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-   -   When to start drawing Social Security (http://forums.pelicanparts.com/off-topic-discussions/987797-when-start-drawing-social-security.html)

Baz 02-16-2018 05:39 AM

When to start drawing Social Security
 
My thoughts have always been if you don't "need it" - just wait until you can draw the full amount (for me it's at age 66).

I've even wondered about waiting longer, so the amount will grow.

I'm in perfect health and will be 64 in June so absent of any obvious health issues, expect to live a long life.

I also enjoy my work and don't plan on quitting - ever.

Then there's this argument:

<iframe width="854" height="480" src="https://www.youtube.com/embed/zDfdOcbJfAM" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen></iframe>

More to consider:

<iframe width="854" height="480" src="https://www.youtube.com/embed/7WIAL6GL8ts" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen></iframe>

And for those (like me) who plan to continue working - there's this:

<iframe width="854" height="480" src="https://www.youtube.com/embed/OnKSGS29ZQs" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen></iframe>

jhynesrockmtn 02-16-2018 05:56 AM

My wife is a bit older than me and will be 62 in a year. Her retirement is on the lower side having been a dental asst. most of her career. She will start to draw hers and continue to work 1-2 days per week to pay for her healthcare mostly. I had many years where I maxed out my contribution and will likely wait longer to start drawing mine although I don't want to work any longer than I have to. I wished I loved my job enough but don't.

asphaltgambler 02-16-2018 07:12 AM

I think they hit you pretty hard if you take it early.........I'm 58 and it looks like I'll be working until I die........

The upside is ......my work ethic. I would enjoy more free time but couldn't imagine not doing something related to productivity; income based or not. It's the farm kid in me.....and God has blessed me with great health and a strong body

Adrian Thompson 02-16-2018 07:21 AM

I'm going to make the assumption that most people on a board like this are financially educated enough to have been saving outside of Social Security for their retirement. If so, I've read many articles over the years that say of you plan on living past 80ish then don't' start collecting Social Security until your 70. Waiting until 70 give you such a step up from starting at 66, 65, 62 etc. that you come out ahead in once past 80 (it might be 81 or 82, It's been a while and I've read different figures.

tadd 02-16-2018 07:24 AM

Getting out more than you pay in... and we wonder why SS has problems.

Take the first example. Guy says $84K over the four years of 62 vs 66.

Folks who do well and eventually hit the cap pay in ~$200K. So in 10 years (or 72) you have taken out what went in. Average age is 78.

No wonder we have problems when everyone is going an additional $80k over what was put in.

tadd 02-16-2018 07:28 AM

Don't forget that RMDs are on your 401Ks. At 70 you HAVE to take out a certain amount by law or its a 50% penalty.

Adrian Thompson 02-16-2018 07:29 AM

Quote:

Originally Posted by tadd (Post 9928456)
Getting out more than you pay in... and we wonder why SS has problems.

Take the first example. Guy says $84K over the four years of 62 vs 66.

Folks who do well and eventually hit the cap pay in ~$200K. So in 10 years (or 72) you have taken out what went in. Average age is 78.

No wonder we have problems when everyone is going an additional $80k over what was put in.

Not sure I follow the logic. I'll be pulling many many multiple times what I put into my various retirement accounts, you know, compound interest and all that. If (both parties) of government hadn't been using the social security fund as an atm for decades the system would have no issue.

Crowbob 02-16-2018 07:33 AM

If the goal is to maximize lifetime benefits you need to determine how long you're going to live. Not how long you plan on living but how long you're actually gonna be pushing air in and out on a regular basis. That is the bare bodkin. Nobody knows exactly how long they're gonna live. But, if you're honest with yourself, are aware of family medical histories, your own lifestyle choices and other factors, you can get pretty close.

For most people, the longer you live, the more advantageous ON A TOTAL LIFE-TIME INCOME BASIS, it is to wait. However, for tax purposes, for spouse purposes and lifestyle choices it may be better to draw early.

The break-even point AGE-WISE varies but if you're gonna be around until about 85 years of age the differences ON A TOTAL LIFE-TIME INCOME BASIS are minimal. When you draw will be pretty much a wash.

If you're sick, hate your wife (and/or eligible ex-wives), want to pull the plug before age 85 draw ASAP.

Be advised, the age-85 point is an estimate. Also, believe it or not, longevity in the US is DECREASING. In addition, if there are no exes or dependents, what you dont collect-nobody collects. It goes away. It's not transferable, IOW wasted.

It seems a reasonable strategery to collect up front, distribute the money to the kids via gifts and what-not or amass a larger estate to be passed on to the heirs which is not taxable until about $5M.

Also, SS retirement is taxed as regular income. But generally, if you do not work (which increases the taxable benefit amount) 85% of SS is taxed at your unique marginal rate. If you do draw early, be sure to have SS withhold at minimum 15%. That way, the checks that come in the mail (or magically appear as numbers in your monthly bank statement) ends up being 100% discretionary spending. WooHoo!

Finally, there is much discussion about how long the scam will be around. It's pretty much a given (IMO) that it will be here forever because its a ponzi scheme to the benefit of the SSA (and what's good for SSA is good the the US-but not necessarily good for your kids).

They will get theirs eventually, but it will be practically worthless.

Crowbob 02-16-2018 07:38 AM

Quote:

Originally Posted by Adrian Thompson (Post 9928462)
Not sure I follow the logic. I'll be pulling many many multiple times what I put into my various retirement accounts, you know, compound interest and all that. If (both parties) of government hadn't been using the social security fund as an atm for decades the system would have no issue.

But they did use it as an ATM. The logic involves actually creating wealth vs. redistributing what wealth already exists. Various retirement accounts are reflective of the stock market. SS is a reflection of some yahoos in DC sneaking new laws in.

ckelly78z 02-16-2018 07:44 AM

The other factor not mentioned in the posts so far, is the desire to leave the workforce at 62 (9 years from now)is pretty great for me. This is the reason I have been investing 20% into my 401K for the last few years after investing 6% a year for the prvious 25 years, which should be near $1M, not to mention the $1500 a month company pension I will be getting. I'm going to start drawing SS as soon as possible 62 YO, to help pay for health insurance.

Between my 401K, and my pension (taking full survivorship for my wife), there should be more than enough to live very comfortably for a long time, so taking SS early will allow me to go early.

David 02-16-2018 07:47 AM

Now we're getting off topic, but... I never understood people keep saying the government stole money out of social security.

Social security is a pay as you go system. What comes in through taxes, goes out as payments. If there is money left over, a surplus if you will, which is what started happening under Reagan as a way to get ready for all the baby boomers retiring, the money has to go somewhere. That somewhere is US Treasury bonds. So yes the surplus money leaves the Social Security account but it's replaced with bonds. So there is no stealing of Social Security funds by other branches of government.

What people may be referring to is Congress and others in government may have seen this surplus in the US Treasury and decided to spend it. They didn't spend the Social Security money because that's in bonds, they spent the US Treasury's money which will have to borrowed when Social Security starts cashing in the bonds.

Bill Verburg 02-16-2018 07:47 AM

Quote:

Originally Posted by Baz (Post 9928359)
My thoughts have always been if you don't "need it" - just wait until you can draw the full amount (for me it's at age 66).

I've even wondered about waiting longer, so the amount will grow.

I'm in perfect health and will be 64 in June so absent of any obvious health issues, expect to live a long life.

I also enjoy my work and don't plan on quitting - ever.

Then there's this argument:

<iframe width="854" height="480" src="https://www.youtube.com/embed/zDfdOcbJfAM" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen></iframe>

More to consider:

<iframe width="854" height="480" src="https://www.youtube.com/embed/7WIAL6GL8ts" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen></iframe>

And for those (like me) who plan to continue working - there's this:

<iframe width="854" height="480" src="https://www.youtube.com/embed/OnKSGS29ZQs" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen></iframe>

It's complicated and the answer is different for everyone

considerations
there is a penalty for taking it early, from 62 to full retirement age.

there is a bous for waiting and taking it after full retirement age

you must start Medicare @ age 65, if not taking SS you pay out of your pocket until you start ss, at which time it is taken from the monthly ss payment. The Medicare payment has been subject to fairly large increases for the last few years, if you are making payments from ss then you are save harmless and mostly exempt from these Medicare increases, if you are paying out of pocket you Medicare premium goes up every year until you start ss at which time the save harmless provision kicks in.

If you run the #s w/o the Medicare issue factored in and compare the full retirement date w/ the latest times of ss start(66 is full and 70 latest), the break even is @ ~180mo after that the total return for waiting exceeds the total return for earliest start.

It's difficult to adjust for the Medicare costs, some yrs it goes up a lot others not so much and inflation adjustments to ss further cloud the issue, But for most years and most time frames based on what's been happening lately Medicare cost increases greatly extends the break even date

It's best to get the actual #s that are available from SSi, but what they don't provide a great deal of info or guidance on is the Medicare aspect.

Halm 02-16-2018 07:54 AM

Quote:

Originally Posted by Baz (Post 9928359)
I also enjoy my work and don't plan on quitting - ever.

Sounds a lot like me. I am now 68 and not touching my SS benefits.

They are not going away. Congress can't even pass a bump stock law with full NRA support. How in the world would they ever remove SS benefits???

So here is the deciding factor for me: Where else can you get a guaranteed 8% growth per year between 66 and 70?

Crowbob 02-16-2018 07:59 AM

It absolutely is a very individual decision. SSA wants you to wait because it pushes the day or reckoning further into the future.

Also, if you're in pretty good shape financially, which most boomers are NOT, I'd wait to collect. Inflation is creeping back into the news. Inflation is the enemy of fixed-incomers.

Crowbob 02-16-2018 08:02 AM

The 8% growth is only guaranteed for as long as you're alive. The growth becomes 0 when you kick. SS is not an investment. Its a tax.

jcommin 02-16-2018 08:04 AM

I have weighed both sides of this debate.

I have friends that took the SS money at 66 and rolled it into an IRA or a deferred account because they are still working. That makes sense to me - Otherwise it becomes a tax problem. I know some that still work, use the SS money to pay down debt. I get that too.

I'm 67 and still working and will retire at 69 - I'm going to draws at 70- for every year I defer, the amount grows 8% annually. I never expected to work this late in my life - life got in the way.

Everyone is different - there is no right or wrong answer.

vash 02-16-2018 08:05 AM

subscribed to learn stuff from you older codgers. ;)

VincentVega 02-16-2018 08:08 AM

My mom was planning to wait, I assume to maximize the return. She got sick and died. I like the idea of $$ in my pocket, lets me decide what/where/when. If you dont really need it, take your check and donate it to those that do need it. Or not, save it or spend it however you want.

As said, so many variables its an induvidual decision. I hope my personal situation allows me flexibility vs trying to maximize a payout with an unknown lifespan.

Crowbob 02-16-2018 08:14 AM

I'm guessing most of us here are pretty good with numbers. However, most of the people out there aren't. And there's allot of 'em.

What that means is that as the financial illiterates age, the stresses to do something about SS increases. The solution is to raise the taxable income limit for FICA, raise the age of eligibility for benefits and push gramma and her wheelchair off the cliff.

Crowbob 02-16-2018 08:17 AM

Not taking your check is donating but you dont get to choose to whom it is donated.


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