Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Social security was based on the idea that our population was going to keep growing with the same rate as the Baby Boom. If that was the case, then it would have been relatively simple for each subsequent generation to keep funding the previous generation's needs.
However, that's simply a pyramid scheme, and it collapsed. As you can see, people are not having as many children as their parents. (Thank you, feminists.)
In fact, instead of having a pyramid of population growth, we have an inverse pyramid of population collapse.
While you are right, to a certain extent, Social Security started long before the baby boom. Changes to the plan were affected by the baby boom later on.
I feel sorry for the person or party who tries to eliminate social security. It's not happening anytime soon.
I feel sorry for the person or party who fails to reform Social Security and allows it to crumble because of a failure to act. That could be sometime soon.
Many people file at 62, because it is far easier than applying for Social Security Disability.
I have serious doubt about that statement. If you get SS disability, no matter when, the benefit is based on what you would be projected to get at FRA, not at 62. It is well worth the roll of the dice to get it as soon as you are qualified for it. Note I said qualified, and not to be going for it as a substitute for unemployment. There are many things a person can do that would pay better than SSDI, if they are physically able to do it.
I have serious doubt about that statement. If you get SS disability, no matter when, the benefit is based on what you would be projected to get at FRA, not at 62. It is well worth the roll of the dice to get it as soon as you are qualified for it. Note I said qualified, and not to be going for it as a substitute for unemployment. There are many things a person can do that would pay better than SSDI, if they are physically able to do it.
Yup. I am just over 9 years from FRA and my SSDI estimate is only about $50 a month less than the FRA SS estimate. I am sorely tempted to file a claim for "sikawirkin syndrome" but I have some people I brought into this world that I still need to launch and it just might not fly anyway. But seriously, if someone has a legit claim they have no incentive to wait until 62. I think it took under 3 months for my sister and I thought her case was iffy (legit but hard to prove).
Last edited by ReachTheBeach; 06-08-2016 at 07:24 PM..
I have serious doubt about that statement. If you get SS disability, no matter when, the benefit is based on what you would be projected to get at FRA, not at 62. It is well worth the roll of the dice to get it as soon as you are qualified for it. Note I said qualified, and not to be going for it as a substitute for unemployment. There are many things a person can do that would pay better than SSDI, if they are physically able to do it.
Some people are stuck in the middle ---- they can't really work, but they cannot get approved for SSDI, or the process is too lengthy for them.
Quote:
The strongest factor in claiming Social Security early: the type of job you have
There were several factors that the GAO found to play a role in claiming benefits early. None, however, was more salient than the type of work one did from the ages of 60 to 62 -- or directly before becoming eligible for Social Security.
If an individual was employed in a blue-collar job, they were 55% more likely to claim benefits before the age of 66. It shouldn't take too much thinking to figure this one out: as we age, we become less able to undertake the strenuous physical activity required of many blue-collar jobs
Over 70% of those who worked in farming, mechanics, construction, and as an operator called it quits before reaching full retirement age. Whether man or woman, however, those with professional white-collar jobs only took benefits early half of the time -- a significant difference.
The takeaway is clear: the type of work you do -- physical vs. mental -- plays a large role in determining when you take Social Security benefits.
Source: RETIREMENT SECURITY Challenges for Those Claiming Social Security Benefits Early and New Health Coverage Options
The other major factor influencing a decision to claim early: employment status
Beyond the type of work one does, whether or not one has a job between the ages of 60 and 62 is the other major factor. The GAO found that if someone was employed full-time between at these ages, they were 30% less likely to claim benefits early.
Also, another factor is potential income derived from Wealth:
Quote:
Those who delay claiming until their full retirement age tend to have greater income and wealth in retirement and rely less on Social Security than those who claim earlier. Our analysis shows that the median income for those who delay was 45 percent higher after claiming benefits than for those who claimed early, and 33 percent higher at age 72. Although delayed claimers have higher median Social Security benefits, those benefits make up a smaller portion of household income than for early claimers.
Admittedly playing devil's advocate, but there is a small doubt. If interest rates spike when I am about to retire and the market tanks right after I retire, I might get a fixed annuity for funding the gap that turns out to be a good investment and won't be withdrawing anything from the investment portion during the recovery. That's very unlikely but points out one big difference between the strategies that appeals to me. Using a fixed annuity to fund the gap, I will have stability and a fairly good guarantee (nothing is absolutely certain). I would only do it if I have run the numbers for my expected expenses (and have good reason to think my expectations are valid) and the income stream is more than adequate. If the market goes on a tear and I could have made out better I wouldn't kick myself over it; I know that if I had it to do over again I would still take the safe choice if the numbers worked. And if no major surprises hit, I will enjoy life. If they do hit, i will deal wth them from there...
If the rates were high enough for THAT, I would pull every cent from the market I could and ladder CDs to fund the delay and ifnore the market completely. Having zero sequence of risk at the start of retirement is invaluable. Total agreement there.
And for Mirceas post above: totally expectable and understandable for sure. Agrees 100% with my personal observations. Its very easy to delay SS if you don't need it as much in the first place. Since only about 5% delay to 70, plus similar percentages between FRA and 70, that aligns perfectly with the percentage of "wealthy" enough out there, where that definition is enough to live on via other income and savings large enough to delay and still have plenty of savings left. A typical blue collar worker will have a much harder time achieving that, because of less education and lower equivalent hourly wages. Professionals typically pick a career they enjoy that pays well and lasts as long as they want, typically outrunning inflation significantly (ie: an engineer typically would make 3 times more than their inflation adjusted starting salary was at end of a career..doctors and lawyers even more. Blue collar might make double), and experience is worth more than physical strength and stamina. Better to be a nerd than part of the herd, we used to say.
Last edited by Perryinva; 06-09-2016 at 12:16 AM..
That is a misleading way to think about it. It's not like you have some money, or some assets and you are making 8% a year on them. The reason? You are failing to take into account all the money you will NOT be receiving between the ages of 62 and 70. Only when that is factored in is it possible to say what you gain by waiting. And in any case, no matter how you figure it, it will be a number of years after beginning to receive the higher benefits at age 70 before you "break even".
I realize that there is a break even point, and if you don't live to that point, you lose. That's obvious. But you are also dead, so how much does it matter. A lot of people will outlive that. It's always a risk. If you think of SS as insurance that you will live long, then wait. Especially if you don't really need it. If you actually need it early, then don't.
I just read over and over and over how people are totally afraid to spend down their principal, and I'm not sure why that fear is there unless they think SS is going away. It's like, "Let's live off the interest forever". Do I want to spend all my principal? Maybe not. But if I had a million, I don't think I'd have any problem spending down to $500K to wait to 70.
I realize that there is a break even point, and if you don't live to that point, you lose. That's obvious. But you are also dead, so how much does it matter. A lot of people will outlive that. It's always a risk. If you think of SS as insurance that you will live long, then wait. Especially if you don't really need it. If you actually need it early, then don't.
I just read over and over and over how people are totally afraid to spend down their principal, and I'm not sure why that fear is there unless they think SS is going away. It's like, "Let's live off the interest forever". Do I want to spend all my principal? Maybe not. But if I had a million, I don't think I'd have any problem spending down to $500K to wait to 70.
The other thing people ask me when they hear my crazy talk about actually spending my money is legacy. I would rather leave my kids as contributing members of society than leave them money if I had to choose. There will likely be something no matter what and if they are bitter if I pass at 69 leaving less than I would have if I had not delayed then I failed on a different level...
The other thing people ask me when they hear my crazy talk about actually spending my money is legacy. I would rather leave my kids as contributing members of society than leave them money if I had to choose. There will likely be something no matter what and if they are bitter if I pass at 69 leaving less than I would have if I had not delayed then I failed on a different level...
BB Yup
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
