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Yes, everyone's situation is different. If you gotta take, you gotta take it. But a lot of people here are talking about having a choice and I am really commenting on the economics if you have a choice.
I hear you
I was just trying inject a bit of humor. Can't hurt right?
All the calculations in the world won't help you if you fall over the day you retire! You should retire and go on SS as soon as your monthly income (from all sources) will support an adequate lifestyle.
Your conclusion is pretty sensible; I see it as a philosophical question more than a financial question. However, I have often wondered why so many people in this Retirement Forum obsess about an early death? (Not saying in your case it's an "obsession", just that your comment raised the issue in my mind.) After all, most people do not suffer an early death. A group of ex-colleagues I am part of meets once every other month for lunch, and we have been dying off, but in our 80's. I suppose if you have known someone close who has died early, it makes quite a psychological impact.
Another aspect of the obsession might be the feeling, so often expressed here, that we don't start living until we stop working. So naturally the people who feel that way would be worried about their time of actually "living" being cut short, or cut off completely as in the case of falling over the day after they retire. That would be a terrible tragedy for people who think that way. Just imagine, a person existed for say, 62 years but never lived. Personally I never had that feeling. I was always living and doing interesting things both inside and outside of the workplace. Work is part of life, not separate from it.
Running out of money in old age would be a horrible experience, so if there is any doubt about that "adequate" lifestyle, it may be the best thing to work another year or two in order to be sure.
most people have no choice to retire and delay . laying out the dough would leave them dangerously low . these debates we have are really not for them . they are only for those with a choice .
money may not buy happiness but one of the nicest things having money buys is choices in life. the choice to delay or not can leave you with many flexible options .
Last edited by mathjak107; 03-29-2017 at 03:03 AM..
Excellent post ER! I wonder the same thing! I find it curious that some people will spend 20-30-40 years doing something towards saving for retirement, then base their actions on the assumption that they will die early? IF you were able to and have saved for your retirement and reach that point where its time to use that savings, then the HOW to best use that money to fund your lifestyle becomes dependent on how long you live. Fairly straightforward, I mean, the longer you live, the more you need, right?
So I guess I just don't get why anyone would base their income decision on the assumption they will die at 70 or 75 (obviously, if they have good reason to know they will, that's entirely different), when the consequences of living longer are more dire than living shorter. It's not a game or contest to see how you can get the most from the government, or time it to spend your last dollar with your last breath. It's about providing whatever life you deem necessary for yourself (and loved ones) for as long as is more reasonably expected. If you die with unspent (or unclaimed) money, but lived how you wanted, then it is not a shame or a waste, and you didn't lose. You are dead, and it doesn't matter. All that matters is that while you WERE alive you (and whomever you deem important) lived as you wanted. Using that savings to delay filing may, and often does, provide more secure income in the event of your unfortunate long life costing more than your assumed short life.
Clearly, this is not possible for everyone.
Naturally if one is of the ilk that apparently woke up one day and said "Dang, I'm 55, guess I better start preparing for retirement, but I'd rather retire early ", there is no hope for an easy answer.
Or a life of hardships where at every turn, finances were decimated, and at 62 they just can't go on, be cause of health or circumstances and SS seems like a way out, it may be barely workable.
Or women married much of their life, letting their husbands handle the finances, never or insufficiently earning much income that paid in to SS, finding themselves divorced or widowed and in dire straights. (Significantly more common than the other way around)
The reality for cases like those are never rosy. There is no slight adjustment or an easy option or decision that results in a happy ending. And I understand the frustration, hostility or envy from these forum members when they read threads where posters that apparently have it all, where things fell in to place for them most of or all of their lives, (from their point of view) then debate on merits of delaying filing to live an even richer life.
I honestly, sincerely do.
Unfortunately, the reality of life is that it is unforgiving. One person paying for everything and earning everything, living on their own is much harder than two people happily living and working together sharing expenses and a single dwelling. Simple math, and harsh reality. It works if the single person is well prepared. But not as well as a couple that is well prepared. Almost everyone naturally gives advice from their point of view. I am constantly amused by the working married men and women that discuss the merits of their retirement, and how they are doing fine....while their spouse is still working!! How insensitive to the single person that once they have to retire, their income and health benefits may come to a crashing halt! Yet we read it all the time.
It is all about perspective. And what seems perfectly reasonable from one perspective is clearly outrageous from another. (Ie : in what way is a $60k pension not more than enough for anyone to be more than comfortable on)
So when those of us, (and you all know who "we" are) seem to be preaching or lecturing about delaying filing, or working longer to assure a more secure retirement, please understand that we are NOT demeaning or judging. We are simply trying to clarify that some assumptions should be examined with eyes wide open, facing reality head on, rather than hoping it will all work out, because it has to. And the advice may not be even remotely applicable to you at all.
the only question most of the public ask themselves is what if i die ? rarely is it what if i live .
that is what drives them to file early .
they generally are not knowledgeable enough to realize there is so much more that hinges on that choice nor the fact they may not have even all the details of the effects so they can make a wise choice .
you see it right in this forum when they talk about how it sucks to wait until 70 to first spend more money .
So when those of us, (and you all know who "we" are) seem to be preaching or lecturing about delaying filing, or working longer to assure a more secure retirement, please understand that we are NOT demeaning or judging.
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the only question most of the public ask themselves is what if i die ? rarely is it what if i live that is what drives them to file early .
they generally are not knowledgeable enough to realize there is so much more that hinges on that choice
smh........you guys seem to me to be the ones obsessed - with justifying in your own mind your choice. in my mind it is not the question what if I die, or live it is the certainty that none of us can know.
exactly , we don't know who will live and who will die . . so the ramifications of living may far out weigh the ramifications of dying for most seniors .
out living your money or taking nasty pay cuts down the road and being pretty miserable are the negatives of living . DEAD IS DEAD ! game over ! no more spending . so clearly planning around what if i or my spouse live is what i am most interested in , not what if we both die .
think pascal's wager .
Pascal's wager is an argument that asserts that one should believe in God, even if God's existence cannot be proved or disproved through reason.
If you believe in God and God does exist, you will be rewarded with eternal life in heaven: thus an infinite gain.
If you do not believe in God and God does exist, you will be condemned to remain in hell forever: thus an infinite loss
.
If you believe in God and God does not exist, you will not be rewarded: thus a finite loss.
If you do not believe in God and God does not exist, you will not be rewarded, but you have lived your own life: thus a finite gain.
smh........you guys seem to me to be the ones obsessed - with justifying in your own mind your choice. in my mind it is not the question what if I die, or live it is the certainty that none of us can know.
Well, in your case, you have a defined plan for the money you are collecting from 66-70, ie: you need to make improvements on your condo. So delaying makes little sense. You clearly would have no SS saved for those improvements if you delayed, requiring use of other funds instead. And as others have said, to which I also agree, if there is more than adequate income collecting early, and market gains are of small consequence, then the peace of mind that you are all set, without worrying about recouping what you spent down delaying, so that you maintain an inheritance is absolutely the way to go.
I'm not retired yet, at 59, so in no way am I obsessed about my decision to delay or not. I may end up filing much sooner than 70, as the reasons can be numerous to do so. I don't kid myself; I will not know for sure until I am there. It is quite true that the gains are not large. To some a few thousand extra a year is not remotely worth spending down their savings $200k. Some people have difficulty spending their savings and just can't unless forced. I can see that, especially with the "I want whats due me" prevailing feeling. There are some very legitimate reasons that so few people file at 70.
My dad (now 78) filed at 62, because he basically thought that was when you were supposed to. Everyone he knew filed at 62. He had been retired for many years, and was glad for the extra income, so he didn't have to draw as much from savings to live. At 68, (ten years ago, before the housing bubble burst) he mentioned to me that he heard that he could pay back all his SS, with no interest, and start collecting a larger check from that point on. (You could at that time, which is another reason that so few filed late. There was no point to that if you could choose a "do over" later. Now the time limit is 6 months pay back. ). He was looking at annuities because he was worried about his "investments". He doesn't know one single thing about investing, and basically acted like his "guy at Merrill Lynch" was a freind that was looking out for him. He just wanted to have a known steady income. He would have to pay back about $85k, had enough to do it. When he looked at annuities he could get for $85k, the increased SS amount beat them all, hands down. In the end, he decided not to, because he decided, either way he had more than enough to live on, Merril Lynch was making money for him for years, and that would mean less he could leave to the kids or in case of some medical care that required a lot of cash. Bottom line: he lost way more than $85k over the next 2 years because when the recession losses occured, no one could talk him out of selling at the bottom, as he was afraid he was going to lose everything. He locked in his losses, and now only has savings in CDs. He is mad at himself now for not paying it back and locking in a higher SS for life. A prime example of sequence of risk, and timing.
This bull market is not going to last forever...maybe 2 years more tops? Just about when I want to retire....so who knows what the right decision might be for me!
Last edited by Perryinva; 03-30-2017 at 06:08 AM..
the best outcomes are usually retiring when things fell just prior . it forces a lower starting draw but generically a lot of raises along the way as markets recover .
take bill and dave both retiring in 2008 , both the same age and both have a million dollars .
well bill retires on 4% of 1,000,000 or 40k but dave decides to delay a year . markets plunge and dave retires on 4% of 700k or 28k .bill still has the same 700k but draws 40k inflation adjusted . you can clearly see something is wrong here .
so now you have two guys who had the exact same amount , yet one retires on 40k inflation adjusted and just a mere 1 year later the other starts out at 28k inflation adjusted .
you can see that someone will either be short of money or someone will have to much money left . this shows the reason the 4% rule can never be a rule .
but it also shows how retiring at the peak can be riskier than retiring after the fall .
Last edited by mathjak107; 03-31-2017 at 04:29 AM..
If you are married, and love your wife, what if you die at 72 and she lives to be 98? For many of us there are two people in the equation and not just one.
As for me I'll collect in another year and a half when I am 70 and by doing so my wife and I will receive $4,300/month in combined social security benefits alone not counting anything else. This money will be exempt from federal and state taxes as long as we do not have a lot of other additional income.
If social security is all we got (we get a little more from other sources) we could live rather comfortably in most areas of the country. $4,300/month is equivalent to a job that pays $1,000 weekly take home pay and there are families all across the country raising children on less than that.
We are in almost exactly the same situation. We have some cash that we are using to lever our way out of debt, then while delaying, will burn through 40% of our investments. But it will take us to the finish line...on fumes. At that point draw from investments will stop except for RMDs. If the market is good, then great. If not, then, OK. If everything collapses, OK. We'll grow corn. Nobody gets out alive anyway.
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