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Exactly. One shoe doesn’t fit everyone, just because someone disagrees with me on what they are going to do I wouldn’t say they have psychological problems.
As I keep saying research your options and whatever you decide, enjoy it because not one of us can predict how short or long our retirement will be nor how healthy we will be to enjoy it. At the end in my book living Life is more important than having extra bucks at the end. Now this doesn’t mean that I haven’t planned to at least be comfortable at the end in whichever decision I took.
So it’s not like the choices are
Take at 62 and be destitute at 85
Or take at FRA and be comfortable at 85
Exactly. One shoe doesn’t fit everyone, just because someone disagrees with me on what they are going to do I wouldn’t say they have psychological problems.
As I keep saying research your options and whatever you decide, enjoy it because not one of us can predict how short or long our retirement will be nor how healthy we will be to enjoy it. At the end in my book living Life is more important than having extra bucks at the end. Now this doesn’t mean that I haven’t planned to at least be comfortable at the end in whichever decision I took.
So it’s not like the choices are
Take at 62 and be destitute at 85
Or take at FRA and be comfortable at 85
Yes. My widowed Dad is 88 and living in an Independent Living facility. He's near most of the family so they visit and bring him to their places for family gatherings or just for dinner. He has his own apartment with a kitchen but can also get meals in the dining room. They have Happy Hour every Friday evening. He gets the dental care he needs, eyeglasses and high-end hearing aids that are bluetooth-enabled so his smartphone calls go straight to the hearing aids (Medicare doesn't cover eyeglasses, hearing aids or dental care). OK, some of his bodily systems are showing signs of wear, but at 88 that's to be expected, and he doesn't have to clean his apartment, maintain the building or mow the lawn. One of the ladies who lives there took a European cruise with her family. She's 92.
Dad is my role model. A comfortable old age isn't cheap and I have no intention of relying on whatever the taxpayers decide to supply (Meals on Wheels, subsidized senior housing, Medicaid nursing home, etc.) when I can no longer live independently.
IF you have the wherewithal to retire early AND delay filing, you absolutely will have MORE income from the start while young enough to enjoy it, because there is no fear of running out later. I WANT to pull that extra $4k/mo from my portfolio while I am the youngest I will ever be and enjoy ourselves.
Exactly this.
I'm 61. My thinking is that I'm going to happily blow through half my net worth over the next 9 years and then rely on a $45K/year Social Security income stream for a substantial chunk of my cash flow. What remains of my wealth mostly held in reserve to keep me in my house as long as possible and eventually fund long term care. I look at those "4% safe withdrawal rate" articles, shrug, and conclude that there's another way.
I would. I paid into the SS system and that money belongs to me. If I take it early, even though it is less money, I can bank it or invest it and leave it to my kids. At least they can inherit it, instead of the U.S. government.
That is one way to look at it. Here is another:
Let's say you carry insurance on your car and home, faithfully paying premiums to Allstate or GEICO or State Farm, every year for 40 years. Fortunately, you are a safe driver and never had anything bad happen to your home, so you never needed to collect. Would you say that money belongs to you, and you got robbed... or were you just lucky?
Now flip it around and imagine you had a fire that destroyed your entire home. You receive a check from the insurance company that totals much more than you ever paid out in premiums. Would you say you maybe weren't so lucky anymore, but you were glad you had that insurance when you needed it most?
Social Security was designed to function like an insurance product, insuring against a destitute old age, with all of us (working Americans) sharing the risk in a gigantic pool. The word is even right in the title of the federal program: "Old-Age, Survivors, and Disability Insurance (OASDI)." The equivalent of the "house fire" analogy is one of us living to 100 (as increasing numbers do), and outliving our savings... in which case we keep on collecting social security, far beyond what we paid in.
It was not intended to function as a personal bank account.
Last edited by HeelaMonster; 06-11-2019 at 08:48 AM..
Reason: ETA: none of which dictates the decision to collect at 62 versus 70
Would you happen to know why SS would discount my benefits at age 62? Let's say I would normally receive $1400. at age 62 (I think it is more) but instead they pay me only $1000.?
I was working up until the time I became disabled at age 53 but didn't apply for benefits until age 55.
At 55, you have 34 possible work years since age 21. For SSDI, they would knock off an additional 5 years. They'd be using your 29 highest income years in the calculation. If you had filed at age 53, they would have used the 27 highest income years. You would have gotten more money 2 years ago but not a huge amount more.
Since your SSDI income is so low, I'd guess you're eligible for SSI (cash welfare). I don't know those rules. If the monthly benefit varies a large mount from what you were expecting, I'd guess it's some rule in the SSI program.
Let's say you carry insurance on your car and home, faithfully paying premiums to Allstate or GEICO or State Farm, every year for 40 years. Fortunately, you are a safe driver and never had anything bad happen to your home, so you never needed to collect. Would you say that money belongs to you, and you got robbed... or were you just lucky?
Now flip it around and imagine you had a fire that destroyed your entire home. You receive a check from the insurance company that totals much more than you ever paid out in premiums. Would you say you maybe weren't so lucky anymore, but you were glad you had that insurance when you needed it most?
Social Security was designed to function like an insurance product, insuring against a destitute old age, with all of us sharing the risk in a gigantic pool. The word is even right in the title of the federal program: "Old-Age, Survivors, and Disability Insurance (OASDI)." The equivalent of the "house fire" analogy is one of us living to 100 (as increasing numbers do), in which case we keep on collecting social security, far beyond what we paid in.
It was not intended to function as a personal bank account.
If that's the case then I should be able to file my claim with State Farm 40 years after paying monthly premiums and receive a check every month from them whether I need it or not. Insurance doesn't pay you back unless you have an incident and file a claim. SS was designed to pay pack those who put money into it. There's no need to show how you have suffered an injury. The money is there because it's yours. SS expects you to file and get some money out if it without the need of being destitute.
If you want to treat it as auto insurance and never get a penny back after paying into it for 40 years, then no one is stopping anyone else from not filing and getting benefits.
What about taxes? 100% of my portfolio withdrawals are taxable, while only 85% of my SSI would be taxable. My taxes will go down if I draw at 62, leaving me more money. Of course our illustrious Congress could change that in the the blink of an eye, but it's the reality now.
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