Here's the difference in SS benefits between 62 and 67 for me. (infant, teenagers)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Don't forget you will also have 5 years of collecting SS if you start at 62 rather than 67.
I believe the five years of claiming equal the additional monthly income assuming you live to the expected age.
there is no expected age and once you get past about 22 years the delaying gives you more money . if you don't spend down the invested assets delaying you can do about the same providing markets co-operate .
I still have a few years until I'm eligible for Social Security, but based on my recent SS benefits statement, if sign up to receive SS at age 62, I will get approximately $800 per month LESS than if I wait five years at 67 at full retirement age (FRA). Is that extra $800 per month worth working an extra five years?
This is overly simplistic, but I think it may help. Say you and your brother have the same numbers. You retire at 62 with $1000/mo. By the time your bro retires at 67, you have netted $60,000. It will take him about 6 1/2 years at $1800/mo for that extra $800/mo to equal 60000. At this point, he obviously makes $800/mo more than you. But you have already been retired for over 11 yrs. before he starts bragging that he makes more. So, you had 11 yrs to watch him go to work every day while you wave at him as he leaves(assuming you bother getting up that early).
Just my two cents.(it was one cent cent 5 yrs ago).😉
I just quickly skimmed through the previous posts, so I apologize if I'm repeating something already said. That said, please correct me if I'm wrong.
I recall reading somewhere that the monthly SS payment is based on how much cumulative benefit one has accrued and dividing in into monthly payments based on actuarial tables. I.e., they estimate (based on actuarial tables) how many months of life one has left and set the monthly check amount to use up the cumulative benefit by that time. If you die early, the government wins. If you live longer than they expect, you win (and get more than they planned for).
This is overly simplistic, but I think it may help. Say you and your brother have the same numbers. You retire at 62 with $1000/mo. By the time your bro retires at 67, you have netted $60,000. It will take him about 6 1/2 years at $1800/mo for that extra $800/mo to equal 60000. At this point, he obviously makes $800/mo more than you. But you have already been retired for over 11 yrs. before he starts bragging that he makes more. So, you had 11 yrs to watch him go to work every day while you wave at him as he leaves(assuming you bother getting up that early).
Just my two cents.(it was one cent cent 5 yrs ago).😉
Good stuff! Some people might value the time and freedom more than money.
I just talked to a beloved coworker today. He's retiring in October (on Halloween - gonna be a great party!). He will be 67. He's considering doing some consulting or follow-on work after he retires.
I really think it depends upon your activity level and how well you feel. And if you enjoy your job. I'll work at least until 62. That's only 4-1/2 yrs. Right now I climb on roofs and outwork the guys. Plus I love my job and am at the top of my game.
Being active is SOOOO important. Just do it! Enjoy your life however you decide!
This is overly simplistic, but I think it may help. Say you and your brother have the same numbers. You retire at 62 with $1000/mo. By the time your bro retires at 67, you have netted $60,000. It will take him about 6 1/2 years at $1800/mo for that extra $800/mo to equal 60000. At this point, he obviously makes $800/mo more than you. But you have already been retired for over 11 yrs. before he starts bragging that he makes more. So, you had 11 yrs to watch him go to work every day while you wave at him as he leaves(assuming you bother getting up that early).
Just my two cents.(it was one cent cent 5 yrs ago).��
however delaying ss is not always about working longer . it is about retiring and just laying out the ss money while delaying ss . spending remains the same regardless from day 1 .
the only thing that changes is you will be made up of more of your own money early on and less of your own money later.
imagine someone retiring at 62 and delaying . they can pull up to 24k from ira money tax free using just the standard deductions . they can qualify for the zero capital gains bracket in their taxable account and they can add some roth income for a six figure tax free income if they have the resources . .
they pay no federal tax , they get to spend down over 320k in ira money they already deducted and will never pay tax on , they have 320k less in rmd's and their ss grows to a 70% bigger check . now that would be a good plan unless you were sickly.
the problem is a plan like that requires setting the building blocks in place early on. but most of us do not know what we don't know so it is usually to late for a great tax plan , self included .
Last edited by mathjak107; 05-15-2018 at 07:15 AM..
I just quickly skimmed through the previous posts, so I apologize if I'm repeating something already said. That said, please correct me if I'm wrong.
I recall reading somewhere that the monthly SS payment is based on how much cumulative benefit one has accrued and dividing in into monthly payments based on actuarial tables. I.e., they estimate (based on actuarial tables) how many months of life one has left and set the monthly check amount to use up the cumulative benefit by that time. If you die early, the government wins. If you live longer than they expect, you win (and get more than they planned for).
No, that’s not how it works. Your FRA (full retirement age) monthly benefit is determined by a formula from adding together your 35 years highest SS incomes. The incomes of each year are adjusted based on a ratio of what the government determination of the US average income for that year was vs the present is. If in 1976 the average income was $16k and today it is $48k, then what ever you earned in 1976 is multiplied by 3. So the multiplier is different for every single year , AND those numbers change every year until your FRA. THOSE highest 35 years are added together and divided by 460 to give your adjusted lifetime SS average monthly earnings. THEN, a means adjusted income sliding scale of two inflection points formula is used to determine your FRA benefit. Each year, the inflection points rise approximately the same percentage as the average income increases per year. So the first approx $650/mo of your average earnings is multiplied by 90%. The next amount above 650 but below about $5000 is multiplied by 35%. Then everything above 5000 is multiplied by 15%. (Inflection points approximate per memory, but close) That total is your FRA monthly benefit. Your benefit is reduced by 0.5% for each month before your FRA you take it. Your benefit increases 0.667% of your FRA amount for every month you delay after FRA to file. It has nothing to do with any actuarial data. The formulas have been the same for over 40 years. THAT is when they used actuarial data to determine the early vs delayed benefit ratio. There is NO massively complex formulas or mystery about where the amounts come from. All that has changed are the FRA dates from about 1980. So regardless of whether the expected life expectancy of a retiree has gone up one month or 10 years, the exact same benefits are paid out for the same age.
I still have a few years until I'm eligible for Social Security, but based on my recent SS benefits statement, if sign up to receive SS at age 62, I will get approximately $800 per month LESS than if I wait five years at 67 at full retirement age (FRA). Is that extra $800 per month worth working an extra five years?
With life expectancy reaching towards 90 these days, YES IT IS.
$800*12*23=$220,800 more in the time after age 67.
Assuming your benefit is about $1,200 at 62 and $2,000 at 67, you will still make $403,200 as an early retiree compared to $552,000 = $148,800 more total.
That increase does not count the fact that you will also have five more years to contribute to a 401(k) (with catch-up contributions) and an IRA contribution as well. Five more years of earning money and five fewer years to pay for.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
