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I worked as a teacher for almost forty years and retired in June 2018. I just turned 62 years old. I was paid until this month. I worked for private schools and did not earn a pension and paid into Social Security.
I can't work full time anymore for my mental health.
Effective next month I will start working as a Math Tutor and will make about $1,600 a month gross working about 15 hours a week. Under the maximum amount I can earn if I collect SS early. I have about $750,000 in a 403B in a mixture of stocks and bond funds. I love tutoring part-time.
Everyone online says I should wait until I am 70 to collect Social Security. Every Financial Planner says I should wait until I am 70 to collect. Most of my friends say I should wait until I am 70 to collect.
But I have spent hours online listening to their arguments and they make little sense to me. Basically, they are saying I should wait 8 years for my money and pull about $145,000 out of my retirement accounts and lose the opportunity cost of that money so I can break even and come out ahead 20+ years from now?
(Because I would not be getting a Social Security Check for eight years and would need that money for my cost of living, I would be forced to take out AN EXTRA $18,000 a year out of my 403B for the 8 years and lose the investment returns from those additional 403K withdrawals. If I would have got an average of 5% annual return from that money I pulled out to make up for the missing Social Security Checks over the next 8 years, I would be short $178,846.00 that could be used going forward. $145K with investment returns at 5%)
This wait till 70 to collect Social Security plan by everyone makes no sense to me. Does this make sense to you?
It depends on how long you expect to live----beyond 70.
It depends on how long you expect to live----beyond 70.
Does it really matter how long you expect to live as though you have a say in that? People die everyday in their early 60s that don't expect to die regardless of how healthy they think they are or how long their parents lived. One of my best friends died a couple of years ago in her late 60s from a heart attack but her mother lived to be in her late 80s. She didn't expect to die and thought she was going to have a long retirement.
No one can promise you that you will live to 70 or be healthy enough at that age to do half the things you want to.
The OP isn't able to do anything as he is no longer a member of C/D. In fact, given that the OP just created this account this morning, he was only a member for about 4 hours. Or I should say, this SN was.
Please read this before posting further to this thread. There are 100 similar threads here. Let’s let this one die.
I worked as a teacher for almost forty years and retired in June 2018. I just turned 62 years old. I was paid until this month. I worked for private schools and did not earn a pension and paid into Social Security.
I can't work full time anymore for my mental health.
Effective next month I will start working as a Math Tutor and will make about $1,600 a month gross working about 15 hours a week. Under the maximum amount I can earn if I collect SS early. I have about $750,000 in a 403B in a mixture of stocks and bond funds. I love tutoring part-time.
Everyone online says I should wait until I am 70 to collect Social Security. Every Financial Planner says I should wait until I am 70 to collect. Most of my friends say I should wait until I am 70 to collect.
But I have spent hours online listening to their arguments and they make little sense to me. Basically, they are saying I should wait 8 years for my money and pull about $145,000 out of my retirement accounts and lose the opportunity cost of that money so I can break even and come out ahead 20+ years from now?
(Because I would not be getting a Social Security Check for eight years and would need that money for my cost of living, I would be forced to take out AN EXTRA $18,000 a year out of my 403B for the 8 years and lose the investment returns from those additional 403K withdrawals. If I would have got an average of 5% annual return from that money I pulled out to make up for the missing Social Security Checks over the next 8 years, I would be short $178,846.00 that could be used going forward. $145K with investment returns at 5%)
This wait till 70 to collect Social Security plan by everyone makes no sense to me. Does this make sense to you?
You get an 8% per year bump in payout waiting till you are 70. Its a pretty good return if you think you'll live healthy out into your upper 80s.
If you think you can live on what you have with no problem, then it doesn't matter too much I guess.
SS is more insurance for living a long life than anything else.
you get a 6% increase from 62 to fra and 8% from fra to 70 . that is not the same as a return .
your return is actually zero for 22-24 years once you figure checks given up , spousal benefits not collected , spending down invested assets or not investing the early ss money as well as uncapped increases in your medicare premiums until you collect
"Assuming a 5% return" is an aggressive position these days, unless you're heavily stock weighted and can stomach downturns.
As others have suggested, it's a gamble on how long you'll live. The delayed payout was designed to be actuarially neutral (so I've read), but that was some time ago, so it's likely on average folks would come out slightly ahead these days (we live longer) but who is "on average"?
Keep in mind too that we're in a period of political risk for entitlement programs, including SS. Do you want to delay, only to find the benefit has been diluted?
I agree with you. I plan to file at 62 and not touch my TSP, I have no idea if this, or any future administration will dilute the benefit plan or suddenly decide to increase the early retirement age. I prefer to take mine at 62 because my investments will be there for my heirs if I suddenly pass away, while SS will be discontinued upon my death.
Also the break-even point for me is about 74 ( I believe) that would be 14 years of eating into my TSP account and NOT taking SS.
Everyone is different but I plan on taking mine as soon as I can.
if you are spending down money to delay and spending invested assets, figuring delaying from 62 to 70 and spending down a balanced portfolio or money that could be put in a balanced portfolio you are looking at at least 22 years .
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