How far down would you spend your assets? (inherit, coverage, retirees)

[TuborgP]

Originally Posted by mathjak107

It really amounts to do you want to be more longevity weighted for your income or more market weighted for that income if you are running a portfolio that you would have to spend down to lay out the ss from.

Starting at 70 you will either be more longevity weighted delaying with a bigger portion coming from ss or market weighted if you took it earlier and have a bigger portion coming from the portfolio

We had the opportunity to do 62/70 and did. Because of pensions our target goal was the combined pension/ss amount and how that would make us even more golden and the surviving spouse Bada Bing!

Because I could take spousal at and then convert to my own later it made it much easier to delay.

Gone are those days and that is truly unfortunate.

[WVNomad]

Originally Posted by lieqiang

True, and it's also gender neutral despite woman consistently showing longer expected life span then men, usually over two years.

So if it's sound from an actuarial homogeneous gender standpoint then on average woman should win by delaying, and men should lose.

Huh….I never thought of the possible differences due to gender. I wonder if that might have any theoretical implications for couples taking social security….e.g. all other things being equal should the man take it earlier than his wife, etc? Things would be so much easier if we all knew when we were going to leave planet earth.

[leastprime]

Originally Posted by selhars

How far down would you spend your assets in order to delay Soc. Sec to 67 -- or even 70?
You could think of it in dollar amount or years' living expenses.

And I suppose once they're down to that amount a person could get Soc. Sec. at whatever age they happen to be. If that bottom line amount only gets them to FRA so be it....if it's 68, 69 or 70 and they're still above their bottom line amount so much the better.

I don't know how to set up a poll, so I've just put some options here.

-- 50K, 100K, 150K, 200K, 250K, 300K, 350K, 400K, 450K, 500K....or some higher amount?

-- 1 year's expenses, 2 year's, 3 year's expenses, 4 year's, 5 year's expenses, or more than that?

I don't think other factors count -- like whether a person has a pension, or paid off house, or whatever.

I'm just thinking in terms of comfort level (for whatever reason) of having one's own financial assets and not wanting to go below a certain amount to delay Soc. Sec.

Already gave some background in this thread, applicable only to us. (P#15)
Fundamentally, you have to know yourself, some rudimentary economics, knowledge of alternative-of- choices, and a some luck.

For us, 2008, 2010, 2012, we realize that SS is a modified SPIA annuity with special features but finite. We understood then, that the Market always has a floor ($0) but an unlimited upside (infinite) especially in an recovery. I saw then, that a spend down of retirement assets to garner higher SS benefits also had a good chance in forcing sub-optimal realestate and/or equity sales, with a real possibility of poverty somewhere in retirement.

Today, the Alternatives-of-Choices, RealEstate and Equity Markets are very different from a decade ago.
YRMV,
GL

[Submariner]

Originally Posted by WVNomad

I think this is a pretty interesting point. I’ve actually never done the math, but to me it makes complete sense that you got similar aggregate numbers regardless of the age you started. I’m sure the science is not quite perfect, but actuarially (if that is a word), social security is designed to provide the same level of total benefits regardless of when one starts receiving them. For any individual, that may not be true, but it should more or less be true when aggregated across lots of people. I think there is something to be said for factoring in your anticipated life expectancy, possibly drawing down 401K assets while one still gets the benefit of married filing jointly in lieu of deferring social security etc. but in the end, since we don’t know how long we (or our spouse) will live, we don’t know with certainty future income tax rates, rmd ages, etc. I think one could make a reasonable argument that it doesn’t really matter when you begin drawing social security benefits. You probably more or less end up in the same place at the end.

Six months ago, I was in the middle of this debate myself. I started a thread all about it.

To me, the most important factor in determining how to maximize my return from years of investing in S.S. is to know exactly what age I plan to die.

But my crystal ball is not working currently.

So I had to guess an age. I guessed 80yo.

Over the course of that thread, there were other posters who posted the actual age that S.S. uses from their actuarial tables to project when we will most likely die.

For each person who has decided to pay into S.S. we have to make a choice between three ages when we want to start receiving benefits. 62, FRA, or 70.

But really it is just an exercise in math, the end results make no difference. You will get back the same regardless of what age you decide to start your S.S. benefit.

[lottamoxie]

If someone is properly planning for their retirement, they'll keep shorter term $$$ needs out of equities or other higher risk/higher volatility investments and in a safe(r) choice, like CDs as one example.

How long is enough to keep on the sidelines? Variable. Six months is decent to start. Some may desire 1 or 2 yrs worth of full expenses kept out of the market.

The idea is that one should be ok through market corrections or even crashes that resolve in less than 1 or 2 years. Not having to sell any equities when the market is down is a plus.

If SS benefits *have* to be taken years before FRA in order to be able to live, that's a function of incomplete planning or not able to work long enough to build up the necessary nest egg amount. Of course that happens, but hopefully one can avoid the choice of 'when to file' being removed from the equation.

8% gain per year for each year of SS benefits not started at age 62 is not nothing. And again, one could choose to file at age 63 or 64 or literally any month after turning 62, up until age 70. Each passing month adds a bit more to the benefit amount, to equal 8% increase per year.

[Submariner]

Originally Posted by lottamoxie

... 8% gain per year for each year of SS benefits not started at age 62 is not nothing. And again, one could choose to file at age 63 or 64 or literally any month after turning 62, up until age 70. Each passing month adds a bit more to the benefit amount, to equal 8% increase per year.

For each year you delay starting S.S. benefits your monthly check will increase slightly.

But is that truly a 'gain'?

The total amount of benefit you project to receive over the course of your life remains the same, there is no gain in the total sum you will be paid from having invested for all those years.

[bobspez]

Not more than one month's expenses. I collected at 62, one month after my job ended. The breakeven point for waiting to 67 was 20 years away at 82. I didn't think that the chance of living past 82 to start collecting more was worth the 20 year wait to break even.

I agree with those that said no matter when you start collecting you probably wind up with roughly the same amount. It also seems to make sense that if you can live on what you get at 62, take the money up front. A bird in the hand is worth two in the bush.

Originally Posted by selhars

How far down would you spend your assets in order to delay Soc. Sec to 67 -- or even 70?
You could think of it in dollar amount or years' living expenses.

And I suppose once they're down to that amount a person could get Soc. Sec. at whatever age they happen to be. If that bottom line amount only gets them to FRA so be it....if it's 68, 69 or 70 and they're still above their bottom line amount so much the better.

I don't know how to set up a poll, so I've just put some options here.

-- 50K, 100K, 150K, 200K, 250K, 300K, 350K, 400K, 450K, 500K....or some higher amount?

-- 1 year's expenses, 2 year's, 3 year's expenses, 4 year's, 5 year's expenses, or more than that?

I don't think other factors count -- like whether a person has a pension, or paid off house, or whatever.

I'm just thinking in terms of comfort level (for whatever reason) of having one's own financial assets and not wanting to go below a certain amount to delay Soc. Sec.

[WVNomad]

Originally Posted by lottamoxie

If SS benefits *have* to be taken years before FRA in order to be able to live, that's a function of incomplete planning or not able to work long enough to build up the necessary nest egg amount. Of course that happens, but hopefully one can avoid the choice of 'when to file' being removed from the equation.

It is always nice to have options, so if you have sufficient assets that you can use to live your desired lifestyle with social security at 62 or 65 or 70 then the its really just a matter of electing benefits at an age to either maximize your level of financial comfort or to maximize your financial situation (or both). But I think one could certainly develop a financial plan that requires or assumes taking benefits early, and that plan could be solid, sound, well thought out. If you know social security at age 62 provides $2000 per month and you have assets sufficient to generate $1000 per month, and your monthly spend is $3000 per month, and you want to retire at age 62 then that’s a pretty solid plan. Doesn’t seem like it would/should be characterized as incomplete to me.

To me, that’s the really great thing of allowing individuals to take social security at different ages. It provides opportunities to retire early (before FRA) if your monthly benefits, other assets are inline with your spending.

[mathjak107]

Originally Posted by Submariner

For each year you delay starting S.S. benefits your monthly check will increase slightly.

But is that truly a 'gain'?

The total amount of benefit you project to receive over the course of your life remains the same, there is no gain in the total sum you will be paid from having invested for all those years.

It is an 8% increase less the checks you give up , return on invested assets spent or the ss money that could have been invested plus spousal benefits if any not gotten.

There is a high cost to that 8% increase that you hope to make up through longevity

[Yippeekayay]

Portfolio? Down to zero. The way I see it, I give charity now direct as opposed to give charity when I'm dead indirect.

Fixed Assets? Untouched..be given split to my kids.