Collect Social Security at 62 or 66?

[nicet4]

Originally Posted by highcotton

It's people like you that scares other uninformed people. Let's get something understood once and for all. There will never be a change made to SS for people that have already qualified for it (age 62). And in all likelihood there will never be a change made to SS for people that are within 7 years of being qualified to receive it, or beyond the age of 55. For Washington to make such a change would be stupid and immediate death to any politician that suggested, endorsed or voted for it. Do you really think that Washington would pull-back on benefits that retirees are already getting...when those people have no chance of making up for the shortfall? Get real!

SS is often called a Ponzi Scheme but it isn't because government will never run out of money. We've borrowed trillions and if it takes a few trillions more government will simply print up what they need and continue.

Social security will never "go broke" in the classic sense.

I am 64, my wife is a couple years younger and while we both qualify for benefits now my wife will wait until her full retirement age of 66 and I will wait until I am 70.

Unless you are well off in retirement savings ($200k or better), poor health and know for certain you are going to die < 78 or whatever the "break even" point is or are in desperate financial shape I believe it is best to wait to put it off as long as one can to obtain the highest possible benefit.



At my full retirement age SS has my estimated monthly benefit at $2,150/mo and my wife will be entitled to 50% of my benefit, as long as she waits until her full retirement age, which is $1,075/mo.

If we wait until full retirement age for each we received a total of $3,225/mo which will be plenty for us to have a very comfortable retirement. $38,700 most of which isn't subject to federal income taxes and non of which is subject to state taxes. It's like a weekly take home pay of $744 which is more than many couples receive and they, unlike us, are raising children and paying down a home mortgage.

But what if we had collected at age 62? I would end up with $1,612, she would have $806 for a total of $2,418/mo for a difference of $807/mo which for us makes a difference of just getting by and living a good retirement life.

But what is most important to be is my wife if I were to die first. If that were to happen she would lose her benefit and pick up mine... good luck living on $1,612/mo which would be really hard to do in my opinion.

Our plan is for me to collect when I am 67, she would be 66, so she can collect half of what my benefit would have been at full retirement at 66. There is no point for us waiting at this point because hers can never be more than 50% of my FRA benefit. As soon as she gets it I will suspend mine and continue working. She'll receive $1,075 while I work another 2 years and 10 months.

As long as I work we won't need her social security money so we'll just bank it saving an additional $36,550 in cash.

When I hit 70 then I will collect and be entitled to $2,902 per month. $2,902+$1,075=$3,977/mo which will allow us a very comfortable retirement without ever having to rely on savings or our IRA's. While I currently earn more than $3,977/mo we live comfortably on about $1,500 less every month right now. Seeing as how that is nearly equivalent to a $918/week take home pay I would like to think most retired couples can live comfortably on that if they don't have any debts (they shouldn't) and the home is paid for (which it should be).

But most importantly to me is what would happen to my wife if I were to die first? She would lose her benefit but pick up mine @ $2,902 which a single retiree should be able to live comfortably on. For me knowing she will receive $2,902/mo, instead of the paltry $1,612/mo if I had quit to collect at 62, allows me to sleep much better at night.

I also want to work beyond age 70 and for me 85 seems like a good retirement age. If we can be collecting that social security while I continue to work we'll be doing really good.

I often hear those younger whipper snappers complaining about how older people don't adapt to the world of changing technology. Well, all next week I'm going to be in Las Vegas learning a new cad program AutoSPRINK Fire Sprinkler System Design Software so while I am in class every day (7:30 AM to 5:30 PM) my wife will be lounging in her room knitting or sitting out by the pool. This is really exciting for me... we're getting on the plane tomorrow and what tickles me most is I'll probably be the oldest geezer in the class but I will have the most experience too.

I am in my office now using a 64 gig flash drive to copy over all my desktop files to my new laptop.

It ain't about me and it ain't about breaking even. There is more to life than retirement.

Yep, I plan to live to 105 like my great grandmother.

[BuffaloTransplant]

Originally Posted by GenPatton

Take it as 62. You never know what may happen. You can die at 63. Plus if you need money, then just a get a small part time job. A bird in the hand is worth 2 in the bush!

Agreed. And if you need the part time job, then work until you die at your desk...
Just make sure you have medical insurance until 65. Maybe that will all be irrelevant as obamacare will doom us all

[Umbria]

I intend to collect at 62. You never know what may happen in the future and I want to have the extra $$ while I'm still young enough to do the things I enjoy (travel, etc...)

[mathjak107]

why not spend more while you are younger from savings and then if you live you have the security of refilling your savings with a whopper of an ss payment down the road.

it is like having an annuity or longevity insurance that kicks in at 66 through 70 . except for the amount of money you lay out you could not find a cola adjusted annuity that pays that much anywhere on the planet or safely get a return on your money that is almost 8% with a cola to boot.,.

my early benifit is around 16k , my age 70 benefit is around 30k and that is without colas . there can be a huge difference .

if you die early ,well in case you did not notice dead is dead,game over. if you do not have enough to lay out up front perhaps you can not really afford to retire on the lower payment either.

if you are single then it is a toss up but if you are a married couple odds are great one of you will live long enough to collect alot more then taking it early.

you get to collect spousal benefits too while letting the bigger one continue to grow so it not like you are not payed to wait.

old school thinking was what if i die, new school thinking is about how can i have the best darn retirement i can and not outlive my money.

[augiedogie]

Wife and I are taking a rather pessimistic viewpoint on this, so be warned, but here it goes. We plan to keep on working past 62. She will start collecting at 65, me well? We also plan to keep on working, saving if possible, and cutting expenses. Considering the financial condition of the country, and the number of babyboomers now retiring, SS is going to be way overstressed. So we are trying to count on it as little as possible.

[gomexico]

Originally Posted by mathjak107

old school thinking was what if i die, new school thinking is about how can i have the best darn retirement i can and not outlive my money.

Yes. Exactly.

[mathjak107]

to many think they can not spend more early on if they take ss later. they just don't think outside the box.

they certainly would spend more early on if they knew they had an annuity starting at 66 through 70 that would refill their savings but they never think in those terms.

for the amount you need to lay out over those years and cover the reduced ss payment you would have gotten it is a great deal to wait.

like i said if you don't have the dough to lay out up front odds are you need the ss to live on and will not be doing any extra spending because you took it early.

perhaps if you dont have the money you really can not affort to retire at 62 if you have no other income .

while there are some that have little savings and fat pensions that take it at 62 that is not the typical case.

[tom1944]

math- are you saying for people with a good defined benefit pension it makes sense to take ss at 62? For example I will have 40 years in my pension system at 62. The formula we use is years over 55 so 40/55 for me. I will leave my wife survivor benefits so say I reduce that by 12%.

I pay 7% for my pension plus ss 7%+ taxes plus about 8% of my salary in hc premiums while working. In retirement I will only have to pay hc premiums at 1.5% of my pension. My pension used to have a COLA but while it may be reinstated it no longer is guaranteed. I love my job so I was considering staying past 62. Every year I stay working I increase my pension and ss by about 9-10% plus shorten how long my other retirement money has to last. The consideration I have is starting about the age of 58 and certainly by 62 I am effectively working for zero current income and the only benefit is raising my future retirement income.
If I hated my job I would certainly leave.

[TuborgP]

Originally Posted by tom1944

math- are you saying for people with a good defined benefit pension it makes sense to take ss at 62? For example I will have 40 years in my pension system at 62. The formula we use is years over 55 so 40/55 for me. I will leave my wife survivor benefits so say I reduce that by 12%.

I pay 7% for my pension plus ss 7%+ taxes plus about 8% of my salary in hc premiums while working. In retirement I will only have to pay hc premiums at 1.5% of my pension. My pension used to have a COLA but while it may be reinstated it no longer is guaranteed. I love my job so I was considering staying past 62. Every year I stay working I increase my pension and ss by about 9-10% plus shorten how long my other retirement money has to last. The consideration I have is starting about the age of 58 and certainly by 62 I am effectively working for zero current income and the only benefit is raising my future retirement income.
If I hated my job I would certainly leave.

Crunch the numbers and see what your annual income would be at age points between 58-70. You will as you know see a sizable income taking into account pensions and investments between ages 58-61. Beginning at age 62 you can begin to add in SS at each age for both you and or your wife. Weigh that against your expected retirement income needs/desires. Once you have that done factor your job satisfaction as the final decision factor. You are fortunate as you are able to stagger solid income streams to kick in over a 12 year period from age 58-70 and that is a blessing. It is what we did by retiring at 59 1/2 with pensions and investments with my wife kicking in SS at 62, me taking spousal at 66 and then claiming my full at age 70. It gives a good 11-12 year range to work with before maxing your income streams at age 70. After that you have Mandatory Distribution Requirements from taxable funds and a structure income pattern to work for you a very long time with continued income growth and investment opportunities.