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View Poll Results: At what age did you start receiving social security?
Before 62 13 8.84%
62 63 42.86%
63 6 4.08%
64 7 4.76%
65 11 7.48%
66 22 14.97%
67 4 2.72%
68 4 2.72%
69 1 0.68%
70 13 8.84%
After 70 3 2.04%
Voters: 147. You may not vote on this poll

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Old 08-27-2017, 08:46 PM
 
Location: Idaho
1,451 posts, read 1,153,086 times
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I did not vote because I have not collected SS yet. There is also no option to check more than 1 box because I plan to collect spousal SS at 66 then collect my own at 70.

My husband waited until 70 to collect his SS this year. Few years back, just for fun, I did a spreadsheet finding his 'break even' age, and it was something like 82. We actually weren't too concern about break even! Our reasons of delaying are quite similar to those of Perryinva. In addition, I was still working until the end of 2015 so if my husband had collected his SS, the payments would have pushed us into even higher Federal tax bracket.
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Old 08-27-2017, 10:13 PM
 
1,049 posts, read 513,133 times
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Quote:
Originally Posted by Perryinva View Post
Well this is where we fundamentally disagree. I am also one of those people, with a decent pension that will easily pay all my living expenses and then some. I have more than $750k saved in various pre and post tax accounts including Roths. And I can say it absolutely is not about growing my nest egg. It is all about the guaranteed net income. If we have zero nest egg at 70 and beyond thanks to a market meltdown, ponzi scheme, whatever, we will always have at least $9k/mo income of which about $5600/mo will be COLA SS, by delaying to just 69. Delayed filing allows me to minimize my taxes and live with complete confidence at that $9k/mo level plus whatever I expect the RMD amounts to be at 70.5, AFTER drawing down to live on. Because of my birthday, I will not go to 70, but a few months before, but the majority of the heavy lifting will already be done.

At early-retirement.org, where the average income is much much higher than here, there is an entire cohort that lives strictly off a SWR designed around their retirement age and savings. Virtually NONE of them live on anywhere near 4% SWR, as they know they need their nest egg for 45-50 years, not the 25-30 we bandy about here. There are many retired at 40-45, with $3-10Mil, and draw 2-2.5%. Way WAY above my league. To them, principle growth and earnings are an everyday affair. If THEY don't have the confidence that they can draw 4% based on a 7-8% average market return, why on earth would I chance my future on reduced guaranteed income based on the hope that I could grow a measly $24k/yr for 8 years in to something thst produces what the SS annuity guarantees? For instance, take a high age 62 SS of $2k/mo, compounded at even 6.5% monthly for 8 years is $250k. Using the 4% rule of thumb, that generates $10k/yr, taxable. At age 70, SS would be an added $1400/mo or $16,800/yr, of which only $14280 is taxed, and all is free of state tax. If markets are normal, I could easily still have $700-800k after drawing down, which will mean taxed RMDs of about $30k/yr. If I file at 62, and make that extra $250k, I would have to regularly draw an additional $10k just to equal, after taxes, the delayed amount, plus the $10k that the extra $250k "makes", just to have the same net income. So now $20k more, inflation susceptible, of my income is dependent on my portfolio, for the rest of my life.

Like I said, I cannot look at this as maximizing savings. Break even is a useless concept to me. Maximizing savings is what I had to do to GET the amount I wanted to enable draw down and generate the extra income/safety for retirement. Once in retirement, income is what matters if I live. If I die, last, it matters not what I had saved. If I die first, my wife will only care about the income because she would never invest in the market.

And yes, Matt, I should have clarified that the $750k number I threw out is savings NOT needed to produce income to live on, but rather safety net or nest egg savings. I was talking ONLY the amounts needed to delay filing, not needed to live on and also delay filing.

And as always if you decide to delay, and change your mind, you can always file, and get 6 months retroactive payments as a lump sum. I also do not pretend to really know my state of mind 10 years from now. When I am 67, DW will be 72 and may have a short time to live, and my emotions may get the better of me and I may simply file then. Or I may find out that the income we have far exceeds what we need, and we want to gift a large amount. Who knows. But delaying gives me options.
Fair enough.

It sounds like we have very different risk tolerances. No problem with that.

And btw, I retired at 42 and live off FAR less than 4% of my liquid assets. And I still think , given my background in math and computer science, that the odds are so heavily slanted ( but obviously not 100%) towards drawing at 62 that it is a no brainer FOR ME. I'll probably just waste it on wild men and booze anyway...:-)
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Old 08-28-2017, 03:27 AM
 
71,486 posts, read 71,652,652 times
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i always thought i would take the path that fidelity's ss optimizer layed out for us a few years ago .

it put together a rather complex plan for maximum bucks .

my wife was already collecting from 62 . their plan had her stopping at her fra . now her benefits start to grow again until 70 . at 70 she re-files . when she is 70 i would be 66-8 months . i would file restricted application for 1/2 hers . mine would grow to 70 . .

at 70 i file and she files for her spousal adder of 300 a month which gets added to her benefit .

that would have given maximum bucks .

but a funny thing happened on the way .

once i got close to 65 there was little reason i shouldn't file .

while i made to much money working my 1 day and special projects when i wanted and would not see much of a check , now i could earn up to 45k and get full checks .

we are spending 100k a year from savings delaying not counting other income we have coming in now so we saw no reason not for me to file at 65 .

by filing i am protected under hold harmless from future medicare premium increases too since i start medicare in october . so i start ss on friday .
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Old 08-28-2017, 05:33 AM
 
Location: RVA
2,164 posts, read 1,264,598 times
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Quote:
Originally Posted by NewbieHere View Post
Honestly, the rich don't really worry about SS. Let's not get carried away here.
We have to define "rich". I would characterize someone with $5MIL as rich. But early retirees with that amount and use it as their sole source of income with a 2.5% SWR are only living on $125k/yr, certainly not a very high income, and they are indeed very concerned about their SS.
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Old 08-28-2017, 05:52 AM
 
Location: RVA
2,164 posts, read 1,264,598 times
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Quote:
Originally Posted by Cabound1 View Post
Fair enough.

It sounds like we have very different risk tolerances. No problem with that.

And btw, I retired at 42 and live off FAR less than 4% of my liquid assets. And I still think , given my background in math and computer science, that the odds are so heavily slanted ( but obviously not 100%) towards drawing at 62 that it is a no brainer FOR ME. I'll probably just waste it on wild men and booze anyway...:-)
Ahhh, well then, congratulations on a successful early retirement!! So you are just like the typical early retirees I described, and acknowledged that they in general also take SS at 62. I am an engineer and very comfortable with math. But often it is not about the math. You obviously are comfortable with a low SWR, and have been for 17 years, leaving money invested for the long term to generate your income. So when you hit 62, your mindset does not change. Maximize savings means more saved wealth, and income for you, just as you have been doing successfully for many years. No reason to mess with success. Many people (most?) are terrified of having to depend on market performance to generate income. They are used to a steady paycheck, day in, day out, regardless of the market. I know many many more like that, and personally no one like you. DW once commented that she couldn't wait until I am retired because she can't stand watching our investments rise and fall. I didn't have the heart to tell her that will not change in retirement. If it was up to her, we would have everything in CD ladders. So it is VERY much a risk tolerance thing. The vast majority of us will never have a Warren Buffet attitude and be as old as he is and still an investment guru.

It is not like we can just turn off that behavior and suddenly invest for generation of income. It is a learned behavior, and typically why we still work until 62 or 65 or whatever. I acknowledge that I am FI and can retire at any time. I am only working to boost my pension further, really. At 42, while I had a good job, I was broke thanks to divorce number 2, and was not investment saavy at all. If you are FI at 42 and quit, there is still time to go back to work and recover, essentially what I did at 42. Start all over again. At 62, or 60, if I quit and RE, AND my income is not what I thought it would be, going back to work is typically not an option or certainly not a desirable one!!! I will most likely be one of those that wishes I had retired much earlier, and not spent the healthiest years of my life working, because my retirement income will be way more than I need to live well enough. I wrestle with this every day. Some days I convince myself just OMY. Other days, it seems foolish.

Last edited by Perryinva; 08-28-2017 at 06:11 AM..
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Old 08-28-2017, 09:44 AM
 
6,875 posts, read 7,270,643 times
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So Mathjack, you're filing now at your FRA of 66+8 months??
That would work for me IF -- I wanted to even keep working to even get to my FRA of 67.

What I can see doing is stop working at 65, collect my pension. And either:
-- go part-time work then, and NOT pinch off savings (work one or two years part time, who knows)
-- stop work altogether and maybe pinch off savings
-- stop work altogether and go back to work part-time at 67.
(in any case holding off Soc. Sec as long as I can)

As a separate issue: can you please explain HOW or if earnings are 'weighted' when the Soc Sec benefit is calculated?
Are certain years given more weight? Are early years inflation adjusted?

For example if my earnings are:
-- 1985 - 1996 an average of say....25 thousand (some years 16K -- other years 33K)
-- 1996 - 2017 an average of say....80 thousand (some years 60K -- other years 100K)
-- 2017 - 2025 -- an average of say 30-thousand (projected)

Thanks
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Old 08-28-2017, 10:31 AM
 
Location: Houston, TX
14,688 posts, read 8,472,440 times
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35. I receive disability benefits.
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Old 08-28-2017, 11:23 AM
 
71,486 posts, read 71,652,652 times
Reputation: 49068
Quote:
Originally Posted by selhars View Post
So Mathjack, you're filing now at your FRA of 66+8 months??
That would work for me IF -- I wanted to even keep working to even get to my FRA of 67.

What I can see doing is stop working at 65, collect my pension. And either:
-- go part-time work then, and NOT pinch off savings (work one or two years part time, who knows)
-- stop work altogether and maybe pinch off savings
-- stop work altogether and go back to work part-time at 67.
(in any case holding off Soc. Sec as long as I can)

As a separate issue: can you please explain HOW or if earnings are 'weighted' when the Soc Sec benefit is calculated?
Are certain years given more weight? Are early years inflation adjusted?

For example if my earnings are:
-- 1985 - 1996 an average of say....25 thousand (some years 16K -- other years 33K)
-- 1996 - 2017 an average of say....80 thousand (some years 60K -- other years 100K)
-- 2017 - 2025 -- an average of say 30-thousand (projected)

Thanks
noooooo . we decided not to wait so long , i am filing at 65.

all years are inflation adjusted . i am not sure exactly when they update
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Old 08-28-2017, 11:58 AM
 
1,049 posts, read 513,133 times
Reputation: 1800
Quote:
Originally Posted by Perryinva View Post
Ahhh, well then, congratulations on a successful early retirement!! So you are just like the typical early retirees I described, and acknowledged that they in general also take SS at 62. I am an engineer and very comfortable with math. But often it is not about the math. You obviously are comfortable with a low SWR, and have been for 17 years, leaving money invested for the long term to generate your income. So when you hit 62, your mindset does not change. Maximize savings means more saved wealth, and income for you, just as you have been doing successfully for many years. No reason to mess with success. Many people (most?) are terrified of having to depend on market performance to generate income. They are used to a steady paycheck, day in, day out, regardless of the market. I know many many more like that, and personally no one like you. DW once commented that she couldn't wait until I am retired because she can't stand watching our investments rise and fall. I didn't have the heart to tell her that will not change in retirement. If it was up to her, we would have everything in CD ladders. So it is VERY much a risk tolerance thing. The vast majority of us will never have a Warren Buffet attitude and be as old as he is and still an investment guru.

It is not like we can just turn off that behavior and suddenly invest for generation of income. It is a learned behavior, and typically why we still work until 62 or 65 or whatever. I acknowledge that I am FI and can retire at any time. I am only working to boost my pension further, really. At 42, while I had a good job, I was broke thanks to divorce number 2, and was not investment saavy at all. If you are FI at 42 and quit, there is still time to go back to work and recover, essentially what I did at 42. Start all over again. At 62, or 60, if I quit and RE, AND my income is not what I thought it would be, going back to work is typically not an option or certainly not a desirable one!!! I will most likely be one of those that wishes I had retired much earlier, and not spent the healthiest years of my life working, because my retirement income will be way more than I need to live well enough. I wrestle with this every day. Some days I convince myself just OMY. Other days, it seems foolish.
Perry, that describes it exactly. Its about much more than the math, it's an emotional decision too because it's your lifestyle. And I'm with you....many more people are terrified of risk than comfortable with it. But like you said, it's virtually impossible to eliminate it completely, particularly with today's interest rates. I can't tell you how many people I know who completely bailed from the stock market after 2008. Worst decision in hindsight.

I'm of the mindset that information travels so much faster, and market inefficiencies are such that volatility is inevitable. There's gonna be wild rides in many markets (including even real estate...my
Bay Area home lost 30% from 2006-2012, then completely recovered in 4 years...ever seen that before? But I digress.....) The real worry, as many have pointed out, is a long flatlining of returns like we saw in the 60s.
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Old 08-28-2017, 12:38 PM
 
6,875 posts, read 7,270,643 times
Reputation: 9785
Mathjack,
OK, I suppose your income is so high 85% of your SS may be taxed anyway, right?
But at least, after your FRA, they won't hold back the 1 for 2, right?

Or, do you not care about any of that, You just want the benefit, with other limits and rules (taxes and the holdback) not really being factors.
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