Turn 62 this month (pensions, raising, wife, older)
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Yes it does. It is a higher invested balance under the same assumptions. ORP does the same thing, but calculates net after taxes. Also, tax rate for a single widow are much higher, so source of income for the one left behind is major. The problem with Firecalc is it is all pre tax calcs. One could have two identical results with one with much lower taxes and it treats them as the same success, which is fairly ridiculous.
that portfolio income could be in the zero% bracket while the higher ss is taxed . or it could be the opposite where the portfolio income is taxed on 100% and ss on only 85% .
Can sign up for early SS at $1,900 or wait until 66.4 to get $2,600.
Yes, I have read the million, billion comments about this, but for me this time it is personal.
Any 62 early birds have any thoughts?
Yes, I'm one of them.
Totally burned out from working essentially non-stop for over 40 years in(what we today call), IT. Basically my career consisted of computing, as it existed in the late 60s, through the growth of the internet. I was a geek before the word existed.
In any case there was zero chance I was going to work 4 more years to age 66. Losing SS income didn't matter. Maintaining my sanity was what drove me to sign up early. Well, it wasn't my only income so that made it an easier decision.
I notice in another post you made that you have been retired for two years, so apparently you have an income stream sufficient for your retirement. So your question is really an economic one and should be easy to decide. The difference between $1900 and $2600 is $700 per month for 4 years and 5 months or 53 months. So by waiting you don't get $100,700 in SS payments. You recoup that $100,700 over the next 144 months (12 years). So at age 78 and 5 months you finally break even. That's the day you actually start recieiving that additional $700 a month. Up to that point SS has just been paying you back the money you gave up.
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Originally Posted by CatPeople
Can sign up for early SS at $1,900 or wait until 66.4 to get $2,600.
Yes, I have read the million, billion comments about this, but for me this time it is personal.
don't forget the money being spent while delaying making up for the lack of ss , that could have stayed invested , so that has to be counted too as well as spousal not received and extra medicare premiums while delaying .
that money laid out to delay is gone forever for good and no longer able to compound forever . so it certainly has to count . break even for all that is pretty far out because you could have that balanced portfolio compounding at 5-6% real return .
Last edited by mathjak107; 09-10-2018 at 01:51 PM..
don't forget the money being spent while delaying making up for the lack of ss , that could have stayed invested , so that has to be counted too as well as spousal not received and extra medicare premiums while delaying .
that money laid out to delay is gone forever for good and no longer able to compound forever . so it certainly has to count . break even for all that is pretty far out because you could have that balanced portfolio compounding at 5-6% real return .
Yes but as you have said numerous time is the market risk you are taking a big downturn could impact those dollars that you kept invested and were relying on.
At the end is where are you willing to rely on more. SS won’t cover most of us completely so the question would you rather rely on a larger % of your dollars coming from a market that can fluctuate or a SS amount that should remain safe.
How would a retiree react mentally to a huge downturn in the market when they are heavily relying on it? It’s all about peace of mind and we are all different regarding on how it would affect us
how about if you planned to go to 70 and died earlier and collected nothing , spent down assets trying to delay and markets were crappy for your remaining assets ?
that could be even worse if you want to play all the possibilities out . if your spouse had to file under fra now they not only get a reduced benefit but have less assets left since some were spent down trying to delay .
down markets are already expected in retirement planning since a safe withdrawal rate is already based on the worst outcomes . sure it could effect your balance left at the end but unless it was an extended downturn it is not a problem .even the 2008 retire is fine 10 years later.
longevity risk can be a pretty nasty risk , just like market risk . market risk can be recoverable many times , longevity risk can't , there are no do overs if you are wrong , ha ha ha .
we went in the middle at 65 so we got a bit of both reduced .
how about if you planned to go to 70 and died earlier and collected nothing , spent down assets trying to delay and markets were crappy for your remaining assets ?
that could be even worse if you want to play all the possibilities out . if your spouse had to file under fra now they not only get a reduced benefit but have less assets left since some were spent down trying to delay .
down markets are already expected in retirement planning since a safe withdrawal rate is already based on the worst outcomes . sure it could effect your balance left at the end but unless it was an extended downturn it is not a problem .even the 2008 retire is fine 10 years later.
longevity risk can be a pretty nasty risk , just like market risk . market risk can be recoverable many times , longevity risk can't , there are no do overs if you are wrong , ha ha ha .
we went in the middle at 65 so we got a bit of both reduced .
I never said that one was a slam dunk over the other. At the end each person has to make a decision for their situation and decide what gives them peace of mind.
well it goes back to what my point was . one is not inherently going to guarantee your spouse has anymore money to live on then the other or that your total income will even be any higher then had you taken early ss and not spent down all that money delaying and just let it compound..
early ss and investing can leave you with just as much to spend and just as much of a balance as delaying . you still need longevity to some pretty old ages to make delaying the better choice over early ss and investing . you do need at least average returns on your investments as well and decent sequences .
it is only a question of are you more comfortable with more longevity risk or more market risk .
Last edited by mathjak107; 09-10-2018 at 04:43 PM..
We are 62.5 and 63.5. Can't even consider retiring until Medicare kicks in. The premiums are too high. Luckily we both love our jobs and just got back from spending 2 weeks visiting our daughter in Alaska. As long as we take a few trips a year I am fine working.
It is indeed just market risked income vs annuity income. Filing at 62 in 2010 and index investing that amount through today trounced waiting to collect until 70, even if that amount is simply put in to a high interest savings and drawing the 70 - 62 difference from that to supplement. That supplemental amount also has an added tax component that the delayed SS does not.
And remember, the caveat is that in that case, you are STILL not actually using your SS to live on! You simply have chosen a different path to delay via. This covers a pretty small cross section of the retirement population here.
And in the hypothetical example, remember that taxes on the income for each year have to be paid (in order to use an index fund and avoid RMDs). So ones tax bracket while considering the alternative is very important. The higher your tax bracket, the more delaying benefits you, as the “growth” of the SS amount is tax free while delaying. Also, it is always discussed as if delaying costs the say $100k in the $1500/mo example all at once. In reality delaying allows you to draw monthly & keep the bulk you have saved and it contiues to grow, and then decide on an ongoing basis what makes sense. It absolutely is not a slam dunk, but whereas delaying is riskier in the beginning during the delay, it is idiot and basically loss of income proof, for the last remaing years (10-20-30?) when faculties and savings mean less and income means more. Filing earlier means having to manage investments for LIFE. If I was GUARANTEED a 4% inflation draw on my investments, forever, I would file early. But I’m not, anymore than I am guaranteed to live to an average age. So it is a risk and risk tolerance issue for a percentage of your income against a favorable COLA annuity with survivor benefits guaranteed risk free component.
IF i have a large portfolio that had to be managed all the time, there is a lot of comfort in knowing that a larger portion of my income is guaranteed COLA & tax advantaged.
Unfortunately what this means is that the people that can most often an more easily benefit from delaying, are typically the ones that need it the least. So based on the lower benefit and nest egg total retiree retiring at 62, for the vast majority of people, filing at 62 as well is the best answer. They have not proven or lived a life of smart investing either due to ability or circumstances. Defining their income upfront is more important.
Last edited by Perryinva; 09-12-2018 at 06:27 AM..
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