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Also retired military and also receive a VA pension. I went ahead and took it at 62 - why not. Some extra funds that I can use for things to help others.
House has no mortgage, no property tax - and who know maybe I would not make it to 65 or whatever.
I think this "why not" approach has a lot of merit. I'm completely confident that it is not "actuarily sensible" in that (assuming we don't know when we are going to die) delaying until later would likely provide greater total lifetime benefits. However, if you have your financial house in order such that you don't need social security to meet your financial obligations, then "why not" doesn't seem nuts to me. It's like found money and the reality is you could drop dead at 63.
I think people who find themselves in this sort of fortunate position are likley people who have lived below their means most of their lives, invested regularly and consistently into low cost index funds, and, in general, have delayed gratification. I think those same folks are most likely to feel compelled to defer social security because it is "sensible"...which it probably is. But if you don't need it, I see no reason not to take it now, and enjoy it---either spend it on yourself or others you care about.
One suggestion that might be applicable....if you are married, maybe have one of you take it at 62, have the other defer. Hedge your bets a bit----it doesn't have to be all or nothing.
OP - that's great about no FEHB, and no Survivor benefit out of your pension. You only have to have worked 5 years to get full Pension if you retire at 62 or later.
I am only a GS-9 - trying for an 11 before I retire - planning on 62 regardless of if I get a promotion or not. I was USAF from 1984-1992 - then civil service immediately after. Next year I will have 40 years. No military disability as of yet - but if I can get information from people I worked with, and my depression started when AD - I might try for something. I can't use the VA at all even after 8 years active duty unless I have at least 1% disability. How many years did you have in the Military - did you retire or just separate?
You'll get pensions and assistance. If your life expectancy is ~84 or less, i don't know why you would wait past 62. That could be three extra years of healthful travel, an active lifestyle, etc.
Both my parents are still kicking at 85 and 86, so there's a good chance I'll live past 84. The main reason to wait is for survivor benefits for my wife who has always been a low earner and is 4 years younger.
I went into retirement with no debt and I highly recommend it to others.
That alone gives you a lot of leeway and a much lower budget to deal with.
You also have a few years yet before making hard decisions.
Your plan sounds reasonable for now and I would suggest revisiting it next December to see if anything needs to be changed.
I wholeheartedly agree with you. Actually I tend to over-analyze this stuff so I'll probably revisit it a hundred or more times between now and December 2024 and every other December until I retire.
I think this "why not" approach has a lot of merit. I'm completely confident that it is not "actuarily sensible" in that (assuming we don't know when we are going to die) delaying until later would likely provide greater total lifetime benefits. However, if you have your financial house in order such that you don't need social security to meet your financial obligations, then "why not" doesn't seem nuts to me. It's like found money and the reality is you could drop dead at 63.
I think people who find themselves in this sort of fortunate position are likley people who have lived below their means most of their lives, invested regularly and consistently into low cost index funds, and, in general, have delayed gratification. I think those same folks are most likely to feel compelled to defer social security because it is "sensible"...which it probably is. But if you don't need it, I see no reason not to take it now, and enjoy it---either spend it on yourself or others you care about.
One suggestion that might be applicable....if you are married, maybe have one of you take it at 62, have the other defer. Hedge your bets a bit----it doesn't have to be all or nothing.
Yes I could take it at 62, but since I plan to keep working until at least 65 to pay the house, the tax hit would be huge.
Unfortunately I've never been much of a saver. We've lived paycheck to paycheck the majority of the time. Right now I only have a little over $100,000 in my TSP (401K). My saving grace is the multiple "pension" income streams I have now and will continue into retirement. All of which have COLAs. My wife has her FERS disability retirement and SSDI which will convert to regular SS at FRA. I have my military retirement and VA disability now and will eventually add my own FERS retirement and SS. Any retirement savings is just extra $.
OP - that's great about no FEHB, and no Survivor benefit out of your pension. You only have to have worked 5 years to get full Pension if you retire at 62 or later.
I am only a GS-9 - trying for an 11 before I retire - planning on 62 regardless of if I get a promotion or not. I was USAF from 1984-1992 - then civil service immediately after. Next year I will have 40 years. No military disability as of yet - but if I can get information from people I worked with, and my depression started when AD - I might try for something. I can't use the VA at all even after 8 years active duty unless I have at least 1% disability. How many years did you have in the Military - did you retire or just separate?
I retried after 22 years.
It's definitely worth trying to get anything you can service connected. If you have any medical records from your time in service that would be the place to start. Lots of VSOs (Veteran Services Organizations) like the VFW, DAV, and many more can help you submit a claim for free. I don't remember where you live, but here i Virginia the Department of Veteran Services is state agency that also provides free help. That's who I used.
I wholeheartedly agree with you. Actually I tend to over-analyze this stuff so I'll probably revisit it a hundred or more times between now and December 2024 and every other December until I retire.
OP you are too young to make a firm decision on what age to take SS. There is no rush to decide. Once you approach age 62, make a health assessment and a financial assessment. If everything is tip-top, you can postpone till next year. Rinse and repeat until FRA. After FRA, it becomes more of an exercise of how much money you want to leave on the table.
I kept deferring SS until a few months ago. I am currently age 68 with a good corporate pension that pays most of my monthly living expenses. However, with the SS COLAs in the last couple of years, my estimated SS benefits got too much to defer any longer. There is little chance I would ever recover the $54,000 per year I would receive in SS if I were to wait past age 69, so I filed to start my SS in the first month after my 69th birthday.
OP you are too young to make a firm decision on what age to take SS. There is no rush to decide. Once you approach age 62, make a health assessment and a financial assessment. If everything is tip-top, you can postpone till next year. Rinse and repeat until FRA. After FRA, it becomes more of an exercise of how much money you want to leave on the table.
I kept deferring SS until a few months ago. I am currently age 68 with a good corporate pension that pays most of my monthly living expenses. However, with the SS COLAs in the last couple of years, my estimated SS benefits got too much to defer any longer. There is little chance I would ever recover the $54,000 per year I would receive in SS if I were to wait past age 69, so I filed to start my SS in the first month after my 69th birthday.
Right now I'm looking at three options:
65 1/2ish when the house is paid off.
FRA - 67
70.
I plan to retire once the house is paid off but I may delay taking SS.
65 1/2ish when the house is paid off.
FRA - 67
70.
I plan to retire once the house is paid off but I may delay taking SS.
I agree with a lot of what people are saying here about continuing to reassess.
I have looked at this a lot and I'd say between 67 and 70, not 65. It does not look like you need the money. A couple of things. This inflation is not over and it is structural now (the rate of increase in inflation is going down , but the cost of living is 20% higher permanently and we could see more inflation due to all the debt we have as a country and how that's going to impact central planning). Secondly, waiting to 70 is longevity insurance. There is more of a chance that one person of a couple could live to 90 or beyond.
I think you have enough income to live well the entire time and you will not be suffering. However, I would max out your TSP from here on out (while simultaneously paying down the house). See what unnecessary spending you can cut out (practice for retirement).
I am planning to retire at 66/67 and take SS at 70. Between 66/67 and 70 I will do a lot of projects around the house that have been delayed and take shorter trips to visit friends and family in the US. I will be frugal and wait for the bigger check. In the event I were to need any help around the house or go into an assisted living scenario the bigger checks later in life will help a lot. Also, I'd rather use some deferred compensation between 67 and 70 and draw some of that down because it's going to come back later to bite me in the butt with RMD's at 75.
The exception to not waiting. I have a friend that retired in 2000. When she turned 62 she took SS. The thing is she still has all that money (and she's now 77). The only thing she spent any of that money on was solar panels on the house (which is just like prepaying expenses). So, I'd only take it early if you could save it. She has it all invested with T Rowe Price. They have his pension and they have been traveling the globe leaving for 3-4 weeks at a time up to six times a year. So, they haven't just miserly been saving.
Update this thread once or twice a year!
Last edited by Wile E. Coyote; 12-13-2023 at 04:46 PM..
I forgot to mention. We get the Cost of Living Adjustments for SS after we reach 62. You do not have to take SS to start getting the COLA's accrued to your account. So, that's going to assist you in the bigger check at 70 (on top of not losing 30% if you took it at 62 and gaining 24% between 67 and 70). You may only break even, but, maybe the peace of mind of knowing you secured more money in case one of you lives way past 80ish.
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