Author Topic: What age do you plan on taking your SSI?  (Read 23937 times)

Roland of Gilead

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Re: What age do you plan on taking your SSI?
« Reply #50 on: April 09, 2014, 05:32:10 PM »
Right ok, I forgot it is not 8% except for the years between full retirement age and age 70.

I mean it still works out as 24% for 3 years but only during those years.

beltim

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Re: What age do you plan on taking your SSI?
« Reply #51 on: April 09, 2014, 05:34:00 PM »
Right ok, I forgot it is not 8% except for the years between full retirement age and age 70.

I mean it still works out as 24% for 3 years but only during those years.

Correct.

Do you see my larger point about that 8% annual increase not being equivalent to an investment return?

beltim

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Re: What age do you plan on taking your SSI?
« Reply #52 on: April 09, 2014, 05:37:37 PM »
Oh, and Roland you are right about that being an 8% real return.

Roland of Gilead

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Re: What age do you plan on taking your SSI?
« Reply #53 on: April 09, 2014, 06:20:27 PM »

Correct.

Do you see my larger point about that 8% annual increase not being equivalent to an investment return?

Sort of.  I see it being equivalent to an investment return in the same way you might choose to take X amount of your portfolio and buy an annuity from a private insurer to guarantee you have income in old age.   It isn't an investment return where you could ever get your principal back as you may be able to do with a bond.

beltim

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Re: What age do you plan on taking your SSI?
« Reply #54 on: April 09, 2014, 06:34:05 PM »

Correct.

Do you see my larger point about that 8% annual increase not being equivalent to an investment return?

Sort of.  I see it being equivalent to an investment return in the same way you might choose to take X amount of your portfolio and buy an annuity from a private insurer to guarantee you have income in old age.   It isn't an investment return where you could ever get your principal back as you may be able to do with a bond.

Okay. But you're not accounting for the fact that the number of years you receive a benefit changes. Am I making sense with that? 

Say you can receive $10,000 a year at age 67 and $10,800 a year at age 68.  And say you live through the age of 77. In the first case, you get $10,000 x 10 years = $100,000. In the second case, you receive $10,800 x 9 = $97,200.  The "return" from delaying benefits by a year is negative, because you get less money. Right?

Roland of Gilead

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Re: What age do you plan on taking your SSI?
« Reply #55 on: April 09, 2014, 07:03:05 PM »

Correct.

Do you see my larger point about that 8% annual increase not being equivalent to an investment return?

Sort of.  I see it being equivalent to an investment return in the same way you might choose to take X amount of your portfolio and buy an annuity from a private insurer to guarantee you have income in old age.   It isn't an investment return where you could ever get your principal back as you may be able to do with a bond.

Okay. But you're not accounting for the fact that the number of years you receive a benefit changes. Am I making sense with that? 

Say you can receive $10,000 a year at age 67 and $10,800 a year at age 68.  And say you live through the age of 77. In the first case, you get $10,000 x 10 years = $100,000. In the second case, you receive $10,800 x 9 = $97,200.  The "return" from delaying benefits by a year is negative, because you get less money. Right?

But it is always like that with an annuity.  Also, what does it matter to you after age 77 if you are dead?  The important fact is that before age 77 you know 100% that you are getting an 8% return on the $10,000 you "invested" in SS when you were 68.  You get 8% (and it is more like a real return since we said it is COLA'd) for the rest of your life.  Might live to 80 might live to 120 because of some new stem cell research.

iris lily

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Re: What age do you plan on taking your SSI?
« Reply #56 on: April 09, 2014, 07:14:02 PM »
I've lived a life of financial restraint.

But when it comes to the government handing out money, I will take it as soon as I can get it. I've also said that same thing about lottery winnings: Rather than yearly payments I'll take it all up front please (therefore sacrificing some of it) and that is fine.

Ya gotta have a philosophy and that's mine: grab from Nanny G while the grabbing is good. I am old enough that there will be SS there and probably during my lifetime, but I doubt I'll live all that long.

Spartana

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Re: What age do you plan on taking your SSI?
« Reply #57 on: April 09, 2014, 07:59:14 PM »
I've lived a life of financial restraint.

But when it comes to the government handing out money, I will take it as soon as I can get it. I've also said that same thing about lottery winnings: Rather than yearly payments I'll take it all up front please (therefore sacrificing some of it) and that is fine.

Ya gotta have a philosophy and that's mine: grab from Nanny G while the grabbing is good. I am old enough that there will be SS there and probably during my lifetime, but I doubt I'll live all that long.
This! Won't actually get much, if any, SSI when my time comes but I would take it early. Bird in hand and all that.

Waving "Hi" to you Iris Lily from my bike (OK from a motel room I'm sharing with my bike and my dog :-)!)

sol

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Re: What age do you plan on taking your SSI?
« Reply #58 on: April 09, 2014, 08:01:55 PM »
I intend to claim as late as possible unless my retirement plan is failing and I need the money sooner.  The option to withdraw early is just another form of safety margin.

beltim

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Re: What age do you plan on taking your SSI?
« Reply #59 on: April 10, 2014, 12:31:58 PM »
But it is always like that with an annuity. 

Exactly.  So why are you treating this differently?

Also, what does it matter to you after age 77 if you are dead? 

It doesn't.  That's exactly why I'm saying you need to consider how much total money you get, not just annual income.

The important fact is that before age 77 you know 100% that you are getting an 8% return on the $10,000 you "invested" in SS when you were 68.  You get 8% (and it is more like a real return since we said it is COLA'd) for the rest of your life.  Might live to 80 might live to 120 because of some new stem cell research.

There is no time period ever that you wind up collecting 8% more total money from Social Security by delaying benefits for one year.

Edited to more accurately reflect the discussion, as described in response to James.
« Last Edit: April 10, 2014, 01:15:15 PM by beltim »

Jamesqf

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Re: What age do you plan on taking your SSI?
« Reply #60 on: April 10, 2014, 12:54:23 PM »
Also, what does it matter to you after age 77 if you are dead? 

It doesn't.  That's exactly why I'm saying you need to consider how much total money you get, not just annual income.

But you can't know what the total will be until you die :-)

Quote
There is no time period ever that you wind up collecting 8% more total money from Social Security.

Using real numbers, collecting SS at 62 would get me $1176/month, waiting until 70 would mean $2218/month.  So if I lived until 79 1/4, I would collect more from the government than if I started collecting at 62.  At 80, I will have collected a total of 8% more.

beltim

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Re: What age do you plan on taking your SSI?
« Reply #61 on: April 10, 2014, 01:14:21 PM »
But you can't know what the total will be until you die :-)

Of course.  But that doesn't mean it's not worth considering the possibilities.

Using real numbers, collecting SS at 62 would get me $1176/month, waiting until 70 would mean $2218/month.  So if I lived until 79 1/4, I would collect more from the government than if I started collecting at 62.  At 80, I will have collected a total of 8% more.

Agh, you caught me typing too quickly.  Roland and I were discussing 8% annual increases.  So my statement should be amended to "There is no time period ever that you wind up collecting 8% more total money from Social Security by delaying benefits for one year."

And even then, I'm only talking about the amount you receive in Social Security benefits, without consideration of taxes or other income.  Also, I'm going to edit my original post to avoid future confusion.


Roland of Gilead

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Re: What age do you plan on taking your SSI?
« Reply #62 on: April 10, 2014, 05:22:51 PM »
beltim seems to really want to know his expiration date so he can draw down his portfolio to just above zero  :-)

I am going to assume I will always have a portfolio with a mix of stocks and bonds up until the day I die such that I can spend X amount of money and know my portfolio will last and I don't have to work at Walmart at age 87.

If I am going to always have a portfolio generating returns, why would I not want a guaranteed almost 8% real return in part of that portfolio?  The only reason I might not want to lock in that return is if I know my expiration date or my need of funds is so great that I must take SS before age 70 to survive.  I am going to discount the case of SS running out of money and not paying me because a)  You should have a pretty clear view at age 62 what the next decade will look like as far as funding and b) If they remove SS suddenly it will not really matter if you have taken it early because everyone old will die in the riots and chaos that follows.

iris lily

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Re: What age do you plan on taking your SSI?
« Reply #63 on: April 10, 2014, 08:13:09 PM »
Quote
Waving "Hi" to you Iris Lily from my bike (OK from a motel room I'm sharing with my bike and my dog :-)!)



WAVING BACK, SpartanA!!!

Jamesqf

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Re: What age do you plan on taking your SSI?
« Reply #64 on: April 10, 2014, 10:01:14 PM »
Agh, you caught me typing too quickly.  Roland and I were discussing 8% annual increases.  So my statement should be amended to "There is no time period ever that you wind up collecting 8% more total money from Social Security by delaying benefits for one year."

Logically, if you can eventually collect a larger amount by delaying 8 years, you must be able to (eventually) collect a larger amount by delaying 1 year.  I'd like to see the math that says otherwise.  I don't know of an SS calculator that would tell me the benefit amounts for each year, or I'd do it myself. 

MDM

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Re: What age do you plan on taking your SSI?
« Reply #65 on: April 10, 2014, 10:13:27 PM »
Agh, you caught me typing too quickly.  Roland and I were discussing 8% annual increases.  So my statement should be amended to "There is no time period ever that you wind up collecting 8% more total money from Social Security by delaying benefits for one year."

Logically, if you can eventually collect a larger amount by delaying 8 years, you must be able to (eventually) collect a larger amount by delaying 1 year.  I'd like to see the math that says otherwise.  I don't know of an SS calculator that would tell me the benefit amounts for each year, or I'd do it myself.

Numerator: Take 1.08*X $/mo starting in month 13
Denominator: Take X $/mo starting in month 1

Ratio = 1.08*X*(m-12) / X*m for integer m >= 13.
         = 1.08 * (m-12) / m

So the ratio approaches 1.08 (i.e., "8% more total money") as m -> infinity.

beltim

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Re: What age do you plan on taking your SSI?
« Reply #66 on: April 10, 2014, 10:49:41 PM »
Agh, you caught me typing too quickly.  Roland and I were discussing 8% annual increases.  So my statement should be amended to "There is no time period ever that you wind up collecting 8% more total money from Social Security by delaying benefits for one year."

Logically, if you can eventually collect a larger amount by delaying 8 years, you must be able to (eventually) collect a larger amount by delaying 1 year.  I'd like to see the math that says otherwise.  I don't know of an SS calculator that would tell me the benefit amounts for each year, or I'd do it myself.

Numerator: Take 1.08*X $/mo starting in month 13
Denominator: Take X $/mo starting in month 1

Ratio = 1.08*X*(m-12) / X*m for integer m >= 13.
         = 1.08 * (m-12) / m

So the ratio approaches 1.08 (i.e., "8% more total money") as m -> infinity.

Thank you.  Someone finally gets what I'm saying.

Spartana

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Re: What age do you plan on taking your SSI?
« Reply #67 on: April 23, 2014, 11:11:27 PM »
and don't forget to calculate in annual cost of living increases I believe you'd get when taking SS. If a person starts collecting at age 62 rather than 80 (as mentioned above) you would have say a 3% COLA added to your benefit each year for those 18 years - making the difference between benefit amounts at each age much narrower.

Roland of Gilead

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Re: What age do you plan on taking your SSI?
« Reply #68 on: April 24, 2014, 06:46:06 AM »
and don't forget to calculate in annual cost of living increases I believe you'd get when taking SS. If a person starts collecting at age 62 rather than 80 (as mentioned above) you would have say a 3% COLA added to your benefit each year for those 18 years - making the difference between benefit amounts at each age much narrower.

First, nobody would take SS at age 80 instead of 70 because there is zero benefit.

Second, the delayed payment is also COLA'd so there is no narrowing of the difference between the benefit amounts.

AlmstRtrd

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Re: What age do you plan on taking your SSI?
« Reply #69 on: April 24, 2014, 12:44:21 PM »
I have looked more closely at SS as a result of this thread and will probably delay taking it as long as seems feasible so that my wife will get a better benefit when I eventually kick. At least that is what I think at the moment.

Workinghard

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Re: What age do you plan on taking your SSI?
« Reply #70 on: April 24, 2014, 01:10:10 PM »
My husband will take his at 66 due to health reasons. I initially planned on waiting until age 70, but I'm reconsidering taking it earlier. My husband is 7 years older than me and his SS benefit is higher. Since I'm likely to outlive him, I can increase to his benefit amount should something happen. If I started at 661/2 the difference between my amount and his is around $400. If I waited until 70 to take my SS, I would get $300 a month more. Any math people want to run the numbers?

dude

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Re: What age do you plan on taking your SSI?
« Reply #71 on: April 24, 2014, 01:43:27 PM »
According to the SS website, I could get $458, $651, or $807 at ages 62, 67, and 70.  My amounts are low, because the job I have had for the last dozen or so years did not take out $$ for SS.  Nonetheless, $600 would cover about half of my monthly expenses, so I'm thrilled!  I do hope to be able to wait until at least age 67 to collect, although with a history of cancer in my family, I'm not at all confident about living a long healthy life.

Just an FYI, but don't trust the numbers on your Annual Statement.  They presume a couple of things -- (1) that you will continue to make the salary you currently make until you retire, and (2) that you will retire at the age you begin withdrawing.  Because SS uses a 35-year work history, it projects out to those ages (62, 65-67, 70) as if you were retiring at those ages with your current salary.  If you are retiring early, like many in this place, you will obviously NOT be making that salary until you reach benefit eligibility age(s), and moreover, you will get big fat ZEROES calculated into your 35-year history for every year you didn't contribute.  There is a tool on the SSA website where you can go in and input actual numbers based on your chosen retirement age to get a more accurate figure.

SS will be there for me in 12-20 years, of that I'm pretty certain.  Not sure when I will take it.  Initial thinking was to take it right away, but will wait and see what the financials look like then before deciding.

Spartana

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Re: What age do you plan on taking your SSI?
« Reply #72 on: April 24, 2014, 09:00:19 PM »
and don't forget to calculate in annual cost of living increases I believe you'd get when taking SS. If a person starts collecting at age 62 rather than 80 (as mentioned above) you would have say a 3% COLA added to your benefit each year for those 18 years - making the difference between benefit amounts at each age much narrower.

First, nobody would take SS at age 80 instead of 70 because there is zero benefit.

Second, the delayed payment is also COLA'd so there is no narrowing of the difference between the benefit amounts.
OK good to know. I just assumed it (COLA) was factored in already on the calculator when it showed you your various benefits amounts based on age received. So basically the amount the calculator tells you you'd get at various ages is somewhat incorrect and you'd receive an annual COLA increase every year even if you didn't begin taking it early? So you'd actually receive a higher amount than the calculator says you would if you take later?  Cool.
« Last Edit: April 24, 2014, 09:03:31 PM by Spartana »

MDM

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Re: What age do you plan on taking your SSI?
« Reply #73 on: April 24, 2014, 09:20:30 PM »
See http://www.ssa.gov/OACT/COLA/colaapplic.html for an overview of how COLAs affect SS benefits.  You can go further down the rabbit hole here: http://www.ssa.gov/OACT/COLA/Benefits.html#aime.

If a COLA occurs in a given year (note: nonzero COLAs are not automatic - they can be zero if inflation is low), all payments will increase: current and future.

In theory, COLAs merely keep payments in line with inflation, so you can ignore COLAs when comparing "when to start Social Security?" options.

Bateaux

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Re: What age do you plan on taking your SSI?
« Reply #74 on: April 25, 2014, 01:25:01 AM »
The first minute of the first day I'm eligible.   anything ele is foolish.

nawhite

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Re: What age do you plan on taking your SSI?
« Reply #75 on: April 25, 2014, 01:26:38 PM »
The first minute of the first day I'm eligible.   anything ele is foolish.

Why? Are you in bad health and expect to die earlier that most people? Do you honestly expect the program to reduce benefits for people above the age of eligibility between the time you hit eligibility and when you hit full benefits?

While the first is possible, the second is RIDICULOUSLY unlikely.

Roland of Gilead

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Re: What age do you plan on taking your SSI?
« Reply #76 on: April 27, 2014, 02:11:33 PM »
The first minute of the first day I'm eligible.   anything ele is foolish.

Why? Are you in bad health and expect to die earlier that most people? Do you honestly expect the program to reduce benefits for people above the age of eligibility between the time you hit eligibility and when you hit full benefits?

While the first is possible, the second is RIDICULOUSLY unlikely.

There is a heck of a lot on the cutting block before they will be able to touch the $20,000 a year or so some 67 year old is getting from SS.   In other words, your benefits are safe as long as we have a government in place.

iamlindoro

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Re: What age do you plan on taking your SSI?
« Reply #77 on: April 27, 2014, 02:18:18 PM »
The first minute of the first day I'm eligible.   anything ele is foolish.

The first minute of the first day you are eligible likely involves accepting a reduced benefit for the rest of your life.  My opinion would be that this would be more foolish than prudent.

TomTX

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Re: What age do you plan on taking your SSI?
« Reply #78 on: April 27, 2014, 03:37:46 PM »
If I buy the max amount of service time and work until then, I'll be able to draw a (reduced) pension at around age 54. The reduced pension probably won't be enough to live on - certainly not indefinitely, as it has no COLA. My 'stache only needs to bridge the gap from when I draw the pension, until I can start social security at an amount I can live on long-term together with the pension - once I hit that number, why would I wait longer?

Waiting on a bigger social security payout can be seen as the same trap as working "one more year" before FIRE.

beltim

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Re: What age do you plan on taking your SSI?
« Reply #79 on: April 27, 2014, 03:45:34 PM »
The first minute of the first day you are eligible likely involves accepting a reduced benefit for the rest of your life. 

This is true.

My opinion would be that this would be more foolish than prudent.

Actuarially, Social Security is required to price the benefit such that on average there's no difference on when you take benefits (assuming you're not working during the period that you could claim benefits).  The only way that this decision would be foolish or prudent is if you knew or had data to suggest that you would live shorter or longer than the median. 

Workinghard

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Re: What age do you plan on taking your SSI?
« Reply #80 on: May 28, 2014, 06:53:06 PM »
Since this thread was started, I've done more research and I've changed our plan. My husband, who is 6 years older than me, and the higher earner, will start withdrawing at age 70. His benefit at that age will be $2850.  Assuming he lives longer than me, I would be eligible for the higher benefit at his death. At age 66 1/2, my benefit would be 1719 and at age 70, $2386.

I'm totally lost when I should file and if I should file on my own or his SS. At age 66, his SS would be $2100. I did post on the bogle board. One person tried to walk me through it step by step, but I ended up confused and totally lost in the process.

I'm not sure when I'll retire. Certainly not early. I'm thinking between 62-64. I'll be 59 when my husband retires and that would gives us a few more years before withdrawals would be necessary. I'm looking at 1m net when he retires and 1.25m liquid when I retire. Part of that will depend on when we sell our home. We're going through things now, doing minor repairs, and will put it on the market in Jan.

I'm thinking my husband will choose to work PT if that's his personal spending money for vacations and whatnot.

For those who aren't mathematically challenged, which is the best way for me to go with getting my SS?