Does It Ever Make Sense to Work and Collect Soc. Sec? (55, spouses)
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You were told wrong ,they do not equal out at the end. That may have been true decades ago when they first drew up the numbers .
just using average life expectancy for a 65 year old will always have delaying show a bigger balance as well as a larger allowable draw. Ss has no sequence risk unlike your portfolio. ? Less powder has to be kept dry for the down turns
I am still correct that god didn't promise me a tomorrow. I'd rather collect something for a while than gamble it all on the notion that I am going to live to 70 and beyond. I've never felt very lucky.
Every once in a blue moon that I buy a lottery ticket it reinforces the reason why I don't buy lottery tickets regularly, lol.
If you are living off your social security and your portfolio it really boils down to this.
You can delay ss and the 70% bigger check at 70 makes you 70% less dependent on markets and rates but a lot more dependent on longevity. So you have a choice between gambling on longevity or gambling on market and rates
I may run down some scenarios and options and numbers with people. But in the end, I don't try to persuade people not to take it at 62 any more. (Not that that's what you were doing mathjack. I certainly didn't take it that way.)
I just say you might want to hold off, or delay, for as long as you feel you can.
Some people would rather have less now, than take a chance on more later.
And as we've acknowledged so many times, each person's reasoning, outlook, thoughts about money/health/living, and financial situation, etc. is different.
I may run down some scenarios and options and numbers with people. But in the end, I don't try to persuade people not to take it at 62 any more. (Not that that's what you were doing mathjack. I certainly didn't take it that way.)
I just say you might want to hold off, or delay, for as long as you feel you can.
Some people would rather have less now, than take a chance on more later.
And as we've acknowledged so many times, each person's reasoning, outlook, thoughts about money/health/living, and financial situation, etc. is different.
Agreed - people don't want to hear facts and figures...they want their GD money....NOW! But seriously, if you believe that on an emotional level you really don't care and won't be convinced by logic. And they usually believe they'll die young or believe that the worst thing that could happen is that they don't get what's theirs. If I die young...it won't matter to me a bit if I collected SS or not.
It is interesting to note that many posters still in their 50s and younger, view living to 85 as a remote possibility, still using anecdotal information of the 10 people they know that died at 70 or younger as “proof” that filing early means they will get more in case they don’t “break even”. Ignoring the hundreds they know that are still alive. The math and logic of this has been beat to death on so many “when to collect SS” threads its not worth repeating. Typically SS is the major or entire source of their retirement income. And of course, we are required to acknowledge that many people have no choice due to illness, disability, inability to work etc, etc, because apparently failing to mention that all too obvious disclaimer means we are mean, insensitive, or holier than thou when it’s just a case of “yeah, everyone knows that”.
More often though, I believe that filing early is just easier and yields an acceptable good enough amount, while filing later is simply not an easy option because working past 62 is distasteful enough that the lure of “good enough” is all it takes. Especially if they are single, and were not high earners most of their life. It is pretty hard to convince someone that has had a job(s) they despise their whole life, to work 4-5 more years longer to make an added $300/month in SS, if they believe that $1200/mo is all they will need forever. When the lure becomes an added $600 to $1000/mo, AND the delayed filer STILL retires at 62 (or earlier) while spending from day one that delayed amount, it is a far far easier argument to win.
Those that file at FRA and beyond typically have either the savings and investments that allow retirement at an age well before 62, so living with or without SS was perfectly acceptable, or they enjoy their career and the money that went with it, or they have an adequate pension that allows a more detached view of the real value of SS. All of those scenarios allow the filer to live with an income that puts SS as a smaller percentage and can view it as part of a diverse income strategy as an annuity covering longevity. No one that has to “get what’s theirs” now considers a longevity annuity, which typically go hand in hand with those that either wouldn't live below their means so have inadequate savings, or never made enough/had the means to allow saving enough, for a safe retirement, but still insist they should be able to retire at 62, just like everyone else, regardless of the reality.
There is then the cohort that does realize (and can work) that while working until 70 does mean 8 years less retirement, it also means that is 8 years less to be funded, while decreasing debt or increasing savings for the same 8 years, with the largest and typically more than adequate SS income that is COLA adjusted for the rest of their lives. If married, the spousal earned adder can be as much or is at least 1/2 of their FRA.
For even an average MFJ earner with a non working spouse, that can be at least $36k/yr tax free, equal to a taxed/fica/med paying job of $43k. No real income worries for the rest of their lives, however long that may be. When one passes, the other is still collecting at least $24k/yr. Compare that to the same couple filing at 62, and at age 70 they have had to deal with 8 more years of costs, and would have $21k/yr to live on ( equal to $24k/yr taxed) until one passes and then the survivor is collecting $14k/yr. No thanks.
Last edited by Perryinva; 02-20-2018 at 05:53 AM..
the reality is most of those who retire at 62 have no choice to delay . they don't have the assets to safely layout while not working .
delaying is a choice very few actually have .
there is no logic to waiting until 70 to first use the ss money to spend more . i would say if you can't take the same draw day 1 that you could when ss kicks in then there is no point in delaying because you really can't afford to delay and it makes no sense waiting 8 years to increase your draw
the reality is most of those who retire at 62 have no choice to delay . they don't have the assets to safely layout while not working .
delaying is a choice very few actually have .
there is no logic to waiting until 70 to first use the ss money to spend more . i would say if you can't take the same draw day 1 that you could when ss kicks in then there is no point in delaying because you really can't afford to delay and it makes no sense waiting 8 years to increase your draw
The most you can get at age 70 if you have 35 high income work years is about $45k. To retire at age 62, you’d need about $400k to replace the Social Security income. Anybody in the 80th percentile for wealth can do that. Most people who accrued that kind of wealth are looking at at least a $35k age 70 Social Security check which would take $300k to replace. Somewhat better than “very few” but well beyond the reach of the median 62 year old.
Once you’re up over the 90th percentile, it hardly matters because your Social Security check will never be a significant portion of your cash flow. Maybe 10% of 60-something’s are in a position where they have to get the math right.
For me, Social Security is insurance against outliving my savings. I have to do some deferred gratification to fund the insurance policy. I’m in that 80th to 90th percentile band where it matters and where I have the choice.
it may not be liquid wealth for one thing . rule of thumb is if it takes more than 35% -40% of liquid assets to delay don't do it .
you will find most of those here who say they didn't delay , really couldn't delay and it was not even an option .
the irony is those who can afford to delay don't usually need the higher payments . it is the lower asset groups that do and they really don't have it as a smart choice .
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