it is a boon. You see your income does truly get bigger the longer you wait and by waiting you have done 2 things stretched your bottom dollar with increased payments and lowered your tax rate in future years while taking your RMD.
Thank you, and I 'hear' you. I think I understand you.

Pretty sure I have enough 403(b) funds to live on for the four and a half years it is before I turn 70. One thing that scares me, is that being by myself, I don't have a spouse who will question my spending. I recognize in myself the lack of self-control in regards to spending money. It's a constant battle, and I think I'm winning the war . . . I least I hope so.

Sounds like before I do anything, I'll have to get out the budget spreadsheet and play around a little. Pretty sure I want to get a SPIA; the only question is when and for how much. Maybe that along with systematic, monthly withdrawals will satisfy my budget needs between now and August 2021.


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Old 02-03-2017, 07:02 AM
 
Location: Florida
4,358 posts, read 3,694,371 times
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Quote:
Originally Posted by volosong View Post
Thank you, and I 'hear' you. I think I understand you.

Pretty sure I have enough 403(b) funds to live on for the four and a half years it is before I turn 70. One thing that scares me, is that being by myself, I don't have a spouse who will question my spending. I recognize in myself the lack of self-control in regards to spending money. It's a constant battle, and I think I'm winning the war . . . I least I hope so.

Sounds like before I do anything, I'll have to get out the budget spreadsheet and play around a little. Pretty sure I want to get a SPIA; the only question is when and for how much. Maybe that along with systematic, monthly withdrawals will satisfy my budget needs between now and August 2021.


.
There are also mutual funds that will pay out dollars every month. Vanguard has some. But they will fluctuate with the market.
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