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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 02-14-2010, 02:44 AM
 
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assuming laws dont change: ill take it at 62 pay it all back at 70 ...

refile for almost double the rate for my wife and i. but sssshhhh, heres the part few realize:

ill then use that massive income deduction that usually will just leave you with a negative income for the year tax wise thats useless normally and i will then use it to do a roth conversion....yep hows that little secreat......

no better deal then giving them the social security back, they then give you it back to apply towards your roth conversion and get almost double the payments on ss for life,.....


but sssshhhh , this is our little secreat here, we dont want the rest of the world catching on or it might go away.

Last edited by mathjak107; 02-14-2010 at 02:58 AM..
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Old 02-14-2010, 05:52 AM
 
Location: Central Maine
4,687 posts, read 5,534,464 times
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I don't anticipate ever being eligible for SS (I'm a CSRS federal retiree), and there's no "never" choice on your poll.
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Old 02-14-2010, 07:38 AM
 
Location: Forests of Maine
30,671 posts, read 49,423,020 times
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It makes very little difference to me.

My employer's pension kicked-in when I was 42.

For me SS will reduce my pension. So there is no benefit to taking SS early, or late. My take-home will remain the same.
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Old 02-14-2010, 07:50 AM
 
Location: Phoenix, AZ
3,088 posts, read 4,677,585 times
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Planning on seimi-retirement at the end of this year. . . will be 64 & 4 mo. Will need to take SS then. Planning on waiting until home values recover some, then do a reverse mortgage in order to quit working entirely
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Old 02-14-2010, 08:51 AM
 
2,024 posts, read 2,986,054 times
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Quote:
Originally Posted by gls View Post
based upon your profile picture, you are way too young to be collecting social security.:d
:d
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Old 02-14-2010, 09:21 AM
 
Location: Neither here nor there
14,810 posts, read 13,999,531 times
Reputation: 32944
64 for deceased ex-husband. Would have started earlier but didn't know I was entitled to widow benefits from his account. Started drawing on my own when I retired at 66.
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Old 02-14-2010, 10:48 AM
 
Location: High Cotton
6,131 posts, read 6,440,063 times
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The problem with collecting at 62 and paying it back at 66 to reset the benefits is - dealing with the hassle and income taxes that will almost certainly become a factor when coming up with the lump sum payback.

For example, if the [future] timing happens to be favorable with the person's investments you still must pay capital gains tax...unless of course the government drops capital gains tax when it's time to payback the SS benefits.

If the retiree already has enough liquid cash in savings now to payback the benefits latter - why not just supplement your other income with the money (in savings) you already have and wait to collect SS at age 66 since you don't really need the SS money before age 66?

I retired in my mid 50s (wish I'd retired earlier!) and don't plan on receiving SS until age 66 so I will get full benefits and increases. I don't need the SS money - so why should I take it at age 62 and then pay it back at age 66 so I can receive full SS benefits? In all likelihood I would end up being in a higher tax bracket as I accumulated the payback amount - by pulling from IRA or 401k accounts, or selling securities that cause capital gains tax to be paid, etc., etc.

The only time (in my opinion) that you would want to take SS early (age 62 with the intentions of paying it back at age 66 to begin receiving full benefits) would be if you had non-taxable money available to you at age 66...or if you have (or will have) liquid money lying around that won't cause you added income taxes when you accumulate the payback amount.

The four year (62 vs. 66) total SS benefit amount is not really that much money, but it sure can cause tax problems if you wait to start pulling the payback money together when you're a year or two away from turning 66.

My view is - if you have enough money available to you from various sources (penion, savings, dividends, etc.) to make it until age 66 - why take SS at age 62 and then scramble tax-wise and/or investment-wise to pay it back at age 66. It just isn't worth the hassle.

Last edited by highcotton; 02-14-2010 at 10:57 AM..
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Old 02-14-2010, 10:57 AM
 
71,468 posts, read 71,652,652 times
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since its an 8 year time frame that money you get from ss that you will pay back should not be in long term risky investments like equities.. nothing riskier then a bond is my suggestion for that money so big capital gains arent to likely ...

that free money to pay for your roth conversion when payed back makes it worth it a hundred times over. that income deduction will be priceless when coupled with a ss payment of almost double the 62 rate for both you and your spouse....

basically your only holding on to that ss money in those early years as security against you and your spouse not making it until at least 70.. whatever you earn on it in the mean time is a moot point.
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Old 02-14-2010, 10:58 AM
 
Location: WA
5,392 posts, read 21,385,099 times
Reputation: 5884
Quote:
Originally Posted by mathjak107 View Post
assuming laws dont change: ill take it at 62 pay it all back at 70 ...

refile for almost double the rate for my wife and i. but sssshhhh, heres the part few realize:

ill then use that massive income deduction that usually will just leave you with a negative income for the year tax wise thats useless normally and i will then use it to do a roth conversion....yep hows that little secreat......

no better deal then giving them the social security back, they then give you it back to apply towards your roth conversion and get almost double the payments on ss for life,.....


but sssshhhh , this is our little secreat here, we dont want the rest of the world catching on or it might go away.
I am certainly open to and capable of that plan... just worry that changes in regulation sometime over that period will screw up the deal.

While I am dribbling out of the IRA now to keep taxes down this would allow me to retain my tax shelter for earnings and still manage to cover the tax on the withdrawal in the future.

Is there actual experience with people doing this (including taking the payback hit to cover the conversion) without issues, and is there any talk about modifying these tax provisions?

Do you just file for SS at 62 and trust that the tax regs will be stable 8 years later?

I am not sure I trust the US government enough to count on this.
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Old 02-14-2010, 11:21 AM
 
Location: SW MO
23,605 posts, read 31,467,321 times
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I lost half my pension in divorce at age 48, retired at 62 and began drawing SS that year as well to make up for the loss in pension funds. My wife retired at 54 and will start drawing SS this year at age 62. Between the two of us we actually bring in more than we really need and it will only get better when my wife's SS begins.

Actuarily it made good sense to start drawing at 62 rather than waiting until 66. Longevity is not a strong suit for men in my family so I decided to get the SS while the getting was good.

Our house payment, including taxes, is manageable and we live frugally but well and comfortably. No complaints. Without the SS I would not have been able to retire when I did.
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