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Can you elaborate on your question a bit, maggiekate?
I must be drinking, although I thought it was just green tea, but I missed about 25 necessary words here!
Magic age 62, pass go
and collect money! Money does come from S.S. however, the catch is
if you work , or retire early you do minus 30%. therefore collect the cash now, or wait?
If you do take it at 62 and don't have to spend it, plan to pay it back (without interest) when you reach full retirement age and you can reapply for the larger payments and keep the earnings from the investment.
I am surprised that I never heard anything about this business of paying back and reapplying. I guess it is not too publicized or maybe I just have not applied yet, so I never heard about it.
There is a breakeven point. Somewhere around 77 you are ahead of the game if you waited until 66 to collect. The magic question is will you live to 77 and how much after that. If you live to 97 then you were better off waiting to 66 by a long shot. The other major question is which is higher your SS or your spousal benefits. The lower of the two might want to take it at 62 and the higher of the spouses at 66 or later. There are also several new tricks that have been figured out within the guidelines.
like i said if you can wait until 66 or better yet 70 its like buying a whopper of a deal on an annuity that kicks in at that time.... you couldnt buy an annuity anywhere near that price if you took ss at 62 and decided to supplement with an annuity later on
my plan is hold out as long as i can but start taking a higher withdrawl rate from my savings right from 62 because ill refill my savings later on if i live that long with the higher payments coming in. if i dont live that long, well then its a moot point any way. its still better then an annuity as your not penalized in amount because it has a death benefit,namely your spouse gets the higher rate ,... usually you get a lower payment with an annuity once you start with the death benefit options.
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by taking it at 62 unless your going to pay it back and start over your locked into a lifetime of lower withdrawl rates as you have to watch not running out of money sooner.. a 30% larger pay check later on with cola adjustments on top of that amount can be substantial..
of course you do need enough assets to hold you over from 62 to 70 so thats key to this whole idea
Last edited by mathjak107; 02-03-2009 at 02:56 AM..
If they don't change the laws, I plan to take at 62 and then cancel it at 66 1/2 and reapply for full benefits. I have to pay back the 4.5 years of payments which I've calculated into my retirement plan.
For me, that means I get to keep my money earning appreciation while collecting gov't money for 4.5 years after which I "pay back" the loan.
only thing you have to remember is if your social security is taxable then you may pay more in taxes then you might earn on this money that your paying back...
only thing you have to remember is if your social security is taxable then you may pay more in taxes then you might earn on this money that your paying back...
Work the numbers so that you stay under the threshold.
It's part of the planning. Each person needs to do the numbers several ways and see which is the best for them in their situation.
I ran the rough numbers for me if I start at 62 vs. 65 or 66, and it takes me to age 81 before the lines cross.
If most or much of that $$ goes into the bank, we're miles ahead.
Everyone's case is different.
A friend used it to help him start a small business. He did well for several years, then died unexpectedly of pneumonia.
Work the numbers so that you stay under the threshold.
It's part of the planning. Each person needs to do the numbers several ways and see which is the best for them in their situation.
staying under the threshhold for me is tough as our retirement lifestyle will certainly take more than whats allowed before its taxed.... the taxes will come to more than id get in return on the money and soooo we will totaly put it off until 70 hopefully and use the annuity idea i posted above
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