Why I took Social Security at age 62 (drug, payments, benefit)
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Another factor to consider is after you retire, you then wait till age 70 to collect the Social Security benefits, you won't break even till your 80s. At that time, your health is likely to be shot, so you can't enjoy what the money could have bought you in the past, or you could be dead already. If you're still alive and your Social Security hasn't been reduced to pay for all the illegals, then most likely, the nursing home will take it all. So, the big payoff by delaying for Social Security never happens for the small number of people who wait till 70 to collect, except very rarely, for a very tiny number of people who remain healthly into their mid 80s and beyond.
no one who delays suddenly starts spending more at 70 if they delay . what happens is you set your draw rate day 1 in retirement . what you do is lay the money out up front so your income stays consistent and level all the way through retirement inflation adjusted along the way . that way you can set your lifestyle up around it . then your draw from savings gets cut way back when ss kicks in and you refill what you laid out with the difference in the checks .
it is the only way to do it otherwise it is ridiculous living on penny's waiting until 70 for the dollars to kick in . you could never plan your budget or lifestyle around that unless you lived on a fraction of what you could . it just would make no sense and no one i ever met would do it that way .
if you can't afford to layout the money than you can't afford to delay ss . that option is really not a choice for you . that is why most end up filing earlier . they do not safely have the option
Last edited by mathjak107; 09-12-2016 at 02:47 PM..
it makes no sense to ever buy any annuity without delaying ss first .
for what you give up between 62 and 70 in checks there is no annuity on the planet that you can get for that amount of money that is cola adjusted , pays that much and passes to a spouse .
you are throwing money away by taking ss early and then purchasing an inferior annuity .it would make no sense to spend the money and not get the best choice
Last edited by mathjak107; 09-12-2016 at 02:49 PM..
I just tried to rate Perryinva and Mathjak's posts positively but it wouldn't let me. Said I needed to spread around to other people first. Thank you both for laying your knowledge out on this matter. It really helps me in so many ways. I have 16 years to go before 70 so I want to really understand this issue.
As Matt said, the current benefit rates are based on outdated actuarial tables and when returns on typical savings rates (remember when savings accounts at any bank were 4 1/2% or better) were ubiquitously better. Delaying until 70 today is a better deal than it was 15-20 years ago. And if it turns sour while I am 66, then I still have the option to file then. But for me to PLAN on taking a reduced income, intentionally, when I can readily afford an annuity option like this that exists, IS financially foolish. For me. And I am certainly not a 1%er or even a 10%er.
Last edited by Perryinva; 09-12-2016 at 03:13 PM..
I am told that it does not cost the government any more or less if you retire at 62, 67 or 70. They have it al figured out due to death stats.
I think you are correct in what the goverment wants but the question is have they updated the life expectancy tables correctly? My guess is probably not. Lets say at age 65 the life expectancy is 85 in the goverment tables. Assuming the table are a few years old I would bet that life expectancy might really be 87 and thus the gov will payout more money than they projected.
Thus if you think you will be in the half of the people that live longer than the life expectancy you should go for delaying to age 70 if you can afford too.
My thinking is that it will not matter to you if die before breaking even. But if you have a spouse they should benefit from the delayed SS as they will get your check.
My motto is to get at least some back collecting at 62, instead of rolling the dice for a bigger check. Just about every family I know started at 62. As they say, dead is dead, so I want to enjoy what I can now.
Again, if you can't afford to delay, then why make this statement?
If you are saying that you would rather live a longer retirement at a lower income, and retiring at 62 and collecting then makes that possible, then THAT is a PERFECTLY reasonable request and objective. Especially if you are so wealthy that the tax advantages of delaying are devalued. If I could guarantee an income of $150k a year, COLA, for life, and still have a $500k nest egg at retirement at age 58, I would retire TODAY, AND it would make little difference to my lifestyle whether I collected at 62 or 70, because I need no where near $150k/yr in retirement to live much better than I am now!
When you say "bigger check", you sound like you mean a bigger SS check, which, of course, you ARE rolling the dice on, in the sense, you may die before you collect. But for those proponents of delaying (and still retiring early), the bigger check starts immediately and grows from there, because they don't worry about running out of money if they (or their spouse) inconveniently happens to live to 80-85-90. Their "bigger check" is SS plus safe savings withdrawal rates and pensions, etc.
I think you are correct in what the goverment wants but the question is have they updated the life expectancy tables correctly? My guess is probably not. Lets say at age 65 the life expectancy is 85 in the goverment tables. Assuming the table are a few years old I would bet that life expectancy might really be 87 and thus the gov will payout more money than they projected.
Thus if you think you will be in the half of the people that live longer than the life expectancy you should go for delaying to age 70 if you can afford too.
My thinking is that it will not matter to you if die before breaking even. But if you have a spouse they should benefit from the delayed SS as they will get your check.
You're assuming that the actuaries didn't build in increased live expectancy when they built the tables in the first place? They'd be irresponsible if they didn't.
To the OP, just make the decision whatever it may be and be happy with it...can't look backwards at that point.
I am not sure about something Vic just brought up. Can you still suspend at FRA if you filed at 62? Then restart at 70 to gain a few years of delayed credits?
Since the percentages for delaying have not (ever?) changed, there is no way that they anticipated increasing life spans for future recipients. Their only solution to that was to increase FRA.
I've always though that declaring 66 or 67 Full Retirement Age, then only crediting 35 years of SS premiums was even more means testing to reduce higher earnings recipients. It is yet another reason I aim to retire at 62, because after that, literally all my SS and Medicare contributions, at the highest rates and amounts they have ever been, count a near big fat zero for my future benefits.
Last edited by Perryinva; 09-12-2016 at 04:03 PM..
10 years ago. It was so simple. My pension had $400 extra that ended at age 62 in anticipation of a social security benefit. So I did start SS at age 62. Not my best decision. Should have, could have, waited till DW retired which was near my FRA. Locked in a reduced benefit for the rest of my life.
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