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Old 06-08-2019, 06:26 PM
 
Location: Connecticut
26,276 posts, read 42,256,997 times
Reputation: 7803

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I was talking to a friend the other day about Social Security and when to take it. A family member is waiting until 70 to get the maximum benefit but my friend thinks that may not be best. He noted that you are losing 7 1/2 years of income by waiting and it would take a number of years to recoup that money.

His reasoning is this. At 62 1/2 he would get $1,900 a month from SS. At 70 the benefit would be $3,600. If he starts taking it at 62, he would earn a total of $171,000 in those years between retirement and 70 ($1,900 x 12 x 7.5 = $171,000). If he waits to 70, it will take over 8 years to break even and get that $171,000 back ($3,600 - $1,900 = $1,700; $171,000/$1,700 = 100.59 months or 8 years, 4 months).

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
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Old 06-08-2019, 06:34 PM
 
Location: east TN
265 posts, read 73,428 times
Reputation: 1024
Given my dad died at 49 and mom at 63, neither of them collecting a dime from SS, I took mine at 62 and smile with every passing month


Honestly, the SS money is just gravy we dump back into savings, and more of it would just be more gravy we likely won't ever need.
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Old 06-08-2019, 06:47 PM
 
Location: NC
6,543 posts, read 7,956,796 times
Reputation: 13438
There’s a crossover point when you’ve earned the same amount total no matter which route you took. After that the 70 yr start earns you more. So if you live beyond that point you have done better to have waited. And that’s when things are getting more expensive so nice to have more resources. I think that age is 78 and a half.
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Old 06-08-2019, 06:49 PM
 
3,315 posts, read 640,659 times
Reputation: 2287
Given that both my parents are in their 90s, my aunt is 89, my uncle is 96, and my grandmother died at 95, I'm delaying as long as possible.
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Old 06-08-2019, 06:52 PM
 
Location: Knoxville, TN
1,236 posts, read 585,282 times
Reputation: 2710
I took it at 62. I want to live on my cashflow (I also have a pension) rather than draw down my savings. Since I had years out of the workforce as an at-home mom, the difference in the amount of the social security I get at 62 vs. 66 isn't enough to lose sleep over.
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Old 06-08-2019, 06:54 PM
 
Location: New Jersey
8,486 posts, read 12,445,645 times
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You also need to take into consideration that you have other sufficient income to last when taking it at 62.
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Old 06-08-2019, 07:04 PM
 
11,963 posts, read 5,102,113 times
Reputation: 18693
Quote:
Originally Posted by JayCT View Post
I was talking to a friend the other day about Social Security and when to take it. A family member is waiting until 70 to get the maximum benefit but my friend thinks that may not be best. He noted that you are losing 7 1/2 years of income by waiting and it would take a number of years to recoup that money.

His reasoning is this. At 62 1/2 he would get $1,900 a month from SS. At 70 the benefit would be $3,600. If he starts taking it at 62, he would earn a total of $171,000 in those years between retirement and 70 ($1,900 x 12 x 7.5 = $171,000). If he waits to 70, it will take over 8 years to break even and get that $171,000 back ($3,600 - $1,900 = $1,700; $171,000/$1,700 = 100.59 months or 8 years, 4 months).

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
I wonder what percentage of people waited until 70 just to die at 69 or sooner.
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Old 06-08-2019, 07:17 PM
 
Location: Florida
5,226 posts, read 3,005,081 times
Reputation: 9580
I knew a number of people that never saw 66.
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Old 06-08-2019, 07:18 PM
 
199 posts, read 73,587 times
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There are plenty of break even calculators out there. I think my break even is about 80. I don't see much reason to wait past 62. Living to 80 is not a given. My parents both died at 85. The last few years they had, I don't think any extra money would have made any difference. I also don't want to work past 62. I am tired of the whole thing and I have paid into SS since I was 15. At 62 it will be time to collect something.
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Old 06-08-2019, 07:24 PM
 
Location: Central IL
15,201 posts, read 8,504,300 times
Reputation: 35559
Quote:
Originally Posted by JayCT View Post
I was talking to a friend the other day about Social Security and when to take it. A family member is waiting until 70 to get the maximum benefit but my friend thinks that may not be best. He noted that you are losing 7 1/2 years of income by waiting and it would take a number of years to recoup that money.

His reasoning is this. At 62 1/2 he would get $1,900 a month from SS. At 70 the benefit would be $3,600. If he starts taking it at 62, he would earn a total of $171,000 in those years between retirement and 70 ($1,900 x 12 x 7.5 = $171,000). If he waits to 70, it will take over 8 years to break even and get that $171,000 back ($3,600 - $1,900 = $1,700; $171,000/$1,700 = 100.59 months or 8 years, 4 months).

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
Why does everyone doing this math think they are the first and only person to have ever thought like this?

Maybe it's a bad idea for guys with heart trouble, but as a healthy woman I think my odds of living to 80+ are pretty high and I'd rather take the higher benefit (along with associated COLAs). Who knows what the market will do....
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