When to start drawing Social Security

[Alfasrule]

Bummed I've been paying into the system for 44 straight years. I'll be 57 this year. Had a real job at 13 a my High School to pay for my tuition. When I worked for IBM for 24 years I reach the cap for many years, as well as today. Should be a clause if you paid into the system for "X" amount of years.

[sammyg2]

I will start drawing SS at age 62.
I've done the math and I stand the best odds of getting more of MY money back with that strategy.

[KFC911]

Originally Posted by sammyg2

I will start drawing SS at age 62.
I've done the math and I stand the best odds of getting more of MY money back with that strategy.

Yers got spent...mine too . I think I'll get a few pennies back for every dollar starting at 62 also...see no point in delaying...

[Seahawk]

Originally Posted by sammyg2

I will start drawing SS at age 62.
I've done the math and I stand the best odds of getting more of MY money back with that strategy.

Even with the penalty if you earn above $18k in salary from a job?

You don't seem to be the type to not work.

[KFC911]

Originally Posted by Seahawk

Even with the penalty if you earn above $18k in salary from a job?

You don't seem to be the type to not work.

Honestly....can you expand Paul...I dunno about this stuff. I'm the same age as Sammy, 57, and never really figured SS into my planning anyways...

Sammy...you too...'splain it

[fintstone]

Another consideration is if you don't start to spend 401K early is that if that you must start at 70.5 and then draw it out fast (schedule to correspond withe expected lifespan). If you have fully funded it for a lifetime of work (and kept it is an S&P index)...you may have about $1.5M at 70. You would probably have to draw out about $8-10K a month to even come close to spending it. It seems that unless your other assets are gone and you have created debt, a tired old dude would struggle to spend it...unless you are trying to fund your kids retirements.

[stevej37]

Originally Posted by fintstone

Another consideration is if you don't start to spend 401K early is that if that you must start at 70.5 and then draw it out fast (schedule to correspond withe expected lifespan). If you have fully funded it for a lifetime of work (and kept it is an S&P index)...you may have about $1.5M at 70. You would probably have to draw out about $8-10K a month to even come close to spending it. It seems that unless your other assets are gone and you have created debt, a tired old dude would struggle to spend it...unless you are trying to fund your kids retirements.

And also, if drawing a larger amt from the 401k, combined with SS will lead to being in a higher tax bracket.

[icemann427]

Originally Posted by KC911

Honestly....can you expand Paul...I dunno about this stuff. I'm the same age as Sammy, 57, and never really figured SS into my planning anyways...

Sammy...you too...'splain it

KC,

Until the year you turn 66, you can only make $16,920 in earned income before you lose one dollar of SS benefit for each two dollars over that limit you earn. Once you turn 66, the earned income limit is raised to $44,880 before you are penalized. As well, the older you get, there are certain ages where the earned income limits change, too.

[Seahawk]

Originally Posted by KC911

Honestly....can you expand Paul...I dunno about this stuff. I'm the same age as Sammy, 57, and never really figured SS into my planning anyways...

Sammy...you too...'splain it

FRA is the key. The penalties for earning more than $17k a year before FRA makes taking SSN before 66.4 untenable for me. Makes no sense since I will continue to work and earn enough to skew my SSN benefits.

https://faq.ssa.gov/link/portal/34011/34019/article/3739/what-happens-if-i-work-and-get-social-security-retirement-benefits

You can get Social Security retirement benefits and work at the same time. However, if you are younger than full retirement age and make more than the yearly earnings limit, we will reduce your benefit. Starting with the month you reach full retirement age, we will not reduce your benefits no matter how much you earn.

We use the following earnings limits to reduce your benefits: If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit.

For 2018 that limit is $17,040.

In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different limit, but we only count earnings before the month you reach your full retirement age.

If you will reach full retirement age in 2018, the limit on your earnings for the months before full retirement age is $45,360.

Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings.

[sammyg2]

Originally Posted by Seahawk

Even with the penalty if you earn above $18k in salary from a job?

You don't seem to be the type to not work.

I've tried to retire twice but it didn't take, third time is a charm
I'll be working at something but it won't be a real job. I could turn tinkering in the garage into a full time thing.
I never seriously counted on social security and planned for retirement accordingly so it'll be not much moire than icing on the cake.
Did I mention the wife is younger than I am and isn't planning on retiring anytime soon?

[sammyg2]

Another thing, the bastages decided that folks like me and KC won't reach FRA until age 67.
Ain't no way I'll be working at 67, The docs said I would be dead five years ago (they were wrong).

I spent 40 years scrimping and saving and NOT spending money on stuff I want so I could have a great big pile O'money to dive into like scrooge McDuck.

[Por_sha911]

I've done the math and I would prolly end up with more from SSI if I retire early.
I imagine most folks would be in the same shoes but the real questions are:
- do you want to live on less to just to say you collected more back from SSI before you kick the bucket?
- have you figured what healthcare is going to cost? I have and my employer has such awesome benefits including paying the majority of a gold level healthcare plan. I don't want to walk away from that until I am at least at full retirement benefit level.

[fintstone]

Originally Posted by Seahawk

FRA is the key. The penalties for earning more than $17k a year before FRA makes taking SSN before 66.4 untenable for me. Makes no sense since I will continue to work and earn enough to skew my SSN benefits.

https://faq.ssa.gov/link/portal/34011/34019/article/3739/what-happens-if-i-work-and-get-social-security-retirement-benefits

You can get Social Security retirement benefits and work at the same time. However, if you are younger than full retirement age and make more than the yearly earnings limit, we will reduce your benefit. Starting with the month you reach full retirement age, we will not reduce your benefits no matter how much you earn.

We use the following earnings limits to reduce your benefits: If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit.

For 2018 that limit is $17,040.

In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different limit, but we only count earnings before the month you reach your full retirement age.

If you will reach full retirement age in 2018, the limit on your earnings for the months before full retirement age is $45,360.

Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings.

Yes, it is double whammy if you take it early and keep working (and make good money). It reduces your benefit permanently each year plus reduces what you get $1 for every $2 you aren above $17,040.

[ckelly78z]

I don't plan on making more than $17,000 of recordable/taxable money per year after I retire early. I have all sorts of cash paid projects that can be done, and like to tinker on fixing things in my shop.

With no debt, few expenses, and a simple life, I will have plenty for my wife and I, and actually live better than we are now.

[Robert Coats]

Originally Posted by KC911

Yup..

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

Those are the Stones (

One day, in the year 1973, Mick Jagger and Dennis Weaver went to the Playboy Mansion for a party. Once the boys were formerly introduced to Hugh Hefner, the three of them began to frolic with the Playgirls. Dennis Weaver somehow ended up kissing Hugh Hefner's wife, and Hefner caught them in the act. Hugh Hefner was livid, and jumped upon Dennis Weaver, pounding, punching, and kicking Mr. Weaver's ass. Hef then jumped on top of Dennis Weaver, and while sitting on his chest, continued to beat him to a pulp. Having been witness to all of these shenanigans, Mick Jagger started belting out in song:

"Hey! Hugh! Get off of McCloud!'

[JackDidley]

Originally Posted by Robert Coats

One day, in the year 1973, Mick Jagger and Dennis Weaver went to the Playboy Mansion for a party. Once the boys were formerly introduced to Hugh Hefner, the three of them began to frolic with the Playgirls. Dennis Weaver somehow ended up kissing Hugh Hefner's wife, and Hefner caught them in the act. Hugh Hefner was livid, and jumped upon Dennis Weaver, pounding, punching, and kicking Mr. Weaver's ass. Hef then jumped on top of Dennis Weaver, and while sitting on his chest, continued to beat him to a pulp. Having been witness to all of these shenanigans, Mick Jagger started belting out in song:

"Hey! Hugh! Get off of McCloud!'

You have to be really old to get that joke. Unfortunately, I get it.

[Baz]

Bump

[berettafan]

Originally Posted by icemann427

KC,

Until the year you turn 66, you can only make $16,920 in earned income before you lose one dollar of SS benefit for each two dollars over that limit you earn. Once you turn 66, the earned income limit is raised to $44,880 before you are penalized. As well, the older you get, there are certain ages where the earned income limits change, too.

I think many are missing the importance of the phrase 'earned income'. As stated above (correctly) the limitation is on 'earned' income. W2, 1099 (sch C) type income. NOT pension distributions, not cap gains, not S corp income.

The math on early ss is simple. from early to full you get $xx,xxx in ss income. how many months of the difference between this and FULL benefit would it take starting at full retirement age to make up that difference?

IIRC a common answer is around 7 years.

this of course doesn't factor in opportunity cost of not having early SS income to invest/pay down debt, etc. it also doesn't consider tax impacts such as pushing you to a non zero cap gains tax bracket, etc.

[cmccuist]

5 pages of solid advice, but confusing. I don't need SS to live comfortably (worked for Aramco for 7 years and saved a couple $MM).

How do you guys feel about a financial planner specializing in SS distribution?

[Baz]

Originally Posted by berettafan

I think many are missing the importance of the phrase 'earned income'. As stated above (correctly) the limitation is on 'earned' income. W2, 1099 (sch C) type income. NOT pension distributions, not cap gains, not S corp income.

The math on early ss is simple. from early to full you get $xx,xxx in ss income. how many months of the difference between this and FULL benefit would it take starting at full retirement age to make up that difference?

IIRC a common answer is around 7 years.

this of course doesn't factor in opportunity cost of not having early SS income to invest/pay down debt, etc. it also doesn't consider tax impacts such as pushing you to a non zero cap gains tax bracket, etc.

I just like the idea of getting something that is designated "full" - it makes me feel good inside.

There's math involved as you said.....but unless I'm hurting for the $...I'll wait. I only have 2 more years left and next year I get Medicare....woohoo!