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I waited to age 70 to start collecting SS. If I don't make it to the break even age of approximately 80, in hindsight, it would have been a mistake. A mistake I would not have to live with. If I had started collecting before 70 and make it past 80, in hindsight, it would have been a mistake. However, it would have been a mistake I would have to live with. That was the rationale behind my decision. Additionally I have no health issues, fairly good genes.
I live in Canada so my understanding of the US social security program is pretty basic.
Do most Americans look at their SS payments as a sole source of income in retirement, or as a supplement to their own investments and private pensions ?
I'm sure many do. My parents would be screwed without it, that's for sure, but they have a small amount in retirement funds to help. I have never planned on it as a sole source of retirement income, but it will be a substantial chunk - about a third - of my income.
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Originally Posted by mapleguy
Second. If a US citizen has a pension from a former employer, does that result in their SS benefit being reduced ?
It depends upon if the employer withheld SS taxes. If they worked for say, the city of Ft. Lauderdale, then their SS benefits are impacted. (I only know this because my S-I-L had hers chopped in half because of this, and my brother had no idea that was going to happen. Not a pleasant surprise, but they should have been aware. )
In my case, it's not an issue. I will have a full pension, and my SS will not be impacted as I have always had SS taxes withheld.
I started Collecting SS at 62 and never regretted it one second. After all you don't have to work anymore. I have hobbies and interests. I read somewhere if I make it to age 80 then I will have gotten the same amount of money from SS than if I had waited to 66 my full benefit age.
I actually computed that for my husband when he retired at 62, and it's true! And there's a bigger chance that you will die or develop a disability the older you get and thus have less "good" retirement years by waiting. We never regretted it one second either!
I will take my SS at 62 as my folks didn't live very long. Mom died at 78, Dad died at 68, brother just died at 66.
That is probably one of the better reasons to take early SS. There is no excessive longevity in my family either although most of the women have lived into their early to mid 80s. I'm single and am retiring this year at age 62 and will delay taking SS for the time being, withdrawing more from my 401k to compensate. But I plan to do some calculations to determine how much delaying impacts my taxes, Medicare Part B, etc. and keep up to date on whether the new administration plans any changes to SS and how this will impact me. If the stock market crashes, I will definitely start SS to preserve my investments. Also I have a good pension with COLA so am not that dependent on SS for my old age.
I will take my SS at 62 as my folks didn't live very long. Mom died at 78, Dad died at 68, brother just died at 66.
If it were only that "easy". My mom died at 79, my dad at 63. My mom's sisters, 96, 95 and her brother 84. My dad's brother, 85. I think my dad's sister is still alive (92?). My mom's parents, 76 and 75. My dad's parents, 85 and 84 (auto accident!).
And...everyone in your family may live to 99, but you may be run over by a bus tomorrow. I'd say if you can do without it, do without it; if you need it to retire the way you want to, go for it.
I think that making it to 62 gives you a bit of security. That reduces anxiety.
Even if you decide to delay the onset of SS, you know that if things get ugly, you can click that mouse and start the gravy train. Each scoop of gravy will be smaller, but at least you will have some.
You are correct. Once I reached age 62, it gave me a sense of security to know that if something did happen, if I lost my job, I would have something to fall back on...I had already unfortunately raided my 401k and have not been a great saver throughout my 40 years of working. Regret it, but nothing I can do about it now.
So, fast forward and at 65 I signed up for Medicare...that was great too. I planned on working until age 68, start drawing SS at full retirement age of 66, and live off that and bank my annual salary of $70K to try to replenish the cash coffers before I retired...
Made it to 66 in August last year. In October, my job of 18 years was eliminated ... although I was a bit sad, I was actually pretty relieved, as I knew my home will be paid for in August 2017 and I was frankly tired of working. So, although my SS monthly income is about $100 less monthly than it would have been at FRA, between my severance package from my firm and SS, I will be okay...I am also receiving unemployment benefits until May, I believe and don't feel bad at all about getting this since I gladly paid into the system for myself and others while I was working. I also am going to try to put a little away each month into some sort of investment, maybe just a mutual fund, but we'll see.
It does feel like finally I'm getting something in return for all the years I worked, and I am so happy to be able to relax and not work...I feel blessed and don't care that I couldn't keep working. Life is good!
I am envious of those that can retire at 62. Good planning! I have 5 more years before I can retire with a full pension, and I will be 66. So at 66 and 2 months (for SS) I will say goodbye to my 9 to 6 5 days a week...and I can't wait.
Funny you wrote this. I am turning 58 next week and can't wait to retire as well but I have been feeling guilty that I am literally wishing my life away. At our age we should not want to fast forward 5 or in my case 7 years when we only have so many healthy years left.
But I'm like you (and the OP) I am very much looking forward to the financial independence SS as well as growth of my investments will provide. I too look forward to 62 when I will wait but know that if things got really bad I can always file and get a reduced income.
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