When to start drawing Social Security

[74-911]

If we only knew how long we would live ?? My parents both died in their 50's, her parents in their 80's. Grandparents from 75 to 97 so who knows ??

My wife and I both started SS at age 66. She retired at age 55, myself at 60.
She has a nice pension, nice SS check and accumulated a substantial 401K which has been rolled into an IRA.
I have no pension but get a nice sized SS check and also have a substantial IRA rolled from a 401K,

We realistically should have no financial issues. Having a pension my wife is better off than I am in that regard.

The biggest mistake we made was not converting more of our traditional IRA's into Roth IRA's when the rules were changed in 2011 IIRC. I converted a lot into Roth IRAs but should have taken more of the tax hit then and done a lot more and it is to late now.

We both had to start RMDs last year and as a result we are having to pay more for Medicare and now 85% of our SS is taxed as ordinary income (such a deal).

I am surprised at how few people realize that SS be can be considered taxable income and the amount of income required to trigger taxation is small and was not indexed.

There is no best answer as to when to start SS but it can be much more of a complicated decision than a lot of people realize...

[fintstone]

Another reason to take it as early as possible is if you have done very well...there may be future limits based on income, changes on how cost-of-living increases are computed....or other changes to SS that can reduce the amount or end it altogether. For folks who still have a mortgage at 62 will hopefully paid most, if not all, off at 70.

I recently read a study that indicated that for about a decade, many (if they had it) actually spent more after retirement than when working...and then less (unless medical issues).

[74-911]

Originally Posted by fintstone

............I recently read a study that indicated that for about a decade, many (if they had it) actually spent more after retirement than when working...and then less (unless medical issues).

That is probably true in our case... when we retired we actually had time to do stuff.

[Crowbob]

Some people have trouble adjusting. It took me 5 solid years before I settled down. Every morning for five solid years I woke up elated not having to go to work.

There's a donut hole with early retirement that you have to plan for. You can stop working any time you want but the hole between when you stop working and when you begin drawing is larger the earlier you retire.

Say you tell the boss to shove it at age 60. There's two years before you can collect anything from SS. If you wait for FRA, 66plus, that's 6 years.

In addition, most people with pensions have to go on Medicaid at age 65. Medical care insurance cards will have to be reshuffled no matter what.

[JackDidley]

Originally Posted by Crowbob

And the WHO hoped they'd die before they got old.*

It all depends*, of course, on what you're doing at age 85. Some folks just plain 'ol get tired of living. Not happy, not unhappy but simply 'done'. That's what I'm shootin' for. At that age, it seems like the people around you are the most important they'll ever be.

Doing stuff for other people while you can really is an investment. But I do not advertise nor volunteer for anything.

Neighbor brings me cookies, another invites me to their family BBQ's. My grand kid keeps getting shoved on me. House is dusty but I dont care.

Way better than sitting in front of a computer or driving around all day so I can retire rich.




* pun alert

Fixed that for you.

[Bugsinrugs]

My advisor told me to take advantage of my wife taking her s.s. at full retirement age and me waiting until I am 70. When my wife applies for her s.s. I can apply for spousal benefits and I would get half the amount she gets. Supposedly my birthdate of 1952 is the last year that people can do this.

[p911dad]

Out of my 1965 high school class of 730, 165 and counting have already passed on. That's a significant number. Of course some passed before 62. I was shocked at my 50th reunion how many were gone. Not scientific in any way. But, if they had waited counting on collecting SS at 66 or later, Uncle Sammy would have made out. You are often healthy until you are not, seems like an obvious statement, but once in your 60's your historic life style and genetics really starts to kick in to the mortality tables. Some for the good, some for the bad.

i chose to take it at 62, I don't regret it or miss the extra money i could have had by waiting. Someone above basically said that once you are in the mid 70's a lot of energy goes out of you and the time you could have had having some adventures and fun that you couldn't afford in your 60's for lack of that extra SS cash is gone. Shoulda woulda coulda. Everyone has different circumstances

[icemann427]

Yes, Baz, you are correct in all your assumptions. I just decided that I'd rather have the income when I was younger than when I was older. Because of certain health issues, I'm guessing I will not even make it to 77, so there was no reason to wait for me...

Originally Posted by Baz

So you're saying as long as you reach the age of 77......you would make up the difference in dollars you did not get by starting your SS at 62?

Which means if you live to be 97.......you could calculate the upside of additional income you will make by waiting (difference x 20), right?

Say for the sake of discussion it's $400 per month. That's $4.8K/year (x 20) = $96K.

Quite a difference!

My Mom turns 95 next Tuesday so reaching the age of 97 is not unreasonable......

[pwd72s]

Originally Posted by p911dad

i chose to take it at 62, I don't regret it or miss the extra money i could have had by waiting. Someone above basically said that once you are in the mid 70's a lot of energy goes out of you and the time you could have had having some adventures and fun that you couldn't afford in your 60's for lack of that extra SS cash is gone. Shoulda woulda coulda. Everyone has different circumstances

At age 74, I can agree with the energy thing. Travel? Nope. Too tired for the hassles and the upset of my system...I need my routine these days. Adventure? Much more fun when in your 20's and 30's.

Bottom line...I definitely had more energy at 65 than I do at 74, and when the decline begins, it seems to increase rapidly.

Now on the money thing? All depends on the importance you attach to money...

[Crowbob]

Originally Posted by JackDidley

Fixed that for you.

Thanks, Jack.

I muddle things up when talkin 'bout my generation.

But actually I shouldn't have capitalized 'stones'. Not everything functions like it used to, you know. There was also a reference to depends which was probably not that funny, either.

[JackDidley]

Originally Posted by Crowbob

Thanks, Jack.

I muddle things up when talkin 'bout my generation.

But actually I shouldn't have capitalized 'stones'. Not everything functions like it used to, you know. There was also a reference to depends which was probably not that funny, either.

Well, the Stones and the Who both failed at that "die before I get old" thing. I guess they will just fade away.

[Baz]

Originally Posted by icemann427

Yes, Baz, you are correct in all your assumptions. I just decided that I'd rather have the income when I was younger than when I was older. Because of certain health issues, I'm guessing I will not even make it to 77, so there was no reason to wait for me...

Thanks, Icemann. For the record, I'm pulling for you to reach 100 - or more! Give it hell, bro!

[Por_sha911]

Originally Posted by tadd

Getting out more than you pay in... and we wonder why SS has problems.
No wonder we have problems when everyone is going an additional $80k over what was put in.

So, do you think it is greedy to expect to get more out of CD when it matures than when you took it out? Part of the SSI justification is that the govt was supposed to be investing that money you put in 40 years ago for you (yeah right, that's what they did). Besides, that, you are being paid back in inflated dollars that aren't worth as much.
SSI rightfully OWES you more than you put in.

[wdfifteen]

Originally Posted by Bugsinrugs

My advisor told me to take advantage of my wife taking her s.s. at full retirement age and me waiting until I am 70. When my wife applies for her s.s. I can apply for spousal benefits and I would get half the amount she gets. Supposedly my birthdate of 1952 is the last year that people can do this.

Interesting strategy. I’ll look into this. The rules can be damn arcane.

[fintstone]

Originally Posted by Bugsinrugs

My advisor told me to take advantage of my wife taking her s.s. at full retirement age and me waiting until I am 70. When my wife applies for her s.s. I can apply for spousal benefits and I would get half the amount she gets. Supposedly my birthdate of 1952 is the last year that people can do this.

Yes, that is filing a "restricted" application for spousal benefit only. They changed the law in 2015 to prevent anyone born after 1 Jan 1954 to do this...so you made it by over a year. You can take a spousal benefit at Full Retirement Age (FRA) which is half of your spouse's FRA benefit, when you reach FRA at 66. Spousal benefits max out at FRA, waiting longer does not add/help. You could file a “restricted” application, just for spousal benefits, at FRA; collect half of hers and then switch to our at 70 (assuming it is larger than half your wife's). Your own retirement benefits would continue to grow 8% a year until 70.

[aigel]

Originally Posted by Baz

My Mom turns 95 next Tuesday so reaching the age of 97 is not unreasonable......

No offense BAZ, but woman have significantly higher life expectancy than men. Usually you would look to your male family to get an idea. Father, his brothers, grandfathers and their brothers. Of course often those guys had really bad lifestyles with smoking etc. so it may not be easy to gauge.

Cheers, G

[KFC911]

Originally Posted by pwd72s

Actually, it was the Who with the "hope I die before I get old" line...

Yup..

Hey...You...Get off of my lawn!

Those are the Stones

I ran the numbers....only way it works for me is if I never paid a $ in, start collecting at 35, or wait until 85...give or take

[dmcummins]

I plan on taking mine at 62. I’ve been retired since 50, but the after tax money is starting to run a little low. But the wife has a nice pension and my 401k and now IRA has grown nicely over the years.

I’m planning on getting rid of the Boxster at that point and buying myself a nice car with the SS checks.

[Bugsinrugs]

Originally Posted by fintstone

Yes, that is filing a "restricted" application for spousal benefit only. They changed the law in 2015 to prevent anyone born after 1 Jan 1954 to do this...so you made it by over a year. You can take a spousal benefit at Full Retirement Age (FRA) which is half of your spouse's FRA benefit, when you reach FRA at 66. Spousal benefits max out at FRA, waiting longer does not add/help. You could file a “restricted” application, just for spousal benefits, at FRA; collect half of hers and then switch to our at 70 (assuming it is larger than half your wife's). Your own retirement benefits would continue to grow 8% a year until 70.

Just to clarify about your comment about spousal benefits maxing out at FRA and waiting does not add/help... Am I able to apply for half of hers now since I am 66 or do I have to wait until she reaches FRA? She is currently 64.

[Halm]

Originally Posted by Bugsinrugs

... Am I able to apply for half of hers now since I am 66 or do I have to wait until she reaches FRA? She is currently 64.

IMHO, this thread is great for helping figure our when you might want to start taking benefits. But the HOW to take them may not be as straight forward. I would suggest schedule a meeting at your local Social Security office to discuss the options that meet your objectives.

As an example, here is a copy and paste from an article I found on spousal benefits:

"If you collect a spousal benefit and you begin collecting this benefit before you reach FRA, your benefit will be permanently reduced."

HTH