Why Wouldn’t You Take Social Security at 62? (inherit, coverage, separate)
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We took this year which is when we reach 66, which was full retirement age for us. Our view while it may be a bit outside the box, is that we are fairly comfortable and live a nice life. We are reasonably healthy now and don't know what the future will bring. We actually took a little less as we both started in January and my DOB is April and DH is Sept. We both retired and relocated at 59 and have been living off savings and a pension. We decided to take the money and run as we now are essentially living on our SS as our investments grow.
We wanted to get as much back while we are still active and able to do rather than wait for a few more years. IT is what works best for your personal situation.
there are so many different combinations of the above .. tell me which age you want me to argue is better and i can make a case for taking it early or delaying ..
.the reason it is so easy to argue is because for someone with enough assets to delay and not work they have to spend down assets to delay that are or could be invested . it typically takes until 90-95 delaying ss to equal a 5-6% real return. which is what not spending down a balanced portfolio to delay would typically average .
to delay those 8 years the stats actually say it is more likely investing and taking early ss will leave you with a bigger balance then betting on longevity and delaying.. i posted that math earlier with those charts .
at the end of the day the two ages can even out either way since the investments growing can offset the taking it early .
But there are so many variables, as you note.
One thing to consider is the uncertainty of how your investments will do during those eight years. Could double; could shrink by 30%. What is certain in my case is that if I delay to 70, the SS check will cover all basic expenses. What is also certain is that my parents have lived into their 90s, my uncle at 96 is still going, my grandmother made it to 95, and my aunt is almost 90. (What is uncertain is whether I will live that long.)
I've been a stay at home Mom but have worked our entire marriage of 37 years. I brought in money with my paintings, crafts and other venues. But I had the reward of watching my children. I now watch my grandsons and now teaching them homeschooling. My daughter gives me a little money to help us make ends meet. But when you look at my SS and how much I have paid in it isn't enough to draw.
I have been told I can draw half of my husbands SS, this is what we will do.
there are so many different combinations of the above .. tell me which age you want me to argue is better and i can make a case for taking it early or delaying ..
.the reason it is so easy to argue is because for someone with enough assets to delay and not work they have to spend down assets to delay that are or could be invested . it typically takes until 90-95 delaying ss to equal a 5-6% real return. which is what not spending down a balanced portfolio to delay would typically average .
to delay those 8 years the stats actually say it is more likely investing and taking early ss will leave you with a bigger balance then betting on longevity and delaying.. i posted that math earlier with those charts .
at the end of the day the two ages can even out either way since the investments growing can offset the taking it early .
Also....another thing to consider is the current interest rate environment. If you can lock up a 12% return on a 30-year bond, better to use every available penny to buy the bonds and take SS early.
(Some people reading this might think 12% for 30 years is an impossible example, although Mathjak probably knows what I'm referring to. Bonds in the early 80s were paying that. And in that environment, I would borrow, beg, and steal.....well, not steal.....every cent to lock that up.)
except that 12% was a losing deal back then until inflation came back down ... no guarantees if it happens again they will ever get it back down again so be careful what you wish for
I've been a stay at home Mom but have worked our entire marriage of 37 years. I brought in money with my paintings, crafts and other venues. But I had the reward of watching my children. I now watch my grandsons and now teaching them homeschooling. My daughter gives me a little money to help us make ends meet. But when you look at my SS and how much I have paid in it isn't enough to draw.
I have been told I can draw half of my husbands SS, this is what we will do.
at your full retirement age other wise it is less. if both you and him take it early you both get cut .
if you have enough years in to have an ss record you always get your own first now ... then if you are due any spousal difference it is added to your own benefit , never exceeding 1/2 your husbands fra amount
Last edited by mathjak107; 06-09-2019 at 07:47 AM..
One thing to consider is the uncertainty of how your investments will do during those eight years. Could double; could shrink by 30%. What is certain in my case is that if I delay to 70, the SS check will cover all basic expenses. What is also certain is that my parents have lived into their 90s, my uncle at 96 is still going, my grandmother made it to 95, and my aunt is almost 90. (What is uncertain is whether I will live that long.)
I'm waiting.
nothing has any guarantee , you only have a choice in risks ...do you want more market and interest rate risk or more longevity risk to make up your income , that is your two choices..
so far over 118 -30 year cycles in retirement , markets have rarely disappointed . a 50/50 mix failed to last just 4 of the 118 30 year cycles ...even 100% equity failed to last just 6 ...so if you want to go by statistics , that is damn high odds in your favor which outweigh the longevity odds of getting as much from ss .. odds of seeing that much from ss are statistically less .
that is why you can argue that in many cases taking ss early leaves you in better shape down the road then delaying ss does and the markets rarely disappointed in that regard , so spending down those invested assets or money that could have been invested can alter the outcomes of delaying ss in comparison to taking ss earlier and not depleting those assets forever that were spent down instead of the ss early on .
but if those early years were poor market years and the best years were after age 70 , well then drawing less from your portfolio because of the higher ss payments down the road may win . so not only returns but sequences matter too ...
so anyone who puts out an article about which way is best is clueless and really is not looking under the hood ...
Last edited by mathjak107; 06-09-2019 at 08:01 AM..
I think the SS at 62 focuses too much on the math. What if you are just tired of working? If SS makes retirement possible, isn't that worth more than squeezing every dime out of the system? I am sure there are people out there that love their jobs, but I think most people are ready to retire at 62. What price can you put on having each day to do as you wish, and not have to report to some job?
I think the SS at 62 focuses too much on the math. What if you are just tired of working? If SS makes retirement possible, isn't that worth more than squeezing every dime out of the system? I am sure there are people out there that love their jobs, but I think most people are ready to retire at 62. What price can you put on having each day to do as you wish, and not have to report to some job?
when it comes to these types of discussions and comparisons , they are not ABOUT WORKING LONGER ... they are about retiring at 62 and having ENOUGH ASSETS TO HAVE A CHOICE , as to whether to lay out the ss money up front from your own assets or take ss early and lay out nothing ....
these types of discussions are only for those with enough assets to retire early and have a choice of taking ss or not ! they have nothing to do with working longer or not .... those with under funded retirements or those who safely can not lay out 8 years of money will not have the choice , therefore any comparisons will not apply to them since they can only file early if they stop working .
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The working factor
