If I wait to 70 to collect Social Security........ (pensions, financial advisor, move)

[teacher who retired]

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?

[Zenstyle]

I explored the social security website recently, and "age 70" is not even mentioned there. If you wait until you're 66, you'll get your full benefits. The age 70 thing is a hold-over from years past. It doesn't pertain anymore.

[Zenstyle]

Correction: age 70 is still a thing. I was mistaken. Sorry about that!
But, at age 64, I'm claiming in two years, while still eking out a living.

[Hemlock140]

Originally Posted by Zenstyle

Correction: age 70 is still a thing. I was mistaken. Sorry about that!
But, at age 64, I'm claiming in two years, while still eking out a living.

You do get a substantial increase in monthly benefit waiting until 70, but what you lost in those years 66-70 can take 10 years to recover, so good health is a factor. In my case, I'm still working probably to 70 because I love my job, and collecting SS now would mean a big tax bite, so I'm waiting. The extra 4 years will also increase my pension. Here where I work all of the recent retirements have been people aged 70-72.

[marino760]

Retire now if you can afford to if you are at a job you no longer enjoy doing. You'll never get those 8 years back from 62-70, and you'll never be as healthy in 8 years as you are now.

[Cruzincat]

It's a two step decision. Each person will have their own data to look at, based on their own circumstance.

1. Calculate your breakeven point where your income from SS starts to become lower than it would if you waited until 70.

2. Look at the average longevity of your most recent ancestors.

If the two ages are close then is it worth the gamble to wait?

Of course, if you need the money now because you don't have other sources of income, just do it!

[Cruzincat]

Originally Posted by marino760

Retire now if you can afford to if you are at a job you no longer enjoy doing. You'll never get those 8 years back from 62-70, and you'll never be as healthy in 8 years as you are now.

That was my reason for leaving, however at FRA or shortly after FRA. I had hoped to go to 70, but the job was no longer fun and I began to realize my health was getting worse, and the job I had meant eating on the run/on the road all the time. I have lost about 40 pounds since retiring, since it is easier to eat healthy. Had I waited longer, it might have become impossible to make improvements, if it involved exercise.

[bigdogmom13]

I'm in a similar situation. I'm hoping to retire in 5 months, at 64 1/2, and my financial advisor also says to wait until 70 to take SS. We'll see. I definitely won't take it until my FRA (66 for me) and will re-evaluate every year after that. I'm very healthy and both parents lived into their mid-90's so it may be worth for me to wait until 70.

[rjm1cc]

I would vote for waiting. But why not try it for a year and see how it goes. You can always start SS.

Lets say your SS check is 100 now 130 at FRA and 170 at 70. If you spend your 401k money now to get the extra 70 a month (also increased for inflation) I look at it as if you are buying a 70 a month annuity for life with no extra annuity fees.

Note I made up the numbers so you should put in your own numbers and see if a SS annuity is worth the cost. Remember your 401k money can run out but you SS annuity will not. I think of it more as a safety factor. Easier to work and get extra income now than when you are 70 or 80.

[teacher who retired]

Assuming a 5% return on the money I would be able to keep in my 403B because I got Social Security this Fall at age 62 vs waiting until I am 70, my break-even date is about 86 years old. 24 years from now!

We don't get a nominal 5% return over the rest of my life, (25 plus years), then our pensions, endowments and retirement programs will crash and move us into a huge depression.