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I marvel that I'll see articles about how to "increase" a pension or Soc. Sec. and the article will give one option as "work longer." Well, duh.
Delaying taking or applying for Soc. Sec or a pension, doesn't necessarily mean working until you claim it.
It's common sense and doesn't really even need to be said that if a person keeps working until getting their pension or Soc. Soc. that the benefit will be higher.
To me that's like a "no, $#!t, Sherlock."
I mean, is there really someone who doesn't know that if they work longer their benefit will be higher? I know there are lots of people who don't know much about Soc.Sec, or how pensions work. But is there's really someone who doesn't know THAT? Really?
... I mean, is there really someone who doesn't know that if they work longer their benefit will be higher? I know there are lots of people who don't know much about Soc.Sec, or how pensions work. But is there's really someone who doesn't know THAT? Really?
Yeah, there is. Lots of folks don't realilze that if Bill worked at a $100K a year job, his SS will be more than Mary, who worked a $40k job.
I marvel that I'll see articles about how to "increase" a pension or Soc. Sec. and the article will give one option as "work longer." Well, duh.
Delaying taking or applying for Soc. Sec or a pension, doesn't necessarily mean working until you claim it.
It's common sense and doesn't really even need to be said that if a person keeps working until getting their pension or Soc. Soc. that the benefit will be higher.
To me that's like a "no, $#!t, Sherlock."
I mean, is there really someone who doesn't know that if they work longer their benefit will be higher? I know there are lots of people who don't know much about Soc.Sec, or how pensions work. But is there's really someone who doesn't know THAT? Really?
Most people on this forum argue for taking every penny they can get as soon as possible. That's likely because their invested assets alone would pay for their retirement.
Why are you so angry at the mere mention of working longer? It does not seem like an option that is ever mentioned. People do not explore how much they are leaving on the table by retiring early.
I ran the numbers based on My expected longevity. Definitely taking a pension I would be better off collecting sooner. With SS I would never take the 25% reduction at 62. I guess if you have millions in your 401k you will look at this differently.
Sure, there's no "one size fits all" answer to most retirement questions.
For my own planning, I don't worry much about the business of breaking even or not on these decisions. I think in terms of withdrawal rates... how much can we safely spend.
Most people on this forum argue for taking every penny they can get as soon as possible. That's likely because their invested assets alone would pay for their retirement.
What forum are you reading? Because that is certainly not the case here on the Retirement Forum. Most of the discussion/recommendations here pertain to why one is better off waiting until one's full retirement age, if not waiting all the way until one is 70 before applying for Social Security.
What forum are you reading? Because that is certainly not the case here on the Retirement Forum. Most of the discussion/recommendations here pertain to why one is better off waiting until one's full retirement age, if not waiting all the way until one is 70 before applying for Social Security.
Well, I'm not going to spend the time to link all the instances here on City Data.
I think that a lot of people in CD like to make the case for delaying but the majority, just like in the general populace, file for SS @62. Most of them because they really have no
choice if they don’t want to work anymore. Many of the others because of the false logic of “what if I die before the break even? (Well, you’re dead, so who cares?) as well as the ever popular “I want it now while I am young enough to enjoy it” or the corollary “what would I do with the extra money at age 85, anyway”. Of course, that is just another way of saying that you can’t afford not to delay.
I think that many underestimate the importance of a COLA adjusted benefit like SS, IF they happen to live a long life. Naturally, if you are assured of a short life, delaying is foolish. If one is absolutely independently wealthy (say worth $10M plus), then SS doesn’t matter. The same, really, if ones SS is a small amount. If you only collect $1000@62 vs $1700@70, is $700/mo really going to make that big a difference?
LTC is only getting more expensive all the time. LTC insurance has limits.
I saved and invested for my(our) retirement, to USE the savings, not watch it only grow larger to be eventually spent by heirs. (Thanks for the Ferrari, Dad!). So spending it “down” (which hasn’t happened yet because earnings outpace withdrawals, except for 2022) simply makes sense as I am already 65, retired at 61, and look to wait until my SS is say, $4k/m @68 instead of the $2500/m or so it would have been at 62.
Like any annuity, you do have to live long enough to get your premiums back for it to make sense. Since I had no choice on when to collect my basically non-COLA pension, enlarging my clearly superior SS pension fits in well as a strong 3rd leg of non-work income.
I ran the numbers based on My expected longevity. Definitely taking a pension I would be better off collecting sooner. With SS I would never take the 25% reduction at 62. I guess if you have millions in your 401k you will look at this differently.
1- If I apply to begin taking S.S. at 62, and I expect to live until I am 80yo, which is another 18 years. During that 18 years I would reap a total of $199k from S.S.
2- If I wait and file for my S.S. at my FRA [66y10m], and if I collect until I am 80yo, which would be for 13years and 2months. I would reap a total of $204k from S.S.
3- If I wait and file for my S.S. when I reach 70yo, and if I collect until I am 80yo, which would only be another 10 years. I would reap a total of $195k from S.S.
Waiting until my FRA gives me the most total benefit from putting my money into S.S. all of these years. But it is only $5k more than taking it at 62yo.
1- If I apply to begin taking S.S. at 62, and I expect to live until I am 80yo, which is another 18 years. During that 18 years I would reap a total of $199k from S.S.
2- If I wait and file for my S.S. at my FRA [66y10m], and if I collect until I am 80yo, which would be for 13years and 2months. I would reap a total of $204k from S.S.
3- If I wait and file for my S.S. when I reach 70yo, and if I collect until I am 80yo, which would only be another 10 years. I would reap a total of $195k from S.S.
Waiting until my FRA gives me the most total benefit from putting my money into S.S. all of these years. But it is only $5k more than taking it at 62yo.
Yes, I did that math with my numbers and got essentially the same result. But, it's a matter if you want (or need to compress those payments into a shorter timeframe (13 years versus 18 years for example). In terms of monthly payment do the higher payments fit into your cashflow needs better (can that amount help offset any long term care or assisted living????). It can be looked at as kind of an insurance policy. Very few people can afford long term care insurance (it is so expensive and won't necessarily be approved when you need it -- good luck getting it to pay out). In your case do you want a $925 payment or a $1,300 payment?
I see it kind of as a forced savings (for later) by deferring SS. I'm not sure if delaying beyond FRA is that enticing if I'm only living to 80 (but, maybe I'd split the difference and take it at 68.5 or something). Knowing me I probably won't draw it until 70. I can take some 401k money out virtually tax free in that time between retirement and collecting SS.
I think that a lot of people in CD like to make the case for delaying but the majority, just like in the general populace, file for SS @62. Most of them because they really have no
choice if they don’t want to work anymore. So, I still see that as a choice...Many of the others because of the false logic of “what if I die before the break even?(Well, you’re dead, so who cares?) I agree it's ridiculous logicas well as the ever popular “I want it now while I am young enough to enjoy it” I have a couple friend who made both of those arguments and they did travel almost nonstop from 2000 until the pandemic hit (and they've been back at it for six months). or the corollary “what would I do with the extra money at age 85, anyway”. Of course, that is just another way of saying that you can’t afford not to delay. Yes, I get justifying your situation no matter what it is...
I think that many underestimate the importance of a COLA adjusted benefit like SS, IF they happen to live a long life. Naturally, if you are assured of a short life, delaying is foolish. If one is absolutely independently wealthy (say worth $10M plus), then SS doesn’t matter. The same, really, if ones SS is a small amount. If you only collect $1000@62 vs $1700@70, is $700/mo really going to make that big a difference? My brother was asking me what annuity he could buy to get an income stream in retirement a few years ago. I told him the best annuity there is is Social Security so delay taking Social Security (he was opposed to the idea until I told him I didn't mean he had to keep working, just delay SS -- so, he got onboard with that and lived out of his checking account not touching his savings or 401k for 3-4 years until collecting SS at 69 and at the time his SS was about triple his expenses because everything was paid off
LTC is only getting more expensive all the time. LTC insurance has limits. This is for rich people to protect their wealth because it has not been made affordable for the masses imho
I saved and invested for my(our) retirement, to USE the savings, not watch it only grow larger to be eventually spent by heirs. Well, that's tricky because being broke in old age probably won't feel great -- so, maybe that one is like your category -- who cares because you're dead... LOL (Thanks for the Ferrari, Dad!). So spending it “down” (which hasn’t happened yet because earnings outpace withdrawals, except for 2022) simply makes sense as I am already 65, retired at 61, and look to wait until my SS is say, $4k/m @68 instead of the $2500/m or so it would have been at 62. That's what I'm talking to myself about (delaying SS for the bigger payout and higher cash flow over few years
Like any annuity, you do have to live long enough to get your premiums back for it to make sense. Since I had no choice on when to collect my basically non-COLA pension, enlarging my clearly superior SS pension fits in well as a strong 3rd leg of non-work income.
This makes total sense.
Sorry, I commented all over your post; but, I thought you had so many points I agreed with
I need to do some more projections and tax estimates because I don't think I have comprehended how those RMD's are going to hit (after 75). But, for now I can see retiring close to 67 and delaying SS until 70 and using those first three years of retirement to just get more organized and fix up the house (or on second thought maybe that's what I need to do with a lot of my weekends until retirement). I know we plan and then life happens...
Last edited by Wile E. Coyote; 09-16-2022 at 11:13 AM..
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