Author Topic: Social Security at Age 62  (Read 3360 times)

Farmgirl

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Social Security at Age 62
« on: October 07, 2014, 05:56:44 AM »
I am 56, working full time and carry my family medical benefits.  My husband is 61 and has his own business that is slowly diminishing due to various things beyond our control.   

We are considering having him take SS at age 62 to at least have some steady cash, continue to earn the $15K permitted, and I would go back on payroll to get paid whatever is left over (hopefully helping my future SS amount because of some zero earning years when the kids were little).

Does this sound feasible? 

mbl

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Re: Social Security at Age 62
« Reply #1 on: October 07, 2014, 06:26:55 AM »
Do you mean go back on the payroll in his business to be paid the portion over $15k that he would have earned?

I would suggest talking to a tax professional before you do anything.

Farmgirl

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Re: Social Security at Age 62
« Reply #2 on: October 07, 2014, 07:30:05 AM »
Yes, that was our thinking (I would go back on payroll and take any overage as my salary for doing the bookkeeping and other work...which I currently do now for "free").

retired?

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Re: Social Security at Age 62
« Reply #3 on: October 07, 2014, 07:34:52 AM »
Do you mean go back on the payroll in his business to be paid the portion over $15k that he would have earned?

I would suggest talking to a tax professional before you do anything.

Agree.  Worded that way (get paid whatever is left over) unfortunately sounds fishy.  There is probably a good way to do it.  Perhaps over time. 

hybrid

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Re: Social Security at Age 62
« Reply #4 on: October 07, 2014, 07:39:33 AM »
This is a very complicated question, the long and short of it is you typically do not take SS at age 62 with two exceptions.

1) Financial hardship requires you to improve cash flow NOW (but that's not you, right?)
2) You are absolutely certain you will not live past your early 80s.

There are lots of threads about this very subject and your specific circumstances will vary from others. Suffice to say my DW is eligible in two years and since we do not need the money immediately and her family life history is good, our plan is to defer until age 70.

At age 62 your husband will receive 75% of the full SS benefit, and at age 70 he will receive a whopping 132% of that benefit. At age 66 he receives the full benefit exactly. That percentage goes up from 75 to 132 on a monthly basis. 

Farmgirl

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Re: Social Security at Age 62
« Reply #5 on: October 07, 2014, 07:43:20 AM »
Thank you all for looking at my post.  We are just trying to figure out what might be best.  On DH's side of the family, men don't live long--but the history we have to draw upon is that those men were all heavy smokers.

It sounds like holding out as long as we can is the best move as far as SS goes. 

retired?

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Re: Social Security at Age 62
« Reply #6 on: October 07, 2014, 07:53:17 AM »
Yes, you can find basic "break even" charts that answer the question "If I start taking SS at age X as opposed to a later age Y, at what age will the cash flow total be equal?"  Call the answer Z.  If you are confident you will live past age Z, then you choose to start taking at the later age Y.

From what I can tell, this usually is presented as a simple sum of cash flows, not accounting for the time value of money and inflation.  And, none of these take care of your specific situation, which may warrant taking early even if you expect to live long.

Franklin

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Re: Social Security at Age 62
« Reply #7 on: October 07, 2014, 07:59:42 AM »
Yes, you can find basic "break even" charts that answer the question "If I start taking SS at age X as opposed to a later age Y, at what age will the cash flow total be equal?"  Call the answer Z.  If you are confident you will live past age Z, then you choose to start taking at the later age Y.


Last time I checked the break even date was "coincidentally" the same as the average life expectancy of a man and woman.

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Re: Social Security at Age 62
« Reply #8 on: October 07, 2014, 09:20:34 AM »
Well, aside from discounting, that would make sense.  Then, the govt can be indifferent as to when you start taking benefits.  Of course, there should be some adverse selection, i.e. those that take at 62 are less confident in their longevity (as a whole), so age at which one starts is likely not independent of age of death.

A starting point, albeit a stringent alternative, would be to give the full benefit at the average life expectancy in a single payment.  You die before then, you get nothing, you live past that you get a lump sum X.  There would be high confidence on the cost of that, but it is not very useful for retirement, so actuaries look at the actual life expectancy data by age/gender (and other variables) and create dollar amounts by age at which benefit starts that have the same cost as the stringent case......less some amount to account for risk and adverse selection.

But, good point.  And, perhaps discounting is included in those break-evens.  It certainly would be in the actuarial calcs.