Taking Social Security at 63 or 66

[Richva]

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

[retiredtraveler]

"...My question:  Are you willing to bet you're going to live 8 1/2 more years?  Are you feeling lucky?...".

    This subject is always sooooo subjective. It really depends on your finances, aside from SS. Average lifespan for males is now 76. But 'average' is a pretty useless number.

     ".....By age 65, U.S. males in average health have a 40% chance of living to age 85 and females have a 53% chance of living to age 85. If the couple is married, there’s a 72% chance that at least one of  them will live until age 85. But if these same folks are “healthier” (25% healthier than the average person), then their chances of living to age 85 bump up to 50% for the male, 62% for the female and 81% for at least one of them....".

   Do I feel lucky? Yes.

[Richva]

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@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.

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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......................

[kleino]

Financial advisors use life expectancy into the 90s becaise it is so probable.  This is the table I looked at https://retirement-income.clickfunnels.com/joint-life-calculatorvtwhgz8a

A single female who has reached at 66 has a 30% chance lving to age 90 or above. In a married couple, one of the parties has a 42% chance of living to age 90 or better.  These figures do not account for the potential life-elongating science that is quickly progressing.  

[et95429808]

I agree thats why we should get it at 63.

[js43806861]

The actual break-even time is approximately 11.5 years. So someone taking Social Security at 63 instead of 62 would catch up at age 74.5 and then pull ahead of someone who collected at 62. The extra credits for waiting until 70 actually decrease the break-even time so that you would begin to pull ahead at age 78.6. 

[GailL1]

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.

[drawpoker]

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.)    

[wk9509]

Hi! My name is Bill K. and I'm confused about weather I should be on SS or not. I'm 64 and still working. I make about 20K a year. I was told i should have signed up at 62 and banked the money until I decide to stop working. My target date was 66. However, it seems that I have been wasting money that I could be getting. Right or wrong? I know that at 66, I will be getting about $400+ more a month than if I went on SS now. But, will this all break even as long as I live for a few years?

If you can help, please let me know.

Thanks,

Bill

[3278443860]

Bill K., what are your options?

1. Keep working and retire later, and take SS later?

2. Stop working, live off savings, and take SS later?

If you make $20000 a year, I don't think you trigger the added SS taxes.

From IRS.GOV

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.

[GailL1]

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?

[drawpoker]

GailL1 said:
"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?"

Thanks, guess it wasn't it clear. To clarify, I meant the age at which the widow first Files for benefits, not that there are increases after filing. If she waits to age 66, she gets 100% of the husband's benefit amount.
I mentioned it because it is another way of looking at "early versus full retirement age" filing. Only widows have a 6 year window to consider, not 4 years, in addition to the factor of what they would get on their own work record if they waited.
Complicated stuff!

[communityhost]

Is that for both widows and widowers?