A new (to me) angle on when to take Social Security (55, inheritance)
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It won't happen for at least one obvious non-ideological reason: the pols who would would vote on that have a cushy, privileged lifestyle that they want to keep & they know that seniors are the highest voting demographic by percentage. If they made moves to dump it it would cause a major social upheaval & we would clear the decks of the whole group considering this, red or blue.
There is plenty of money sloshing around in DC being used for less necessary things & being wasted, they touch SS & they know they are dead ducks.
Living longer and also working longer. Taking SS at full retirement age would then seem like a no-brainer.
Everybody's different. For me, I have the genes writing on the wall. I will be lucky to live another 10-12 years. The average age of death is now 78 in the US. I am taking mine now. I have less stress, a part time job that I like, and although it is a struggle financially every month, I am taking it while I can.
Really? You mean the $20 bills I marked with a mustache on the dead presidents aren't sitting in vault waiting for me to retrieve them? What a shock. Don't be so literal. Thanks!
Hey there are still a lot of folks out there that think they do have an account with money in it marked for them!
If you are a single man, I can see taking it early even if you don't need it - then you can invest it if you wish. After 70 1/2 your RMDs from IRAs may kick your income into a higher tax bracket with higher SS payments (85% subject to taxes I think).
Or singlewoman. I will be taking it early and investing it even though I don't need it.
If I die before using it then my niece will inherit that investment account, and it won't be still sitting in the government coffers.
The table should not matter to an individual. It is saying 50% of the receiptants live past the break-even point. If it is wrong by a couple of years it should not mater to you. You have to estimate your life expectancy and use that.
Think more in terms of your monthly check and your monthly expenses.
In the business section of the Sunday, June 15, 2014 Los Angeles Times, financial advice columnist Liz Weston, whom I have always found to be accurate, reliable, and well informed, made the following point in one of her responses. I quote the two relevant sentences:
"Starting benefits early locks you into lower payments for life and will result in significantly smaller lifetime benefits for most people.That's in part because Social Security hasn't adjusted its payment formulaseven as life expectancies have expanded, so most people will live beyond the "break-even" point where delayed benefits exceed the amounts they could have received had they started earlier." (Emphasis mine).
I had always thought, perhaps ignorantly, that it was a statistical wash for Social Security whether people took their benefits early or late - and apparently that was the case at one time. Now, if the L.A. Times columnist is correct, it seems we are better off in the aggregate waiting until full retirement age or beyond because "life expectancies have expanded".
I am a big time advocate of putting it off for as long as you can.
I will never bet against myself living a short life. I plan to live to be 100.
I am in jmac and LLN's camp. I will have always enough in pensions (his and hers w/survivor) to survive on without hardship, but I won't be happy traveling well into my later years, so I'll take the SS probably as soon as I am able, if only as extra to invest and to pay for those cruises I need to go on. My mom and dad did not live to 80 so I don't think I have the genes to get very far past break even.
I don't want to pull a "Frank Petersen" either. Frank worked well past the age that he could retire because he was so fit, a long distance runner and cyclist well into his 60's. Everyone said "Frank, retire, you've got your pension". He always said he would retire "next year". FINALLY he retired and was so happy to have more time to ride and travel to half marathons and such. He appeared to be the fittest guy I knew of any age. He died of a massive coronary less than 6 months after retiring and never saw a dime of his SS. He thought he was so healthy he'd live forever.
we may do the opposite. we will take the trips now as soon as we retire at 62 and spend far more than we would had we taken ss early and we will delay ss .
the reason being we can excessively spend down those waiting years from savings since when those larger payments kick in we will need very little from our own money.
many times waiting for that bigger payment gives you more to spend early on ,not the way folks think which is they have more to spend early on by taking it earlier.
you still need to keep to much powder dry for bad sequences and poor markets and interest rates if you are pulling from your own nest egg to live at anything more than 1 or 2% inflation adjusted vs the pensionized income from higher ss which frees up more money later on for more aggressive and longer investing since you will need less from savings in comparison for life.
for a married couple odds are one of you is going on a lot longer.
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Last edited by mathjak107; 06-19-2014 at 04:01 AM..
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Don't be so literal. Thanks!
