View Full Version : Just turned 62, to SS or not to SS
Simplemind
6-5-18, 11:39am
Would love to hear your thoughts on taking it at 62 or waiting. My husband is 63 and currently on SS disability. His long term disability insurance runs out when he is 66. We had figured on me waiting until I was 65 so that when his insurance ran out we could replace it with my SS. I'm still feeling like I am leaving money on the table by not taking it at 62. I am paying $900 for medical insurance and who knows how much that is going to go up between now and when I can get medicare at 65. Decisions, decisions..
I think the received wisdom is that it's best to wait to collect SS until you are full retirement age unless you have some compelling reason not to.
I am your age, Simplemind. I am not taking it yet because I still can earn over 16000, and if I took it, they would reduce it one dollar for every two dollars I earned. (I think.)
So are you still working, and do you make more than 16000?
I know what you mean about leaving money on the table, although supposedly you break even at about 79 if you wait to take it.
Teacher Terry
6-5-18, 12:22pm
Because I make 22k/year I am waiting until 66 which is FRA.
I don't work (retired with pension at 55) and don't need the money at the moment. We live well within our means. So I was wondering if it would be best to take and invest.
How long to you plan to live?
I think I’ll take mine at 62 and invest the money. I don’t need the money and never planned on needing it. So I’d rather have it now, if i live longer than the average it may cost me a little in the end. But by then it probably won’t matter. And who knows what changes may be in store when it starts running out of money? Means testing or more taxes for those who saved and don’t need it?
Our answer is the same as dmc. It all is a gamble and we figure out taxes and extra Medicare payments will be greater in outward years due to the mandatory withdrawals from tax sheltered accounts at age 701/2. So we took it early to invest. My hubby is a take it now kind of person. I might have left it for awhile.
SS is 70% higher at age 70 than age 62. What is longevity in your family?
It's a calculation only you can determine what's best for you.
Both of my parents died in their mid 80's. So if things calculate out that you break even at about 79-80yrs old, there are only a few years where it would make a difference. Perhaps investing it for those 8 years would make up for that? In almost every other case in my life I would delay gratification for a bigger reward but when we are getting to the end of things and life has shown me how unpredictable it can be.... I wonder about leaving money on the table. I don't envision needing to take any of my own money until it is mandatory at 70, at least if things continue as they are at present. We lead a very simple life.
Simplemind
6-11-18, 9:42pm
Finally got a chance to talk to our advisor and he said taking all things into consideration, to start taking it now at 62 and invest it until we need to use it. We can then leave our investments to continue to grow.
Teacher Terry
6-11-18, 9:47pm
Sounds good
I just put together a spreadsheet based on what the SSA says my benefits would be if I collected at 62(early retirement), 67 (full retirement) and 70 (max retirement age). I'm 50 now and my numbers were based on the assumption of not working any more, but that should be irrelevant since the amount of benefit is a set percentage of one's "full retirement age" benefit.
If I stop working today my benefit is projected to be $1710 if I start collecting at 62, $2509 if I start collecting at 67, and $3163 if I hold off until 70. Using net future value calculations and assuming I could invest the money at 4% if I start collecting at 62 I'll have just over $217,000 at age 70. If I start collecting at 67 I'll have almost $93,000 by age 70.
I haven't worked up the net future value calculations of the $217,000 or $93,000 but even assuming that I didn't earn any interest at all I could live 12.5 years from age 70 and would come out the same whether I started taking benefits at age 62 or age 70. Using the same assumptions if I start collecting at 70 instead of 67 it would take 11.8 years before I would come out behind if I start collecting at 67 but save the money. Basically social security's actuaries assume that you likely live into your early 80s. Someone who dies earlier comes out ahead with early collection. Someone who lives super old probably loses out overall if they took the early benefit.
Assuming I would continue to earn interest will push the point of "should have held off from taking benefits" even further out. The other unknown is what rate of return I could actually expect during the years I was collecting early but just investing the money. Getting closer to 5% would make taking early benefit a no brainer. Getting closer to 3% would make holding off a better deal. One can only guess what the real return will end up being, so that kind of makes it a gamble. But at the end of the day it probably doesn't really matter since the difference seems pretty small.
It is hard for me to ever imagine retiring at 62 when my benefit would only be $1245 per month.
Ultralight
6-12-18, 6:09am
It is hard for me to ever imagine retiring at 62 when my benefit would only be $1245 per month.
Well, don't do anything fun that costs money until you've saved enough for retirement.
I am more in the longevity insurance camp than the breakeven camp on this.
My wife is younger than me, and has a less robust earnings record. In our case, it makes a lot of sense for me to wait and her to take it early. I view delaying SS as a relatively cheap inflation adjusted annuity with a mild tax benefit.
Ultralight
6-12-18, 6:59am
My wife is younger than me, and has a less robust earnings record.
I am curious. Why do these things matter?
I tend to date women who are older than me and who make more money. If I marry again, this will likely be the case. Would your strategies apply to me and why? Thanks.
Ultralight
6-12-18, 7:30am
It matters because when I'm dead my wife gets the larger of the two benefits.
If you adopt the sugar mama strategy, be sure to be married at least ten years.
Okay, good info. I appreciate it.
May I ask, what is the age gap of you and your wife? Is worrying about you walking through the pearly gates way before your wife does seem warranted?
Okay, good info. I appreciate it.
May I ask, what is the age gap of you and your wife? Is worrying about you walking through the pearly gates way before your wife does seem warranted?
Five years. Plus they tend to live longer due to female privilege. I want to leave this life knowing she'll be able to tip the cabana boys generously.
I am more in the longevity insurance camp than the breakeven camp on this.
My wife is younger than me, and has a less robust earnings record. In our case, it makes a lot of sense for me to wait and her to take it early. I view delaying SS as a relatively cheap inflation adjusted annuity with a mild tax benefit.
I'm definitely waiting, although I was tempted to take it and use it to pay off the rest of my debt and then sock it all away. DH is getting his now, which helps. In terms of longevity, he has more bad habits and more medical conditions than I do, so unless I have a surprise cerebral hemorrhage like my mother, uncle and grandmother did at early ages, I'll probably outlive him. I was hoping that I could sell my house in NJ, pay off this house in VT, and live off of SS. If I can't live off of SS I can't retire. To me, a portfolio is merely a place to display all the receipts for my stupid purchases over the years.
Ultralight
6-12-18, 7:47am
Five years. Plus they tend to live longer due to female privilege. I want to leave this life knowing she'll be able to tip the cabana boys generously.
Thoughtful of you.
Five years is not a huge gap, but still very thoughtful of you.
Thoughtful of you.
Five years is not a huge gap, but still very thoughtful of you.
When you’re a family guy, you try to consider the long term. College, estates, stuff like that. I’m hoping to leave enough pension and SS income behind that they will hardly notice I’m gone.
The other unknown is what rate of return I could actually expect during the years I was collecting early but just investing the money. Getting closer to 5% would make taking early benefit a no brainer. Getting closer to 3% would make holding off a better deal. One can only guess what the real return will end up being, so that kind of makes it a gamble. But at the end of the day it probably doesn't really matter since the difference seems pretty small.
DW and I (okay, mostly I) have been reviewing our retirement savings plans in the new economic climate. What I've been reading across a variety of sources (both bullish and bearish) is that even the standard 4% withdrawal rate may be a tad optimistic these days. We're shooting for 3.5% as a hedge. I don't remember what our SS plan is atm but we're also looking for a financial planner who will give us a second (well, third, actually) opinion on our plans so we'll review that then.
iris lilies
6-12-18, 8:49am
Finally got a chance to talk to our advisor and he said taking all things into consideration, to start taking it now at 62 and invest it until we need to use it. We can then leave our investments to continue to grow.
My knee jerk reaction is that of course your advisor will advise you to take it now to invest for later reward.
The cynical reason I have is that it is more money for him to handle, i.e. more commissions.
The less cynical reason is that these guys believe wholeheartedly and with blinders on that what they do is important and how they act will make your money grow.
For me, I like diversifying my asset growth potential and so
I have kept my Social Security earnings growing in the Social Security pot, away from the grubby little hands of my investment advisors. I will probably start pulling Social
security income next year at age 65.
I haven’t checked in a while, but I believe I’ll only get around 20k if I take it at 62. I quite working just before turning 50 so I’ve got quite a few 0’s for many years. Taking it next year at 62 would keep me from withdrawing that amount from my own accounts, thus keeping it invested. My wife has a pension so this would have no effect on her.
There is also the concern that due to the shortfall of SS funds that things may change in the future. And those of us that saved and prepared for retirement will either see our ss taxed higher or reduced to fund the others.
So for me it still makes sense to take it early, keep other funds invested. If I live much longer than expected and my rate of return is low. It will cost my heirs a little. But it’s really not a big deal either way.
I just applied for SS Benefits yesterday and will begin collecting later this year at 63. As dmc noted, that's a couple thousand $'s per month I won't need to take out of my retirement accounts.
frugal-one
6-12-18, 10:07am
I just applied for SS Benefits yesterday and will begin collecting later this year at 63. As dmc noted, that's a couple thousand $'s per month I won't need to take out of my retirement accounts.
Plus, they are saying SS is solvent until 2026. IMO take it while you can. The money may be used to fund the military later???? They have robbed from it before!
Teacher Terry
6-12-18, 10:16am
Making sure each spouse is secure if one dies is the way to go. Both of us took reduced pensions so we could leave them to one another. Both of our SS is so minuscule due to WEP that we will each take at our FRA. Thankfully our small pensions are COLA. In the 1970’s I worked in the benefits department for a large steel company and men would tell their wives they had taken a smaller pension so if they died they would receive one too. Then the asshat would die and I would have to tell a sobbing widow between the ages of 50-60 that he lied and there was nothing. Most of these women had never worked. They would get really upset and ask me at 21 how they were supposed to live. I love that now each spouse must sign off on the others pension if a survivor benefit is not chosen.
Simplemind
6-12-18, 11:16am
IL it was not my advisor that suggested I take it early to invest, that was my idea. He had suggested that I wait until 66 if we didn't need it. We talked about where DH and I were with our monthly expenditures right now. We live comfortably below what we are bringing in with his SS disability and long term disability insurance and my pension. I'm 62 and he is 63. He loses his disability insurance at 66 so I had planned on at the very least taking it at 65 to replace his lost insurance. He has medicare and I'm paying $900 a month for medical which is our largest expense. I don't know what medical is going to do next year so that is the biggest factor that could pop us out of the comfort zone between now and 65. Expenses will go down once I get on medicare and hopefully we would still bob along until 70 when we would start minimum distribution from our investments.
Simplemind
6-12-18, 11:34am
Teacher Terry that had to be horribly awkward. More than once when somebody died where I worked the spouse found that they had never updated the beneficiary information when they married and they weren't getting anything. Details, details. In my case I did take the larger pension amount because I was going early at 55. At that time DH was making great money and bennies, loved his work and planned to work till 65 at least. People questioned me leaving early and taking less but I knew I was done and a lot could happen between 55 and full retirement at 59. Well.... his stroke 6 months after I retired changed everything. I'm thankful that we were debt free when I retired because we lost his income and benefits when he lost his job. It took about a year to get him approved for SSDI and that with the long term disability insurance almost made him whole for income pre stroke. We were just lacking medical insurance.
We discussed me taking the larger amount but felt it was right for us now and that if I should pre-decease he would be the beneficiary of my deferred comp account which I had spent years maxing out contributions and had more money in that than my pension plan. With that and his SSDI he will be more than OK.
Teacher Terry
6-12-18, 11:43am
It was horrifying for everyone involved. It was 40 years ago and I never forgot it. My dad did the right thing by my mom and wanted her covered figuring he would die first which he did. Despite great planning unexpected things happen but glad it worked out fine financially for you both.
Well, don't do anything fun that costs money until you've saved enough for retirement.
I am prepared to work until I am seventy. Based on family history I should then be able to enjoy 20 good years of retirement before I start to lose it physically, mentally, or both. My parents are both very active doing landscaping for themselves, neighbors, and their church among other things. My grandparents and great-grandparents also stayed strong and active through their eighties.
ApatheticNoMore
6-12-18, 6:13pm
considering how bad some of the jobs are out there that alas I must consider I think if i was 62 now I'd collect now. Because really jobs that make you grit your teeth to even have to consider. But since I'm not 62 I must do what people with no other income (savings some but not income) but temporary unemployment do - which is desperately seek work.
Teacher Terry
6-12-18, 7:10pm
I really hope that your plan works for you. I have seen a lot of tragic things happen and lost 3 friends between 59-67. All people that took care of themselves.
I personally hope to be able to work until 60 (ten more years) but then retire while I hopefully still have many years of active enjoyable life ahead of me. The last thing I want to do is end up like a good friend of my father. He retired in his early 60's and on Saturday morning, the day after his last day, he was cleaning out the gutters on his house, fell off the ladder and cracked his head wide open. Never even collected a single pension check. Yes, that could happen at any age, even before retirement, but it was a harsh reminder which I've never forgotten that no one knows what tomorrow will bring. I'd like to be in the "die broke" category and don't intend to work any longer than I need to to have a realistic shot of being in that category.
I personally hope to be able to work until 60 (ten more years) but then retire while I hopefully still have many years of active enjoyable life ahead of me. The last thing I want to do is end up like a good friend of my father. He retired in his early 60's and on Saturday morning, the day after his last day, he was cleaning out the gutters on his house, fell off the ladder and cracked his head wide open. Never even collected a single pension check. Yes, that could happen at any age, even before retirement, but it was a harsh reminder which I've never forgotten that no one knows what tomorrow will bring. I'd like to be in the "die broke" category and don't intend to work any longer than I need to to have a realistic shot of being in that category.
I worked with a good man who retired and died the next day at breakfast. He was such a responsible person that I figure he was just holding on until he had fulfilled his obligation to the company. I took my SS at 62.
I worked with a good man who retired and died the next day at breakfast. He was such a responsible person that I figure he was just holding on until he had fulfilled his obligation to the company. I took my SS at 62.
Everybody has their story about the guy dying on his first day of retirement. For me, the lesson is not so much to quit working as soon as possible so much as to gravitate toward work that isn’t so awful that you look at retirement as a sort of salvation you can be robbed of by dying too soon.
goldensmom
6-13-18, 1:10pm
I retired with a pension at age 49. I applied for SS at 62 and as my husband is still employed and we have my pension, I put my SS into our saving account. My reasons for applying at 62 was not financial or the fact that I may die tonight but simply because I wanted to.
Teacher Terry
6-13-18, 2:02pm
I was fortunate enough to pick and train for a career I loved. I didn’t always love the people in charge but loved the work. My poor MIL also died right after retiring. She had trips planned she never got to take.
Everybody has their story about the guy dying on his first day of retirement. For me, the lesson is not so much to quit working as soon as possible so much as to gravitate toward work that isn’t so awful that you look at retirement as a sort of salvation you can be robbed of by dying too soon.
+1
I do think it's a weird phenomenon. I happen to know of three of them. And my take-away was that for some people, retirement, to your body, might be just like when you get a cold as soon as you go on vacation. I really believe that when you have a driving purpose, your body responds by doing what it can to stay healthy.
I am signing up the moment I am able, for reasons similar to dmc's.
I "retired" when I was 36, since then most years I have had no contributions, or very minimal ones from the small amounts paid for some of my public service positions, so while my contributions during my peak years were huge, I'm wondering if I'll get anything at all.
iris lilies
6-13-18, 2:14pm
+1
I do think it's a weird phenomenon. I happen to know of three of them. And my take-away was that for some people, retirement, to your body, might be just like when you get a cold as soon as you go on vacation. I really believe that when you have a driving purpose, your body responds by doing what it can to stay healthy.
or maybe those of use with driving purpose get it, the purpose, because our bodies are healthy and are not expending resources fighting off disease and injury.
The two are intertwined, thats for sure.
I am signing up the moment I am able, for reasons similar to dmc's.
I "retired" when I was 36, since then most years I have had no contributions, or very minimal ones from the small amounts paid for some of my public service positions, so while my contributions during my peak years were huge, I'm wondering if I'll get anything at all.
They would not have been all that huge, given the cap on taxable earnings. The payout formula also favors low earners, so your ROI may look much better than for a typical 125K per year salaryman.
They would not have been all that huge, given the cap on taxable earnings. The payout formula also favors low earners, so your ROI may look much better than for a typical 125K per year salaryman.
Yes, they were capped contributions as I recall for the last 10+ years of my paying into the system. Which seemed huge at the time.
The past 10 years or so though, my SS contributions are off of a subject income of < $10k/year I suspect.
Simplemind
6-14-18, 9:58pm
After looking at all the pros and cons.... signed up for SS today. Woohoo !!
iris lilies
6-14-18, 11:28pm
After looking at all the pros and cons.... signed up for SS today. Woohoo !!
Ok, thats good!
Teacher Terry
6-14-18, 11:34pm
You guys you can’t equate health with not having a purpose. That is so wrong. You never know when you will be struck with a serious illness.
You guys you can’t equate health with not having a purpose. That is so wrong. You never know when you will be struck with a serious illness.
I don’t think that was the point. Nobody’s invulnerable, but I think a sense of purpose or meaning carries a definite survival advantage. It doesn’t need to be from your work, but could be.
Victor Frankl made a powerful argument for that view in “Man’s Search for Meaning”.
Seems to me that "purpose" is a nebulous thing. We took our SS at 62. Perhaps if I had had a career that made me jump out of bed with glee every morning, I would have postponed.
Seems to me that "purpose" is a nebulous thing. We took our SS at 62. Perhaps if I had had a career that made me jump out of bed with glee every morning, I would have postponed.
Purpose doesn't have to be work-related, but a lot of people find their identity and sense purpose in their work and career. But it can be found anywhere--in being there for family, or in crossing things off a bucket list, or finishing that quilt or that book or whatever.
iris lilies
6-15-18, 9:40am
Seems to me that "purpose" is a nebulous thing. We took our SS at 62. Perhaps if I had had a career that made me jump out of bed with glee every morning, I would have postponed.
I consider myself to have a strong sense of life purpose. I am not being a smart aleck when I say my life purpose is to have fun. My life purpose is to pursue the things that interest me and give me pleasure.
It really is that simple.
iris lilies
6-15-18, 9:41am
I don’t think that was the point. Nobody’s invulnerable, but I think a sense of purpose or meaning carries a definite survival advantage. It doesn’t need to be from your work, but could be.
Victor Frankl made a powerful argument for that view in “Man’s Search for Meaning”.
yes, this.
Seems to me that "purpose" is a nebulous thing. We took our SS at 62. Perhaps if I had had a career that made me jump out of bed with glee every morning, I would have postponed.
I think most of the things that make life worth the trouble of living are fairly nebulous. Purpose. Love. Faith. Honor. Gratitude. Contentment. Wonder. Pretzels. Stuff like that.
I haven’t necessarily leapt out of bed eager to work every day, but when I put it in the context of building a future for my family, it’s been enough to get me moving.
Yes, they were capped contributions as I recall for the last 10+ years of my paying into the system. Which seemed huge at the time.
The past 10 years or so though, my SS contributions are off of a subject income of < $10k/year I suspect.
THe social security benefit is calculated by averaging the top 35 years of a persons earnings, adjusted for inflation to current amounts. If you maxed out inputs for 10 years that puts your average somewhere around what an average wage earner would have over the course of their lifetime, so your benefit will likely be in the same range as an average person would get despite not having paid much in for a lot of years.
Teacher Terry
6-15-18, 10:38am
Yes L I have read that book and many others from people that survived.
Even if I would have continued working for 10 or 15 more years the ss payment was not that much more. Definatly not enough to continue paying in. I also had several years where I was maxed out. Not sure if there were 10 years of them. I definatly noticed the difference in my paycheck.
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