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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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Don't think the amount of benefit at 62 is that much different from 66. If you have the money to retire go ahead and take the benefits at 62. Not getting any younger and by 70, you will be really tired.

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Regular Social Butterfly

"Don't think the amount of benefit at 62 is that much different from 66"


To be precise,  yh5104,   the amount is  exactly  25% less.   Maybe to some that would be considered   "not much" difference.   Others may think otherwise.   Very,  very highly subjective.

 

"Not getting any younger and by 70, you will be really tired." 

 

Interesting you mentioned that.    Not about being really wore out and tired,  LOL.     Money Magazine editors started asserting in January this year that 70 is the new full retirement age.   I can't vouch for their software calculator ( or offer any of my own) but they are telling seniors that if they wait until age 70 to start drawing,   the difference in the benefit amount over filing at age 62 is

 

       76 %  more  (Seventy Six Per Cent)   

 

That's a pretty sobering statement,  isn't it. 

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Honored Social Butterfly

"....To be precise,  yh5104,   the amount is  exactly  25% less.   Maybe to some that would be considered   "not much" difference.   Others may think otherwise.   Very,  very highly subjective....".

 

   Yup!  And I would add, for yh6104, you can go out to the SS website, put in your social, and see what your benes would be at 62, or waiting until 66.


"...Why is everyone a victim? Take personal responsibility for your life..."
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Everyone is DIFFERENT.
There is NO RIGHT OR WRONG.
Each individual or couple needs to sit down with someone who really understands how Social Security pays out for each individual and/or each other.
Don't rely on anyone who does not give you at least 3 or 4 options on how to start your payments!!!!
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Wrongo, once a planner has all your facts, this turns into a math problem. I never saw a math problem that did not have a correct and several wrong answers. Once you know all the numbers and facts YOU must decide what level of risk you are willing to take (use up all savings,then have NO savings) while waiting for a bigger soc sec, that might never come if the cement truck rear ends you.

 

Most people must live 17 yrs past age 66 to recoup what they lost, by not filling at 62, 48 months earliler. Good Luck

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Most planners say to wait to max soc  sec.  They ignore two big items.

 

1. If we use current savings, 401 k, IRA/s they can get down to zero and then if my wife dies before 66 or 70, we have used up considerable savings and she or me will never collect a nickel from her waiting to get an increased benefit that might not ever come.

 

2. Planners usually don't mention the $40,000 to $50,000 you leave on the table when my wife does not file at age 62 (early filer),  it will take her living 18 years or age, 81 years old to break even for waiting.

 

3. and finally in late 60,s and early 70.s we are in good health and can travel etc. and use our income for reitement plans. If we wait 5-7 years when I am 70 and Mrs is 67 who is to say if one or both of us will be able to go places, travel and take cruises and trips. How many 85 + yrs old folks, will spend all their income in retirement, or do they wish to leave it to charities and the Kids.

 

Dale

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None of the options presented by the pundits asking us to wait to receive our benefits attributes anything to health situations. Actuarial tables exist for those of us with many health situations such as diabetes, chronic high blood pressure, atrial fibulation, etc... These need to be accessible to make a good plan for accessing information to make a good choice of when to ask for benefits.

 

I think that we need much more information than just being told to wait by the so-called experts.

 

I am afraid that these articles are merely exploiting our ignorance when trying to convince us to wait regardless of our health situations. And what the Actuarial tables actually tell us about our life expectancy.

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I think most pundits also share the informaiton below.  I got this table from the Retirement Income Blog

 

Because there is more to life than your life expectancy and discount rate, here are the other factors to consider:


Issue

This would argue to….
If you think you can earn more than 6% annuallyTake the money now
If people in your family tend to outlive the average life expectancyTake the money later
If you need the money to live on nowTake the money now
If you are married and your spouse is also dependent on the paymentsTakes a lot more figuring – call us on this one
Your tax bracket will be lower laterTake the money later
Will you have earned income prior to your full retirement age forcing you to forfeit some of your social security benefitTake the money later
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Honored Social Butterfly


@everettbaker wrote:

None of the options presented by the pundits asking us to wait to receive our benefits attributes anything to health situations. Actuarial tables exist for those of us with many health situations such as diabetes, chronic high blood pressure, atrial fibulation, etc... These need to be accessible to make a good plan for accessing information to make a good choice of when to ask for benefits.

 

I think that we need much more information than just being told to wait by the so-called experts.

 

I am afraid that these articles are merely exploiting our ignorance when trying to convince us to wait regardless of our health situations. And what the Actuarial tables actually tell us about our life expectancy.


Not sure which particular articles you are referring to, but you are your own determining force in making the uptimate decision of when to retire. 

Life's a Journey, not a Destination" Aerosmith
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@nyadrn wrote:

@everettbaker wrote:

None of the options presented by the pundits asking us to wait to receive our benefits attributes anything to health situations. Actuarial tables exist for those of us with many health situations such as diabetes, chronic high blood pressure, atrial fibulation, etc... These need to be accessible to make a good plan for accessing information to make a good choice of when to ask for benefits.

 

I think that we need much more information than just being told to wait by the so-called experts.

 

I am afraid that these articles are merely exploiting our ignorance when trying to convince us to wait regardless of our health situations. And what the Actuarial tables actually tell us about our life expectancy.


Not sure which particular articles you are referring to, but you are your own determining force in making the uptimate decision of when to retire. 


 I guess people should apply for a term life insurance policy when determining the age when they should retire - earlier or later.  The (amount of) the term life premium quoted after a health evaluation & questionaire should indicate what risk category you seem to be in actuarially. 

 

It's Always Something . . . . Roseanna Roseannadanna
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@GailL1 wrote:

 I guess people should apply for a term life insurance policy when determining the age when they should retire - earlier or later.  The (amount of) the term life premium quoted after a health evaluation & questionaire should indicate what risk category you seem to be in actuarially. 

 

I  made my decision on a whole bunch of factors and term life had nothing to do with any of them.
Life's a Journey, not a Destination" Aerosmith
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nyadm said . . .

"I  made my decision on a whole bunch of factors and term life had nothing to do with any of them."

_____________________________________________________________________________

 

I was half-joking because the OP seemed to want some way to determine how longivity played into the decision of raking early retirement or not.

 

So should we have a questionaire on the SSA website to help in this determination.

At what age did your parents die?  Is your health similar to their health condition?

Do you have uncontrolled high blood pressure?

Do you have uncontrolled diabetes?

How is your heart?

Do you smoke, drink excessively, have lots of stress?

Are you obese or drastically overweight?

Are you a risk taker in your hobbies?

Is there a big tree overhanging your home?

 

No, there is no way to determine how long one might live - but statistics show that women live longer than men.  Being in good shape healthwise also help you to live longer.

It's Always Something . . . . Roseanna Roseannadanna
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Honored Social Butterfly


@GailL1 wrote:

nyadm said . . .

"I  made my decision on a whole bunch of factors and term life had nothing to do with any of them."

_____________________________________________________________________________

 

I was half-joking because the OP seemed to want some way to determine how longivity played into the decision of raking early retirement or not.

 

So should we have a questionaire on the SSA website to help in this determination.

At what age did your parents die?  Is your health similar to their health condition?

Do you have uncontrolled high blood pressure?

Do you have uncontrolled diabetes?

How is your heart?

Do you smoke, drink excessively, have lots of stress?

Are you obese or drastically overweight?

Are you a risk taker in your hobbies?

Is there a big tree overhanging your home?

 

No, there is no way to determine how long one might live - but statistics show that women live longer than men.  Being in good shape healthwise also help you to live longer.


Ok  I missed that.. just wondering if you had a new way to tell lol

Life's a Journey, not a Destination" Aerosmith
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My perspective is certainly not applicable to all, but likely of some interest to many.  I am a retired Federal Government Civil Servant having worked full time for the FEDs for over thirty years, retiring as a CSRS annuitant. While I did not contibute to Social Security during the bulk of my employment with the FEDs, I did however, pay into Social Security through many years of private sector employment, including 12 years with USAF as both a regular service member and with the Air National Guard.  Additionally, I also contributed to a mandatory 7% of annual income requirement for the purpose of securing an annual Civil Service Retirement eligibility while working for the FEDs.  Consequently, provisions of the 'Windfall Protection Act', significantly reduced the Social Security expectations I had expected to recieve in return for my private sector contributions... by virtue of the fact that I was already recieving the Federal Pension that I contributed to as a full time Federal employee.  In short...  my earned Social Security benefits are being significantly reduced simply because I opted to make government service a career.  Further, when my spouse passed away at the age of 61, I was denied spousal Social Security earnings because my earned (Civil Service only) benefits exceeded her own.  So what does this have to do with claiming your benefits at an earlier age (in my case 62)?  Simple.  Get your contributions (deminished as they might be) while (and as soon) as you can.  I've discovered that what you have voluntarily given to the government is not what you can realistically expect to receive in return for it.  Not now, nor likely in the future.

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Shanran1, I'm in a similar situation.  I retired from Federal Service in 2011 at age 56 after being employed for 33 years. Add my 4 years of military time and my 1+ years of accumulated sick leave and I retired with 38 years of Federal Service. While federally employed, I was under the Civil Service Retirement system (CSRS). I'm currently drawing  a CSRS annuity. I'm also working part time for United Parcel Service and am paying into SS. Also, for the past 20 years I'm worked as an independant contractor umpiring NCAA college baseball games which I also pay SS tax when I file my Federal income tax. I will be 60 years old next year. My plan is to begin drawing my SS benifits as soon as I turn 62. During my Federal service I also contributed in to the TPS (Thrift Savings Plan). In addition to that, I also have a regular IRA account. 

 

g

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My husband and I both took our SS at 63 and have been retired for a year. We also have pensions so have not had to touch our 401K's. I feel that no one knows how long they will live and if one or both of us die the survivor  or our kids will at least get the 401k money.  SS end at death.

 

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Honored Social Butterfly


@brooker50 wrote:

My husband and I both took our SS at 63 and have been retired for a year. We also have pensions so have not had to touch our 401K's. I feel that no one knows how long they will live and if one or both of us die the survivor  or our kids will at least get the 401k money.  SS end at death.

 


Being able to retain the 401k funds untouched it great...  did it change your decisions of life insurance?

Life's a Journey, not a Destination" Aerosmith
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If you file when you have children in highschool under age 18 you get money for them also.  However, if you wait to file you will lose this benefit if they are now older than 18 when you file; .  Thus, I took mine early it was Much better than waiting!


@Richva wrote:

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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dj5891 said:

_________________________________________________________________________________

If you file when you have children in highschool under age 18 you get money for them also.  However, if you wait to file you will lose this benefit if they are now older than 18 when you file; .  Thus, I took mine early it was Much better than waiting!

___________________________________________________________________________________

You have got me confused now.  I am familiar with survivors benefits for children under 18 (or until they graduate from H.S.) if a parent dies.  Also,  children of all ages can receive disability benefits if they are disabled,  either physically or mentally.  

But if a worker is filing for benefits under the old age fund (retirement) I have never heard of receiving additional benefits if he/she has children under 18.  Or children of any age,  for that matter.     

Could you please elaborate on this?   I am sure others here would like to know.   

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I think dj5891 has to be talking about either a survivors benefit or even disability when there are young children still dependent - There is nothing under the Old Age SS Benefit that causes an adjustment for SS. 

 

 

It's Always Something . . . . Roseanna Roseannadanna
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I'm using easy numbers to make things comprehensible only.
Say your ss$ per month is $1000.taken @ 63 rather than 66.
The 36 pmts come to $36,000. Do what ever you want with
This money. FOR 3 YEARS!
At 66 you would get approx. $1430,or $430/mo.more if you had waited.
Divide $36,000 by $430= 84 pmts for you to catch up even with early(age63)
Payouts. 84 divided by 12= 7 YEARS. THATS A LOT OF YEARS TO WAIT.
TO BRAKE EVEN! And remember you enjoyed 3yrs of control of YOUR $$$!
As simple as this seems it is a good example. If you invested that $36K and
Made $,you would even be better off to take the $ at 63yrs!
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@jp6340 wrote:
I'm using easy numbers to make things comprehensible only.
@SAY your ss$ per month is $1000.taken @ 63 rather than 66.
The 36 pmts come to $36,000. Do what ever you want with
This money. FOR 3 YEARS!
At 66 you would get approx. $1430,or $430/mo.more if you had waited.
Divide $36,000 by $430= 84 pmts for you to catch up even with early(age63)
Payouts. 84 divided by 12= 7 YEARS. THATS A LOT OF YEARS TO WAIT.
TO BRAKE EVEN! And remember you enjoyed 3yrs of control of YOUR $$$!
As simple as this seems it is a good example. If you invested that $36K and
Made $,you would even be better off to take the $ at 63yrs!

Gotta tell ya, I love the way your mind works.  I am starting to think I should take it at 63 anyway but one thing to consider is taxes. My wife will still be working until I hit 65 anyway so Uncle Sam will get more of my checks. Still, I like your logic. 

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I've been studying my situation for retirement for a couple of years.  Using Flexible Retirement Planner, you can input when you get social security.  I have a pension, TSP, spouses pension, my SS and spouses SS.  For me, the planner shows that if I plan to start drawing at 62, I can live off a higher amount with a high Probability of success (POS).  I set a goal of 99% POS.  Delaying SS reduced my 99% POS spending by several thousand per year.  Now I know that there are benefits of waiting but if you were guaranteed a reasonable interest on your money, you would be better off taking it as soon as possible and invest it till you needed it.  The break even point presented in previous responses does not include any interest gained on SS invested until you needed it.  If you can gain enough interest on that money, there is no break even point.  I don't remember what the interest rate was but I don't think it was that high (~3%).  But there is always a risk of losing that money hence a reward for waiting.

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   You've done a bunch of planning for retirement, so you know there is no 'one size fits all'.   It's not simply about getting payback at a certain age,  it's your entire financial picture and expectations. How much do you want to spend now (for whatever activities you want in retirement) versus what is realistic for long-term finances?  Do you anticipate some extra expenses right after retirement for remodeling your house, or traveling? Do you want to wait on anything (expense wise) until you're eligible for full SS, or do you want to do some things now. If you take SS out early, how is your long term income/expense picture?

   There is as much 'personal choice' in this as actuarial stats, to me (while being 'realistic' about long-term finances).  

   However, if pressed for a short answer, I'm waiting until I get full benes, but I'm not in a situation where I need the money now. So, easy for me to say wait.  

     


"...Why is everyone a victim? Take personal responsibility for your life..."
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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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@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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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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Re: Taking Social Security at 63 or 66

 

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.

-----------------------------------------------

Not so....  I took SS at age 62 and by age 66 will have collected over $78,000 not including my personal retiremen which drives this amount to $98,000.  My break even point is 86 years old. 

 

If you think SS will be available in the future???  Pleae explain how so, since America has a debt of  over 17 trillion dollars... which it can not pay back....

 

Most do not understand how large a billion is much less a trilion dollars.  If you count a billion one dollar bills, one every second... it will take over  31.7 years non-stop to count the billion dollars. 

 

The US financial system will collaspse as will the world's financial system....  The only unknow is when....

 

Take your SS payments as soon as you can and pray that the US financial system stays intact as long as it can.... 

 

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Regular Social Butterfly

"by age 66 will have collected over $78,000 not including my personal retiremen which drives this amount to $98,000.  My break even point is 86 years old. "

 

Sorry,   not getting you.     What do you mean by personal retiremen (t)   ?  What Part of social security is that?   How did you arrive at such a high break even point,   86 years old?   Not aware of any calculators that would compute the age that high. 

 

Splain,   Ricky !   

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Age you take Soc Security depends on need and life expectancy.  Heres the math: Figure the amount you are foregoing by waiting til a later age, including upward annual adjustments and earnings on the accumulation.  This is a negative amt since it hasn't been received.  Project how many months at the higher age rate including upward adjustments before you get back to "even", earn the amt you opted not to receive.  This is the age you will have to attain to benefit for waiting.

 

Say you're eligible at age 62 for 1,000 a month, 12,000 for the year.  Let's say you can put that away and earn 3% annually through interest and cost of living adjustments. Your balance at the end of 5 years is 65,621.

 

Let's further speculate that you can now get 1,500 a month or 18,000 a year because you're 66.  Let's be really generous and add on another 3% for cost of living adjustments. Roughly, you're talking about 3 1/2 years until you get back to "even" (make up for the payments you didn't take early).  You're about age 70 1/2.

 

My question:  Are you willing to bet you're going to live 8 1/2 more years?  Are you feeling lucky? And what if Social Security Privatization comes along and you're at the mercy of your own investing prowess?  All bets are then off.  And are you going to enjoy having the spending power of the Social Security income for 5 more years?  This takes you to age 75 1/2.  

 

My recommendation:  Take the money at the earliest age even if you're still working and have to give some of it back--just factor this into your calculation--because none of us have a written guarantee we will attain a certain age.  Also you may be in better physical shape to enjoy the extra income in your sixties than in your mid seventies.

 

Good luck! 

 

 

 

 

 

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