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I read one financial article after another advising retirees not to take the SS at 62, even if they are retired by then but to wait a few years and draw it later.
While I understand the financial view behind it, I wonder if taking it early isn't better from a quality of life issue. People's active retired years are the early years when they can travel more and people tend not to spend as much when they get in their 80s except on health care. I wonder if people who do delay taking their SS regret not going ahead and taking it earlier so they could enjoy their active younger years more fully.
These articles are simply calculating the overall amount a person living to an 'older' age would 'earn' from taking SS early (62), rather than later (65-70). If there was a best, 'one-size-fits-all' answer for everyone, the articles would be unnecessary.
Clearly, each early retiree, needs to carefully analyze their own situation, to determine if taking SS early makes greater sense for them. As I recall, the 'break even point' for taking early SS at 62 vs 65 (example) is 12+years. Of course, if one must withdraw money from an investment account to offset required funds from early SS, that cost must also be factored in.
For healthy working couples with pension/s or other, who do not need to live on their SS income, it often makes sense for one or both to delay their withdrawal date/s. However, an interesting Gallup Poll showed that while only 34% of future retirees believed that SS would be a substantial part of their retirement income; ... over 55% of actual retirees said that SS was a major part of their retirement income.
Then there's the people who are too broke to wait but are still working or working part-time or whatever. I don't know how many people retire "early" and draw Soc. Sec. at 62 as an act of living large.
I retired at 63, spouse retired at 62, and we've opted to delay taking SS. That decision hasn't affected our quality and enjoyment of life in the least. If we couldn't afford to travel and do the things we like, we would have delayed retirement.
We decided to maximize our SS pensions by delaying them as long as possible. We figure we'll need the SS more in our 70's and 80's when our health begins to deteriorate. Being able to pay for better health care is at least as big a "quality of life" item as travel.
Quote:
Originally Posted by kanhawk
I read one financial article after another advising retirees not to take the SS at 62, even if they are retired by then but to wait a few years and draw it later.
While I understand the financial view behind it, I wonder if taking it early isn't better from a quality of life issue. People's active retired years are the early years when they can travel more and people tend not to spend as much when they get in their 80s except on health care. I wonder if people who do delay taking their SS regret not going ahead and taking it earlier so they could enjoy their active younger years more fully.
The average person isn't concerned with longevity studies or break even points.
Many that I know latch onto them and use them to justify their decisions to quit working and draw SS at 62. I'd respect them more if they'd just say "I'm tired of working and I'm willing to roll the dice that I'll live healthily until the break-even".
That begs the question: ~what happens then?~
They live healthily and happily and largely until the break-even, and then their minds and/or bodies betray them. Or inflation catches up with and then breezes past them. That extra 20-30% income might come in handy.
Of course they'll always have that 2 weeks in Phuket, when they were 63, to remember...
We're thinking of retiring at 55.... and taking SS at 62. This means we will draw down our money for 7 years, and then halve it to accommodate SS. In my calculations, waiting means we very well might outlive our money, taking SS means we have money left for our descendants.
you have those who for one reason or another can not work and have no choice. whether or not they can afford to retire they are forced into it. they may or may not be able to afford to retire but have no choice.
then you have those that have a choice.
some can afford to retire and have other sources of income . some don't and base their decision on the ole what if I die and did not collect anything.
they usually have no clue about other options and don't really care.they want their money now and they want to retire now.
many of those type end up having failed or miserable penny pinching retirements,
the real question should have been what if I live not what if I die as dead is dead.
the really sad cases are the ones who gave no thought to strategys of collecting ,could not afford to retire in the first place and left their spouse in an even worse situation should they die.
not only did they leave their spouse with one reduced survivor benefit check as a starting point but that check will get reduced a second time if the wife has to take survivor benefits early,
there is a whole lot more to deciding when to take ss than the breakeven point or what if I die reasoning.
many couples leave over 100k in benefits on the table by poor planning or lack of understanding the issues of filing early and they options they lose.
Last edited by mathjak107; 05-17-2013 at 04:06 AM..
Everyone has a different situation, but overall, if you can afford to delay taking benefits, it should be a great investment. Where else can you earn a guaranteed 8% return on your money? In addition, COLA will apply later on to the greater amount. Delaying social security is a really great stategy if you can afford it and if you and/or your spouse live long enough. I would think more than twice if you need to delay your retirement in order to delay taking SS.
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