ot: we have discussed Social Security before

[eddief]

and when to take it. Today I found this resource that is the best, most in-depth I have ever seen.

If you open up this url and then click on the hyperlink - "delay the start of Social Security benefits" a 52 page pdf comes up. So far, it seems like straight talk, no sales pitch, just good research, facts, common sense:

http://www.cbsnews.com/news/a-smart-...cial-security/

Basically, live on your other assets and delay taking SS.

[GregL]

Originally Posted by eddief

Basically, live on your other assets and delay taking SS.

Sadly, far too few Americans have any other assets to speak of. We're a nation of spenders, not savers...

[Ralph]

Yes......But......if you took your SS at 62, didn't spend any of it, and invested it until you were normal retirement age, then started drawing income from that "pot" plus the SS check, wouldn't you also be better off? of course....that would depend on investment results. And how long you will live.

I think the SS payout is actuarily correct, based on life expecticy, and you really can't beat it. If you live until the tables say you will die, it's all the same. However.....since everyone's financial situation is different, and ability to successfully invest unneeded cash flow is different, and life expectancy is different, what's best for one is not necessarily what's best for someone else.

I took mine early, age 62, and left investments alone. That way, I think I'm ahead. Most of the studies I see don't take into account opportunity costs on investment assets....the cost to you of spending down your assets and not SS.

And.....What if you die before you start collecting at a later age? And never collect from SS anything? That's why....from the SS system's point of view, it's all the same to them and same cost, no matter when you take it. I'm just an old retired stock broker (now called financial advisor), and that's how I look at it. If you're not good at saving and investing, or don't have much savings and investments, you are probably better off waiting as long as you can before taking SS. That way you will get a bigger monthly check for lifetime. And I imagine that's true for most Americans. Good article BTW.

[LouDeeter]

If you are still working at 62, no brainer, don't take it. If not, then the break even point for most people will be about 73-4, therefore, you would get more per month after that, making the delay a good decision long term. But, you could also argue that 1) You won't need as much in your 70s as in your 60s and 2) you do take the risk of not getting it at all. There is also the issue of spousal social security--not only what your spouse can get if you die, but also how much the spouse can get if the primary person dies, but how much they can get if they didn't work enough to qualify for ss themselves. There is a penalty for them to begin at 62 as well. In my case, I am retired and began SS at 62 and my wife began spousal (using my numbers as the base) at 62.

[fuzzalow]

Originally Posted by eddief

Basically, live on your other assets and delay taking SS.

This advice is supportive of two very basic truisms in matters of money:

• Time is money
• The advantage in the cumulative effect of compounded returns, or in the case of SS, compounded interest. Warren Buffet has espoused this simplicity to the general investor for many years

The longer that a retiree can delay in drawing down against their investment principal, the longer that principal amount is allowed to work in generating returns in the marketplace.

[oldpotatoe]

Originally Posted by LouDeeter

If you are still working at 62, no brainer, don't take it. If not, then the break even point for most people will be about 73-4, therefore, you would get more per month after that, making the delay a good decision long term. But, you could also argue that 1) You won't need as much in your 70s as in your 60s and 2) you do take the risk of not getting it at all. There is also the issue of spousal social security--not only what your spouse can get if you die, but also how much the spouse can get if the primary person dies, but how much they can get if they didn't work enough to qualify for ss themselves. There is a penalty for them to begin at 62 as well. In my case, I am retired and began SS at 62 and my wife began spousal (using my numbers as the base) at 62.

I did too and hopefully this won't get locked but I'm not confident the 'next' administration wouldn't screw with the eligibility age or something else about SS and leave me and wife 'in the cold'...so I started it at 62.

[fuzzalow]

Originally Posted by oldpotatoe

I did too and hopefully this won't get locked but I'm not confident the 'next' administration wouldn't screw with the eligibility age or something else about SS and leave me and wife 'in the cold'...so I started it at 62.

Why stoop to fear mongering and baseless speculation? My goodness, short of the unilateral authority over the military as Commander in Chief, anything approaching implementing an insidious change to SS still has to pass Congress. I have no inside track as to the slam dunk on who the 'next administration' is - do you know something we don't?

I'm perplexed as comments like this are most unlike you.

[oldpotatoe]

Originally Posted by fuzzalow

Why stoop to fear mongering and baseless speculation? My goodness, short of the unilateral authority over the military as Commander in Chief, anything approaching implementing an insidious change to SS still has to pass Congress. I have no inside track as to the slam dunk on who the 'next administration' is - do you know something we don't?

I'm perplexed as comments like this are most unlike you.

Huh??

MY choice and a comment on a bicycle forum..fear mongering? I'll leave that to congress.

Republican Congress and Republican POTUS and who knows what Chris or Rand or Ted might do??

It would be 'simple' to raise the eligibility to say 67 at the stroke of a pen..save $zillion$ instantly, at least that's what the Chamber of Commerce says..

of course there may be some 'unintended conscequences' but hey, it would keep the tea party goin' strong..

[SlackMan]

Originally Posted by oldpotatoe

Huh??

MY choice and a comment on a bicycle forum..fear mongering? I'll leave that to congress.

Republican Congress and Republican POTUS and who knows what Chris or Rand or Ted might do??

It would be 'simple' to raise the eligibility to say 67 at the stroke of a pen..save $zillion$ instantly, at least that's what the Chamber of Commerce says..

of course there may be some 'unintended conscequences' but hey, it would keep the tea party goin' strong..

I'm not sure it matters which party is in power in the future or what the idealogy of future politicians might be. The basic math of Social Security implies that future benefits will have to be much lower in inflation adjusted terms than they are now. And forecasts such as this were done before so many people dropped out of the workforce (see recent employment reports). With fewer people working, there will be less funds paid into the system to support payments for those on Social Security. Or, those working will face an extremely high Social Security tax, which I suspect will cause more to drop out of the workforce or reduce working hours.

As for me, not quite at retirement age, I use a forecast of $0 for Social Security when I do my retirement planning. Any money I do get from Social Security will be a pleasant surprise.

[fuzzalow]

Originally Posted by oldpotatoe

Huh??

MY choice and a comment on a bicycle forum..fear mongering? I'll leave that to congress.

I was not criticizing your choice, I was questioning the reasoning and rationale that brought you to decide on the actions that you took. If your responded emphasis in boldface is indicative of indignation at my comment, with all respect, you had misconstrued.

Republican Congress and Republican POTUS and who knows what Chris or Rand or Ted might do??

The mid-term of 2014 and presidential of 2016 elections haven't happened yet. Those persons, and their agendas, are not foregone conclusions.

It would be 'simple' to raise the eligibility to say 67 at the stroke of a pen..save $zillion$ instantly, at least that's what the Chamber of Commerce says..

of course there may be some 'unintended conscequences' but hey, it would keep the tea party goin' strong..

Well, to speak brass tacks for a moment: The one voting block that will not get screwed is the senior citizen and the major government entitlements that most impact them: Medicare and Social Security. Because senior citizens VOTE. Every other voting age demographic, it seems, is disaffected or can't be bothered to VOTE. So I do not believe that it is possible to screw over and railroad payout structures of SS or Medicare over the backs od Seniors by the simple stroke of a pen. Because at time of election or re-election, there indeed will be consequences.

The Chamber of Commerce is a lobbying group. I don't know or stay current with any of their views, writings or agendas.

[zap]

Originally Posted by Ralph

Yes......But......if you took your SS at 62, didn't spend any of it, and invested it until you were normal retirement age, then started drawing income from that "pot" plus the SS check, wouldn't you also be better off? ? le BTW.

Doubtful that you would be better off versus delaying unless you are a better investor than Warren Buffet. This of course assumes you live into your 80's.

What you can do is collect SS then pay it back to get a nice bump up in monthly payments.

[oldpotatoe]

Originally Posted by SlackMan

I'm not sure it matters which party is in power in the future or what the idealogy of future politicians might be. The basic math of Social Security implies that future benefits will have to be much lower in inflation adjusted terms than they are now. And forecasts such as this were done before so many people dropped out of the workforce (see recent employment reports). With fewer people working, there will be less funds paid into the system to support payments for those on Social Security. Or, those working will face an extremely high Social Security tax, which I suspect will cause more to drop out of the workforce or reduce working hours.

As for me, not quite at retirement age, I use a forecast of $0 for Social Security when I do my retirement planning. Any money I do get from Social Security will be a pleasant surprise.

Me too. SS is gravy to me.

Everybody has their own reasons when it comes to SS. But benefits will have to be reduced if the system is to survive. I just wanted to be grandfathered up front. No telling what's gonna happen in 2014 and 2016... Got an idea but we'll see. I am not optimistic about 2014 through 2020....

[redir]

Originally Posted by SlackMan

I'm not sure it matters which party is in power in the future or what the idealogy of future politicians might be. The basic math of Social Security implies that future benefits will have to be much lower in inflation adjusted terms than they are now. And forecasts such as this were done before so many people dropped out of the workforce (see recent employment reports). With fewer people working, there will be less funds paid into the system to support payments for those on Social Security. Or, those working will face an extremely high Social Security tax, which I suspect will cause more to drop out of the workforce or reduce working hours.

As for me, not quite at retirement age, I use a forecast of $0 for Social Security when I do my retirement planning. Any money I do get from Social Security will be a pleasant surprise.

But a lot of the Boomers will be on their way out too so that leaves a bit of a void. I agree with your last statement. No doubt about it, it will just be bonus money.

[Ralph]

Originally Posted by zap

Doubtful that you would be better off versus delaying unless you are a better investor than Warren Buffet. This of course assumes you live into your 80's.

What you can do is collect SS then pay it back to get a nice bump up in monthly payments.

Well....if you took, say, about $1700/month at age 62, and invested that until about age 67. that would be a little over $100,000 plus what you made on it over a 120 month time frame. Then with drew around $400-500 per month from that pot, plus your SS check, you would be better off a long long time, probably forever.... increasing income over time, VS waiting and taking a bigger SS check. And what if you die without ever collecting anything while waiting? In this example, you would have something to leave to heirs. And BTW.....You can give the money to Buffet to invest for you. Just buy some of his shares. I own some....the B shares. Great long term return. But like I said above....without the investing effect, the SS system has it figured out so it doesn't matter to them spread out over millions of people how you do it.

And sure.....you can take the check at 62 for a few years, then pay SS back, and get a bump up in check size. But that has a cost also. In above example you w/b giving up, after collecting for 5 years, $100,000 or so, plus the income on $100,000 or so.... forever. Just to get a bigger monthly check until death. How does that make sense, and yet I hear about doing that all the time.

[jlyon]

And sure.....you can take the check at 62 for a few years, then pay SS back, and get a bump up in check size.


They have already closed this loophole.