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My mistakes above (was working from memory). File at 62 is currently roughly $25k, with SSA predicting $44k in age 62 dollars if delay until 70. PER SSAnalyze SS calculator:
Age 70 SS, Filed at 62 is $29k, assuming 1.5% COLA.
Age 70 SS, Filed at 70 is $52k, same COLA.
So one would start with $23k more, as mentioned above.
At age 80, file at 62, SS is $34k, with a total payout of roughly $565k. While file at 70 is $60k, with a total payout of roughly $607k.
"Break even" is roughly age 78 at about $500k, with about a $26k difference in income. I look at my Dad at 78 (79 in 6 months) and he still has a long ways to go.
Plus, if I file at 70, if I die first, say at 80, my wifes SS survivor benefit is $60k, and she drops her $19k SS, since she is 5 years older. If I file at 62, her $19k is replaced with only $34k. And I guarantee she has no idea how to handle investments in the least, so the significantly larger income is worth more than a larger savings.
It always surprises me. And thats with 1.5% COLA. The average over the last 25 years has been 2.39, which makes the difference larger.
It always surprises me. And thats with 1.5% COLA. The average over the last 25 years has been 2.39, which makes the difference larger.
As the years progress seems like those SS COLAS are getting lower and lower. With President Trump wanting to eliminate my FERS pension COLAS it would not surprise me that at some point in the future Social Security COLAS will too face some type reduction, so that 1.5% COLA you are projecting may turn out to be 1/2 of that.
Automatic Cost-Of-Living Adjustments received since 1975
July 1975 -- 8.0%
July 1976 -- 6.4%
July 1977 -- 5.9%
July 1978 -- 6.5%
July 1979 -- 9.9%
July 1980 -- 14.3%
July 1981 -- 11.2%
July 1982 -- 7.4%
January 1984 -- 3.5%
January 1985 -- 3.5%
January 1986 -- 3.1%
January 1987 -- 1.3%
January 1988 -- 4.2%
January 1989 -- 4.0%
January 1990 -- 4.7%
January 1991 -- 5.4%
January 1992 -- 3.7%
January 1993 -- 3.0%
January 1994 -- 2.6%
January 1995 -- 2.8%
January 1996 -- 2.6%
January 1997 -- 2.9%
January 1998 -- 2.1%
January 1999 -- 1.3%
January 2000 -- 2.5%
January 2001 -- 3.5%
January 2002 -- 2.6%
January 2003 -- 1.4%
January 2004 -- 2.1%
January 2005 -- 2.7%
January 2006 -- 4.1%
January 2007 -- 3.3%
January 2008 -- 2.3%
January 2009 -- 5.8%
January 2010 -- 0.0%
January 2011 -- 0.0%
January 2012 -- 3.6%
January 2013 -- 1.7%
January 2014 -- 1.5%
January 2015 -- 1.7%
January 2016 -- 0.0%
January 2017 -- 0.3%
Last edited by Nightengale212; 05-26-2017 at 11:23 AM..
Reason: Addition
My mistakes above (was working from memory). File at 62 is currently roughly $25k, with SSA predicting $44k in age 62 dollars if delay until 70. PER SSAnalyze SS calculator:
Age 70 SS, Filed at 62 is $29k, assuming 1.5% COLA.
Age 70 SS, Filed at 70 is $52k, same COLA.
So one would start with $23k more, as mentioned above.
At age 80, file at 62, SS is $34k, with a total payout of roughly $565k. While file at 70 is $60k, with a total payout of roughly $607k.
"Break even" is roughly age 78 at about $500k, with about a $26k difference in income. I look at my Dad at 78 (79 in 6 months) and he still has a long ways to go.
Plus, if I file at 70, if I die first, say at 80, my wifes SS survivor benefit is $60k, and she drops her $19k SS, since she is 5 years older. If I file at 62, her $19k is replaced with only $34k. And I guarantee she has no idea how to handle investments in the least, so the significantly larger income is worth more than a larger savings.
It always surprises me. And thats with 1.5% COLA. The average over the last 25 years has been 2.39, which makes the difference larger.
don't forget to count any money you will be spending of your own delaying that either is being un-invested or not invested . a balanced fund being spent down or not invested in because you are laying out the money puts break even at 22-24 years depending on spousal benefits that are also delayed.
just comparing ss to spending down from inflation proof bonds has break even at 20-21 years
Last edited by mathjak107; 05-26-2017 at 11:45 AM..
Trouble with the bold underlined statement is you are talking RMD's 5+ years into the future. No tax software can predict that far into the future.
All in all though what you point out is the way to do it. Especially if you have real assets. For the majority of us it can be done just a bit simpler. Ball parking income and expenditures is the first place to start. If you need to supplement your income to meet expenditures with SS then do it. If you are a couple and only need a portion of the two take the lower of the two SS. If you have retirement savings and can afford to hold off by spending down that asset you should. It makes the most sense and does the better job of protecting future incomes.
I forget who mentioned this here but I do not understand the need to replenish savings once into retirement. Those funds are yours to spend. Enjoy the results of your actions and spend it down. Take trips, buy cars, make life enjoyable. You worked and busted your ass(es) all your working life to be ready for this part of your life. Don't let it go to waste or get passed on to heirs and Uncle Sam (who will take a bigger portion if you die, spouses not included as heir). We would prefer to hear travel stories, luxury items bought, houses updated and all in all good stories from you. That is part of why we are here.
We may have come for hints and answers but we stay because we become a family. We want to hear from our family.
the rmds will only get worse as time goes on as the balance hopefully grows so if it works out poorly today odds are it will be worse later.
the replenishing when delaying is because you may be drawing down way way to much for perpetual sustainability early on when delaying .
you may not be able to maintain that level of draw safely if you don't rebuild some of it back .
it really isn't "extra" money .
if i retire and need 40k from my portfolio inflation adjusted and have a million bucks , if ss is 40k i need an 8% draw rate inflation adjusted for 8 years .
no way can i sustain 4% safely for at least 22 more years if i already spent down at the rate of 8% ....
so you have to adjust things when ss cuts in so your draw reduces and ss takes up the slack .
in essence the 70% bigger ss check is reducing your draw by 70% making it easier to recover what you need to safely sustain the same income level through retirement inflation adjusted . .
don't forget to count any money you will be spending of your own delaying that either is being un-invested or not invested . a balanced fund being spent down or not invested in because you are laying out the money puts break even at 22-24 years depending on spousal benefits that are also delayed.
just comparing ss to spending down from inflation proof bonds has break even at 20-21 years
The assumptions there are that one would be as aggressive then, as they are during accumulation. Except for the very wealthy, that is unrealistic, regardless of what history shows is the smarter allocation of in estments. People that NEED to USE the money they have saved, are far more conservative during the years they are using it than when accumulating it. Only people that have a large chunk of savings designated "to be inherited or used in case of dire emergency" choose riskier investments, meaning equities.
In my own example, my incomes are theoretical actual ones, NOT required ones. I SHOULD be able to live just fine on half of my required income at age 70.5 when RMDs come in to play. So I will not HAVE to withdraw savings to replace SS from 62 to 70, while I delay. But theoretically, IF I wanted to spend that much, I could. Any amount in between as needed, is fine.
the rmds will only get worse as time goes on as the balance hopefully grows so if it works out poorly today odds are it will be worse later.
the replenishing when delaying is because you may be drawing down way way to much for perpetual sustainability early on when delaying .
you may not be able to maintain that level of draw safely if you don't rebuild some of it back .
it really isn't "extra" money .
if i retire and need 40k from my portfolio inflation adjusted and have a million bucks , if ss is 40k i need an 8% draw rate inflation adjusted for 8 years .
no way can i sustain 4% safely for at least 22 more years if i already spent down at the rate of 8% ....
so you have to adjust things when ss cuts in so your draw reduces and ss takes up the slack .
in essence the 70% bigger ss check is reducing your draw by 70% making it easier to recover what you need to safely sustain the same income level through retirement inflation adjusted . .
Bold again you do not need to sustain it for 22 years. The entire reason as you stated in the line before is to maintain it for 8 years (62 to 70). Big difference between the two. As you are making your way after 70 maybe some might need to replenish but that will be fewer than first glance.
As I stated in my post you saved and scrimped to get to retirement. You have a plan and a nest egg. That nest egg is there for you to use. There is no sense in leaving that on the table unless you die unexpectedly. If you retire say 62 to 65 and have a cool million in retirement and you are planning on taking 3% plus the equivalent SS money you only need that to cover those 8 years. So in your defense if you have drawn too much then maybe you might want to replenish but I contend you will not want to go back to original portfolio balance. Just get it to a point that will make ends meet in the future.
As the years progress seems like those SS COLAS are getting lower and lower.
As well they should, given that inflation is extremely low and has been for over a decade. A COLA isn't supposed to be a "raise". It is supposed to be an increase to account for inflation.
That's a good thing, right?
Quote:
Originally Posted by Nightengale212
With President Trump wanting to eliminate my FERS pension COLAS
Proposed changes to the federal retirement system would save the government more than $4.1 billion in 2018 and at least $149 billion over the next 10 years.
That's a good thing, right?
But of course it has zero chance of being implemented once the federal employee union lobbyists start bribing Congress through campaign contributions.
Proposed changes to the federal retirement system would save the government more than $4.1 billion in 2018 and at least $149 billion over the next 10 years.
That's a good thing, right?
But of course it has zero chance of being implemented once the federal employee union lobbyists start bribing Congress through campaign contributions.
FYI, I am an R.N employed by the Veterans Administration for the past 17 years. Unlike some Federal Government employees who have jobs that salaries that are higher than equivalent jobs in the private sector that is not the case for R.N.s, and that being said when I took my position along came with it a 20% pay cut but the promise of a pension after 20+ years of service to make up for the upfront income loss. That promise may be broken, and no it is not a good thing especially since I am 60 years old and a little too late for me to jump back into private sector employment and try to make up the income difference.
Do a little research because not all Feds are rolling in the dough like you may think.
Bold again you do not need to sustain it for 22 years. The entire reason as you stated in the line before is to maintain it for 8 years (62 to 70). Big difference between the two. As you are making your way after 70 maybe some might need to replenish but that will be fewer than first glance.
As I stated in my post you saved and scrimped to get to retirement. You have a plan and a nest egg. That nest egg is there for you to use. There is no sense in leaving that on the table unless you die unexpectedly. If you retire say 62 to 65 and have a cool million in retirement and you are planning on taking 3% plus the equivalent SS money you only need that to cover those 8 years. So in your defense if you have drawn too much then maybe you might want to replenish but I contend you will not want to go back to original portfolio balance. Just get it to a point that will make ends meet in the future.
nope , do the math in firecalc .
8% up front for 8 years and 4% plus 40k ss failed way to many times to last a 30 year retirement time frame .
it may if markets are not worst case scenario's but if you have some unexpected large bills or unexpected spending that has you going way over budget at times you will be glad you planned for a full 30 years whether you live that long or not .
if a couple odds are almost a coin toss one will .
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