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There is a reason the breakeven point is about the average age people live to. That's the point, to make it a 50/50 proposition for the average person.
The thing many people overlook though is if they are married they can start one spouse early, both collect a benefit and delay the other to 70 and switch over then. That's the main play with SS but it doesn't work for everyone obviously.
There is a reason the breakeven point is about the average age people live to. That's the point, to make it a 50/50 proposition for the average person.
The thing many people overlook though is if they are married they can start one spouse early, both collect a benefit and delay the other to 70 and switch over then. That's the main play with SS but it doesn't work for everyone obviously.
That is no longer true.. there is no more leaving your own benefit to grow and taking spousal unless you were 62 or older in 2015.. all you get now is yours and if eligible ,a spousal adder on top of yours bringing you up to half . Letting one grow is no longer an option unless you were grand fathered in.
Social security Is no longer neutral either and has not been for years .. more people are living longer so odds are they will pay out more delaying
I appreciate your post because I went back and used those options to see if it made as big a different for me. In my case the savings on taxes were not major.
Yes, since you have a pension you may find that you are always going to have 85% (or close enough) of your SS benefit taxed no matter when you take it. Pensioners probably deserve a separate thread to discuss all of this.
Still working and making good money even at 66 FRA but since I was born before 1/1/1954 I did file a restricted application this year and drawing on my Ex Spousals Benefit which is half her Benefit while mine continues to grow.
Reminder if you were born before that date you can still file a restricted application under the old rules, collect Spousal and let yours grow a few more years.
So I am taking spousal SSI just not my SSI based on my Income. In 2-4 years it will grow another $600-1200 a month.
My Spousal pays my Medicare, 22% taxes then goes straight into my Vanguard account. Not much but it's free money at this point.
Still working and making good money even at 66 FRA but since I was born before 1/1/1954 I did file a restricted application this year and drawing on my Ex Spousals Benefit which is half her Benefit while mine continues to grow.
Reminder if you were born before that date you can still file a restricted application under the old rules, collect Spousal and let yours grow a few more years.
So I am taking spousal SSI just not my SSI based on my Income. In 2-4 years it will grow another $600-1200 a month.
My Spousal pays my Medicare, 22% taxes then goes straight into my Vanguard account. Not much but it's free money at this point.
ssi is welfare...stop using that term . it is not social security retirement
That's unfortunate, but not surprising. Even if one gets all of the software working and tested, they still have to explain to customers what it's doing and get them to trust the answers. That's not such an easy thing.
the software did a good job finding the most dollars but it fell short of actually integrating it with everything else .
the plan it came up with for us was quite elaborate .
my wife is 2 years older so she filed already at 62 ... so the plan had her stopping her early benefit at her fra .. then at 70 she would file and get a bigger payment .. i would be 68 and 10 months so i would file restricted on hers ....at 70 i would file for my own ..when i filed she would get a spousal adder to hers ..
but it failed to account for taxes , spending down our portfolio , effects on rmd's , uncapped medicare premiums for all those years , any aca help from 62-65 , etc.
so it basically did what most here do .. they put on their myopic glasses and only look on the surface at the checks , not under the hood at the whole ball of wax .
Sure, ....
However I've looked at this enough that I feel I can make the following generalization. Any calculation that's done using pre-tax dollars will make the "taking SS early" scenario look better than it really is. After all, we can only spend after-tax dollars so that is what really counts.
Couldn’t rep you again. This is so ignored so often, it amazes me. Perhaps way more retirees in these discussions will or assume they will, pay no or little tax in retirement? I’m sure way more pay very little than pay a lot, and that is why in a previous post I mentioned the higher income retirees tend to delay or promote not early more often. Between Roth conversions, and spending down taxable fund withdrawals, maximizing the state tax free income and tax advantaged federal income counts more. Paying fed tax on only 85% of income is a pretty decent break, plus, converting to Roths while the fed rates are 3% less is another. The last time I ran iORP, it was around 80k in less taxes over a 25 year retirement window. (I also have significant pension income so I am stuck at 85% SS taxed for life.) Plus, the larger the Roth, the far better the surviving spouse ends up going from MFJ to FS. I’m surprised the infamous Tax Torpedo hasn’t been brought up in this thread. If ones income happens to be on that cusp, then the tax difference is huge.
Last edited by Perryinva; 06-15-2019 at 05:41 AM..
there are huge tax torpedoes .... a single can pull a mere 1k extra from an ira for a trip and if at some of the cusps see that 1k get hit with a 47% effective tax rate on that extra 1k . ironically it is those in the lower incomes that can be hit hard by lack of knowledge and tax planning . that is because their money can easily go from not taxed to taxed by just the addition of a little more income ... you have two moving targets to deal with
That's unfortunate, but not surprising. Even if one gets all of the software working and tested, they still have to explain to customers what it's doing and get them to trust the answers. That's not such an easy thing.
I'm going to note this while noting I am not trying to get into the politics of what I am going to say.
The whole mess in 2008 did a lot of damage outside of the obvious. It's made it where there is a large number of people who no longer trust the "experts" or the markets.
He feels he should take that money and, assuming he does not need it, invest it to get a better return. Does this make sense? Is he missing something? Jay
Not to me it doesn't. If it isn't needed then don't take it. Why would you want to fawk around with high risk investing during retirement?
If he enjoys gambling, recommend a trip to Vegas.
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