Taking SS early (62)

[mt terry d]

For everyone saying “I want it now because I won’t be able to enjoy life later”, or something similar…

This is just like the paying down the mortgage vs investing thread. Make financial decisions based on math, not emotions.

The key is having other after tax savings funds to spend down first and have fun with now, which then allows you to wait to draw SS later when your benefits aren’t reduced (FRA), or better yet, when your benefits are actually increased (70). thus spending down 4% (savings rates) money first, while earning 8% as your benefits grow.

Speaking only for myself my decision was based on math.
"I believe it would have taken till I'm 80 to break even."

The last part was obviously in jest.

I plan on hunting and riding motorcycle well into my 80s
And chasing nurses on foot in my 90s.
Seriously.

 

[LostArra]

Social security is going to be hit with some type of reduction or major change in benefits. Politicians from both parties are going to have their hands forced by the budget deficits and national demographics. The Boomer influx of people,drawing with less people paying in is just going to make the budget issues worse.

I see the politicians raising the maximum ($176,000) on social security wages before cutting any benefits. Or possibly just eliminating a maximum wage limit like the Medicare tax.

 

[mt terry d]

forced by the budget deficits

Seriously?
When has that EVER "forced their hands"?

 

[Tenstrike]

I have enjoyed following this thread and would like to see it keep going, I'm 63 and have chose to hold off till 67 or maybe 70, I have a pension and have a small business I enjoy. I schedule my work and can schedule time off when I want. I feel it is better for me to maximize my SS for later as I hope to be kicking for a while. Take care all!

 

[Ross]

One thing to be aware of. Retired 18 months ago, turn 62 in August. Mrs is younger and working. We live on her salary currently. She earns a good income. Due to this I cannot take ss until she is retired, as we are well over what is allowed for any income. Would like to take it and invest, but no way around it. A good problem married a wise one and she is stilll working

 

[Tenstrike]

SS is based on the individual; you can draw and not be penalized on her earnings. Research it and come up with our own answer.

 

[Wapiti7]

Coming from a tax dork, the other thing that hasn't been discussed is the taxability of social security benefits. For those with pensions or other sources of income in retirement, this might be a moot point as they will likely hit the max 85% of gross SS benes being taxable. But for those with a more limited income, it might make even more sense to use IRA's and other income to delay SS until 70 and letting your benefit grow at 8% per year with the intent that a portion of the SS benefits from 70+ are not taxed or taxed at lower rates. Also, another thing to consider is converting IRA's to Roth from retirement date to SS draw date when people are living off of non-qualified (non-retirement) assets and relatively low brackets. Roth distributions are obviously not taxable, but also do not factor into taxability of SS benefits (under current law).

To really get this right, there is a lot of thinking involved. And even then, you're gambling on your ticker holding out to some assumed age.

 

[pacoalcracker]

Everyone thinks they are going to live a long, healthy life. So did my healthy late wife until she was diagnosed with an aggressive and terminal cancer at 55...she passed away 10 months later at 56. She was healthy/fit and seen her PCP on a regular basis. For those saying they are healthy right now and are going to live a long and healthy life......you have no idea what could happen anywhere along that journey. Be positive but also be realistic.

As for financial planners...they have been educated and conditioned by the SSA for many decades to talk their clients into waiting to collect SS...as it generally works in the SSA favor to do so. Many CFP are even pushing clients to stay in the workforce to 70 to take pressure off the SS system vs whats in the best interest for the client....see how the SSA gets their agenda done?

Vanguards "bogleheads" are not biased in any way, are very financial savvy as a group and their studies have shown that if you are a male, take it at 62 regardless of your current health or genetics, unless you have a wife that is a lot younger or who will be very reliant on your SS check....then wait until 70 if possible. For her benefit, not yours. Their website is very informative on many financial matters and SSA/retirement sections are great.

Have a financial plan but take any CFP recommendation with a few grains of salt and your eyes wide open.

 

[RyanT26]

Exactly. I know a hell of a lot more people that did not make it to 70 then those that have. Then you have to factor in living long enough past 70 to make up the difference. That number gets even smaller.

 

[mtwarden]

Retired at 62 and never look back. Was smart, fortunate to put away some monies in the right funds.
In regard to the 30% $ reduction in monthly SSA benefit, I'll be age 78 when lost $ catch up, breakeven should I have waited for FRA 66 & 10 months.
For now, enjoy the freedom and time to spend enjoying the outdoors and balancing life with family. Don't miss the stress or working for or under some other boss.
Will I be able to hunt after age 80...IDK.
However, waiting until FRA66-10, I would only gain $15,000 more lifetime SSA income at age 80.

Here are the numbers example shared by a financial advisor:
Base SSA $2000 @62yo

If you live to the age of 75; taking it at age 62 will get you $358,800+ in lifetime income.
IF you take it at age 66, you'll get $270,000,
and if you delay to age 70, you'll get $198,000.

If your life expectancy extends to age 80; you'll receive $405,000+ if you take it at age 62, $420,000 if you take it at age 66, and $396,000 if you take it at age 70.

If you live until the age of 85; you'll draw $517,500+ in lifetime income if you take it at age 62, $570,000 from taking it at age 66, and $594,000 if you take it at age 70.

I think that sums it up pretty well

 

[Kimber7man]

Everyone thinks they are going to live a long, healthy life. So did my healthy late wife until she was diagnosed with an aggressive and terminal cancer at 55...she passed away 10 months later at 56. She was healthy/fit and seen her PCP on a regular basis. For those saying they are healthy right now and are going to live a long and healthy life......you have no idea what could happen anywhere along that journey. Be positive but also be realistic.

As for financial planners...they have been educated and conditioned by the SSA for many decades to talk their clients into waiting to collect SS...as it generally works in the SSA favor to do so. Many CFP are even pushing clients to stay in the workforce to 70 to take pressure off the SS system vs whats in the best interest for the client....see how the SSA gets their agenda done?

Vanguards "bogleheads" are not biased in any way, are very financial savvy as a group and their studies have shown that if you are a male, take it at 62 regardless of your current health or genetics, unless you have a wife that is a lot younger or who will be very reliant on your SS check....then wait until 70 if possible. For her benefit, not yours. Their website is very informative on many financial matters and SSA/retirement sections are great.

Have a financial plan but take any CFP recommendation with a few grains of salt and your eyes wide open.

Good advice. I just want to say I don’t know how long ago this was, but I am sorry for your loss.

 

[mt terry d]

Another significant factor considering our fake and manipulated $$ system:

 

[flathead#2]

If I live to 80 I may not even know what money is.

 

[SDHNTR]

Everyone thinks they are going to live a long, healthy life. So did my healthy late wife until she was diagnosed with an aggressive and terminal cancer at 55...she passed away 10 months later at 56. She was healthy/fit and seen her PCP on a regular basis. For those saying they are healthy right now and are going to live a long and healthy life......you have no idea what could happen anywhere along that journey. Be positive but also be realistic.

As for financial planners...they have been educated and conditioned by the SSA for many decades to talk their clients into waiting to collect SS...as it generally works in the SSA favor to do so. Many CFP are even pushing clients to stay in the workforce to 70 to take pressure off the SS system vs whats in the best interest for the client....see how the SSA gets their agenda done?

Vanguards "bogleheads" are not biased in any way, are very financial savvy as a group and their studies have shown that if you are a male, take it at 62 regardless of your current health or genetics, unless you have a wife that is a lot younger or who will be very reliant on your SS check....then wait until 70 if possible. For her benefit, not yours. Their website is very informative on many financial matters and SSA/retirement sections are great.

Have a financial plan but take any CFP recommendation with a few grains of salt and your eyes wide open.

I’m very sorry for your loss.


But the rest of your post is utter nonsense. Never in my 25 years in the business have I ever been “pressured” in any way, shape or form to push any sort of “agenda” related to SS. It just math, not some conspiracy theory.

 

[06 SB]

I am 58 and planning on taking it at 62. Like others have posted, I ran an Xcel spreadsheet and associated graphs and that makes it pretty clear. I also have a military retirement and have tricare until 65 so no need to worry about healthcare.

 

[j3h8]

I’m very sorry for your loss.


But the rest of your post is utter nonsense. Never in my 25 years in the business have I ever been “pressured” in any way, shape or form to push any sort of “agenda” related to SS. It just math, not some conspiracy theory.

Where does the math hit an optimal break even point? By the calculations I have ran, if you take it at 70 it will take nearly 11 years to earn the money missed out on by not taking it at 62. I'd be 70... Living to 81 is probably going to happen, but now I've spent 8 years pinching pennies, or whatever I'm doing to not withdraw the money that the government stole from me anyhow.

 

[LostArra]

but now I've spent 8 years pinching pennies, or whatever I'm doing to not withdraw the money that the government stole from me anyhow.

As these 7 pages show, there is not one answer for everyone. If there was a single way to beat the system you can bet the govt would shut it down just like they did the restricted application.
If you are pinching pennies for 8 years then waiting until 70 probably doesn't make sense.

 

[j3h8]

To add to my post, I've been investing since I was in my early 20's and at the same career for the last 22 years. I have both a very healthy pension headed my way and what will end up being a very healthy 401k so long as the market doesn't tank in the next 12.5 years. So pinching pennies is a bit of a misnomer for my scenario. For many that's what they would be doing for what amounts to a minimal gain and a very high risk of never seeing the "return on investment".

I find no scenario where waiting to withdraw SS "maths" out, for anyone really. Math is math and it doesn't change. You can't convince me that anyone should wait unless they have other income sources. Even then, I still don't find it beneficial since SS cannot be passed on beyond your spouse. Most all other income avenues can be left to beneficiaries.

 

[Buckhunter55]

I waited until full SS, for me that was 67 and 2 months. I’d still be working but I’ve had some issues with my joints.

 

[j3h8]

I waited until full SS, for me that was 67 and 2 months. I’d still be working but I’ve had some issues with my joints.

Literally walking on pins and needles