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Old 01-10-2010, 07:44 PM
 
Location: Baltimore, MD
3,745 posts, read 4,216,823 times
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o.k, so here's another answer. Although early retirement locks you into a percentage of your full retirement amount, you will continue to pay SSA contributions via your paycheck. Social Security will recalculate based on your additional contributions and you may be entitled to a larger amount.
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Old 01-11-2010, 07:48 AM
 
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There are a lot of factors to be considered in deciding to take SS early or not. Two high income earners each with SS have a very different possible scenario. You also need to calculate the break even age for you age group. Usually around 77/78. However if you invest the early SS you can push that breakeven point back considerably and will still have your principal in play late in life or when you die. That beats the end of the checks if you want something to pass on.
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Old 01-11-2010, 07:53 AM
 
Location: zippidy doo dah
895 posts, read 1,331,129 times
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Default developing dumpster communities...........

Quote:
Originally Posted by Minervah View Post
LOL! I will be right behind you. I am eligible for full SS benefits in two years. What I have now is a total of about $80,000 in my 401k, IRA, Annuity and a bit of savings. I plan to always work part time but I sure could live on a lot less than what the money magazines all suggest.

$2800 pension and $300k would allow me to live like a queen. As it is, my "throne" will be perched on top of the dumpster but I prefer an Appleby's over a pizza franchise; more variety.
Minervah - If you are looking for ambiance for your dumpster at Applebee's, I have some accessories you may be interested in - the Dept 56 Applebee's Lighted Restaurant to go with your snow village collection (provides a nice glow at Christmas time and is always in style. if you don't have the snow village, i can help you there also - your future retirement income will certainly allow for such frivolities.) I also have four large Applebee's pasta dinner plates/they are incredibly stylish and allow you to invite friends over for dumpster dining.

I believe you were looking at one time at Knoxville as a possible location. If you are still considering that, I have that in my mix of "explore" places as well and perhaps we could look into sharing the dumpster. My retirement is also short of the aforementioned that Dave has accumulated but I do have what I consider a livable income, particularly if paired with another frugalista.
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Old 01-18-2010, 01:12 PM
 
Location: Florida -
8,763 posts, read 10,840,630 times
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$300K will last you until you are 89-years old, if you never make a lick of interest and spend it at $10,000 per year. That's about $835 per month, giving you a gross income of $3600 per month, plus any Social Security you receive at 62/65-67. With an estimated $1000+/- SS, that's $4600 per month or a little over $55,000 per year. ONLY YOU can decide if that is sufficient (don't forget inflation!) .... If you need more, simply incorporate the additional cost/savings and recalculate how long your 401K will last. BUT, you have already done the math, so what is your real question?
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Old 03-30-2010, 06:44 PM
 
Location: Near a river
16,042 posts, read 18,973,893 times
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Quote:
Originally Posted by HappyTexan View Post
No, once you take reduced benefits, that's it for life.
The only way today to get full is to cancel your SS when you reach the age (66), pay back all they sent you and re-apply for SS at 66.
There is no automatic recalculation at 66.
Why bother to start collecting early and then pay it back at full retirement age? If you have to pay it back, you cannot really spend it. Even if you return the money from savings, what's the benefit in the end? And, aren't you paying income tax on all those early payments, so that would be a loss, right?

The only thing I can think of as a benefit is if SS goes bust after you start collecting, hopefully you are grandfathered in
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Old 03-30-2010, 07:54 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,558 posts, read 39,944,045 times
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Quote:
Originally Posted by newenglandgirl View Post
Why bother to start collecting early and then pay it back at full retirement age? ..
Looks to be a very big difference if you are gonna live very long.

It seems in my case, I would full recover my payback in less than 6 yrs. After that, the extra income would be very helpful. If I'm healthy...(and it is still an option) I plan to dip in early, and then payback @ 70 (from my conservative 'bucket'). Then live at least till 80, just to get my 'extra' benefit
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Old 03-31-2010, 02:57 AM
 
71,526 posts, read 71,712,424 times
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Quote:
Originally Posted by newenglandgirl View Post
Why bother to start collecting early and then pay it back at full retirement age? If you have to pay it back, you cannot really spend it. Even if you return the money from savings, what's the benefit in the end? And, aren't you paying income tax on all those early payments, so that would be a loss, right?

The only thing I can think of as a benefit is if SS goes bust after you start collecting, hopefully you are grandfathered in
heres the deal.. since we dont know how long we will live take the money early.. now normally rule of thumb says if your getting 7% long term return and inflation is 3% then you can spend besides the ss about 4% a year from your nest egg.

remember social security is no different then buying an annuity.

but what if you had an annuity kicking in at age 70 for not only you but your spouse that will almost double your income.,.. well having that annuity or social security being able to almost pay double later on if you live allows you the comfort of drawing say 5-6% from your nest egg early on while your still healthy to enjoy it.. then once you make it to 70 you pay back the ss or purchase that annuity so you refill your nest egg for life.


now the beauty of it is that when you pay it back you can either subtract the return off the years income or take a tax credit ....either way you may end up with low or negative income for the year.

now do a roth conversion with that negative income credit..

its a beautiful thing, you got to spend more ages 62-70 because you knew you were refilling your nest egg later on.... you get double the payments almost for you and your wife and you got tax free income from your converted roth..


of course its a moot point if you dont have the extra money to pay it back with but if you do there are many benefits


its not about the lump sum of money you have , its about what you can draw each year to spend..since on your own you have no clue what market returns will be in the future you cant take more then a certain amount for fear of outliving your money.... i would never worry about ss.. ss is such an ingrained part of american culture and structure i doubt its ever going away... the country couldnt survive with out it... you saw how fast we came of with trillions to save the banks...
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Old 03-31-2010, 03:17 AM
 
71,526 posts, read 71,712,424 times
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Quote:
Originally Posted by jghorton View Post
$300K will last you until you are 89-years old, if you never make a lick of interest and spend it at $10,000 per year. That's about $835 per month, giving you a gross income of $3600 per month, plus any Social Security you receive at 62/65-67. With an estimated $1000+/- SS, that's $4600 per month or a little over $55,000 per year. ONLY YOU can decide if that is sufficient (don't forget inflation!) .... If you need more, simply incorporate the additional cost/savings and recalculate how long your 401K will last. BUT, you have already done the math, so what is your real question?
only problem is over that time you will need 20,000 just to pay the same bills as 10,000 did and thats the problem... if you cant take about a 3% raise a year in withdrawls and your nest egg dosnt grow at least 3% every year to allow that then you could be broke far quicker. you will be out of money very quickly trying to pay the same or close to expenses over time..
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Old 03-31-2010, 04:42 PM
 
29,775 posts, read 34,863,854 times
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Quote:
Originally Posted by mathjak107 View Post
heres the deal.. since we dont know how long we will live take the money early.. now normally rule of thumb says if your getting 7% long term return and inflation is 3% then you can spend besides the ss about 4% a year from your nest egg.

remember social security is no different then buying an annuity.

but what if you had an annuity kicking in at age 70 for not only you but your spouse that will almost double your income.,.. well having that annuity or social security being able to almost pay double later on if you live allows you the comfort of drawing say 5-6% from your nest egg early on while your still healthy to enjoy it.. then once you make it to 70 you pay back the ss or purchase that annuity so you refill your nest egg for life.


now the beauty of it is that when you pay it back you can either subtract the return off the years income or take a tax credit ....either way you may end up with low or negative income for the year.

now do a roth conversion with that negative income credit..

its a beautiful thing, you got to spend more ages 62-70 because you knew you were refilling your nest egg later on.... you get double the payments almost for you and your wife and you got tax free income from your converted roth..


of course its a moot point if you dont have the extra money to pay it back with but if you do there are many benefits


its not about the lump sum of money you have , its about what you can draw each year to spend..since on your own you have no clue what market returns will be in the future you cant take more then a certain amount for fear of outliving your money.... i would never worry about ss.. ss is such an ingrained part of american culture and structure i doubt its ever going away... the country couldnt survive with out it... you saw how fast we came of with trillions to save the banks...
SS is fairly easy to fix. The problem is Medicare and that is why you really do need to have 300K plus for health care overage and a positive cash flow of 1-1.5K a month for medical expenses entering retirement. We don't know what the future holds for seniors and medical care other than more cost.
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Old 03-31-2010, 06:49 PM
 
48,516 posts, read 83,922,814 times
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No the breaux xommisio did not find a easy fix to projected SS problems in their months of testimoney by experts.But both medicad and medicare were even worse porblems it showed.The current healthcare bill is even dumping alot more peopel into medicaid also after 2014.Bascailly then;the feds were taking i about 18% of GDP and spending 8% on these three programs. projections then was by 2040 as I recall the spending would be 16% of the 18% taken in; leaving 2% for every other governamnt function.Nne were easy to fix and on SS the democrats said it wasn't in trouble since it was projected at running into deficits then in 2040 by their estimates.Bascailly it showed that congress is unable to move on any fix really without being forced to.
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