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View Poll Results: When did you (or when do you plan to) start taking Social Security benefits?
Age 62 66 55.00%
Age 63 2 1.67%
Age 64 3 2.50%
Age 65 10 8.33%
Age 66 19 15.83%
Age 67 or older 20 16.67%
Voters: 120. You may not vote on this poll

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Old 06-19-2015, 09:41 PM
 
Location: Grove City, Ohio
10,135 posts, read 12,392,750 times
Reputation: 13986

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Quote:
Originally Posted by cdelena View Post
SS is a really attractive program when compared to any other annuity so if you are able and have health and genetics on your side delaying until 70 to get the maximum is a good option.

I plan to spend down my retirement portfolio (mostly IRA) until 70 so that I can spread the tax load before SS, reduce the MRD after 70, and maximize SS payments. Of course a change in government policies or my health could screw up the plan.
I am looking at it in similar fashion.

I am 67 and have always hoped to put off collecting benefits until age 70 because the difference in my benefit is $800/month and that, to me anyway, is a big deal of money.

$9,600 a year tax free for the rest of my life indexed to inflation, or hers if she survives me, is a big deal.
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Old 06-20-2015, 02:09 AM
 
71,700 posts, read 71,801,099 times
Reputation: 49265
Quote:
Originally Posted by rdflk View Post
I think I've seen a few people change their minds.

I haven't even retired yet, and so haven't made a decision...and I've changed MY mind....or can you change your decision if you haven't even made it yet....oh yeah that's called UNdecided INdecision
i think what happens is once folks fully understand the true cost of waiting if they retire but delay the actual gain by waiting isn't that great.

it is more a case of not looking at hings correctly.

they get blindsided by the fact that it is spoken about in terms of being rewarded with a 6% return for every year you wait until fra or 8% until 70 but it isn't a 6% or 8 % return since you are giving up checks and spending down invested assets .

at first i was going to delay , then i looked at he actual break even of 22-24 years when all was calculated in to the equation and realized that unless one of us lives until 90 we barely see more by filing earlier.

to see just a 5% difference requires one to live to at least age 90.

while the checks are bigger what you give up in not getting checks for years and spend down early on eats up a lot of those larger checks .
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Old 06-20-2015, 03:00 AM
 
2,429 posts, read 3,226,304 times
Reputation: 3330
When you say take it early you mean BEFORE full retirement age or AT FRA? (any time before 70)

Because if a person is going to take it even if s/he doesn't need it just to bank or invest it.....why wait until FRA or even 65?....heck, take it at 62..... whether you're still working or not. You can do that right?

I know then you have to do additional calculations and look at whether the taxation and the 2 for 1 SS earnings threshold make it worth it....

If a person -- with an age 67 FRA.....making 100 K is going to work until 65.....should that person take the reduced benefits at 62 while still working and "rebuilding or still contributing" to Social Security....OR....wait until 65 or 67 to file for Social Security.

When you finally do stop working your benefit will be 'recalculated up' anyway, right? Because of the money you've been putting back into the program....so take a reduced amount at 62 and keep working.....

Is there something I'm missing or not taking into account about why that's be a bad idea?
Actually that just occurred to me so maybe I haven't thought out all the holes in that plan.
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Old 06-20-2015, 03:17 AM
 
71,700 posts, read 71,801,099 times
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my comments refer to pre fra .... that would be 62-fra
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Old 06-20-2015, 03:19 AM
 
71,700 posts, read 71,801,099 times
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Quote:
Originally Posted by rdflk View Post
When you say take it early you mean BEFORE full retirement age or AT FRA? (any time before 70)

Because if a person is going to take it even if s/he doesn't need it just to bank or invest it.....why wait until FRA or even 65?....heck, take it at 62..... whether you're still working or not. You can do that right?

I know then you have to do additional calculations and look at whether the taxation and the 2 for 1 SS earnings threshold make it worth it....

If a person -- with an age 67 FRA.....making 100 K is going to work until 65.....should that person take the reduced benefits at 62 while still working and "rebuilding or still contributing" to Social Security....OR....wait until 65 or 67 to file for Social Security.

When you finally do stop working your benefit will be 'recalculated up' anyway, right? Because of the money you've been putting back into the program....so take a reduced amount at 62 and keep working.....

Is there something I'm missing or not taking into account about why that's be a bad idea?
Actually that just occurred to me so maybe I haven't thought out all the holes in that plan.
it can take 16 years to get back the money you give back by working and going over the limit.

it really is not the best thing to do if you know you are going to give it back.
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Old 06-20-2015, 03:21 AM
 
2,429 posts, read 3,226,304 times
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OK... well there goes that idea

Then again...62 plus 16 is "only" 78....My aunt lived until 94 and mom lived 'til 89! And if I don't live that long...at least I had my earlier benefits! I could die, heaven forbid, between 62 and 65...or 65 when I quit working and 67 FRA when I had planned to start benefits. 62 is the earliest "bird in the hand."
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Old 06-20-2015, 04:16 AM
 
Location: Duncan, Oklahoma
2,601 posts, read 1,231,928 times
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Quote:
Originally Posted by Perryinva View Post
May I ask what changed your mind from 5 years ago? I'm especially curious because I am in the exact same frame presently. I'll be 62 in 4 1/2 years and I plan on taking it at FRA .
A good and trusted friend of mine explained to me about the "break even" point of waiting until FRA or taking social security at age 62. She had it all charted out. It made sense in our case. (My husband and I both retired in 2009.)

We both have teacher retirement pensions, savings, and IRAs. Our home has been paid off for years, and we have no credit card bills. We don't really need social security to survive, but since we have no idea how long we will live (although there are no health problems presently), we just decided to go ahead and take the reduced rate.

I also have closely followed mathjak107's posts on this subject. See his post #112 in this thread. I think he knows what he's talking about.

I will admit that at first I was adamant about waiting until age 66 to get the full benefit. The thought of taking less still bothers me, but I can't argue against that "break even" scenario.
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Old 06-20-2015, 04:43 AM
 
71,700 posts, read 71,801,099 times
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i was a big believer in delaying too. until i looked at some complete work ups and saw just how spending assets ,giving up checks and not getting spousal increases until you file at fra all add up.

you also have zero protection against medicaid increases that are larger than cola's while you delay.

it really is not going to be much of a financial decision as much as down the road do you trust betting on markets and interest rates more or betting on your longevity more.

taking it later and delaying counts heavily on markets and rates early on to support you and less so later on once ss kicks in . taking it earlier has you counting on rates and markets less heavily in the early stages since you have ss too but counting on it more down the road since a smaller percentage will be your ss check..

Last edited by mathjak107; 06-20-2015 at 05:20 AM..
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Old 06-20-2015, 06:34 AM
 
Location: Grove City, Ohio
10,135 posts, read 12,392,750 times
Reputation: 13986
Quote:
Originally Posted by mathjak107 View Post
i was a big believer in delaying too. until i looked at some complete work ups and saw just how spending assets ,giving up checks and not getting spousal increases until you file at fra all add up.

you also have zero protection against medicaid increases that are larger than cola's while you delay.

it really is not going to be much of a financial decision as much as down the road do you trust betting on markets and interest rates more or betting on your longevity more.

taking it later and delaying counts heavily on markets and rates early on to support you and less so later on once ss kicks in . taking it earlier has you counting on rates and markets less heavily in the early stages since you have ss too but counting on it more down the road since a smaller percentage will be your ss check..
I looked at collecting at FRA and simply banking it but the federal income tax, if you are still working, tells me it just isn't a good idea.

John decides to collect his FRA benefit which is $2,250 for $27,000.

John continues to work full time and earns $70,000.

Using this work sheet 85% of John's SS is subject to federal income taxes and he can expect to pay $5,738 in federal income tax from his SS benefit alone in addition to paying federal income tax on his wages.

If John worked part time earning $20,000 only 16% of his benefit would be subject to federal income taxes increases his federal taxes by $1,062.

But if John waits to age 70 his benefit would increase by 32% to $2,970 giving $35,640 for the year.

Of course if John continues to work beyond age 70 he's gonna pay a lot of federal tax on that money but if he doesn't the entire $35,640 is free of federal income taxes.

I am still working full time and it is the income tax that keeps me from collecting more than anything else. If it were like days of old, back when social security was not subject to any income taxes, the smart move for me would be to collect now, bank it and in four years have an additional $100k in the bank.

I think it all depends on whether or not you are going to work and how much you expect to earn.
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Old 06-20-2015, 06:48 AM
 
71,700 posts, read 71,801,099 times
Reputation: 49265
any of my references assume the pay check ended. if you are working still or have a pension that covers your cost of living then nothing i refer to would apply
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