Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
A very interesting thought. I was thinking to use half and so I did a quick bit of math. These are not my numbers but lets use $500,000 to lower it by 50% over a 10 year period I would need to draw more than $24,000 annually. The more I thought on it the better I felt about my own plan on delaying. I have been wondering what number I should go to so I will see what others here have in mind. I am lucky in that I have steady income even without draw and SS. With the wife's asset draw added to the mix we are truly blessed.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,070 posts, read 7,505,741 times
Reputation: 9796
Depends, OP.
In 2010, we would have gone thru 10-15% of nonSS retirement assets, for that year. Spouse was RIF'd at age 63 and I was a full time caregiver to my Mom and InLaws. It was very tight.
YMMV
today we could do without SS and be fine and living OK with rental, annuities, and Discretionary.
YMMV. Your question is a point in time, and my answer is also a point in time that would not apply to anything other than 2010.
I have been withdrawing about 6-8% a year for the last 12 years and between that draw and the '08 drop we are down about 23%. We have now started taking one SS payment plus spousal and in a couple of more years will start the higher earner SS at 70.
This was the plan all along providing the best tax, income, and survivor benefits for us.
Don't use any more of your savings then you need to. Life is a strange beast that you surprise you with unknown expenses, especially in retirement.
If you have assets stuck away the smartest thing to do is to take SS at 62 at the reduced rate and then supplement your income with your savings. By doing this your savings will have more time to grow. Keep in mind that taking SS at 62 or 70 makes little difference to the people with money. The only people that need to suffer through life waiting till 70 are the ones that desperately need the few hundred extra dollars that you get for waiting.
The big push to wait till 70 has been the agenda of the retirement planners to keep people contributing to there plans as long as possible to increase the retirement planners income. All have to do to prove this is ask your planner what's the percentage of people they recommend to start at 62, the best numbers I've heard is 4% but most will say ZERO. Even if you have medical issues that has limited your life to maybe just a few more years they will still tell you to wait.
The big push to wait till 70 has been the agenda of the retirement planners to keep people contributing to there plans as long as possible to increase the retirement planners income. .
i guess the math , survivor benefits , under funded retirements and cutting dependency on markets and rates are not the real reasons . .
Although we've not tapped our investments yet, and don't really need the extra SS money, I saw little advantage to delaying SS to age 70 ... since the break-even point for such a delay (beyond 62/65) is about 15-years, or age 80+!
If one additionally taps into growth-producing assets to delay SS, the loss of earned income would move the break-even point out even further (age 80-85?). In some respects, drawing assets to delay SS is like paying a penalty to "borrow" against one's 401K/IRAs.
Since one MUST start taking RMD's from deferred investments by 70-1/2, adding SS at that point, will increase one's effective income, but will also further raise one's taxes. (Of course, some withdraw funds from 401K's/IRA's (or converting to Roth's) earlier than 70-1/2 , to reduce their tax 'hit' later on.
Finally, in our early 70's, we, and I suspect others, are moving out of our primary spending years - Frankly, we're not even sure what to spend our added RMD's on - and will probably give away the added funds. (Not that we're obligated to spend them, but, we don't really need/want more 'stuff').
To answer the original question you should allow your retirement assets to grow as long and as much as possible before you touch the principal. Here is an informative link:
To determine this, most experts will tell you to conduct a breakeven analysis, which is an arduous process of calculating how much you're likely to receive in total lifetime benefits based upon when you elect to receive them and how long you expect to live.
Aside from being speculative and thus prone to inaccuracy, a complicated analysis like this is unnecessary. I say this because the Social Security Administration designs the benefit formula to, on average, yield the same amount in lifetime benefits irrespective of when you begin receiving payments.
Here's how the U.S. Government Accountability Office explained this point in a report on retirement security: "The Social Security benefit formula adjusts monthly payments so that someone living to average life expectancy should receive about the same amount of benefits over their lifetime regardless of which age they claim."
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
