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I know a few people that started collecting at 65 and kept working and banked their entire social security check for 2 or 3 years until they retired. Mathjac, do you think that is a better strategy than waiting until you fully retire to collect when the SS amount will be more?
it depends what you make .. for many of us fra is 66 or higher ... you may end up giving it back working. i waited until 65 because working my one day a week put me over the limit up until the year i would be fra which falls under a special rule and you can earn 45k or so without giving any back up until you are fra .
it depends what you make .. for many of us fra is 66 or higher ... you may end up giving it back working. i waited until 65 because working my one day a week put me over the limit up until the year i would be fra which falls under a special rule and you can earn 45k or so without giving any back up until you are fra .
I thought after 65 you could make as much as you wanted and not effect taxes too much. I had always heard working from and collecting from 62 - 65 is where you get hammered.
I thought after 65 you could make as much as you wanted and not effect taxes too much. I had always heard working from and collecting from 62 - 65 is where you get hammered.
no , you can make whatever after your fra date ....... you are limited up to fra ... the only thing is you get to earn up to 45k in the year you will be fra up to your birthday , then no limit. for some fra is higher then 66 and could be 67
no , you can make whatever after your fra date ....... you are limited up to fra ... the only thing is you get to earn up to 45k in the year you will be fra up to your birthday , then no limit. for some fra is higher then 66 and could be 67
My FRA is 67. Not likely, I will want to work after that.
Hard for me to believe this thread is just under a year old. It seemed way older than that. I have not changed my mind on any of my comments, (well, ines I read) except to note that I am truly lucky to be retiring at 61&4mo, 1 month from now, thanks to an unexpected early retirement package that has me paid through age 63.
In keeping with the thought of this long thread, I would ask this mind experiment :
If you are single, and perhaps have no heirs, what would be your preference? Assume you have no debt and $1M saved, which you worked very hard to achieve and accumulate.
. You retire at age 62, and only need $40k/yr to easily live on. At 62, your SS is $25k/yr, so you only need to draw $15k which is even less than you earn in interest in CDs on your 1M, for a while. Your money grows, and you never touch your principle , until your $40k/yr (which has to be adjusted upwards each year to compensate for inflation) requires more supplemental from your savings, and it will start to reduce.
If you delay collecting until age 70, your SS will $44k. So now your nest egg has money added to it, virtually forever, and you never have to pull from it, because your SS is Cola adjusted and is always more than you need. Of course, for 8 years, you pulled an average of $42k/yr to meet your expenses, so instead of $1M, you start with $675k@ 70. (Since you only pull as much as you need each month, the remainder still earns interest, so less than 8x $42k is the egg reduction).
Which scenario makes you feel better? The large enough nest egg you never have to touch, and watch grow until you die, (or is needed for some catastrophe), but there is the satisfaction that you actually USED some of your hard earned savings FOR your retirement? ....OR
Do you feel better that you have that larger amount saved while you are younger in case you need it, but basically unused for anything except to generate the added income you require?
Filing at age 62 sees you nest egg grow a bit, peak, and then steadily decline. Filing at 70, sees it steadily decline until age 70, then grow forever.
I think each scenario appeals to a totally different mindset, so I am curious....
Last edited by Perryinva; 04-18-2019 at 06:56 AM..
there are all kinds of scenarios we can come up with supporting one side or another ... many of us will be utilizing both our own portfolios which will not be just sitting and growing but subject to spending and sequence risk coupled with that social security..
that will give you a totally different situation and set of numbers which have their own balance points between being more market and rate dependent or more longevity dependent
Hard for me to believe this thread is just under a year old. It seemed way older than that. I have not changed my mind on any of my comments, (well, ines I read) except to note that I am truly lucky to be retiring at 61&4mo, 1 month from now, thanks to an unexpected early retirement package that has me paid through age 63.
In keeping with the thought of this long thread, I would ask this mind experiment :
If you are single, and perhaps have no heirs, what would be your preference? Assume you have no debt and $1M saved, which you worked very hard to achieve and accumulate.
. You retire at age 62, and only need $40k/yr to easily live on. At 62, your SS is $25k/yr, so you only need to draw $15k which is even less than you earn in interest in CDs on your 1M, for a while. Your money grows, and you never touch your principle , until your $40k/yr (which has to be adjusted upwards each year to compensate for inflation) requires more supplemental from your savings, and it will start to reduce.
If you delay collecting until age 70, your SS will $44k. So now your nest egg has money added to it, virtually forever, and you never have to pull from it, because your SS is Cola adjusted and is always more than you need. Of course, for 8 years, you pulled an average of $42k/yr to meet your expenses, so instead of $1M, you start with $675k@ 70. (Since you only pull as much as you need each month, the remainder still earns interest, so less than 8x $42k is the egg reduction).
Which scenario makes you feel better? The large enough nest egg you never have to touch, and watch grow until you die, (or is needed for some catastrophe), but there is the satisfaction that you actually USED some of your hard earned savings FOR your retirement? ....OR
Do you feel better that you have that larger amount saved while you are younger in case you need it, but basically unused for anything except to generate the added income you require?
Filing at age 62 sees you nest egg grow a bit, peak, and then steadily decline. Filing at 70, sees it steadily decline until age 70, then grow forever.
I think each scenario appeals to a totally different mindset, so I am curious....
The larger nest egg is more appealing but you lose years of enjoying retirement. If longevity runs in the family, it might be wise to retire at a later date. If not, retire as soon as possible.
Let us say $1,000 per month at 62 so $12,000 per year thus by age 67 you have collected $60,000.
Let us say $1,800 per month at age 67. An extra $9,600 per year so it will take 6.25 years to "recollect" the $60,000 thus until you are 73.2 years older.
Bottom line is if you die before 73.2 then start collecting at age 62. If you live beyond age 73.2 then start collecting at age 67. Your choice or maybe not yours alone.........LOL
What's wrong with getting rid of debt? Why play the margin between ones mortgage rate and market income? Pay the debt by retirement and then take home ALL the income. Win win.
Quote:
Originally Posted by mathjak107
Because by waiting you shorten the investment time frame and put much more pressure on whatever time you have in other investments... the shorter the time frame the more those years have to be good ones or you are out of luck ...
equity markets are about time in the markets not timing them ....many people make the mistake of dumping more and more free cash in to their house trying to pay things off early before kicking investing in to high gear ...
Then they hit something like the lost decade and burn themselves
There's nothing wrong with getting rid of debt, that's my point. I see what mathjak is saying, put more into long term investments and have time on your side. If the interest in your investments outgrows the interest you're paying in debt, that's positive income over the long term, a friend of mine got wealthy by following that simple formula. But for some of us older folks, time is not on our side, we have to get rid of debt of a mortgage that's anywhere from 3 to 7% interest and credit card debt as high as 24% interest. Pay that stuff off first then the cash you free up as a result, reinvest larger amounts over the short term if you want it to grow. I believe most people are in this situation (saving late in life) versus those who, let's say, was able to accumulate $1M in life's savings. I think that's more the exception than the norm if Americans can't even have $400 emergency cash money on hand as most recently sadly reported.
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