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Thanks MJ. I'm 58 and can't file early. I was asking if my wife could file immediately at her age of 60 should I die today. It appears as if she can, at a reduced figure obviously. Like every other form of filing if she waits she is rewarded with larger payments. But it appears as if she can file as early as 60 if I die at 58 correct? And at 60 it would be approximately 71% of my FRA figure, higher as she delays.
I was age 44 when my husband age 49 passed and I am currently age 60.5. I managed to get Social Security to send me a print out of my estimated survivor benefits which is noted below to give you an idea of the benefit amounts at different ages. I was told the amounts will change by the time I reach my FRA of 66.6 because even if the annuitant is deceased the benefit itself does receive COLA adjustments.
Age 60 - $1041.60
Age 62 - $1176.30
Age 66.6 - $1456.90
here is a nice chart showing your actual return delaying . these are after inflation returns . if one in a couple lives to 90 , which is about a 50/50 chance today the real return of 5.20% rivals a balanced portfolio under the better outcomes but with zero volatility ,no sequence risk and pretty much guaranteed unlike the balanced portfolio .
delaying is not about breaking even . it is about do you want your income more dependent on stock markets ,interest rates and inflation risk or more longevity risk ?
that is the real deal . dead is dead , breaking even is really a puny reason to delay or not . unless you have a pension it boils down to the dependency you want on the source of that income . a 70% bigger check delaying for just 8 years cuts dependency on markets for decades as the draw from your portfolio shrinks by a lot . so that is the real decision .
market risk or longevity risk ???????
we were comfortable in the middle so i filed for age 65 .
Yes, I agree it's a returns vs. longevity risk.
But here's a couple points..... if the probability of one person of any given two living to age 90 is 50%, then the probability of either one of them individually living to 90 is less. Considerably less depending on sex and age. (I.e., I'm a 55 yo female and even ignoring my wild lifestyle, the chance of living to 90 is way less than 50%)
Also, this chart seems to assume that payments between 62 and 70 were entirely spent, or for those with additional monies to spend, stashed under the mattress. I.e., not realistic.
But here's a couple points..... if the probability of one person of any given two living to age 90 is 50%, then the probability of either one of them individually living to 90 is less. Considerably less depending on sex and age. (I.e., I'm a 55 yo female and even ignoring my wild lifestyle, the chance of living to 90 is way less than 50%)
Also, this chart seems to assume that payments between 62 and 70 were entirely spent, or for those with additional monies to spend, stashed under the mattress. I.e., not realistic.
longevity tables work for insurance companies and researchers but not for you and me.
You have to calculate your own life expectancy and I would not be surprised if most of us on this form were on the higher side of average.
longevity expectations are very complex . but we only have 2 outcomes as humans , we are dead or alive and most of us will be alive a lot longer than we think ..
so we have to plan around the fact it is us who will live because the ramifications of being wrong are far worse . .
in fact as michael kitces pointed out :
“life expectancy” can be a somewhat misleading term. Many people hear the term and think of it as a measure of how long they can “expect to live”. In reality, though, life expectancy is a measure of the average time a person within some particular population is expected to live. While the average is meaningful in many respects, it may not always provide the best measure for setting expectations about the actual age someone is likely to reach. Because mortality rates aren’t constant across a lifespan and the distribution of ages at death are heavily skewed (i.e., more people die old than young), commonly cited life expectancy measures—particularly life expectancy at birth, which is most often cited in the media—may result in misleading expectations.
For instance, a child born in 2014 has a life expectancy (average age at death) of 79. However, the median age of death for the same child is 83, and the modal (most common) age at death is 89! Given the shape of the distribution of ages at death (negatively skewed), it’s simply a mathematical fact that the mean is going to be lower than the median or the mode.
Last edited by mathjak107; 08-26-2017 at 04:08 AM..
But here's a couple points..... if the probability of one person of any given two living to age 90 is 50%, then the probability of either one of them individually living to 90 is less. Considerably less depending on sex and age. (I.e., I'm a 55 yo female and even ignoring my wild lifestyle, the chance of living to 90 is way less than 50%)
Also, this chart seems to assume that payments between 62 and 70 were entirely spent, or for those with additional monies to spend, stashed under the mattress. I.e., not realistic.
not quite . you need to live on something .so you either live on the ss and spend the portfolio or spend the portfolio or other income sources that could have been invested and were not , and save the ss . so either way it is a wash .
no matter what you do the internal rate of return on ss is what it is regardless if you spend it or save it . you can see that here . your return is your return no matter what you choose to do with the money .
.
Last edited by mathjak107; 08-26-2017 at 04:14 AM..
I'll be 62 in a few years and retiring then. That's the plan. Right now I'm thinking of taking at FRA 66-8 using investments to get there. But I will rethink once I get there.
Yes I understand taking early means relying more on market returns, but SS is also relying on political winds. Eventually they will have to do something and it will probably entail tax increases and benefit reductions.
Thankfully with my pension and investment I am in good shape enough to have an option.
My family background has been males go in the 78-82 range from heart disease which I'm at risk of, so taking early might become a better option in next few years
When making financial plans I think it would be a terrible mistake to try to predict your life expectancy. Seems to me the only smart thing to do is plan for a long life.
while insurers can tell you just how many people will die a year , they unfortunately can't tell us who .
some of us will be on the wrong side of the statistic and some of us the right side . but not knowing who will die , really only gives us one sensible outcome . we have to plan like we will live or else face the consequences of being wrong and broke .
this is like pascal's wager if you remember that tale .
But here's a couple points..... if the probability of one person of any given two living to age 90 is 50%, then the probability of either one of them individually living to 90 is less. Considerably less depending on sex and age. (I.e., I'm a 55 yo female and even ignoring my wild lifestyle, the chance of living to 90 is way less than 50%)
Also, this chart seems to assume that payments between 62 and 70 were entirely spent, or for those with additional monies to spend, stashed under the mattress. I.e., not realistic.
This absolutely not meant to be personal or demeaning. Your math is pretty bad. (Or I don't understand your point.). As a female you have, on your own, a greater than 50% chance of living to 86, if you are healthy. If you smoke and drink a lot, or do drugs. (wild lifestyle) then, of course, take it earlier. But only because you won't need it later, as you will be dead. It has nothing to do with break even. There IS less incentive to file later as a single than as a couple. That is true of any annuity. Delayed SS just happens to be by far the most bang for the buck annuity that exists today, because the SS rates haven't changed, but the financial environment has. During the high infaltion of the late 70s early 80's, delaying made much less sense, especially as you could file at 62 and pay it all back at 70 and get the higher rate.
Second, whether you compare either early and late file not invested, or the smaller amount invested for 8 years longer, and the larger amount for the shorter period, the "break even point" is the same. That is why they show it that way.
If you can afford to live without SS, and want a COLA annuity, delay.
Last edited by Perryinva; 08-26-2017 at 08:29 AM..
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