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Social Security Timing

Wednesday, October 23, 2013 - 11:47 AM
From MarketWatch.com:

Social Security's real retirement age is 70 - Encore - MarketWatch

"Given that Social Security is a particularly valuable type of income – inflation-adjusted and lasting for as long as you live – it generally makes sense to postpone claiming as long as possible to get the highest monthly amount, assuming you are in good health for your age."

Another persepctive for the best time to claim social security.

That (in bold) is a big assumption and an huge unknown.  Even if one considers one as in "good health" today, it is not a sure thing that one does not become sick next week. 

  I am at lost as to when to claim social security.  The common wisdom is to get it while you can (i.e., physically as well as financially).  But many so-called "experts" state that it is best to wait till 66 (full age).  Now it is 70??  Is there some Government strategy behind these recommendations?  Most importantly, what do you folks at DA think and what do you plan to do (or already did)? 
7
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,427
1. Wednesday, October 23, 2013 - 1:24 PM
I was listening to a local financial advisor who has a program every Monday on TV.  He was answering questions about this same topic.  I was surprised that he actually said he had changed his mine about waiting to take social security because it has to be an individual decision and we all have to do what is best for us.   Even tho we had savings, my gut feeling after doing the math, was to take it at 62 years old for the both of us.  I feared that problems may arise in our future which we did not know about then and the extra money would keep us from draining our savings.  Little did I know that our lives were going to be turned upside down financially these past years and having those SS checks were the key to our financial survival and not having to completely drain our savings.  I also saw the predicament financially our government was in and felt it was only going to get worse economically in the future.  I didn't have enough trust in my own government to be sure how long we could depend upon our SS checks.  So, I bit the bullet, we took SS both at 62 and it was the best decision I ever made for us financially.  We "had" a paid off home but problems caused us to lose it and  move out of our home state and learn to live in a new state in an apartment paying rent all over again.  Thankfully, we can pay our rent and other bills with the SS checks which I had already applied for.

It is an individual decision and even if you have savings, don't be so sure it will be enough if circumstances destroy your plans and you have to start over, as seniors.   If our government doesn't make Obamacare more affordable and work out it's problems, ask yourself where are they going to get all that extra money they plan on subsidizing premiums with.  No one seems to be concerned about this because they want so badly to get the Mandate they need to make it work.  Will it come out of those social security entitlements you are trusting them to "hold" for you?    Think twice and then three times before you trust this government to make good on it's word.  Just my opinion.
3
paoli2paoli21,405 posts since
Aug 10, 2011
Rep Points: 6,149
2. Wednesday, October 23, 2013 - 5:28 PM
I agree, Paoli2, with your rationale for SS at age 62 and I plan to do the same. I have been worried about runaway government spending ever since the budget surplus of the late 90's was squandered with the war on terrorism, Iraq, Afganistan wars, and Bush tax cuts. For me, the ACA premiums are a big improvement over my current individual plan and hopefully will provide an economical bridge to Medicare. I'd rather see taxpayer funds used to keep people healthy than to kill people. I'd also like to see the government collect enough taxes for what it spends.
5
jamesstewartjamesstewart15 posts since
May 22, 2011
Rep Points: 73
3. Wednesday, October 23, 2013 - 8:55 PM
For those who have to or want to retire at 62 or 66 I think it is best to collect SS and let your savings, your IRA's or pension grow. Live off SS. My husband had been on disability for many years and I collected at 62 and continued to work but only part time until 65 when I could also get Medicare.  We lived off his disability, my SS and I was able to continue to fund Roth IRA's and pay for my medical and his supplemental insurance for both of us with my earnings. This worked perfectly for us. I was able to spend more time with my husband and care for his increasing needs and still be able to invest in our IRA's and my 401K for a few more years while still increasing my SS checks by working.

As far as paying for the subsidizing of the  low income for their new healthcare plans, and for all the other expenses you can read about it on the gov website. There are articles in the papers also. The link below is from Yahoo finance. This information has been on C-Span on several Monday mornings.  People from Kaiser Foundation come on Washington Journal explaining all phases of the healthcare plan and they take call-ins and questions. Hope this helps. You can watch the programs on C-span.org and then click on the tab series and then Washington Journal. There is a search box if you want to look for something on Washington Journal. You can watch reruns of Washington Journal. I like newsmakers. The library on C-Span's website if amazing. You can even call in with suggestions for their programming, with questions etc. I was given a cup that has since been broken, but I also have a cloth bag with their logo from them for a suggestion made a few years ago. 

Here Are The New Taxes You’re Going To Pay For Obamacare | Daily Ticker - Yahoo Finance 
4
Ally6770Ally6770941 posts since
Jan 16, 2010
Rep Points: 2,739
4. Thursday, October 24, 2013 - 11:55 AM
I've been thinking about this, also.  My husband is going to retire when he is 62.   Suze Orman advises her callers to wait until they are 67 or 70 to collect social security and live off of their savings until then.  It would be a big drain on our savings if we waited until he was 66 or 67 to collect social security.  I want to thank Paoli for the response because it puts this into another perspective for me.  One reason my husband wants to retire at 62 is because his father died in his early 70's.  I haven't run the numbers but I'm guessing that if you think you are going to die younger, you should go ahead and claim earlier.   I just don't want to put a big dent in the savings waiting to claim social security.
3
linmarielinmarie13 posts since
Jul 15, 2010
Rep Points: 44
5. Thursday, October 24, 2013 - 12:39 PM
#4 Social Security will run the numbers for you. Make an appointment and both of you go in and they will run both of your numbers. The MBA at the SS office  asked me how long my mother, father,  brothers, sisters lived, gave me several situations on how long  it would take to break even etc. But quality time spent with your spouse is very big issue for most of us. Your husband's health and both of your well being for the next step of your life is what should matter. I have outlived my older brother, younger sister and father by many years. I would not have changed anything. I am so glad I retired at 62. My husband did not live as long as his father. Suze Orman is 62 and has millions in bonds and even told us a few years ago that she had over 20 million in long term 5% individual bonds. She probably does not have stress caused by money. She told about flying out to California first class for a $400 haircut. There are so many decisions that are made when you retire and money is just one of them. Having a SS check coming in every month and not having to draw on your savings is very important or was in our situation. Being debt free is a criteria to be considered.

We cannot depend on high interest rates caused by inflation and believe that it will pull us out of our situation. Rent, food, electric, phone, clothing, insurance, gas tax etc will only go up also. We may have more income from interest but I don't know that would cover all of the other things we need for daily living as those prices go up. Traditionally, in the past interest, rates received compare closely with the rate of inflation. I wish you a long and happy time together. No one can predict the future. 
5
Ally6770Ally6770941 posts since
Jan 16, 2010
Rep Points: 2,739
6. Thursday, October 24, 2013 - 1:17 PM
#5  You really are recommending "#4 Social Security will run the numbers for you" .  ?  I have spent months on the phone for hours at the time trying to get the most simple questions answered and do you think I would trust them to "run the numbers" for me?  They are trained to get people to wait as long as possible to collect and convince them about how much more they will get.  They don't tell them the other side of the picture.  I ran my own numbers after  reading an article about why not to wait and yes we would have made a bit more by waiting IF we both lived long lives.  However, the difference was not worth waiting for in our situation and we are so glad today that we didn't wait.   If I had truly died with that cerebral aneurysm in 2000 I would have gotten nothing and the gov would have been the winner.  I survived, got the SS and have had it to use for all these years.  It's like a game of Russian Roulette with social security and I don't like anything that puts up my life as a gamble.   However, each one must make their own decision in this matter.
3
paoli2paoli21,405 posts since
Aug 10, 2011
Rep Points: 6,149
7. Thursday, October 24, 2013 - 2:37 PM
I guess they do things differently where we live. I did not have to wait on the phone. I called and made an appointment for a day that I could get off work, had no waiting, sat down and spoke to the person. He took all the information. He had an MBA in business and tax law, figured everything out, printed it out and I took it home to look it over and made the decisions. For me I could have taken 1/2 of my husband's SS now or later, or  collect on mine now or at a later date or even at 70.  He did each month and he figured out with the amounts for each month and added up any pension income for taxes etc. He was very good. For me the decision was to work part-time to collect on my SS at 62 and not on my husband's. He filled in the figures for each column for us. I just used this age group in the link below because it would be current to those making decisions now. He even figured it out with my SS going up every year if I continued to work part-time, if I earned more than was allowed and paying some SS back etc. The choice I ended up making was to collect SS on my earnings at 62, continue working part-time  earning more that was allowed and paying some SS back. Sounds crazy but what worked best for us was to make more than was allowed pay the extra taxes and pay some SS back. He even gave us the figures for doing a Roth or deducting a traditional IRA. I took the figures home did some trials doing the taxes on some of the years and his figures were consistant with the tax laws at that time and I made my choice. Never looked back and it was the right thing to do for us. Everyone's situation is different. I was only working one job at the time quitting one 5 years earlier becaue I needed to spend more time caring for my husband and getting older I needed more than 3-4 hours sleep. Tax laws are always changing and it looks like they may change for retirees again.

 Oh yes I almost forgot, for each month he put the break even point for each of the decisions that I could make. 


Full Retirement Age: If You Were Born Between 1943 And 1954 
1
Ally6770Ally6770941 posts since
Jan 16, 2010
Rep Points: 2,739
8. Thursday, October 24, 2013 - 3:14 PM
Wow!  You must really be living in Heaven!  We sure don't have a SS like that in our city or anyone like the guy you got!  You were really very fortunate to get someone who seemed to be so educated in what he was doing.  You go into our SS and you can't make an appointment.  You wait in line and are there for hours!  Must be because you live in a small town or something and you don't have a lot of people needing their services.  I would have loved to be able to have someone do that for us.  Good for you but that doesn't mean the poster will be just as fortunate.  I hope she is.
3
paoli2paoli21,405 posts since
Aug 10, 2011
Rep Points: 6,149
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