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Honored Social Butterfly

Taking Social Security at 63 or 66

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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Periodic Contributor

The idle age for claiming any of social security benefit is 66. You can also apply for retirement, disability, survivors or medicare benefits at 23, but the condition is the money you will receive will have lower value.

Consider that it will be approx. 77% of the amount you will receive at 66. So wait until you are 66 (if you can) to enjoy the 100% benefits of SS.

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Periodic Contributor

TAKE YOUR SS AS EARLY AS POSSIBLE. I TOOK IT AT 63 AND HAVE NEVER REGRETTED IT.YOU MIGHT NOT LIVE TO 66 OR 70  TO ENJOY IT AND ALL THOSE YEARS OF HARD WORK GO DOWN THE DRAIN.NEVER MORE HAPPY.

 

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Newbie

Why does everyone say to wait? The math tells the story, without giving out dollars, in my case, if I take benefits at 63, I will receive 80%  between 63 and 66.5. Then multiply 54 months x monthly benefit. The difference between the monthly payments is x. That will give me a break even point of 18.0 years from 66.5. I will be 84.5 and just breaking even. Taking the benefit at 62 gives me a break even of 15 years. Why would anyone advise against taking the benefit earlier than 66.5? What am I missing? In my case, it would seem unwise not to start taking the benefit at 63 since I have no plans after 85. To me this same senario applies to everyone.

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I am of the same opinion. I must be missing the same fact.
I turned 62, 5 months ago.
What I am trying to figure out is if it is worth it to wait until 63. will the payments be X percent for 62, Y percent for 63, etc.
You mentioned 80% for 63. Is that a fact? Is it 75% for 62?
Cheers.
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Regular Contributor

I agree this is mosltly a math problem deciding when to take social security.  But there are also some non-quantitative issues and these are mentioned on the Charles Schwab site and I think the article is a good one http://snip.ly/7na3f

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Regular Contributor

It is ideal to take social security as late as possible – it is very difficult to get a guaranteed 8% return in the market which is what you get when you delay your social security.
This may incredibly help you - www.retirement-income.clickfunnels.com/cheat-sheet-ss
Let's say I offered you an annuity that paid a guaranteed 8% for life, would you take it? If yes, then you want to delay your social security benefits until age 70, if you can.
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Periodic Contributor

It is ideal to take social security as late as possible – it is very difficult to get a guaranteed 8% return in the market which is what you get when you delay your social security. Let's say I offered you an annuity that paid a guaranteed 8% for life, would you take it? If yes, then you want to delay your social security benefits until age 70, if you can.

This may incredibly help you - www.retirement-income.clickfunnels.com/cheat-sheet-ss
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Newbie

Okay I will be 63 in two day and I an still working full time. What the benefit of not working and only collecting SS. So should I just continue to eork

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Honored Social Butterfly


@m474998b wrote:

Okay I will be 63 in two day and I an still working full time. What the benefit of not working and only collecting SS. So should I just continue to work


Advantages 

  • maybe sleep a little later
  • You could be footloose and fancy free living off your Social Security and ALL your other retirement accounts or benefits - just make sure you have enough to last during your remaining lifetime.

Disadvantages

  • You could be poorer - 
  • You would have to do something about your health care coverage and then when you turn 65 and go on Medicare, pay your part of your medical and drug care.  
  • Your Social Security benefit would be reduced FOREVER when you take it earlier than full retirement age - actually not taking it until you are 70 years old gives you the best $$$$$$ benefit
  • You might have to start drawing your OTHER retirement benefits earlier
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Periodic Contributor

I took my ss at 631\2.With my pension savings and tdas I am living very well  getting medical from my union till i turn 65 then go on medicare and get a supplement from my union.life could not be happier.

if you can afford it take your ss as early as possible.enjoy your life now

even if you wait till retirement age after you take out 15% for tax purposes

the difference is not much.

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Periodic Contributor

everything i have read said to wait as long as possible.

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Periodic Contributor

take your ss as early as possible.you will not regret it.enjoy your life now.took it at 63 and happy as hell.

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Honored Social Butterfly

Thank you @tuckem03 for the encouragement to and the vote of confidence in taking one's social security a little earlier.  That has been a great consideration of mine as I am, right now, still working, but soon approaching the point of leaping off the job/work treadmill in full pursuit of my "golden years!"  

 

I've got a little ways to go.  But I can now see the light at the end of the tunnel.  Yippee!

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Contributor

If l start taking SS out the first of next year and work until lm 65, which is 1 more year. Will IHave to pay taxes ony SS, for that year?
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Periodic Contributor

It is ideal to take social security as late as possible – it is very difficult to get a guaranteed 8% return in the market

which is what you get when you delay your social security. Let's say I offered you an annuity that paid a guaranteed 8%

for life, would you take it? If yes, then you want to delay your social security benefits until age 70, if you can.

This may incredibly help you - www.retirement-income.clickfunnels.com/cheat-sheet-ss
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Honored Social Butterfly


@ej9567 wrote:
If l start taking SS out the first of next year and work until lm 65, which is 1 more year. Will IHave to pay taxes ony SS, for that year?

You can work while you receive Social Security retirement (or survivors) benefits. When you do, it could mean a higher benefit for you in the future.

 

Each year SS reviews the records for all working Social Security recipients. If your earnings for the prior year are higher than one of the years we used to compute your retirement benefit, we will recalculate your benefit amount. We pay the increase retroactive to January the year after you earned the money.

 

However, if you are younger than full retirement age and make more than the yearly earnings limit, your earnings may reduce your benefit amount.  So taxes are not the only thing to be concerned about - but it depends on what your earning are -

 

If you are under full retirement age for the entire year, SS deducts $1 from your benefit payments for every $2 you earn above the annual limit. For 2015, that limit is $15,720.

 

In the year you reach full retirement age, SS deducts $1 in benefits for every $3 you earn above a different limit. In 2015, the limit on your earnings is $41,880 but we only count earnings before the month you reach your full retirement age.

 

Beginning with the month you reach full retirement age, your earnings no longer reduce your benefits, no matter how much you earn.

 

Social Security Retirement Planner - Getting Benefits While Working

 

Yes, taxes on a certain % of your Social Security could be applicable - while working and even after you retire - that will depend on your total income and the tax tables.

 

Benefits Planner: Income Taxes And Your Social Security Benefits

 

Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.

No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. If you:

  • file a federal tax return as an "individual" and your combined income* is
    • between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
    • more than $34,000, up to 85 percent of your benefits may be taxable.

Consider this to be on only the contribution portion which was not taxed while working (the employer match)

 

read more at the above  linked Social Security webpages -

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Contributor

 
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Newbie

I will be 62 this year, however planning to work till I am at least 65. I am not married znd feel like I am 40.lol, not brsgging, I think the next three years will give me added years, as I am active and will be able yo travel more later and still do all the things I love, walking, gardening just getting out there and seeing new things and conversing with people! I can't take Medicare till then and would like to keep my current medical till retirement. Just living a good life, 65 for me! 😉
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Super Contributor

I put a posting out on the Social Security discussion, there is a "when to take Social Security" conversation. I have a link to a Google spreadsheet with Net Present Value (NPV) financial calculations.

 

Go take a look at my numbers over there. In summary, I think the conventional wisdom about taking Social Security as late as you can is totally wrong, because it ignores opportunity cost and time value of money. 

 

My calculations say take it at age 62, if you'd otherwise be pulling money out of any decently allocated investment accounts. But if your money is saved in Money Market accounts or in cash under your mattress making 0%, then take it later.

 

 

 

 


Sincerely,
Peter
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Periodic Contributor

I have a question about "double dipping." If I take SS at 62, then spousal benefits at 66, can I then take my benefits (based on my record) at 70?

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If you delay taking your social security payments it will extend the "run out of money" date that Social Security goes bankrupt so that is good for Social Security, but is it good for you?

 

Plus if you die before you start drawing it will save Social Security a bunch of money.

 

Also which would you rather have $5.00 now when you can spend it or $7 later when it all goes to the nursing home you are vegetating in?

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I am a retired federal employee under the old civil service retirement system (CSRS).   I also have 40 + quarters (28 years) under Social Security.  I still work part time with more Social Security taken out.

 

Since the social security Windfall Elimination Provision (WEP) reduces my Social Security benefits so is there any benefit from waiting or should I sign up to get what I can before the law changes again and totally eliminates any benefits?

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Newbie

I remember this deduction from my first paycheck that took out taxes called " FICA ". I owned a business with 30 employees and paid matching " FICA ". I have paid in so much " FICA " - that I am going to start taking back some " FICA " before it quits paying back.

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Contributor

You can wait as long as you want. I'm taking it as soon as I am eligible and leaving more of my money in investments.
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Periodic Contributor

can someone tell me  how much percentage your amount will increase from  62 to 66 if

you hold off from taking your benefits. i just retired from my job at 62.

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Regular Social Butterfly

If you were born between 1943 and 1954 your FRA (full retirement age) is 66. 

 

The percentages  of your PIA (primary insurance amount) your benefit is based upon are easy to figure:  

 

At age 62 -   You get 75% (25% penalty)   

 

At age 66 -   You get 100% 

 

At age 70 -   You get 132%  ( DRC's of 8% per year are added to PIA)    

 

 

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Periodic Contributor

understand. but say you would receive   $1760  if you take at 62  what would be the amount

if you take it  at  63  64 65  and 66  in dollars amount.

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Honored Social Butterfly


tuckem03 wrote:

understand. but say you would receive   $1760  if you take at 62  what would be the amount

if you take it  at  63  64 65  and 66  in dollars amount.


  You go to the SS website and it will tell you. We used to all get an annual SS statement that gave you all the numbers. I think (?) that ended. But the site will give the numbers specifically for you.


"...Why is everyone a victim? Take personal responsibility for your life..."
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Regular Social Butterfly

ret traveler,   somehow I don't think our friend has the inclination to go to the trouble of setting up an SSA online account for that,  do you.     Um,  I just sorta got that,  er,  feeling.....

 

Anyhooo,  he doesn't have to,  he has all the required information he needs right now.  

 

We know his full retirement benefit at 66 is $2,347 because he told us so.   (75% of $2,347  = $1,760 ) 

 

Now,  We told Him that the difference between age 62 and 66 represents 25%.    Or,  breaking it down,  it is  6.250000 % per year.   Meaning,  his benefit rises by that percentage for every year he waits to 66. 

 

Now,  if he wants to get down to dollars and sense (sic)  he knows that 6.25000 per cent rise represents to him  $146.75   ($2,347 - $1,760  = $587  divided by 4 = $146.75) 

 

So,  if he wants to know his monthly benefit when turning 63 it would be $1,906.75.  

 

At 64,  $2,053.50;  

 

At 65,  $2,200.25,  and,  viola ! 

 

$2,347 at 66 ! 

 

Easy as Pi,   isn't it?  

 

Now,  if he comes back and wants the monthly breakdown for when he is 63 years and one month old,  or 65 and 7 months,  I won't be anywhere to be found.   

YOU can help him then,   LOL.

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