U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
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

Reply Start New Thread
 
Old 02-16-2010, 02:24 PM
 
2,024 posts, read 2,987,604 times
Reputation: 1813

Advertisements

Quote:
Originally Posted by highcotton View Post
This was covered in a previous post. Social Security calculates your average indexed monthly earnings during the 35 years in which you earned the most (based on the inflation-adjusted amounts).

Since you only worked for 20 years you did not have earnings for at least 35 years, therefore your average indexed monthly earnings will decrease with each statement you receive. SS does not know if you decided to take a leave from employment and plan to return to employment with future earnings, or if you will no longer be employed again. Thus, they send you the statement each year with zeros for the years you had no earnings and your average indexed monthly earnings will undoubtedly decrease because you do not have earnings for 35 years or more.
Thanks. IOW, I won't get much just as I expected.
Reply With Quote Quick reply to this message

 
Old 02-16-2010, 02:43 PM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
This topic has been discussed many a time. I will just chime in with our situation

Wife taking at 62 starts collecting real soon
I will take spousal benefits at 66
I will take full benefits at 70

That strategy has been discussed many a time and is for specific situations and goals and that would be us.
Reply With Quote Quick reply to this message
 
Old 02-16-2010, 02:46 PM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
Quote:
Originally Posted by Curmudgeon View Post
That's precisely what it meant. However, with two defined benefit pensions with survivoir benefits, 401(k)s and SS, we're at very low risk and will be fine.
We most certainly did have vision and being prepared, it makes perfectly good sense for us.
Everyone's situation is different.
Our situation exactly and as I outlined above it maximizes the life long income for my wife if I pass and also maximizes for her. We will be able to save her SS so our breakeven point will be extended and until well into our 80's plus.
Reply With Quote Quick reply to this message
 
Old 02-16-2010, 02:50 PM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
Quote:
Originally Posted by highcotton View Post
You may want to have an expert run the numbers on taking SS benefits early versus using other assets until age 66 when full SS benefits kick-in and are adjusted for inflation each year for the rest of your life. With two defined retirement accounts you are, as you say, low risk. But, being low risk is not the issue - it is maximizing your SS benefits and your retirement assets. If you have some extra regular (non tax-deferred) taxable savings set aside or even some extra after-tax money in your 401(k) that can be used until you reach age 66, you'll be a lot better off waiting until age 66 to collect SS benefits.

This is not a new topic and the situation I have outlined above is recommended by financial planners for those in a specific situation. One of the goals is to maximize the benefits for the surviving spouse when each partner has significant SS benefits in addition to other fixed sources like pensions etc etc. We have life long pension benefits for the surviving spouse. Remember your SS benefits can't be passed on as inter generation wealth but investment assets can.
Reply With Quote Quick reply to this message
 
Old 02-16-2010, 02:52 PM
 
Location: High Cotton
6,131 posts, read 6,443,832 times
Reputation: 3657
Quote:
Originally Posted by texdav View Post
I think its different for everyone. i personally don't want to wait to see what happens in four years;especaily the way things are going.But I can see it if the perosn actually will need that money to live how they want at 66. Its not always a matter of making the most at a much later date in your age also. The difference between 62 ans 66 is like the difference between 50 and 60 as you advance that I see.So each must decide for themselves what is best for them and their situation.
Unfortunately most people that decide to retire early and also collect early SS benefits don't think much about their future money needs. Those people have the here-and-now "I-want-it-now" mindset. Instead, they should be figuring out how to fund their financial needs in retirement for many decades after they retire....and do everything they can to make sure they never run out of having enough money.

There are two things (maybe three) that many people do not consider seriously when deciding to retire early, and likely don't even know how to evaluate the impact. The first thing is the amount of retirement dedicated assets they must have and how long those assets will likely last based on reasonable earnings and withdrawals. The second thing is that the early Social Security benefit amount will be permanently fixed for life with no increases for future inflation. (The third thing is how much you can depend on family members to support you when you run out of money!)

Since this thread is about taking early SS benefits it should be clear that if someone wishes to retire early they should have sufficient resources available that does not include taking early SS benefits. If they must have the SS benefits to retire, then they should never have retired. But what's even more curious about people that retire early and also collect SS benefits is that the purchasing power of the fixed SS amount will be impacted by inflation throughout retirement.

If (for example) $1,500 is the 25% reduced and permanently fixed monthly SS benefit today, it could very likely only have $750 of equivalent purchasing power ten years from now with 7% annual inflation. Many economic experts believe inflation could rise above 10% with the flood of dollars our government has printed. Factoring in inflation the $1,500 in today's value becomes worth only $750 in just 6-7 years and worth only $300 in just 15 years. Not a very pretty picture for the not-too-distant future for retirees counting on SS without inflation adjustments! And an ugly picture if the retiree actually needed close to the full (exampled) $1,500 early SS payment to make ends meet soon after taking retirement.
(Remember when a Coke was a nickle, a new car was $3k, and a nice house was $20k?)

What often happens with retirees that decide to take early retirement who need to take early SS benefits to make ends meet is that they start pulling more and more money from their dedicated retirement accounts due to inflation and unexpected expenses (not to mention making poor decisions by spending unwisely) until there's nowhere near enough money left to last them until they die. Oftentimes these people will totally deplete their dedicated retirement accounts long before they have one foot in the grave and are left with maybe a partial pension payment and a reduced inflation-impacted SS payment...or just a meager inflation-impacted SS payment.

If there was ever a time to seek expert advice and overdo (over-research, over-save) for something it would be something as important as retiring at the right time...because after you retire it's almost impossible to undo a poor decision where time, money, age and livelihood are concerned. I compare it to purposely over-engineering a load value where it's standard policy to engineer in a huge safety factor. There are already plenty of retirees that made poor decisions to retire early without sufficient retirement assets. I'm sure it's no fun being retired when you've run out of money and all that's coming in is a fixed SS payment that inflation has reduced its original purchasing power to only 1/4 what it was when you first retired. I'm also sure most family members don't get happily excited when they get a call from grandma or grandad saying they need financial help every month or else they need to move-in with them. Happens all the time! Poor planning, poor decisions, living in a here-and-now "I-want-it-now" mindset. A lot of people have (and will) get caught up in that type of thinking, and it won't be pretty!

Last edited by highcotton; 02-16-2010 at 03:03 PM..
Reply With Quote Quick reply to this message
 
Old 02-16-2010, 02:57 PM
 
Location: High Cotton
6,131 posts, read 6,443,832 times
Reputation: 3657
Quote:
Originally Posted by TuborgP View Post
This topic has been discussed many a time. I will just chime in with our situation

Wife taking at 62 starts collecting real soon
I will take spousal benefits at 66
I will take full benefits at 70

That strategy has been discussed many a time and is for specific situations and goals and that would be us.
That is good planning and a good strategy. However, many couples both collect early...just because they can with no clue what they're doing, nor how it affects them long-term.
Reply With Quote Quick reply to this message
 
Old 02-16-2010, 02:58 PM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
With Social Security Benefits, Timing is Everything | Retirement Reform Policy | NCPA (http://retirementreform-blog.com/with-social-security-benefits-timing-is-everything/ - broken link)
For married couples, according to the Times, experts advise the following:

In many cases, the higher-earning spouse should delay his or her benefits until age 70, while the lower earner begins to collect at age 62. This ensures that the surviving spouse will end up with the maximum amount of benefits for the rest of his or her life.
Reply With Quote Quick reply to this message
 
Old 02-16-2010, 03:02 PM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
Quote:
Originally Posted by highcotton View Post
That is good planning and a good strategy. However, many couples both collect early...just because they can with no clue what they're doing, nor how it affects them long-term.
So very true. It always amazed me to go retirement seminars and find out how utterly clueless people are about their financial planning for retirement. These were educated people with degree's etc etc etc. Many people don't understand that their SS benefits are based on 35 years of earnings and if you don't have 35 you have zero's factored in for the missing years. Many with pensions think that if the pension says you are fully eligible after 30 years that means you should be financially able to and if you aren't the pension is inadequate. Duh!!!!!
Reply With Quote Quick reply to this message
 
Old 02-16-2010, 03:05 PM
 
71,626 posts, read 71,751,865 times
Reputation: 49222
everyone has the what if i dont live long attitude when it comes to delaying ss. the truth is that your betting on two horses in a race with 1 bet. if you dont make it to full ss age your spouse most likly will blow right past it and collect... if both of you dont make it to full retirement age then its still a moot point if your dead.
Reply With Quote Quick reply to this message
 
Old 02-16-2010, 03:13 PM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
Quote:
Originally Posted by mathjak107 View Post
everyone has the what if i dont live long attitude when it comes to delaying ss. the truth is that your betting on two horses in a race with 1 bet. if you dont make it to full ss age your spouse most likly will blow right past it and collect... if both of you dont make it to full retirement age then its still a moot point if your dead.
Greetings my friend. Just started a new thread and I suspect you have some good thoughts and contributions on the topic.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top