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Why claiming Social Security early could be more popular than ever this decade

controller1 said:
Are you suggesting the article indicates most people start collecting Social Security at their full retirement age? Because the article does not say such.
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apparently more people take social security at the earliest age possible (62) compared to the 'full retirement age" (66)
maybe those people think they will not live longer than average or maybe they think social security will eventually go bankrupt :(
 
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bogey21 said:
If you earned 10½% you are ahead of the game. My understanding is that if you delay taking Social Security until age 70, your benefit only increases 8%...

George
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8% per year. Would have beaten the market in the last few, unless you were very astute.
 
Yes, you're guessing on your future health, finances, job security, etc.
I traveled all over the world from age 19 through 55, spending money I could enjoy now, but I am very glad I did. Now, at 68 I have difficulty walking, so exploratory travel is out.
I worked half-time through July at a job I genuinely liked. Only quit because I got a new disagreeable boss. I'm claiming SS in January at 69, 2 months, which puts me close to the max. I wanted the extra 8%/yr because I see SS as guaranteed income.
I learned last month that ex-husband -- just turned 70 -- has dementia severe enough to now require nursing home "memory care" unit. I never would have guessed from his history or his family's history. He was still semi-practicing law -- was supposed to have a jury trial this month!
Our ability to prognosticate our futures is limited....
 
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Brett said:
apparently more people take social security at the earliest age possible (62) compared to the 'full retirement age" (66)
maybe those people think they will not live longer than average or maybe they think social security will eventually go bankrupt :(
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FRA varies, mine is 67. Dad's was 65. My older sibs have FRA between 66 and 67. Our FRAs are getting farther away from age 62, while Dad's decisions would have been different based on that fact.
 
we're planning to do a hybrid. DH 4 years older than me will take at 62 (2 kids still in college) and then we'll try to wait until I'm 66.
 
elaine said:
We're planning to do a hybrid. DH 4 years older than me will take at 62 (2 kids still in college) and then we'll try to wait until I'm 66.
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So that means you get to work four years longer... Lucky you.
Seriously, I retired at 62, but DW retired at 67...
She liked the $3K cash bonuses they gave her each Christmas too much
... and still misses them.
.
 
VacationForever said:
8% growth includes the Social Security income, i.e. the principle amount, which you forgo by not taking early.
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I never thought of it this way. Sounds like what they are doing is taking the payments you have skipped and giving them back to you in small increments added to your basic Normal Retirement Age Benefit and calling it interest. Am I right about this...

George
 
bogey21 said:
I never thought of it this way. Sounds like what they are doing is taking the payments you have skipped and giving them back to you in small increments added to your basic Normal Retirement Age Benefit and calling it interest. Am I right about this...
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You can also think of it like any annuity -- the longer it is before you are to start receiving payments, the larger the payment will be.

Kurt
 
I will work (or collect vacation time) for the next 8 weeks----right up until we complete our move from Maine to SC, then in January 2021 start collecting.

I will be considered exactly 65. (Both SS and Medicare)

Those are both Financial decisions, as well as logistics decisions for me.

Everyone has to decide THEIR path................

Pat
 
geekette said:
Yes, it is so much fun when you have the full record filled out, and then the lowest years start dropping out of highest 35. Every kid should start their FICA record as young as possible. Wherever life takes you, get official wages on the record every year. Upgrade the non-zeroes starting at age 50. However longer one works at higher than earliest annual income, while deferring taking the benefit, the better set towards maximizing the eventual benefit payment.

I used to think I would work until 70. Then I realized what a life suck that was. There is some happy medium Sweet Spot Retirement Age between those. It's not that I won't work again, but I don't want the stress mill again. I don't have to make a lot of money to offset those early very low earning years and continue to improve my eventual monthly income via SS payment to me.
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I need to work a few more years, as I lost my pension from my previous company due to their bankruptcy. If I can save enough, I would like to go out when I turn 64 and I can use my company's to bridge into retirement.
 
Blues said:
I haven't yet seen anybody mention one of the best free Social Security planning websites -- http://opensocialsecurity.com/

Also, as mentioned upthread, deciding when to retire from working and when to claim Social Security are two separate decisions. Too many people conflate the two.
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Not necessarily. If you earn over a 18K you benefits are reduced by a $2 earned/$1 reduction of benefit.

Why claim benefits if you work and the benefits will be reduced?

Joe
 
Sugarcubesea said:
I need to work a few more years, as I lost my pension from my previous company due to their bankruptcy. If I can save enough, I would like to go out when I turn 64 and I can use my company's to bridge into retirement.
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What about the pension guarantee company?
 
joestein said:
What about the pension guarantee company?
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My former companies pension was sent to the PBGC, but because it had an aggregate shortfall of $944 million. The PBGC sent letters to all employees stating that since it was so under funded that the most each employee will get is 10% of what they were entitled to. So yes, I will get something but it will just be about 100 a month
 
Sugarcubesea said:
My former companies pension was sent to the PBGC, but because it had an aggregate shortfall of $944 million. The PBGC sent letters to all employees stating that since it was so under funded that the most each employee will get is 10% of what they were entitled to. So yes, I will get something but it will just be about 100 a month
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Sugarcubesea said:
My former companies pension was sent to the PBGC, but because it had an aggregate shortfall of $944 million. The PBGC sent letters to all employees stating that since it was so under funded that the most each employee will get is 10% of what they were entitled to. So yes, I will get something but it will just be about 100 a month
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Sorry to hear that. Very unfair to you and all the former employees.
 
joestein said:
Sorry to hear that. Very unfair to you and all the former employees.
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Yes, it sure was very unfair. The real bummer is that I worked for this company the bulk of my career and they did not offer a 401K plan because they had the pension, so I got a late start in having the opportunity to fund a 401K and I have been maxing it out every year for the past 7
 
joestein said:
Not necessarily. If you earn over a 18K you benefits are reduced by a $2 earned/$1 reduction of benefit.

Why claim benefits if you work and the benefits will be reduced?

Joe
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Actually, I think the point of the comment was the other direction. You don't have to collect SS when you retire; you can wait. You can spend down from other sources while getting a guaranteed 8% return on your SS benefit. As an example; pulling money from a regular IRA and/or rolling some over into a Roth allows you to maximize that option which also reduces the amount of your RMD (required min distribution) at age 72. The latter can be a real tax surprise and needs to be part of any retirement planning.
 
geist1223 said:
Started drawing as early as possible. If I live to 70 I will set a record for males in my family.
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I have a good friend who told me when he reached 62 he had lived longer than either of his parents. He had to quit work before that as he had had 2 heart attacks and a stroke. He did have a teacher's retirement package as well. He just turned 74.
Everything about picking a retirement age is so personal. It's best to run all the options, taking into account your financial situation etc.
In my case I am an independent commission salesman. A couple of years before the 2008 crash I filed for a public retirement that I had been vested in since 2006. In 2006 I lost my major accounts and my income fell by 70% overnight. Turned out in that instance it was good that I took it, as after the 2008 crash the fund dropped significantly and my monthly payout would have been significantly less.

Because my wife retired from public education and had 30 years vested she was able to take her payments as well. That allowed me to keep working and defer my SS until 70. I am now 74. When my wife reached 66 she began to draw 50% of what my SS would have been at 66 and deferred drawing on her account until 70.

So while our situation wouldn't fit everyone I thought it might be helpful to share it to help others.
 
VacationForever said:
8% growth includes the Social Security income, i.e. the principle amount, which you forgo by not taking early.
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Correct. I should have included the information that in my case I am collecting a deceased spouse's SS while mine grows, which is why waiting makes sense.
 
Sugarcubesea said:
The PBGC sent letters to all employees stating that since it was so under funded that the most each employee will get is 10% of what they were entitled to.
Click to expand...

The PBCG is next to worthless for employees. Their real benefit is taking over Pension Liabilities of Companies using Bankruptcy to reorganize. Usually employees and creditors get screwed...

George
 
SusanRN said:
Correct. I should have included the information that in my case I am collecting a deceased spouse's SS while mine grows, which is why waiting makes sense.
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It absolutely makes sense in your situation. It is often repeated that SS grows 8% every year and beats the market, hence one should wait until 70 to collect is misleading. Because the forgone principal is added back, the amount is 8% higher each year. Hence taking early vs. taking at 70 has a breakeven point at about 80.
 
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