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My plan has been to retire at 62 but defer SS until 70. Can live off investments from 62 till 70.
Can not beat the 8% annual increase in benefits and the people in my family tend to live into their 90s.
But a friend just pointed out the flaw in that argument. As far as SS is concerned, I will be unemployed for 8 years which will reduce my 35 year average wage and therefore reduce my SS benefits.
If I had some really low income years in those 35 it would not matter much. But I have had decent income for 35 years and will subtract the 8 lowest years and replace with zero.
My plan has been to retire at 62 but defer SS until 70. Can live off investments from 62 till 70.
Can not beat the 8% annual increase in benefits and the people in my family tend to live into their 90s.
But a friend just pointed out the flaw in that argument. As far as SS is concerned, I will be unemployed for 8 years which will reduce my 35 year average wage and therefore reduce my SS benefits.
If I had some really low income years in those 35 it would not matter much. But I have had decent income for 35 years and will subtract the 8 lowest years and replace with zero.
Are we looking at this wrong?
No you are not wrong.
I plan on doing the same and not pick the SS until and unless I need it at 70.
My plan has been to retire at 62 but defer SS until 70. Can live off investments from 62 till 70.
Can not beat the 8% annual increase in benefits and the people in my family tend to live into their 90s.
But a friend just pointed out the flaw in that argument. As far as SS is concerned, I will be unemployed for 8 years which will reduce my 35 year average wage and therefore reduce my SS benefits.
If I had some really low income years in those 35 it would not matter much. But I have had decent income for 35 years and will subtract the 8 lowest years and replace with zero.
Are we looking at this wrong?
Possibly.
SSA uses the "highest" 35 years to arrive at benefit. Does not matter if they are the the first, middle, or last 35. Don't even have to be consecutive, just highest. So unless you only have 27
or less years of wages at age 62, you'll be OK.
I waited til 70, and have got full credit for the highest 35.
BTW, the 8% only applies to years from FRA to 70. The % is slightly less from 62 to FRA.
Eddyline, on page 2 of the Retirement forum, there is a long thread called Social Security Question by Burkmere. You might want to read that thread. It addresses your original question about the 35 years and also the issue of sitting at home, not working and not collecting. I think you will find it all relevant.
Do you hav a pleasant, low stress office job that pays you well?
Does it offer a lot of vacation and other time off? Can you get that?
Are you in good health generally?
All to say that going to work for another 8 years will (mostly) be challenging
and interesting and satisfying and of course *rewarding**....
Tough it out to 70.
The thing is the make up of loss until 70. I never figured it but hear 20 years to make up loss in payments. Then the interest is difference from what you can earn; not total 8%. Also its your 35 highest earning years. Its different for different people really when to take it.
i have a great little chart already figured out i post for folks to use.
it does not include the fact if you are retiring early and spending down delaying what you are giving up on investments . heck , the last 5 years would have been a whole lot as an example if i had to keep alot more cash to hold us over delaying and gave up lots of gains.
If you already have 35 working years OR MORE then the 8 non working years will not matter at all, because as stated here the SS takes the HIGHEST 35 years to base your benefit on.
Also consider filing and suspending at your FRA, because if you do that, and then for some reason you need the money before 70, you can give up the extra credits and get the lump sum of your FRA benefits that were due you since you filed. If you do NOT file and suspend at FRA then that option is not open to you.
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