For every year that you postpone Social Security benefits, your total Social Security Benefits will increase by 8% (family, cancer)
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I can understand the game plan to a certain extent where couples are involved. However I am single so 62 made more sense. I'm not interested in what if at 70 or 80 or 90. As someone has said many times: dead is dead. I'm enjoying retirement now. Cruises are experiences. I am ticking things off my bucket list before mobility issues show up on my doorstep.
I understand that.
But, my neighbor says he has a better strategy for craps. Something about 6,8. I was only listening with 1/2 er and I was drinking my nth glass of wine.
I am still trying to figure out how 6,8 leads to a longer life.
I can understand the game plan to a certain extent where couples are involved. However I am single so 62 made more sense. I'm not interested in what if at 70 or 80 or 90. As someone has said many times: dead is dead. I'm enjoying retirement now. Cruises are experiences. I am ticking things off my bucket list before mobility issues show up on my doorstep.
but if you really had the financial choice to delay your income should not change .only the make up of your income should change so those cruises should be just as much a do either way . if the answer is you can't lay out the ss money you are not collecting up front then you do not have the choice really to delay .
for someone with the choice to delay , more spending early on should not be one of the criteria . that would make little sense .
unless they intend to work or have a pension that covers things most people can't afford to delay ss if they retire at 62 . they do not have the assets to safely lay out while delaying .
we have these discussions all the time yet few actually even have the choice to delay to 70 "properly "
I take issue with “safely” and “properly”.
I’m 60. Say I spend down half my net worth between now and age 70. I then start collecting a COLA protected $43,524 in 2018 dollars supplemented by a slower draw down of the rest of my net worth. If I’m living independently at home, I’m fine even if I run out of money living on my Social Security check since it’s all tax free. My house acts as my long term care policy. Combined with that Social Security check, it will fund a whole bunch of years of private pay assisted living, memory care, and nursing home. Male, it’s unlikely I’d spend through my home equity. More than 5 years of that is statically unlikely.
If I start collecting at age 62, my Social Security income is $24k. I can’t safely live on that after paying for home ownership costs, health care, transportation, and food. It’s far “safer” to have a COLA-protected $43,524 income stream than a $24k income stream if I run out of money. I get one shot at this. “Proper” is doing risk mitigation so if the worst case happens and I run out of money, I’m still OK. None of us have a Magic Eight Ball that predicts the financial future. There are no models based on historical financial data that can factor in today’s debt to GDP ratio and annual deficit to GDP ratio. Those models don’t have a crash/depression scenario. Those models don’t have a currency collapse scenario. They use financial data from the best economic times ever seen on the planet. Do you think Apple will be a $1 trillion market cap forever? I remember when Nokia was the golden child. I remember when Motorola was the golden child and they don’t even exist now.
I’m not trying to optimize for wealth. If I did that, I’d sell everything and move to a trailer park in flyover country where my age 62 Social Security check pays all my bills and I invest every penny of my net worth. Why would I want to do that?
Some people aren’t in the position to wait for a couple hundred more dollars a month. Nobody knows how long you will keep your health. Most of the people I’ve worked with have either cancer or heart problems. Some didn’t make it to 69. No guarantees...
I’m 60. Say I spend down half my net worth between now and age 70. I then start collecting a COLA protected $43,524 in 2018 dollars supplemented by a slower draw down of the rest of my net worth. If I’m living independently at home, I’m fine even if I run out of money living on my Social Security check since it’s all tax free. My house acts as my long term care policy. Combined with that Social Security check, it will fund a whole bunch of years of private pay assisted living, memory care, and nursing home. Male, it’s unlikely I’d spend through my home equity. More than 5 years of that is statically unlikely.
If I start collecting at age 62, my Social Security income is $24k. I can’t safely live on that after paying for home ownership costs, health care, transportation, and food. It’s far “safer” to have a COLA-protected $43,524 income stream than a $24k income stream if I run out of money. I get one shot at this. “Proper” is doing risk mitigation so if the worst case happens and I run out of money, I’m still OK. None of us have a Magic Eight Ball that predicts the financial future. There are no models based on historical financial data that can factor in today’s debt to GDP ratio and annual deficit to GDP ratio. Those models don’t have a crash/depression scenario. Those models don’t have a currency collapse scenario. They use financial data from the best economic times ever seen on the planet. Do you think Apple will be a $1 trillion market cap forever? I remember when Nokia was the golden child. I remember when Motorola was the golden child and they don’t even exist now.
I’m not trying to optimize for wealth. If I did that, I’d sell everything and move to a trailer park in flyover country where my age 62 Social Security check pays all my bills and I invest every penny of my net worth. Why would I want to do that?
Crap in life happens all the time . It can be very dangerous depleting assets to far down delaying . Plus what if the bull is in the early years of retirement and the rest of the years meh .that can severely effect the rest of the time frame .
So the fact one day an annuity like ss is kicking in may not help much in the shorter term . I highly don’t recommend someone deplete more than 1/2 their assets delaying.
Investing the early ss in to a balanced fund or not spending down invested assets will leave you the same as taking ss later and living to 90 assuming average market outcomes.
There are no guarantees in either case . Markets could disappoint and your longevity may be less. The delayed ss amount is nothing that can’t be duplicated via early ss and not spending down the equivalent. It is only about more market risk or more longevity risk to achieve it
Last edited by mathjak107; 08-04-2018 at 07:28 AM..
I’m 60. Say I spend down half my net worth between now and age 70. I then start collecting a COLA protected $43,524 in 2018 dollars supplemented by a slower draw down of the rest of my net worth. If I’m living independently at home, I’m fine even if I run out of money living on my Social Security check since it’s all tax free. My house acts as my long term care policy. Combined with that Social Security check, it will fund a whole bunch of years of private pay assisted living, memory care, and nursing home. Male, it’s unlikely I’d spend through my home equity. More than 5 years of that is statically unlikely.
If I start collecting at age 62, my Social Security income is $24k. I can’t safely live on that after paying for home ownership costs, health care, transportation, and food. It’s far “safer” to have a COLA-protected $43,524 income stream than a $24k income stream if I run out of money. I get one shot at this. “Proper” is doing risk mitigation so if the worst case happens and I run out of money, I’m still OK. None of us have a Magic Eight Ball that predicts the financial future. There are no models based on historical financial data that can factor in today’s debt to GDP ratio and annual deficit to GDP ratio. Those models don’t have a crash/depression scenario. Those models don’t have a currency collapse scenario. They use financial data from the best economic times ever seen on the planet. Do you think Apple will be a $1 trillion market cap forever? I remember when Nokia was the golden child. I remember when Motorola was the golden child and they don’t even exist now.
I’m not trying to optimize for wealth. If I did that, I’d sell everything and move to a trailer park in flyover country where my age 62 Social Security check pays all my bills and I invest every penny of my net worth. Why would I want to do that?
You and I are thinking exactly alike.
I figure I will spend down around half my net worth (excluding home equity) delaying from 62 to 70. At that point, my inflation protected SS annuity kicks in and will cover all living expenses, and that's independent of the remaining half of my savings.
Also like you, my home equity is my long-term care policy, which will cover 8 years in assisted living or 4 years in a nursing home.
The goal is NOT to collect as much as possible. The goal is to make sure I don't outlive my money.
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