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What about a younger person, say in their mid 50's? With what we know about potential cuts to the Social Security system coming out of Washington, would you think it best to collect as early as possible (age 62) or let it ride until later?
My gut says to start collecting as soon as possible (I still have a good 7 years or so), because if someone my age waits, it may not be around or will be much reduced. What do you think?
Don't go with your gut go with a spreadsheet that show your options in terms of income coming in over a 30-40 year period balanced out by your anticipated cost over the same time period. If not a spread sheet use some sort of objective system so you won't have any regrets at any point after you begin benefits. Which is worse? Leaving money on the table or not having enough to live comfortably on. One of the advantages of doing a will with an estate attorney or one with a strong back ground in wills and estates is that they will ask you many questions that are important to your future and how you plan for it. Sorta like a checklist that will have you to make decisions that will work over the long haul. I say this realizing not everyone has the money/resources to hire a lawyer to do a will. However may I suggest this as food for thought:
Assuming a simple will cost of $400 and up. If you really can't afford the money for a basic forward moving financial plan, do you really have the resources to do anything other than working and waiting until 70 to collect SS? Certainly life events can give us no choice and that is another story. But if you have the option you probably should be able to afford professional advice and not a software based will program.
I am one of those rare birds that actually works out better to retire early.
I am 2 yrs older than hubby. He is going to work til at least 67.
He makes SIGNIFICANTLY more than I do, so I will draw on mine (Federal Civil Service, I can retire at 60 with SS "gap" pmt until 62 when SS kicks in because of the number of years I have).....and then I will switch to spouse from mine once he retires....from everything we have heard IF you are older than your spouse and IF you spouse make a lot more than you do and IF you spouse is going to full retirement age, this is the way to do it to ensure you do not lose out should something happen to you before your spouse retires. (Even Dave Ramsey OK'ed this under current laws!)
Don't go with your gut go with a spreadsheet that show your options in terms of income coming in over a 30-40 year period balanced out by your anticipated cost over the same time period. If not a spread sheet use some sort of objective system so you won't have any regrets at any point after you begin benefits. Which is worse? Leaving money on the table or not having enough to live comfortably on. One of the advantages of doing a will with an estate attorney or one with a strong back ground in wills and estates is that they will ask you many questions that are important to your future and how you plan for it. Sorta like a checklist that will have you to make decisions that will work over the long haul. I say this realizing not everyone has the money/resources to hire a lawyer to do a will. However may I suggest this as food for thought:
Assuming a simple will cost of $400 and up. If you really can't afford the money for a basic forward moving financial plan, do you really have the resources to do anything other than working and waiting until 70 to collect SS? Certainly life events can give us no choice and that is another story. But if you have the option you probably should be able to afford professional advice and not a software based will program.
Thanks for the advice, we're thinking along the same lines... however, there are intangibles here, the biggest of which we really don't know to what degree Congress will cut Social Security over the next decade or so. Even those lame statements the Social Security Administration sends out periodically now have a disclaimer printed on them to the effect that the actual benefit payout will probably (most assuredly) be smaller in the future. So, I guess the question really becomes are folks applying for SS benefits earlier, in anticipation of reduced benefits down the road?
All things being equal, I'd say you're right, use a model to forecast cash flows with best case and worst case scenarios.
As far as a will, I've used software to create a rough will, just in case, to avoid problems with the state and my estate after death.
let us say you are 62 or so and have 35 years of paying into SS. Some of the early years might be $5000 or so. you quit work but don't file for SS, let's say you live off your savings for a few years.
Would those 3 or 4 years between stopping work and filing at FRA where you would have 0 income count against your previous 35 year average? or is it the highest of 35 of your working years? Meaning $5000 may not be much but it is better than making $0 at 63, 64, 65 if those years would be counted in the average.
just curious and wonder if the years of non employment at the end would impact your total $ received at FRA.
Possibility my employer will have to lay people off if this sequestration goes through and if possible I would like to hold off filing until FRA if I can make it until then.
No, the zero year earnings (at the end) will not affect the 35 years of earnings you have [already] accumulated. However, if you do continue to work beyond the 35 years of earnings you already have, and thus replace one or more of the low earning years (of 34-35 years ago) with higher earnings (say in 2013), it will likely make a little difference. I haven't had any employment earnings in many years, and I am not taking SS benefits...
I am one of those rare birds that actually works out better to retire early.
I am 2 yrs older than hubby. He is going to work til at least 67.
He makes SIGNIFICANTLY more than I do, so I will draw on mine (Federal Civil Service, I can retire at 60 with SS "gap" pmt until 62 when SS kicks in because of the number of years I have).....and then I will switch to spouse from mine once he retires....from everything we have heard IF you are older than your spouse and IF you spouse make a lot more than you do and IF you spouse is going to full retirement age, this is the way to do it to ensure you do not lose out should something happen to you before your spouse retires. (Even Dave Ramsey OK'ed this under current laws!)
Yup for many it is a wise way to go and it maximizes the benefit for the surviving spouse
let us say you are 62 or so and have 35 years of paying into SS. Some of the early years might be $5000 or so. you quit work but don't file for SS, let's say you live off your savings for a few years.
Would those 3 or 4 years between stopping work and filing at FRA where you would have 0 income count against your previous 35 year average? or is it the highest of 35 of your working years? Meaning $5000 may not be much but it is better than making $0 at 63, 64, 65 if those years would be counted in the average.
just curious and wonder if the years of non employment at the end would impact your total $ received at FRA.
Possibility my employer will have to lay people off if this sequestration goes through and if possible I would like to hold off filing until FRA if I can make it until then.
Many people wonder how their benefit is figured. Social Security benefits are based on your lifetime earnings. Your actual earnings are adjusted or “indexed” to account for changes in average wages since the year the earnings were received. Then Social Security calculates your average indexed monthly earnings during the 35 years in which you earned the most. We apply a formula to these earnings and arrive at your basic benefit, or “primary insurance amount” (PIA). This is how much you would receive at your full retirement age — 65 or older, depending on your date of birth.
let us say you are 62 or so and have 35 years of paying into SS. Some of the early years might be $5000 or so. you quit work but don't file for SS, let's say you live off your savings for a few years.
Would those 3 or 4 years between stopping work and filing at FRA where you would have 0 income count against your previous 35 year average? or is it the highest of 35 of your working years? Meaning $5000 may not be much but it is better than making $0 at 63, 64, 65 if those years would be counted in the average.
just curious and wonder if the years of non employment at the end would impact your total $ received at FRA.
Possibility my employer will have to lay people off if this sequestration goes through and if possible I would like to hold off filing until FRA if I can make it until then.
The only thing to be aware of is that your projection may have assumed you'd continue earning at a higher rate during those years and dropping off some of the low years. It would then seem that you were penalized for the zero years when in fact, your projection was high.
At 62 I will have 40 years in a government pension. My pension plus my ss will be significatly more than my net salary. I am not sure it would make sense not to retire and take the ss at that point.
The only consideration is if my pension will not continue to have a COLA benefit. If I continue to work my ss and pension increase 8% a year.
I am going back and forth about filing for early Social Security benefits at age 63. I would like to stop working but could work longer because no one is forcing me to retire, and hubby plans to work until 66 or 67. Have any of you filed for reduced benefits before 65 or 66 and regretted it several years later?
I researched the question then made an appointment to see the lady at the SS office. I had reached the wrong conclusions. In two minutes she set me straight and told me how and why to get the most bang for my buck.
I have seen posts saying that you lose money if you wait until you are (now) 67 to receive 100% of your entitled payments. But if you intend to live 100% on SS, annuities, pension, without touching your savings, you need the biggest payments you can receive, AFTER you quit working. And when you reached, what?, 70 1/2, you have to start taking out your IRA.
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When to take SS?
