When To Begin Taking U.s. Ss Payments

[AlwaysRt]

36 minutes ago, Bruce said:

Limited thinking. Scare tactics. You will lose 25% of your total SS pension if you take at 62.

Talk about scare tactics - bold and underlined even! You do go on to qualify your statement a bit, but not fully. Every individual has different needs, some need something, anything, asap. Some will just add th their savings, and everyone else in between. 

Looking at SS payments on a monthly basis is very misleeding as it ignores years of payments at the lower level (age 62 vs 67 vs 70). A calculation of total benefits received at each level is required to determine "lost benefits". To keep it simple and general I will use today's dollars and ignore taxes which are different per individual. Benefit amounts are taken from a real SS benefit summary.

A person retiring at age 62 with a monthly benefit of $738 will have received $150,552 at age 79. Retiring at age 67 with a monthly benefit of $1,048 will have received $150,912 at age 79. 

A person retiring at age 67 with a monthly benefit of $1,048 will have received $201,216 at age 83. Retiring at age 70 with a monthly benefit of $1,300 will have received $202,800 at age 83.

Summary - a person taking SS retirement at 62 instead of 67 is ahead on benefits until age 79 and a person SS retirement at 67 instead of 70 is ahead on benefits until age 83. Individuals then need to include their monthly needs, other income, tax situation, and life expectancy against the age 79 and age 83 tipping points to come up with the best strategy for them. There is not one correct answer for everyone.

 

[robert k]

One has to factor in that once given, they almost never take it away. They usually grandfather people already receiving benefits. If you want to lock things in under the current law, you need to take it before the law changes.

I will stand by my analogy that money received now/soon may be much more valuable than getting a greater amount in the future, that the money now may have much greater buying power. Cost of living increases are based on what the government says they are, not on reality.

[Bruce]

6 hours ago, AlwaysRt said:

Talk about scare tactics - bold and underlined even! You do go on to qualify your statement a bit, but not fully. Every individual has different needs, some need something, anything, asap. Some will just add th their savings, and everyone else in between. 

Looking at SS payments on a monthly basis is very misleeding as it ignores years of payments at the lower level (age 62 vs 67 vs 70). A calculation of total benefits received at each level is required to determine "lost benefits". To keep it simple and general I will use today's dollars and ignore taxes which are different per individual. Benefit amounts are taken from a real SS benefit summary.

A person retiring at age 62 with a monthly benefit of $738 will have received $150,552 at age 79. Retiring at age 67 with a monthly benefit of $1,048 will have received $150,912 at age 79. 

A person retiring at age 67 with a monthly benefit of $1,048 will have received $201,216 at age 83. Retiring at age 70 with a monthly benefit of $1,300 will have received $202,800 at age 83.

Summary - a person taking SS retirement at 62 instead of 67 is ahead on benefits until age 79 and a person SS retirement at 67 instead of 70 is ahead on benefits until age 83. Individuals then need to include their monthly needs, other income, tax situation, and life expectancy against the age 79 and age 83 tipping points to come up with the best strategy for them. There is not one correct answer for everyone.

 

Nope. You are lost in numbers and totals. Monthly SS checks are not a savings account. No reserves to borrow from. There are no totals accept on paper. Life time totals mean nothing to those living month to month one 1 check.

Millions of people have only SS checks to live on. They live on a monthly cycle ( where have we heard that before). So lets keep it simple. A person with a full SS benefit of $1,000 at full retirement of 66-67, gets 25% less at 62, which is $750. That is $3,000 LESS per year for the remainder of their lives.

Again, forget lifetime totals. Look at it monthly. For the rest of their lives, they get to live on $750 a month instead of $1,000 a month.

The $250 (less difference) has real world implications. Less food, less quality of food, less medications, greater problems meeting deductibles and still having money to live on, to pay rent or to eat, to go without heat or AC in order to keep the electric bill low... For those living in Phils, that $250 a month ($250 x 12 months) LESS, represents $3,000 which is the cost of a yearly return trip visit to the US, the cost of dentures, the cost of car repairs.

Living in the US on a full benefit of $1,000 a month is bad enough, but to have to live on $750 a month is a huge issue. In the US, you might find a furnished room for $400-$600 a month... then what?

There is a long running thread on the forum about the costs of living in the US and Phils and the costs of a basic item such as corn flakes. I would suggest that anyone who IS working and CAN CONTINUE to work between the ages of 62-66, think long and hard about living on 25% less benefits for the remainder of your life.

There are many romantic and Tom Sawyer-esk views on retiring to the Philippines. In real life there are thousands of expats in Phils simply because they do not have enough money to live in their native countries and to maintain even a basic lifestyle of shelterand food in a safe area. Planning to live in Phils is a fantasy for most, but a reality for a few. But if you are one of those thinking of coming to Phils due to monetary reasons, then do yourself a favor and work a few years longer and then live better on that full benefit check, no matter what it is, rather than to take retirement at 62 and then have to live on 25% less, month after month, year after year....    

 

 

   

[AlwaysRt]

1 hour ago, Bruce said:

A person with a full SS benefit of $1,000 at full retirement of 66-67, gets 25% less at 62, which is $750. That is $3,000 LESS per year for the remainder of their lives.

The person who retired at 62 would have already received $45,000 the month before the 67 year old receives their first $1,000 check, $45,000 is nothing?

I think I do understand the point you are trying to make but taking a best strategy for a specific group of people and extrapolating it to provide advise for everyone is misleading.

Would retiring at 67 for someone expected to live until 69 really be better than retiring at 62 so they could have an extra $3,000/yr for two years? I say no.

Would retiring at 67 for someone expected to live until 79 really be better than retiring at 62 and locking in their SS in addition to their $3,000/pension? I say probably not.

Would retiring at... There are too many individual circumstances that play into the when to take SS question to have anything close to a blanket statement of what is best for everyone. There is only what is best for you.

[chris49]

I was quite comfortable at 55 so I retired.  At 55 years 6 months.

I had around 6 amazing years with a 6 month bad patch. Not working at at 56 and having a good life is different from not working at 62 or 66.

I had to take my SS at 62. No choice. I was lucky to draw a kids allowance with that. The money does not afford me a luxury living. But it's not to bad also.

At 62 or 66** the monthly income becomes more important than money in the bank. Take a calculator and figure it out. How much do you need to live on monthly. We did that and we found we could save $400 a month. Which we do but things will come up and we sometimes have to spend it.

**As the main forum members know I'm an Aussie with a US Citizenship. I have an available Aussie Pension but it's so far uncollected.  But as far as the question and my response I answered as an American.

[Bruce]

Well the post I was originally replying to was this:

"I have to take it at 62 for two reasons one is the system is broken and I want to get what ever I can. And second is I am going to need the money retiring early. The downward spiral of the US government will continue. When it all goes away I will be in the PI I will be buying rice with my stock dividends."

(end)

His opinion that SS was broken and he wanted to get everything he could is not realistic and helps to spread false ideas. Further in his post, he conveys his forward thinking opinion that he will be living on stock dividends.... If and when SS actually fails to the point that there are no more monthly checks sent out, I do believe that his stock dividends would have ended way before SS did.

The government has the ability to make and or take money in the form of taxes. Before there was a SS failure, I believe that there would be a massive rescue or refunding plan put into place, while 'his' stock investments have no such safety net.

Getting back to the quoted post above, it appears that with that limited information, that poster WANTS to retire early as compared to having to, and he is manipulating his own life and finances to meet HIS goal. OK for him, but we already know he is not 62 yet, and SS is NOT failing any time in the next 20 years, based on current math and considering NO re funding of the program interventions.

Now lets take it a bit farther and look at Phils.... Like it or not, the US economy and SS system is tied to the financial status of Phils. I believe there are more people born in the Phils who now have, for what ever reason, a US based SS income than any other country's retirement system. Any failure of the US government and SS and private pension plans i.e. hospitals - retired nurses, will directly and negatively impact the Phils monetary system and financial way of life.   

Therefore, planning to live in and buy rice etc. in the Philippines directly relates back to my underlying position that 'most' people who rely on SS and nothing else to live on, are better off in retiring at full benefit as compared to 62. The way you wrote: "The person who retired at 62 would have already received $45,000 the month before the 67 year old receives their first $1,000 check, $45,000 is nothing?" is misleading.

I do understand what you mean, but the way you wrote it, it appears a lump sum of 45K is sent out the month before a person retiring with full benefits gets that 1st check. Also, it again, points back to your viewing 'totals' instead of monthly income AND TRYING TO STRETCH THOSE DOLLARS TO MEET THE BILLS.

You are thinking amounts and totals, I am thinking of month-to-month-to-month-to-month living expenses. Therefore I would ask that anyone thinking of retiring at 62 AND having ONLY (1) SS check a month to live on, to add up all their projected monthly expenses and then to see if your SS check would cover it + any savings for emergencies or travel home. Then do the same thing with the expected monthly amount at full retirement.....

Now here is what I think will happen.... and this has been mentioned MANY times on this forum.... People will plan, not like what they see and then start to scrimp and cut back to make the numbers work. Is this who you see your retirement? If so, then YOU are the guy who really needs to think out taking an early retirement, if all you can expect is (1) SS check a month to live on for the rest of your life.  

Based on your family history and your known and expected health issues..... How long does it look like you might live? 70? 75? OK... early retirement might be viable. But beyond 75? If you can still work between 62-66, then you might want to look more at waiting to retire, if possible.  

[davewe]

12 hours ago, AlwaysRt said:

 

Looking at SS payments on a monthly basis is very misleeding as it ignores years of payments at the lower level (age 62 vs 67 vs 70). A calculation of total benefits received at each level is required to determine "lost benefits". To keep it simple and general I will use today's dollars and ignore taxes which are different per individual. Benefit amounts are taken from a real SS benefit summary.

A person retiring at age 62 with a monthly benefit of $738 will have received $150,552 at age 79. Retiring at age 67 with a monthly benefit of $1,048 will have received $150,912 at age 79. 

A person retiring at age 67 with a monthly benefit of $1,048 will have received $201,216 at age 83. Retiring at age 70 with a monthly benefit of $1,300 will have received $202,800 at age 83.

Summary - a person taking SS retirement at 62 instead of 67 is ahead on benefits until age 79 and a person SS retirement at 67 instead of 70 is ahead on benefits until age 83. Individuals then need to include their monthly needs, other income, tax situation, and life expectancy against the age 79 and age 83 tipping points to come up with the best strategy for them. There is not one correct answer for everyone.

 

I have gone to a couple of presentations on Social Security strategies. Hey it's a free meal 

The presenter did a similar scenario where he showed that if you waited to begin taking SS the "total" you would receive would be greater but the point where it crossed and you benefited overall was at something like age 82. I raised my hand and pointed out that I would rather have the cash in my 60s when I am still active and healthy than in my 80s. He did acknowledge that was a downside to the strategy.

If you have a good, stable job that you enjoy and want to keep working, waiting seems a reasonable strategy. Same if you are one of those rare people flush with cash or have a large pension. But for most of us, waiting isn't the best option.

[davewe]

As has been previously stated, everyone has a different circumstance and different reasons for retiring at the point of life he does. I have two 50 year old buddies working construction and they have genuine concerns about how long they will be able to do what they do and whether they will be capable of transitioning to another job or will have to take SS at 62.

SS has a nice online tool where you can estimate what your benefit would be at various ages. The one caveat is that the tool is based on the notion that you will continue to earn in the future approx. what you earn now. Unfortunately, past a certain age most people do not.

I am very very lucky! Let's keep this under our hats, shall we, but I am well aware of the fact that at age 63 I am overpaid  - I suspect my employer knows it too! But I am FB friends with most of my high school classmates. Most are unemployed, underemployed, were forced to retire for a variety of reasons, such as health. Plenty are already taking SS, and not because they are itinerant, retired millionaires. I have one friend who was a highly successful lawyer in So Cal; today she cannot get hired (too old). The list goes on.

So when you calculate your possible futures and try to figure when you might want to take SS, remember that just because you are 55 or 58 or 60 and are currently making 90k/year or whatever - doesn't mean you are gonna make that at 65 or 67. At that age you're just as likely to be a Walmart Greeter - or an unemployed lawyer. 

But I do agree with Bruce, that one thing I don't take into account in my personal equation is the status of the SS system. 

[robert k]

As has been stated "there is no saving" If there are no savings at a lesser amount, there will probably be no savings at a greater amount if all you have is a SS check and there will be no money for a "trip home". People are either savers or they are not.

If you are in dire financial straits, I suggest you start a garden and keep chickens, ducks or rabbits. Japanese soldiers planted gardens in WW2 because they may only have been receiving munitions and very little food.

[Domino22]

For me here is why I will take it at 62. My dad's first heart attack was at 53 yoa and his last and final one was at 58 yoa. I am 56 but my mom is still here and driving a car -side roads only- and she is 91! I make good money but I am tired of what I do. My job knows of my plans and I can always go back and they would also go for a 6 month working deal thru the spring/summer/fall april thru september. I am also looking at this. If mom hangs around awhile this would work, she has two extra rooms!! I could be 60 and living with my mom 6 months a year. I would pay the bills on the house of course but NO RENT MOM. She would love it!