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Re: Taking Social Security at 63 or 66

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Message 61 of 72

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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Re: Taking Social Security at 63 or 66

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Message 62 of 72
Is that for both widows and widowers?
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Re: Taking Social Security at 63 or 66

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Message 63 of 72
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!
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Re: Taking Social Security at 63 or 66

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Message 64 of 72

   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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Re: Taking Social Security at 63 or 66

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Message 65 of 72

@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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Re: Taking Social Security at 63 or 66

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Message 66 of 72

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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Re: Taking Social Security at 63 or 66

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Message 67 of 72

@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

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Message 68 of 72

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

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Message 69 of 72
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.
* * * * It's Always Something . . . Roseanne Roseannadanna
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Re: Taking Social Security at 63 or 66

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Message 70 of 72
draw poker said . . . .
(Widows get 71.5% at age 60, then it goes up by increments to 100% at age 66.)

****************************************
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?
* * * * It's Always Something . . . Roseanne Roseannadanna
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