Author Topic: Taking SS early  (Read 7124 times)

jim555

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Re: Taking SS early
« Reply #100 on: August 09, 2021, 03:50:28 AM »
The risk of living to 100+ is why you take it at 70.  If you die before it starts you are dead so you won't be upset about it.

Car Jack

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Re: Taking SS early
« Reply #101 on: August 09, 2021, 06:59:02 AM »
There are things beyond just calculating the break even point.

Remember that in 2034 or so, the payouts are going to 80% because the trust fund goes to zero so only payments received will be paid to beneficiaries.

Don't forget survivor benefits.  If married, when you die, your spouse gets more if you wait.

What about medicare premiums?  The more you make before medicare, the more it costs.

Roth conversions:  The more you make, the higher your potential tax bracket so you could be shooting yourself in the foot with paying more taxes to convert your IRAs to Roths.

RMDs.  If you wait, and remove 401k and IRA money, you're reducing what your eventual RMDs are when they come and in kind, you reduce the tax you pay.

I was of the mind to take ss as soon as possible for many years.  With the above in mind, I'd turned my thoughts completely around and won't take mine until 70.

simonsez

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Re: Taking SS early
« Reply #102 on: August 09, 2021, 10:24:55 AM »
There are things beyond just calculating the break even point.

Remember that in 2034 or so, the payouts are going to 80% because the trust fund goes to zero so only payments received will be paid to beneficiaries.

Don't forget survivor benefits.  If married, when you die, your spouse gets more if you wait.

What about medicare premiums?  The more you make before medicare, the more it costs.

Roth conversions:  The more you make, the higher your potential tax bracket so you could be shooting yourself in the foot with paying more taxes to convert your IRAs to Roths.

RMDs.  If you wait, and remove 401k and IRA money, you're reducing what your eventual RMDs are when they come and in kind, you reduce the tax you pay.

I was of the mind to take ss as soon as possible for many years.  With the above in mind, I'd turned my thoughts completely around and won't take mine until 70.
I'd bet that Social Security payments in 2034 will be >80% of the promised payout.

If it does happen, it would be political suicide not to mention disproportionately affect the poor and the public would be pissed, probably riots, etc.  There are so many ways to mitigate this (bend points, bend point percentages, SS taxes, payroll ceiling, change the HI-35 for new employees, etc.) without directly affecting the overall percentage being paid out.

We shall see!

mistymoney

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Re: Taking SS early
« Reply #103 on: August 09, 2021, 10:50:05 AM »
There are things beyond just calculating the break even point.

1) Remember that in 2034 or so, the payouts are going to 80% because the trust fund goes to zero so only payments received will be paid to beneficiaries.

2) Don't forget survivor benefits.  If married, when you die, your spouse gets more if you wait.

3) What about medicare premiums?  The more you make before medicare, the more it costs.

4) Roth conversions:  The more you make, the higher your potential tax bracket so you could be shooting yourself in the foot with paying more taxes to convert your IRAs to Roths.

5) RMDs.  If you wait, and remove 401k and IRA money, you're reducing what your eventual RMDs are when they come and in kind, you reduce the tax you pay.

I was of the mind to take ss as soon as possible for many years.  With the above in mind, I'd turned my thoughts completely around and won't take mine until 70.

I'm not sure how all of the above feeds into taking it later.

1) going to 80% in 2034 - isn't this an indication to take it asap?

2) spousal benefits - won't you spouse get the extra in the other accounts you didn't tap to replace ss as well? so - no special considerations needed for those with spouses.

3) for medicare, does it make a difference if you get 20k a year ss and take 20k from investments vs 40k from investments for your income?

4) Roth conversion - agian - if you get 20k a year ss and take 20k from investments vs 40k from investments, how does that affect roth conversions? And - only a consideration for those anticipating those roth conversion - which are likely unneeded if you are already 62 as you can tap all your retirement funds without penalty.

5) I get the RMD - but it depends on how high you expect yours to be. It might not change your plans at all.

maizefolk

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Re: Taking SS early
« Reply #104 on: August 09, 2021, 10:57:05 AM »
If it does happen, it would be political suicide not to mention disproportionately affect the poor and the public would be pissed, probably riots, etc.  There are so many ways to mitigate this (bend points, bend point percentages, SS taxes, payroll ceiling, change the HI-35 for new employees, etc.) without directly affecting the overall percentage being paid out.

We shall see!

We shall see indeed. The last decade has taught me that many things I would have thought of as political suicide still happen so long as they happen automatically. When automatic bad things happen which would require bipartisan cooperation to prevent both parties can say "look it's the other side's fault for not giving in to our demands" and both parties are convinced it'll be political suicide for the other side but not for them.

My guess is no riots as the impact of the cut payouts will be on orders folks less prone to that sort of behavior. The solutions you bring up would all have the effect of shifting more of the burden of supporting the program onto younger people who are still working (and much more prone to rioting). My guess is the right justify this will some language about not punishing success, while the left with some language about the elderly in this country being much whiter (and on average wealthier) than the younger and move diverse workers being asked to pick up the tab with higher taxes, while both also suggesting a reasonable solution could have been found if the other party wasn't so crazy. Anyway, I've veared too far into the political in a thread which has largely been apolitical (thanks).

TL;DR: I think planning for the 21% cut to all social security payments (both new filters but also existing beneficiaries @mistymoney) sometime in the 2030s is probably a reasonable baseline assumption at this point.