Over 65? get $900 from SS

[CRAIGS]

What is this all about, it looks like a scam. See it advertised everywhere on the web. Can someone explain just what is this about.

 

[isisdave]

This refers to not claiming SS at Full Retirement Age, but waiting until you're 70. For someone who gets the average SS payment, the difference in your award amount is about $900 per month.

Here's an example of an article with explanation.

 

[Timeshare Von]

This refers to not claiming SS at Full Retirement Age, but waiting until you're 70. For someone who gets the average SS payment, the difference in your award amount is about $900 per month.

Here's an example of an article with explanation.

That is almost exactly my scenario of FRA vs. 70. I did the extrapolation, however . . . and I'd need to live to roughly age 86 for that delay to break-even in terms of total SS collected . . . and only long term benefits if I live to 86.5 years old. For me and my actuarial projection (given my other health issues), it doesn't really seems like a decent risk to delay past my FRA (66.5 or May 2024).

 

[Talent312]

My rationale for claiming early...
I'd take a smaller amount to use while I'm still ambulatory,
than wait on a larger sum for which the break-even point
may be after I'm already in "the home."
.

 

[Patri]

My rationale for claiming early...
I'd take a smaller amount to use while I'm still ambulatory,
than wait on a larger sum for which the break-even point
may be after I'm already in "the home."
.

I agree. At the break-even point, most people aren’t globe hopping, and don’t need the money for fun. Their lifestyle has calmed down.

 

[SmithOp]

Agree also, took it at FRA while I can make good use of it.

There is another risk / uncertainty in waiting - the fund will need to cut benefits by 25% in 10 years at the rate it's going, and no politicians seem interested in changing course.

 

[Timeshare Von]

I also noted when on the SS Administration page, whether I collect at FRA (66.5) or wait until I'm 67 y/o, the payout is exactly the same . . . so no monetary benefit to waiting even the next 6 months.

 

[1Melanie]

What is this all about, it looks like a scam. See it advertised everywhere on the web. Can someone explain just what is this about.

The govt is trying to get folks to delay drawing. The great baby boom generation has been retiring at the rate of 10,000 per day for the past 10 + years. There are not enough tax payers to replace us and maintain benefits as they currently exist. Not even with the boomlet that occurred during the 80s. If the govt doesn’t figure out something soon, the program may be insolvent by 2035. The best they can do right now is convince people to delay drawing until later. There’s already talk of raising the retirement age to 70.
If you’re in reasonably good health and have a history of longevity in your family AND like your job, it might be worth delaying drawing benefits. Because there’s no guarantees anymore, I preferred drawing as soon as I became eligible. More time to enjoy my timeshare and check things off my bucket list before I can’t anymore.

 

[DrQ]

I'm at a quandary right now. I planned to retire at the year I turned 69, 2024, as I was working and maxing out my 401K.

That got thrown out the window. I've got severance which can take me to June/July and I have Unemployment Insurance which I can start claiming after that runs out as I have up to a year to claim my UI. We can apply for Medicare to avoid COBRA.

I really don't think I would be an attractive permanent new hire, but contracting might be a possibility.

If I can hold out to file for Social Security in January, my monthly increase would be substantial. With the recent market downturn, it is not a good time to liquidate investment capital to capture that monthly gain in Social Security. I need to see what our draw was going to be with the SS numbers from January numbers and start drawing at that rate and have to see if we need more. Then, I have to see how bad the bleeding will be if we hold out until January.

 

[ScoopKona]

If the govt doesn’t figure out something soon, the program may be insolvent by 2035. The best they can do right now is convince people to delay drawing until later.

2030-ish is more likely.

Medicare's trust fund is running dry 2028-ish. So we'll see what (if anything) the government is willing to do to save these programs. My guess is "nothing at all." By the time I can take money out of the system, I'll be happy if it amounts to beer money.

 

[isisdave]

I am certain this has been discussed here before, and probably at least annually.

It really comes down to "do you need the money sooner than later?" and what your other income sources may be.

The government does not care when you take it. Statistically, they know exactly when we (on average) are going to, err, stop collecting. And it's about 82.5 years.

If you're married and the lower-earning spouse is likely or possible to outlive you, the better plan is to wait as long as possible, so that the spouse will get your larger award when you expire. The lower-award spouse should start at 62 if the income is needed. A couple living on two SS incomes is doable many places; a single person on one is harder.

Or maybe you don't need it at all, and just want to maximize your benefit for your heirs. In this case, take it early and invest it.

And there is no big "step" in your award amount at FRA or any other time -- your "delayed retirement credit" goes up incrementally every month you wait from 62 to 70, not 8% all at once annually. And the reduction for early retirement is also per-month.

The above does not apply if disability is part of the picture -- just standard retirement. And it's a little different for spousal awards.

 

[DrQ]

And there is no big "step" in your award amount at FRA or any other time -- your "delayed retirement credit" goes up incrementally every month you wait from 62 to 70, not 8% all at once annually. And the reduction for early retirement is also per-month.

That is not what I saw in my benefit calculator on the "my Social Security" site. There was a pronounced jump in benefits close to my birthday.

 

[Talent312]

My DW delayed taking SS by a few years past. After submitting her application, a SS minion called to offer her a lump-sum which would effectively back-date her start-date. It would mean lower payments based on the earlier start-date.
She was tempted, but ultimately decided not tol take the bait.
.

 

[isisdave]

My DW delayed taking SS by a few years past. After submitting her application, a SS minion called to offer her a lump-sum which would effectively back-date her start-date. It would mean lower payments based on the earlier start-date.
She was tempted, but ultimately decided not tol take the bait.
.

I think this is standard. When someone doesn't start at 62 but wants to start before FRA, sometimes it is because Something Has Changed, like health, employment, death of spouse, natural disaster, etc. Most folks don't know they can get the last six months payments as a lump sum then, by effectively doing a retroactive application which would indeed reduce the monthly award.

 

[SmithOp]

The tax man is likely to take a bite of that lump sum, up to 85% of SS could be taxable if there is other income.