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Treasured Social Butterfly

Re: Taking Social Security at 63 or 66

38,177 Views
Message 61 of 68

LeCherie wrote:

There's a pretty good difference between your benefit at 63, and the max you would get later.  If you can live well on the other income, I would recommend delaying the SS as long as possible.  The alternative would be to take it now, but put it in a high yield savings account.  You won't be able to make up the difference though.

 

Also consider that when you draw your SS, you could be in the high enough tax bracket to have to put part of it back into the SS Fund.


Once you reach your 100% distribution point 65 66 or whatever yours is, you can collect salary and SS without penalty to SS and pay tax on the SS funds. You can see your tax liability and pay quarterly if need be.   "You won't be able to make up the difference though" depends on your life term..  something else to consider.

Life's a Journey, not a Destination" Aerosmith
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Valued Social Butterfly

Re: Taking Social Security at 63 or 66

38,176 Views
Message 62 of 68

There's a pretty good difference between your benefit at 63, and the max you would get later.  If you can live well on the other income, I would recommend delaying the SS as long as possible.  The alternative would be to take it now, but put it in a high yield savings account.  You won't be able to make up the difference though.

 

Also consider that when you draw your SS, you could be in the high enough tax bracket to have to put part of it back into the SS Fund.

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Treasured Social Butterfly

Re: Taking Social Security at 63 or 66

38,098 Views
Message 63 of 68

hf5371 wrote:

Delaying social security benefits until full retirement age has significant financial benefits. You want income that will not run out in your lifetime. This requires comprehensive planning to ensure a smooth transition.


I agree but, as some of the others pointed out, the break even is at 82 or something.  I would really feel cheated if I waited to 66 and died at 72!!!!  (Joke). Seriously, I think the reason financial advisors tell you to wait to 66 is that they all use 90+ in their life assumptions.  If you believe that, it makes sense to wait. If not sure......................

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Re: Taking Social Security at 63 or 66

38,124 Views
Message 64 of 68

Delaying social security benefits until full retirement age has significant financial benefits. You want income that will not run out in your lifetime. This requires comprehensive planning to ensure a smooth transition.

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Valued Social Butterfly

Re: Taking Social Security at 63 or 66

38,127 Views
Message 65 of 68
http://www.ssa.gov/pubs/EN-05-10147.pdf
That is a pamphlet from SSA on just your question except most folks don't have the option of delaying their benefits.

It will make several hundred dollars difference in your monthly benefit if you begin benefits at 63, then you also have to remember that Medicare B premiums will begin to come out of that check at 65. If you are one with a higher annual income (right now at $ 85,000/ $ 170,000), there is also a high income surcharge on Medicare Part B and Part D premiums.

If you are already set for retiring at 63, then your decision to draw now or later should be based on the amount that you would receive under each condition and whether or not that will meet your financial needs for the long term.

I also wouldn't even consider any COLA adjustment for those three years cause I don't see our economy taking off in any huge way - we'll maybe you could add in 1% per year just to give you the whole picture.
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Valued Social Butterfly

Re: Taking Social Security at 63 or 66

37,270 Views
Message 66 of 68
draw poker said . . . .
(Widows get 71.5% at age 60, then it goes up by increments to 100% at age 66.)

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I was with you until you said the above, specifically about the 100% at 66 - if you started drawing at a younger age because you were widowed, how would you ever get to 100% at age 66?
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Valued Social Butterfly

Re: Taking Social Security at 63 or 66

36,956 Views
Message 67 of 68

I am more familiar with the model of reduced benefits at age 62 versus full benefits at age 66.  So age 63 is throwing me off. 

But,  I think most financial calculations use a break-even age of either 82 or 83.  Meaning,  if you expect to live a long life,  the effect of taking smaller benefits for a greater number of years will be pretty much equalized by taking larger benefits for fewer years at that point. (I think the actual age used varies according to which inflation factor is used to calculate)   So, you really have to think about your family history,  parents' longevity,  etc.,  as welll as your own health to gamble on how long you wll live.  

Having said that,  there are many variables to this.  For ex:  Some planners are advising if you don't need the soc. sec.  $$  to meet current expense,  take them early anyway and Invest the checks in some good,  no-load mutual funds.  The return on "taking soc sec. early"  will then be a far more enriching outcome than using the old,  traditional models.   

(Sorry I can't offer much else.  In my case,  it was a no-brainer.  I started drawing as a widow on my husband's account as soon as I turned 60.  Waiting to draw on my own at age 62 would actually have been slightly less as I did not have nearly as many high-earning years on my record.  I could have waited until age 66 and drawn full benefit on my late husband but after running the numbers a 6 year jump seemed the best way to go.  Widows get 71.5% at age 60,  then it goes up by increments to 100% at age 66.)    

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Treasured Social Butterfly

Taking Social Security at 63 or 66

36,982 Views
Message 68 of 68

I am planning to retire this year after my 63 birthday.  I could forgo social security and use  dividends and maybe dip into savings to make up the difference between expenses and pension.  It would allow a bigger check at 66 I have to believe this was already discussed but what is the thought here?

 

Thanks

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