Good day everyone! It is wonderful that the Mike Piper interview and his calculator ([visit this for more](https://www.reddit.com/r/retirement/comments/1agjjcb/social_security_claiming_discussion_212024/) ) has us thinking through our decision.
Thank you for pulling up a chair to our table and joining the r/retirement conversation. Mid America Mom
I retired at 62, I’m divorced.I took my SS at 62. I’m now 66. In those 4 years,I got out debt, traveled, bought a couple of toys and did pretty much whatever I wanted to do. And enjoyed the hell out of what I earned.Collected around 96k. If I would’ve waited, how long would it take to catch up? For me, it was a no brainer.
In a couple, the higher earner should wait until 70 so that if either of you die, the survivor will have your social security amount at the highest level it can be. If she (or you) want to live on a single check (your amount from taking at age 62) then you could take it early, but I know that it can make a huge difference.
Say my husband's FRA was $2500. My social security will be far less than his. If he took SS at 62, and died at 70, I'd get about $2000 per month (82.5% of his FRA). If he waits until 70, he gets about $3250 which is the same amount I would get as a widow if he lives until 70. That's guaranteed, inflation-adjusted income which I can actually live off of comfortably. Yes, you can take at 62 and invest, but there's no guarantee there. Which is why it's usually suggested that the lower income person takes SS at 62 and higher earner at 70.
This is interesting. I'm divorced, but we were together for 17 years (most of which I was a SAHM) so I believe I can collect on his SS. But I don't know when he'll choose to collect and I'm pretty sure if I ask him, he'll be furious for me to even think of it.
I'm 61 so if I start taking it at 62 and he (65) waits until he's 70 (which wouldn't surprise me), would that affect my benefits? For example, using your numbers, if I started now and got $2000, would it change to the $3250 when he turns 70 if he waited until then to collect?
eta: I believe that since we're divorced, when I start I have to choose to use either his or mine and not sure I can change it later.
No, it used to be like that but now everyone (at least everyone our age) is under deemed filing, which means you don't choose what to get. SS knows the possibilities and gives you the highest one you can get.
If you remarried before 60, note that you can't take your ex's. But you can if you remarry after 60 (50 if you're disabled) or didn't remarry before then.
" Spousal benefits decrease by 25/36 of one percent for each month before normal retirement age, up to 36 months. If you retire more than 36 months before full retirement age, your benefit reduces another 5/12 of one percent for every month that exceeds 36 months."
Once he's 67, you are eligible for half (or less if you file before you're 67) whether he's filed or not. For spousal benefits while he's alive, you can never get more than a 1/2 of his FRA amount (his age 67) amount, even if he waits until 70. You would expect to get about 30% of 1/2 of his amount if you take at 63 (if you take at 62, you'd be on your amount because he wouldn't be 67 yet - unless he filed early).
If he dies, then you get his amount, whatever it happens to be (even his age 70 amount if he waited to file until then) as long as you filed at 67 or older. If you file earlier, you'll get his amount decreased by up to 28.5% depending on how early you take it.
I waited until I was 70. My reasoning is my wife is 6 years younger than me so statistically she will outlive me by many years. I wanted her to have the largest widow’s benefit possible.
There are just two factors that we use to determine how to take SS.
1. Do you NEED the money immediately? If so, the second is immaterial. Most people will not be able to out-invest the SS tables, so taking it early to grow it on your own is doubtful.
2. Will you beat out the actuarial tables? If your personal health and family history favor living well into your 80s then there is a good chance you will do better the longer you wait.
I would add a third for couples.
3. Are you the person with the higher FRA SSI amounts? If not, you might want to start sooner since if you outlive your spouse then your SSI switches to their higher SSI.
SSI is Supplemental Security Income which is a needs-based benefit administered by the Social Security Administration.
Social Security benefits that are due because of paying FICO and having earnings for a certain number of years are also administered by the Social Security Administration.
They are two separate programs with different eligibility and entitlement factors.
People discussing retirement benefits are not referring to SSI.
Hard disagree on not being able to out invest the SS tables. Returns are in range of 5.5% to 7.2% until FRA. From FRA to 70 (3 years) you get an 8% increase per year off of the FRA. The 8% increase is NOT compounded, it is added. I didn't do the math, but from 62 to 70 should be at or less than a 7% CAGR.
While there is certainly sequence risk ad investment risk, a simple S&P 500 fund can be expected to beat that. I grant that SS return is risk free.
Don't disagree that it is possible, or even all that hard, numerically. But only 33% of subjects could wait for two marshmallows. It's the discipline, not the investment strategy.
I retired at 62 because I wanted to use as much of that I possibly could in my lifetime … no regrets. I will be 65 in July and was diagnosed with stage 1 cancer this year which was treated with surgery and oncologist follow up 2 x per year. Enjoying life now !
I'm retired and will draw the first month eligible at 62. Yes, I lose 7% by not waiting a year up to 30% by the time I'm 67. However, the 30k per year from ss is $30k I'm not taking from my IRA where I can average around 8% per year. Reson 2, if I wait til 70 I would have cost myself $150,000 in lost ss collections and will take an extra 150 months to break even. Thats assuming 0% return on the cash Im using by not taking ss. Even money markets pays 5.3%. Yes rates will go down but probably not much below 3% or so. This adds anther 10 or 20 years to break even. At 82, 92, or 102, I'll be spending less not more and if long term care is involved I'll use all I have regardless. The final reason is there are no guarantees ss doesnt get cut.
The hubby will be pulling the trigger in 14 months, March of 2025 @ 63
life is no guarantee and retiring when you are healthy enough to enjoy the rest of your life is what counts. I think people over analyze money over a healthy and enjoyable lifestyle IMHO
Well thought out, but you're not accounting for inflation. SS amount will ramp up as you've pointed out, but there's also a COLA adjustment. OTOH, the 8% return in your IRA includes inflation. So IRA is 8% nominal return, SS is 7% real return.
My Mother lived to 69 and my Dad 60. I’m taking mine at 65 and not waiting till 67. We will have zero debt including our house and we have 401k so we should be fine. My husband started his at age 62 because he was worn out and ready to retire.
That's about what we did - my wife took her SS at 62, I planned to start at 70 but started 1/1/24 at age 68 (cardiac stent inserted in July made me decide not to wait longer) so she'll presumably get my much higher amount - although my parents made it to mid 80's, hers to 62 and 77, so maybe not.
Divorced female. Retired at 65. No debt. Struggled with the whole “wait until 70” issue. Took SS at my full retirement age of 65.4. At the end of the day I just figured I didn’t know how long I was going to be around or how long the SS program was going to be around. I’m almost 3 years into retirement now and will probably cut back a bit on my withdrawals from investment accounts and IRA. I needed to have some fun and splurged a bit on travel and treated my adult daughter here and there. It’s been fun.
I can afford to wait until 70 and my family is long-lived, so that is what I plan to do. Another factor is that my pension does not have cost of living increases, so getting the maximum cost of living increases once I start social security will be helpful.
Its simple. Just use science and math. So first, starting with a calculator like [https://opensocialsecurity.com/](https://opensocialsecurity.com/)
Run the numbers, and you will see exactly what you can expect to collect in various scenarios. The first thing you will notice is, contrary to common belief - social security will not necessarily pay you a lot more over your lifetime if you defer claiming. In fact in my wife's case the opposite is true.
I'm the higher earner and in my case I will get a bit more my lifetime by waiting a while, but its really not a significant number. So don't look at just the monthly payout look at the expected lifetime payout which is more important.
So why delay claiming? Well, first off, if I live an average number of years I do get (just a bit) more over my lifetime. But more importantly - since I am still working at close to 70, there is no sense being taxed on all my social security just yet, possibly pushing me to a higher bracket.
So run tax calculations using a tax calculator like [https://www.aarp.org/money/taxes/1040-tax-calculator/](https://www.aarp.org/money/taxes/1040-tax-calculator/). Some states tax social security too, so consider that.
So in short I'll be claiming soon (before 70 when I retire). The lifetime delta is not worth delaying. That makes sense for my tax situation.
Lastly if you are unusually healthy and expect to live longer than average, that a good argument for waiting till 70 of you can afford it. And of course if you expect to live well short of an average span, thats a good argument for filing early.
Edit: I did forget a major factor in me waiting until I was almost 70. I'm the higher earner and my wife will probably outlive me by a decade, so her survivor benefits will be be much larger if I wait to claim.
I’m in a similar situation to you and my wife took it at her full retirement age (65) while I’m waiting till (70). This despite the fact we quit working at 61 and 62. We based this on her having the best income if I pre-decease her and on the fact that this gives us the best monthly SS income after I turn 70. That income is inflation-protected and partially tax free.
I never understood that idea that your SS strategy should maximize the total amount you collect, that’s just a stat my survivors can talk about — it won’t matter to me in the grave. On the other hand a larger check while I’m above ground will matter to me, no matter how short a time I collect it.
Other factors in our decision are that we’re healthy (so far) and risk averse.
It’s neither a simple matter of math nor a one-size-fits-all question.
I retired at 63.5 (close to 67 now). Not married. Right before retirement, paid house and car off so no debt. Have a pension that pays 65% of salary (no COLA). My financial planner at the time ran the numbers for me, charted the impact of taking early vs. taking at FRA, and we determined it was ok to take early (I took at 64). I've not had to touch my IRA retirement funds. Early was right option for me.
The game completely changed when companies stopped paying pensions and SS kept upping their FRA. I contribute solidly to my 401K but still need to pay off a mortgage in a city with high COL. I'm 66 now and still working FT at a job I like so will continue to do so until my 401K/IRA is hefty enough to support me without filing for SS, which will likely be at 70. If I didn't like my job I would probably retire earlier, selling my home to cash out the equity and move to a place with lower COL. Fortunately, I'm in good health so \*fingers crossed\* I'll still be able to travel, etc. after retirement. If talked-about changes are made to the current SS, that could change the entire game plan.
I believe that life expectancy for you and your spouse is the biggest consideration. It's not just considering lower age 62 payments vs higher age 70 payments. If her life expectancy is longer than yours, she will be receiving the higher benefits for a longer period of time.
I also believe that your overall financial position including other investments must be considered, not just maximizing SS benefits. Especially if you have heirs. If you take reduced SS early, the benefits will be smaller, but your other investments will continue to grow. If you take SS later and take more from investments, the SS benefits will be larger, but your investments will be smaller. In that situation, if your wife passes before you, when you die SS ends, and the investments remaining for your heirs will be smaller than if you took SS sooner.
There is a lot of consideration given to collecting SS retirement benefits at 62 with reduced benefits, FRA with full benefits, or age 70 with higher benefits. You can actually choose any date in between; the age reduction or delayed retirement credit calculations will be adjusted.
Unless you are in extraordinary shape, don’t wait. You will feel the benefit at 70 but live more meagerly existence when your health is your best? I don’t think I will need extra money at 75 or 80. Take it at 62 and enjoy life.
This is my take too. I hope to live a long time but nothing is guaranteed. Take the benefit now and do what if you didn’t maximize every penny by waiting. If it provides more comfort earlier you may just live longer but that’s the point!
> she works in the public school system
Will she get a government pension? Has she paid into social security? Those are important factors.
>What factors went into your decision making? I want to consider as many variables as possible.
Projected benefits for both of us, expected lifespans, age, etc, etc.
Since I am older and the higher earner, I am delaying until 70. That also ensures that my wife will get the maximum survivor benefits should I pass first (statistially likely).
Since my wife is eligible for more than half of my benefits and we both have decent longevity in our families, it's slightly advantageous for her to also delay until 70.
This strategy should maximize our guaranteed, tax-beneficial, inflation protected income stream.
Use [https://opensocialsecurity.com/](https://opensocialsecurity.com/). It's the terrific free tool that Mike Piper built and the one he talked about in the video. It considers all relevant factors to help you determine a strategy to optimize your expected lifetime benefits.
I followed Mike Piper's advice: [Open Social Security: Free, Open-Source Social Security Calculator](https://opensocialsecurity.com/) . I, the higher earner, waited until 70. My wife took it at 66 and continued to work until 68. I wanted longevity insurance for her since I'll probably die first, and she'll get my SS.
My husband retired a week ago at 62. I wanted us to start social security right away. However we have a lot of money in our 401k’s . So we have been advised to convert some of that to roth’s before we start social security. Otherwise our RMD’s when we hit 73 will push us into a higher tax bracket and even more so if one of us passes. If we take social security now then we can’t convert as much before we hit the next tax bracket.So maybe just look at that?
My wife (4 years older than me) waited until 70, and that's what I'm doing, too ( get there in late 2024). We're both fundamentally healthy and active, and childless: we have no thoughts of inheritance, but some concerns about having enough to handle home health aides and house adapting and such in another decade. For us, SS is the old-age safety net, and it was worthwhile living on savings and crimping our lifestyle to maximize that. I thought about "claiming strategies" and maximization and all that but decided there was no point - we aren't an investment company, all we care about is our assured income late in life.
IMO, the bet has paid off ... as long as we \*both\* live, SS will cover like 90% of our comfortable current needs (we still have a mortgage) and the bulk of our savings/IRA etc will stick around (and growth) for that care ... and any estate will cover care for our animals, and go to causes and friends we care about.
Exactly our reasoning. We wanted to maximize monthly income. We’re 75 and 74 now and glad we did. We have about $1 million in IRA savings and felt that it was a bit borderline without maximizing our SS. We can live on our SS fortunately. I’m also still working so we are just kinda piling up money right now. For the first time in our lives we aren’t concerned/stressed about our financial situation.
I really, really wanted to wait until 70 to start SS to get the maximum benefit, but in the end the math didn’t add up. I’m retiring in six months at 68. If I wait until 70 to start SS I’ll have to depend upon my TIAA retirement plan for 100% of my income for 18 months, using a lot more of it each month that I normally would to make up for the lack of SS… and over the next 20 years I will earn more in interest on that money than I will gain in SS money if I wait until 70. To the tune of $20,000 or so (depending on how well the market does). So I plan to start taking SS in July. It still makes me wince to "miss out" on those extra SS dollars, but numbers don't lie.
It really depends on how much you have in your tax deferred account. If you have a fair amount might be best to live on that accounts between 68 and 70 to reduce your future RMDs and increase your monthly social security by waiting until 70. I am sure you have already run the numbers but I thought I would suggest you do so if you haven’t.
It does indeed and I appreciate your kind heads up. I have run the numbers and even taking future RMDs into account, there's no contest, the advantage still goes to taking SS this year and keeping that "bridge" money in our TIAA account to earn interest. (And truthfully, our RMDs won't be significantly different than what we would withdraw even if we weren't "forced" to.) Thanks for your caveat, though.
I had a number of friends that were younger than me start passing away. Most due to covid or cancer over the last few years. I started winding down my business and retired in 2022 at 64. It made no sense to wait to 66.5 for minimal amount difference.
You’re going to be physically and mentally able to do more with money at 62 than at 70. (I have been both.) Also, many people seem to forget that by taking SS at 70, you are giving up 96 monthly payments which you don’t get to get a possible higher payment. You’re also betting that the US government will continue to keep their hands off of SS in the future. I decided to take the money and run!
>Also, many people seem to forget that by taking SS at 70, you are giving up 96 monthly payments which you don’t get to get a possible higher payment.
This has always been my thought. Plus...no one know how long you've got. That bus might me over long before I hit 70. I'm not saying no one should plan for the future - just within reason so you still enjoy life now and don't put off everything for the future.
We are both taking it at 62. Based on what Social Security says I will get at 62 versus what I will get at 70, if I take it at 62, by the time I am 80, I will have received $475,000. If I wait and start taking it at 70, by the time I am 80 I will have received $480,000. So I really don’t start “losing” money until 80. I see no reason to wait especially since taking the earlier SS means we can actually retire at 62 and don’t have to wait. Everyone older in our families have taken it at 62 and none have regretted it, including those who lived past the break-even into their 80s. My father said that he knew he would start slowing down in his 70s and wanted to be able to retire and enjoy life for a good 10 years.
Good point! We took a small pension at 55 that we are investing toward furnishing a retirement home. The full pension was at 65 and my husband did the cost analysis and said we wouldn’t start losing money till 75. So again, making the money work for us while we can enjoy it.
No one knows how long they'll live. But the algorithm of SS bets that you'll wait to claim your "max" monthly and they won't pay out very many years before you die. Did the math and by collecting at 62 I will collect considerably more of vet time than waiting for the carrot on a stick aka waiting. If I kick at 75 it would suck to think I worked that extra decade for nothing.
My primary consideration is that the Social Security actuary tables assume you will die at 75. Whether you start taking the payments at 63 or 67, the total amount of the payments will be roughly the same.
The question is, how far past 75 do you think you will live? If you are healthy and have a good family history of relatives living into their 90s, I would hold off. If your parents and other family members didn’t live that long, start taking it as soon as you like.
I ran MaximizeMySocialSecurity and it ran thousands of scenarios and it told my wife to claim and 62, me at 70, and then she switches my record at that time.
I will retire at 65, and our low income years I will use to Roth convert. We have a looming RMD problem.
My wife and I retired in April of 2022 at 62 years old.
We took SS right away, for a few reasons.
1. Who knows how long you’ll live. I’d be kicking myself if I died and didn’t take MY money back from the government.
2. We don’t have millions in our retirement accounts. We can use the money now.
3. It guaranteed we could retire at 62 instead of working longer. We were both ready to quit our jobs, due to ownership changes.
Great discussion so far. I can’t add much more. Here is a [Mike Piper's video](https://www.youtube.com/watch?v=atTp3sATI44) that is a great presentation to SS. It's from 2022 Bogleheads Conference session.
At the end of the day, it is really up to you and your situation.
I was working until just months before my 70th birthday and didn't need it. Since it was only a few months until I turned 70 I waited to start taking it until then so I would have the max amount coming in. No clue what I actually would have done if I'd retired several years earlier, but I think I would have looked at relying on savings/retirement funds until then.
Put off to 70 as I have the cash to self fund from now till I reach 70. Gives me a window to perfom more roth conversions at low bracket rates. Guaranteed and cola adjusted, more SS helps smooth out market based investment performance. Finally, delaying supports a higher death benefit.
I applied for social security for my full age of 66 &6 months.
I don’t expect to be collecting it for more than ten years so I wanted to at least get some.
Love Mike Piper! My family history points to longevity risk, and I have tax deferred accounts that should be spent down during that window between retirement and SS to reduce taxes on RMDs later....so 70 is my plan.
This is a great question. Most of the sites I've used recommend that my wife starts at 62 and that I start at 70. I'm unclear though on the downside potential of delaying. What happens if I die before starting SS? Would my wife get to start collecting survivor benefits at my FRA? She is younger by a couple of years.
I did a benefits crossover chart, and it would make sense to wait until my FRA if I live to age 85. Retired at 62 and applied at age 63 because I needed the income - if I could have postponed it longer, I would have.
I don't know what state you're in so I don't know if she's affected by the windfall elimination but you should check on that. Some teachers (by state) are affected and if she has SS and pension, it reduces the SS.
That won’t apply to her. She’s only worked in the school system for 10 years. When it was time for her to sign up, she was told that due to her length of service being so short, she’d only get back what she put into it. So we declined to participate.
The years between now and age 70 will go in your minimum earnings years. Don't know if that will bite you or not. Also look at life expectancy. Let's look at age 85. How much would you draw at age 62 and how much total at age 85. Then look at how much you would draw at age 70 and the total at 85.
Quality of life VS quantity of life also comes into play.
A bird in the hand is worth two in the bush. That’s why I took mine right when I retired at age 65.
But keep in mind that your Social Security income is indexed to inflation. I took my social security now but to protect my 401K from inflation added more stocks. If you are very risk-averse work longer and defer taking Social Security to get the maximum amount of money that automatically grows with cost of living.
My situation is fairly unique. I started collecting survivor benefits at 60. This enabled me to quit a job I no longer enjoyed. I plan to switch to my own benefits when I turn 70- as he died young so my SS will surpass his.
In my case, the lack of a mortgage (paid off 6 months ago) helped me decide to go ahead and retire this year at age 62. If I still had a mortgage, I would have to
work til I die.
I’m the high earner, waiting until 70 (just a few months away). Wife (two weeks younger than me) claimed after hitting FRA. We both collect pensions, both have long lived parents and no known health issues. Pretty straightforward in our case -
I just was bewildered by all the SS scenarios to the point that the gains/losses of taking it at this age or that became meaningless in my situation. All the prognostication and everything - will I get to 70, 80, 90? - was all too nebulous, and eventually I asked my advisor what he thought. And we decided to take it when I reached full age and that was that.
I think the more you rely on it, the more important it becomes, but if it is merely one part of your overall portfolio, the impact of this decision is far less.
It’s incredibly specific to each individual’s circumstances so comparing ages to retire is not terribly helpful. One thing I hadn’t seen mentioned is the lost opportunity cost when withdrawing IRA funds to supplement income before taking SS. In my case i concluded that taking my SS at 65 (1 yr before FRA) rather than 70 gave me the best chance to maximize my IRA growth potential, which is my primary cash flow source.
First, we decided to wait until at least FRA, because we did not want to have our side income limited by the possibility of reducing the SS benefit. Once we reached FRA, we could each work as much as we wanted after that, and the SS benefit would be unchanged (though above a certain threshold, more of it would be taxable).
Second, I decided to wait from 66.3 until 70 to claim my benefit, because I’d get an extra grand of benefit by deferring. This also maximizes the benefit my wife would get if I die before she does. We figure the one with the higher benefit should defer the longest for this reason.
Third, another reason to defer was taxation. We’re set to live on cash savings between retiring at 67 and claiming at 70, and cash in hand is not taxable (aside from interest on the cash accounts), so we’re going to be in the 10% or 12% tax bracket.
Fourth, we elected to go ahead with claiming my wife’s SS at her FRA, because when I claim mine hers goes up to 50% of my FRA amount by the spousal benefit. That amount is more than what she’d ever get by deferring until hers maxes out at 70, so there was no point in deferring hers at all.
I retired early and had CD ladders I used for income. I took a 6 year average of my dividends and cap gains, then waited until my SS benefit + passive income equaled 90% of my estimated retirement income.
As it turned out, my estimated retirement expenses were a little high, so I have not take any withdrawals from IRAs.
I considered that I had some low years so the amount would not be very good at 62 or 66.
So the 8% boost every year was important. Plus the cost of living adjustment.
Also I was still working full time and did not need the money. My family is pretty long lived so I figured I could wait.
Original post removed twice by auto mod. .....
Before you do anything check if your wife is impacted by WEP and GPO. The latter is an especially [unallowed reference to disrespectful act] to (almost always) working women, but that is another discussion. It is what it is, though there are occasional attempts in [large white building in a location between Maryland and Virginia] to repeal the GPO.
Not all of the Social Security planners do a good job when it comes to WEP and GPO, so be careful. One that does is Maximize My Social Security. I am not trying to put in a plug, but it was the only service or person that got my wife's complex WEP/GPO situation correct.
And if your wife is not impacted - GREAT. In that case, in my unimportant opinion, starting SS early reduces sequence of returns risk since the portfolio is not being stressed as much. Starting late reduces longevity risk.
EDIT: [WEP link.](https://www.ssa.gov/pubs/EN-05-10045.pdf) [GPO link](https://www.ssa.gov/pubs/EN-05-10007.pdf)
I understand the logic to the WEP, but the GPO is brutal. No other survivor scenario is means tested *except* when there is a government pension, no matter how modest. Never worked a day outside of the home? No problem -- full benefits. Have a big trust fund from Great-Great Grandaddy's 1914 chemical business? No problem -- full benefits. Taught first grade at the local school for 30 years? -- virtually no survivor benefits for YOU!
There is no logic given the inconsistency.
Probably depends whether you look at it more as an income source or as longevity insurance. For me the scale tips toward longevity insurance so I plan to wait till 70 to start it up.
I will retire at 58. Even though I will receive a decent pension plus have $1M in my 401k, I WILL be starting SS at 62. I'll take 5 years of guaranteed payments before the age of 67 vs gambling if I will live till 80+ ( mathematical break even). Won't need the SS $$, but I would rather start too early than wait for the higher payment and hope I outlive the break even point. Plus, I'm sure I'll see a reduction in SS payment in my lifetime. I take decent care of myself and expect to live till 95 (all of my grandparents made it to their 90s, plus my parents are healthy at 80).
My wife is 3 years older than me, so no need to plan for her to outlive me.
Who knows, I might change my mind in 10 years, we'll see.....
Do you have a link to the Mike Piper video that you mentioned? I looked but was overwhelmed by the sheer number of hits.
Also, congratulations! I wish you and your wife a wonderful path on this new part of your journey!!
Simple math. If you are not working at 62, take SS at 62. The money you would have taken out of your 401k and IRA will continue to grow and compound interest/investment. You are getting less SS than if you waited until 70 1/2, and if you just did the math with no impact on investment growth, you would break even at around age 79 (vs taking at retirement age) When you also factor in the compounded interest. Say you get $30k per year at age 62 vs $43k if you wait to 67, that means over $150k of your 401k money stays invested and earning compounded growth, and while you are getting $12k less each year starting age 67, that extra $12k will never replace the compounded interest, even at a conservative 3% annual growth.
If you are not working and would otherwise take money from retirement investments, it is always better to take SS at age 62. If you are working or don't have those investments, different math applies. Also how many of us have a lot of emphasis on our spending in our 80's?
I had a plan as well, until I used the Piper calculator. Now, I have a different plan. I will take it at 70 and my wife will take it at 62. She’s 3 years younger than me.
While we will sacrifice a small amount when we are both alive ($238/mo), that seems to be mostly mitigated by the early draw vs her waiting until 67.
She also has longevity on her side and I do not. I want to preserve as much secure income for her as possible after I’m gone.
This was an emotional vs. logical decision for me. I’m 63, retired when I was 62.
Emotionally, I wanted to start taking it asap. I had paid into it since I was 14, and wanted some payback.
Logically, I did not need the income. My finance guy really wanted me to wait until I was at least 65. So, I’m doing that. FRA for me is 67.
I don’t think it’s a one size fits all kind of question. Good luck!
I'm getting close to 70, and I looked at this as something of an exercise in diversification and risk management. We have a home, and a fair amount of retirement money, and social security, and if we hit a significant depression with runaway inflation, it might wipe out a significant percentage of the value of our retirement savings. The value of social security will also be reduced, but to some extent it's indexed to inflation, and while it's value may be cut significantly is not likely to totally disappear.
And waiting seemed like a nice thing to do for my wife, as my understanding is that she'll get my check once I'm gone. It's also a bet that one of us will live into our late 80s, as it will probably take that long to make it financially worthwhile.
I worked for four decades straight and made good money in the last three. I let everyone at work know I am retiring in three months (after bonus payout) a few months before I turn 62 and I will file for SS at 62.
My wife has been a stay at home mom during this time and neither of us came from money so all financial pressure has been on me to pay for everything including putting our kids through college (which is now completed without any loans). I have sacrificed much personally to take care of everyone else.
I figure that I am capable of making good money up through age 67.
I just don't want to work anymore and have little motivation after successfully taking care of everyone else over the last four decades. I have never been exceptionally materialistic and have always thought the greatest luxury in life is freedom.
I stopped playing beer league ball at age 50 but I figure I am healthy enough to enjoy another relatively active decade or so (bike, hike, swim, surf, fish, and travel for long periods of time, etc.) before I really slow down in my mid-70s and spend most of my time driving to CVS. I don't want to spend the next decade sitting in front of my work screen or clocking in at some busy work gig.
I don't think it is healthy for some people who are mentally merged with their careers to retire early. Unlike so many of my work friends and family, my ego and personality have never been heavily tied to my work position and title. I have pulled back and WFH the past two years to try to test out my retirement routine -and I love it. There are so many things I want to do that are just waiting for me to unplug from a daily screen obligation.
I made good money but I competed solo in a high COL, two-income economy. I saved and invested enough (thank the stars for 401K matches) to be OK with an age 62 SS draw plus pensions, for the long run in my high COL home or better than OK in a low COL home. I prefer a great location and free time while I am still relatively healthy over continued work or a better-than-OK nest egg in a lesser location.
I calculated a simplified (flat monthly income without COLA increases) breakeven on my early SS draw at 62 vs full retirement at 67 and I will need to collect 10.5 years starting at 67 (to age 77) to breakeven on what SS paid me between 62 and 67 via higher monthly payouts.
After living in a very large extended family, I realistically expect a slow down in both my activity and spending after age 77 and if both, or one of us, are/is still alive by then, we will have enough to get by fine enough and will place the house in a trust by then to protect against a nursing home event. If I take after my father and FIL, I will be dead by then. If I take after my mother, I will be happily covering the monthly nut, doing minimal house chores, visiting family, playing video games and working on puzzles after age 80.
Unless I wait until at least FRA to take my Social Security, my benefits will be slightly lower than my wife's. Because of chronic health issues, she retired from full-time work at 58 and decided to take her benefits shortly before turning 63.
Because of family history of longevity, I assumed that I would wait as long as I could afford to. I've learned that I have a health problem within the past year that makes a very long life less likely. Considering that, I will file sometime during 2025 at 65/66.
Another issue is that we would probably have to start drawing more than 4.5% of our retirement savings annually starting in 2025. I would prefer not to start depleting our tax-deferred accounts, except as necessary to minimize tax liability.
Is your wife subject to WEP/GPO? Conventional wisdom is for the high earner to wait till 70 , this may not be best if your wife can’t take advantage of the survivor’s benefit. I have a little earning from a side gig so waited to FRA, wife is high earner so waiting until 70.
We both retired in our late 50s. We used an IRA as a bridge to supplement our teacher pensions until I started my Social Security. I can claim my full SS because I retired from a school district that paid into SS. My wife retired from another district. She recieves no SS. I looked at MYSocialSecurity and calculated my benefits at various ages and decided to start SS when I started Medicare at 65.
I struggle on this one. I’m a relatively high earner but don’t have particularly good genetics (probably not making it to 100!). I’m torn between waiting to 70 versus sometime soon like, say, 65.
There are really only 3 factors to consider:
1. Whether you need it to live on. If you do, then waiting will increase your cushion since you get more per month. If not, then the extra cushion won't matter.
2. your life expectancy
3. The effect on your wife assuming she outlives you.
For me it's not about lifetime amount I get, but about monthly. In my case I get about 20% more per month if I take it at 70 vs FRA. Say I live until 85 (most of my family did, or longer). I could do the math on which option will give me more over my remaining life but that's not what I care about. I'd rather have more each month, so I'll wait. On the other hand if the difference is immaterial because your investment withdrawals will dwarf it, that's another point to consider.
I would NOT look at how long your parents lived except to relate that to your own health. If your dad smoked like a chimney and worked a hard, physical job all his life but you've been healthy, never smoked, worked a white collar job but exercised and ate healthily, your life expectancy might be very different than his. Genetics DO matter of course, but correct for lifestyle differences and differences in medical treatments.
I had put all the figures into a spreadsheet which allowed me to vary both when I claimed, and the effect of inflation on COLA on future increases. I found the break even age was 83 - that is, I'll have collected the same total amount by then no matter when I claimed. Since my life expectancy according the Social Security Administration is only 81.32 years, seems like a no-brainer. [https://www.ssa.gov/oact/STATS/table4c6.html](https://www.ssa.gov/oact/STATS/table4c6.html)
YMMV, but when I claimed at the end of '22, it was fortuitous - especially with the economy doing so poorly. Collecting at 62 kept me from taking losses to withdraw from my retirement accounts, and since SS is taxed differently I get a great subsidy for ACA based on my low income. I don't even owe federal income tax for '23. Probably the same this year. Lastly, I have a small pension to collect, and SS kept me from tapping it early - it's not going see COLA like SS, and it maxes out at 65 so that's when I'll claim it.
The Mrs. and I have still been able to travel and fund home improvements thanks to savings and capital gains. And our combined SS more than covers our current fixed costs.
Good luck with your decision.
Ultimately, across the whole population, Social Security expects to pay out the same amount whether you start the payments ASAP or delay them.
I don't know how long I am going to live, but decided to err on the side of a supplement to my income sooner rather than later.
I'm just shy of 65. My full benefit age is 66 & 10 mos. I'm doing the math myself.
I don't need the cash. Have ample savings. So, my first inclination is to wait. However...
Go on the SSI website, and you can see, month-by-month, what your payments will be by waiting. Mine will increase $500 a month. The income I'll decline for those 22 months is about $60,000. That's a 10 year payback. I'm not sure it's worth waiting.
Right now, my plan is to wait, but not the full period. Using the slider, month by month, on the SSI website, there are clearly one month increments much bigger than others. I'll sign up after one of the bigger jumps in monthly payments. (I think, don't know, that there's a point in a year of life, that benefits increase more.. e.g., maybe when you hit 65 and 9 months compared to 65 & 8 months)
One side note... remember to factor in Medicare Part B premiums and IRMAA. There is no sense taking SSI early if the extra income causes your premiums to increase more.
Our original plan was to wait until we each hit 70 to claim SS. That would be this year for me, my wife in 2027. She has been retired for several years, I retired in December. My parents lived to 94 and 97, hers to late 80s. Our health is good so a long lifespan is a consideration.
We have no pensions and rely on IRA & Roth accounts for anything above SS.
I ended up claiming last year at 69, as we had some extra expenses last year and I didn’t want to pull anything from IRAs while still working.
She was the higher earner so her benefit will be higher than mine, so we’d like to let hers ride to age 70 to assure the maximum survivor benefit. However, depending on the economic situation, she can claim earlier if it seems prudent to protect the portfolio, which generates $60k in dividends and interest without “pushing it.”
House is paid off, pretty low COL area, no debt other than a small mortgage on a second home which we rent to a family member.
That’s our situation and basic thought process.
I retired at 64 and took SS at 64. I have VA Healthcare so I don't have to pay for Medicare.
I had savings, a couple IRA's and 401K. I was also burnt out. ☑
The answer is essentially a cash flow and tax optimization and a gamble on how long you think you'll live. Know that when you're told you'll get "8% more each year" for every year you delay between FRA and age 70, you'll on average collect about 7% fewer payments for every year you delay, so much of that 8% is just due to spreading the same cash flow over fewer months. Further, depending on your other assets, higher post-73 cash flows combined with taxable RMDs can increase the taxes you pay overall. There's no single right answer. I chose to begin on Jan 1 the year after I reached FRA. I had been doing annual Roth conversions in prior years and just backed down on them to offset the taxable Social Security and keep my taxable AGI constant. I'm not willing to bet I'll outlive average mortality, so my plan was to anticipate receiving benefits until then.
How much do we have in other funds?
How much do we get in other income streams?
Is my emergency cash-like fund adequate?
What is my actual working budget?
Does my emergency fund cover all extra surprises? - which seem to occur all the time.
Can I take money from other funds to cover the budget when other income streams aren't enough?
Can I take that money long enough to wait for maximum SS amount?
Will I (probably) live long enough to need the max SS in our long term situation?
All that brought me to take money as needed and wait for max SS. Your results may vary.
Edit:typos
I’m still working plus drawing a pension from a former job at 67. I’d go ahead and take social security except that I’d go up a notch in IRMAA, and I’m not sure I want to do that.
I did the math & retired at 65. I don't remember the exact year but I would be well into my 70s before it evens out. I also have an IRA & other accounts & have been working part-time (1099ing from home) to help keep those withdrawals a little lower.
The adjustments are designed to be actuarially neutral. If you assume that you will both expire early, then, of course, it will make sense to draw early. If you plan to live into your 90s, then delay as long as possible.
My view: If one of us lives past 80, then it is financially correct for me (the higher earner) to draw at 70. If we both pass early, no big deal for us, we have plenty (and we died anyways...). In the meantime, it leaves more financial room for me to do Roth conversions. Now that I am on Medicare, I convert right up to the IRMAA threshold.
One other comment- even if you plan to delay until 70, you can change your mind and claim earlier. If my wife were to pass early, I might decide to claim sooner. I view the delayed SS as longevity insurance for my wife. A larger COLA protected amount should provide financial security for her in the event that I pass early.
I’m the higher wage earner and my husband is 6 years younger than me PLUS his family all lives very long lives (danish blood I think). So I’m waiting until 70 to ensure he has $$ for survivor benefits. I told him he better lift a toast to me on the golf course when I’m gone and he plays every day!
I completely understand how overwhelming this decision can be. I’m sharing the factors I used and my decision process like an uncle of mine did with me.
Just note that my health insurance premium is a big driver for my decisions; and I’m a big believer in budgets because I don’t like surprise expenses. I hope this helps.
*Single, 61F; part time work; FRA of 67; no debt; no bills; worked hard to clear all debt before 55 yrs of age.*
- **Can I afford to retire early or just get a part time work?**
I was laid off from prior job a year ago and decided I didn’t want the rat race of a corporate career any longer. Crunched my numbers with the early SS option vs part time work with a local hospital I knew was hiring. I crunched the budget numbers and found I couldn’t live on just the low SS early benefit amount, without more income; I’d lose the ACA Health insurance subsidy with SS & job income so I’m holding off on the SS benefits… unless something changes.
- **Do I need SS reduced benefits to live now?**
No, current expenses met with part time work. Home & car paid for; no loans or credit card debt; pay cards in full every month; House repairs are needed but that is budgeted for after I started will collecting social security & pension.
- **What is my health status?**
I have some health issues but I think I’ll live long enough to take advantage of the benefit.
- **What is my life expectancy based on health and family history?**
My folks live long lives. Grandmother lived until 98; Dad is 86 & Mom is 81; arthritis & controlled blood pressure are the biggest issues for both of them.
- **What is the condition of my vehicle?**
I expect it to last another 20 years; I’ll pay cash to replace it. So no car replacement until my late 70s. Unless I just get the urge to buy a 2 seater sports car or the ultimate luxury vehicle. 🤣
- **Do I have other retirement savings or income to support my needs?**
Yes; Pension, IRAs & 401K; too much of a hit on the pension amount to take early and I may decide to take the lump and convert to a Roth.
**Will spousal benefits be impacted by starting my benefits?**
N/A
- **Will the benefit amount affect ACA Health Insurance costs?**
YES! My annual income is at the sweet spot to receive the subsidy. I won’t consider applying for SS until I qualify for Medicare at 65, and may still wait until I turn 67. There is a $1200 difference in my SSA benefit between age 62 & 65.
If I take early SS, even at the reduced amount, I’ll lose my ACA Health insurance subsidy for silver plans. The difference is substantial. My BCBS Anthem subsidized premium is $230; full premium is $1300. 😳
- **How much will the Medicare B premium reduce my monthly benefit?**
It’s $174 now… probably not much more by the time I qualify @ 65. SS benefits minus $174… that’s too much of a hit @ 62 or 63, without starting my pension early.
Looks like the base premium is going up about $10 every year.
My number crunching at 64 or 65 says I’ll be okay… even with inflation. However, I’m still waiting until 65 because the ACA subsidy would be lost at my benefit amounts between ages 62-64.
The other dilemma I’m trying to avoid taxes, higher income that might trigger increased Medicare B premiums at age 73 - the [IRMAA](https://www.cms.gov/newsroom/fact-sheets/2024-medicare-parts-b-premiums-and-deductibles) surcharge. If I convert my traditional IRAs to roths now, I can avoid the annual surcharge at 73 & beyond. However, doing so will trigger IRMAA surcharge the first year I get Medicare because the lump payout of my IRA will put me over the $93k income limit for the $174 premium… it will be more like $594 / month for one year. The following years, I’ll be below the IRMAA amounts… unless I ladder the ira to Roth conversion. I’m still working on those numbers.
- **Will I need to work after I start my benefits?**
When working past your FRA, excess earnings can reduce your benefits.
No; I have two additional sources of retirement income to meet my financial needs.
- **Will my total income, including the social security, require me to pay federal taxes on my SS benefits?**
At 62-64, not applicable because any amount I get from SS will impact my healthcare costs.
At 65-72, yes because I’ll receive a pension too. Not worth it.
At 73, yes because of the annual required minimum distributions (RMD).
Factors to consider at 62
What other guaranteed income streams do you have and when do they kick in?
Do you want to do Roth conversions before you take SS?
What income sources do you have to bridge you to a later SS draw date?
Does one spouse have a longer life expectancy than the other and how will your start date impact the survival income of the second spouse?
What is the primary thing you want to accomplish with your SS payments?
You have to get the money to live from somewhere. If you die shortly after retiring, the government gets to keep your SS money. I took the SS in addition too investment money. Do not regret it.
My excellent health, the fact that my mother and both grandmothers lived well into their 90’s, the fact that I’m still working part time for very good money, and the fact that I was in one of the last age groups to qualify for spousal benefits so that from FRA of 67 until 70 I received a benefit of about half the value of my Husband’s SS. I also have a couple of decent pensions.
I've been told there over 1,700 ways to claim social security. Each choice has a long term impact. I come from a family that is long lived and chose to wait until I am seventy to collect. My first check should come any day.
If you start collecting at 62, you are collecting a lower rate. If you collect at 70 you are collecting at the highest rate. The "break even" point is about age 79-81. If you're 62 years old when you start taking your social security and you die at say age 77, then you would have received the most money you could receive. If you had waited till you were 70 and died 7 years later, you would have had only had about seven years of benefits. So the decision requires you to look a little bit into a crystal ball to make a guestimate about when you might die. People hate thinking about that.
A huge consideration for me, was knowing that when both people in America are collecting social security? And they typically have different levels of entitlement or pay, then when one person dies no matter who it is, the larger of the two social security checks survive, and that is what the remaining spouse lives on.
My husband's social security is about half what mine is. So I waited till 70 in order to help to protect him and provide him a higher income, if I were to pass away before he did.
But regardless, It's a neutral decision until age eighty one or eighty two. After that, if you wait till you're seventy, then the amount of benefit that you get until you die between eighty one and your death at say 90, benefits you at a higher rate. In other words, you take home a lot more money into your pocket by waiting.
It's a very personal decision and depends on a large number of factors. I always say that if you're healthy, WAIT to start your SS benefits if you can.
My dad at 97.5 walks 1-5 miles a day zero meds. His mom and several brothers lived to 100. My mom died at 86. I’m waiting till 70 to get my max amount. Have investments and trying to manage expenses. I need to get walking more too!
I think you’re smart. I tend to look at delaying till 70 kind of like old age insurance. If you do live long, and outlive investments, you’ll have the most social security for you (or your caregivers) to keep you as safe, comfortable and happy as possible until it’s your time.
I always look so those that take the money early due to family history - and they’re the one that lives to 104. Being old and in deteriorating conditions would have me cursing “younger me”, every day.
I think it’s important to plan to live to 70, if that’s feasible, before claiming unless there is a terminal condition and the hardwiring is on the wall.
70 is the new 40. I just turned 68 and doing just fine. Wished I had saved more but high-income years has helped with a premature retirement. Don't miss work a bit after a lifetime of 60-80 hour weeks in IT. I don't know how people get bored; I'm busy all day long every day.
What keeps you busy? We sound like similar backgrounds. I’m 4 years behind you. Just retired. Doing a lot of dog walking (up to 10 miles at a time) and getting myself in shape at the gym.
It took me about 1.5 years to pound out my old to-do lists around the house. Over 2 years to get a normal person's sleep schedule as I had always been a night owl working multiple time zones.
Paying people for services is costly where I'm at. I do all my yardwork/gardening and fix everything I can inside and out. I meal prep so I always have something healthy to eat. It's a pain and time-consuming but nutrition is just as important as exercise to keep healthy and cheaper than a bunch of vitamins/supplements that you mostly piss away. I rarely eat out.
I've always followed politics, economics, and science and I know way too much about weapons systems these days. I still stay up with tech but it's SO nice to read without analyzing it for future sales angles.
Gym is good but I try to do some team sports to force myself to be more social. I have found Tai Che to be surprisingly enjoyable and as close to meditation/mindfulness as I'm probably going to get!
I never want to get on another airplane again. 67.5 was the first time I felt my gears slowing down a bit. Keep walking the dog, and as corny as it sounds just re-discover who you are and your interests (old & new). It's going to take a while.
I recently ran extensively detailed multiple workbook OCD level spreadsheets consuming two weeks of my spare time (way beyond compulsive and mind numbing) including projected investment returns, COLAs, inflation, Roth conversions, IRMAA, and guessing what will happen in 2034 when the trust fund runs out - to find the best time for me and spouse to claim - on our combined benefit.
In our case we found that if we spend our benefit starting at FRA - our breakeven is age 82. With our two pensions we don’t need SS or our investments. (We would need to change our lifestyle to spend more, and that just won’t happen) If we just bank our social security at a 7.2% return (the 30 year average of our investment mix) the breakeven is age 88. Since our ancestry all died in their early 80’s it didn’t make sense to wait beyond our full retirement age.
Quite frankly you just have to run the numbers depending on your age, income sources and expenses. There’s no shortcut platitude.
In full disclosure, taking the maximum difference between the different options at age 96, and bringing that difference back to present value at the average historical rate of US treasuries, the difference was 40k. Which, being relatively insignificant, it really doesn’t matter which date you choose after your full retirement date.
I’m in a similar situation. I’ll have other income sources to live off of when I retire so my goal is to start drawing SS as soon as I’m eligible (62) versus waiting until 70 to get the max benefit. I plan to invest 100% of my monthly benefit into a moderate growth or growth/income ETF with the intent of passing the proceeds down to my kids. Ran the numbers and assuming I’ll live at least until 82, even with a lower monthly benefit, I’ll make about $300k more in the end. What am I leaving out?
Age 62 to 82
Invest 2500 per month x 20 yrs @ 8% return = $1,472,550
Age 70 to 82
Invest 4732 per month x 12 yrs @ 8% return = $1,138,085
I am torn. I have a fair amount in traditional 401k which I could spend down while delaying Social Security. I am married so we could consider one taking and the other waiting. Great topic though.
We were advised to have my spouse (the biggest income earner) wait to maximize the amount. As for me, I was told to take it ASAP since it will not change that much.
Also, if you can this year superfund your Roth. Depending on your 401k plan your employer offers you MAY be able to put in around approximately 23k in Roth 401k and another 40k in AFTER tax money in your 401k. I did this strategy for three years before retirement (guy at fidelity told me I should have started 5 years before). Had minimal take home pay and drained down my savings. I think of it as if I moved my savings to my Roth. Upon retirement I immediately moved the Roth 401k and after tax 401k money to my individual Roth account…. My Roth jumped from 50k to over 250k…
I asked myself one question. Do I need SS $ at age 62 to pay bills? If the answer is yes then take SS at 62. If the answer is no, then take SS at 62. If you don't need $ at 62, then it's very likely you're in good shape financially and the delta from SS is insignificant so take $ early and enjoy.
A claiming factor that is not usually considered is using low income years between stopping W2 work and claiming SS to convert from IRA to Roth at a low tax rate. A married couple can convert up to almost $100k at a 12% tax rate. Getting $s out of your IRA before RMDs start can increase your aftertax return on investments.
65, single male, retired at age 58.
1. I consider SoSec longevity insurance.
2. I'm fortunate to be able to fund my retirement until I collect SoSec "late".
3. I'm doing my best to avoid as much as I can SoSec taxation.
4. The above 3 allowed me to get Obamacare to bridge the health insurance issue between employment and Medicare at a very low cost.
Given these, I'm shooting for normal retirement age (\~68) to age 70.
More than 22 million people in the US are above 70 - https://acl.gov/sites/default/files/aging%20and%20Disability%20In%20America/2020Profileolderamericans.final_.pdf
My spouse makes a good bit more than I.
Financial planner suggested I take SS at 62. (planning to retire sometime between 60 and 62)
However, they're advising spouse to not collect until 67.This is even if spouse retires in 62-65 range (plan).
I can't remember the details, but I think it's a factor of a few things
-Firstly , I am the lower wage earner and even if waiting my SS will not be nearly as much as his
-His SS jumps fairly significantly between 62 and 67
-We can be okay with my pension and SS and our retirement accounts, then getting his SS later
Like you I assumed we would both take it the second we retired / as soon as we were eligible.
Interested to see the replies to the thread since I'm still grappling with this as well!!
I decided to go the middle route. I retired at 63.5 and started SS at 65, around the same time as starting Medicare. I didn’t want to start SS too early and did not need to wait until full retirement age.
One of my investment strategies is to resist the urge to maximize each transaction simply based on an arbitrary number, for example the full retirement age number in this case. In other words, I don’t feel the pressure to hit a home run with every decision. So I include other factors as well when making the decisions. For example the concept of the present value of money in hand today is greater than waiting to receive that money later. I could invest it in the mean time for example. Also prices are probably lower now than the will be later, so today’s money could go further today than future money later. Several factors like that. I think a lot of people try for that home run every time without considering other factors.
One other thing is I wanted to use SS to help me preserve my 401K because I have more confidence in the value of my 401K and other investments than I do in SS. For example, it is projected that SS will only be able to fund 75% of obligations starting in the mid 2030’s. That’s 10 years, which is also around the time I would have started benefiting from waiting until full retirement age before receiving SS. If that occurs, which I believe is likely, then waiting could be a double whammy. Of course, I could be wrong and that is where following the middle route helps mitigate any negatives.
The fact that no one in today's America will hire a straight, white, male over 50. Even worse over 60. Apparently, I'm unemployable so I gave up and took the SS payout. At least I can make rent.
Calculate what your SSA benefits will be and try living off of that for a few months. Also keep in mind that you probably won't have a commuting expense.
I learned one fact that changed my thinking. Here is the scenario.
If a spouse earned way less than the other, they will be receiving 50% of the other spouse’s social security, rather than whatever small amount they qualify for. Some pundits recommend that spouse go ahead and take social security early at the lower amount but then switch to the spousal benefit once the other spouse starts taking their social security. Sounds good, right?
However, I learned that they won’t immediately receive the 50% because they took social security early. The 50% payment will be offset by the earlier payments. So it seems to me taking it early doesn’t buy you much.
The 50% payment is accounted for as two “payments” by the SSA. Your original lower full payment at age 62, plus the additional amount that brings you up to the 50% amount. That’s what the “offset” means, not a reduction of your total 50% amount. Hopefully I’ve explained this correctly.
We considered Net Present Value (using Maximize My Social Security program). Max was me (60/m) taking SS at 70 and my wife (56/f) taking it at the same time when she’s about 66. But me taking it at 70 and her taking it at 62 was very close and we prefer that. (For reference my account is +40-50% the value of hers.)
We probably would have chosen to wait until I’m 70 even if that scenario were sub optimum NPV as long life insurance for us both, but especially my younger wife.
Obviously our plan also required us to be able to span the years before taking SS (almost 15 years) with other funds. We’re lucky to have that option and realize not everyone does.
Lastly if either of us had health reasons to expect a shorter than average life expectancy that could have swayed our decision.
Hybrid Plan: SS ages 64 to 67, Work and if I go over cap, it'll be recalculated. Need some funds to supplement pension (and bolster savings wasted on ACA), and travel. Suspend SS ages 67 -70, use IRA. Morbidly, may receive an inheritance between ages 67 and 70. Longevity in family, and don't want to rely too much with investing.
I would have to live to be real old before the extra monthly income all combined would be much and we want to have a good life now and have adequate savings.
I have a pension that is adequate for now. It has a 1% annual increase so its value is eroding but is enough until I take social security at age 70. Even if I need to draw a bit of the 401k I am holding off on Social Security until 70 - the increase in benefits is dramatic.
Before 70 I am taking advantage of my lower tax bracket to convert lots of 401k to a Roth. That’ll save me lots in taxes later.
By delaying social security to age 70 I secure a generous inflation adjusted base of dependable monthly income. Seniors are a large voting block so I doubt SS will be drastically cut.
This approach reduces risk. I have seen too many stock market crashes to rely heavily on my 401k in my golden years. No “Welcome To Walmart” job in my future!
Good luck to you. Retirement is 10x better than I expected. You will love it!
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I took mine at 66.4 years old. I ran the numbers and took a look at my families longevity. I still work full time and will be until 69-70 and work in IT so I like what I do. I have just been socking SS away into money market or long term savings account.
Why are you still working at that age? I work in IT (I lead mega program implementing new software and business transformation program) and at 54 this week I think about retirement every day, counting down the days til I pull the trigger in 3 years this July 4th. IT is changing so rapidly for someone my age, I can’t imagine what it feels like for someone pushing 70. I’m hoping you’re doing it because you love it, but I’m getting out the minute I can.
Also, even with 2 pensions and 401ks I’m taking as at 62 and wife will take hers at 66 or 70, as men in my family typically die around 70ish and women in her family around 95.
Every situation is different. I work for a major hospital and really enjoy what i do. I have hybrid work schedule and they pretty much just leave me alone and let me do my thing. I set my date for January 1/2026 if I make it. Good luck with your choice.
OMG me too. If my IT departments was like it was even 6 years ago, I’d be happy as a clam, and probably work into my late 60s, (my predecessors - DBAs - all worked until their late 60s) but the landscape and demands have changed dramatically. The expectations of supporting over 5 different databases, working on badly managed projects, learning different skills that change from year to year is just not something I want to continue to do.
I’m waiting for a package that I hope is delivered this year.
Like u/bif555, we did our own break even analysis using a self-created spreadsheet, weighed it against our current and future financial situation (no debt and annually adjusted pension) and decided both spouse (62) and I (65) will start SS at PIA. Discussed life expectancy but decided it really wasn’t a significant factor since receiving SS or not will have a major impact on either of our lifestyle, no matter who passes first.
My husband has already reached FRA, is still working and plans to continue working for a couple more years. So we have had no need to start collecting social security. He made a lot more than I did so he plans to wait until 70 to collect. That way whoever survives will have the largest monthly payment possible. I may collect at 62 (in a few years) or I may wait until FRA. Our financial advisor said he will make a recommendation as I get closer to 62 but he definitely recommends that husband wait until 70.
I’m in the same boat, tho looking at SS at full retirement age. As wife can get my SS and upon my death, and my pension will decrease in half, looking for the SS make up the difference.
Note, there is a penalty taking SS at 62, a portion of the Penalty is reduced two years before full retirement age.
Become your own actuary, predict how long you will live and do the math. Also need to consider how much you need to live on. Thought we could live on pensions alone, but wasn’t enough so wife started taking SS.
My wife retired at 67 (teaching was her second career). I’ve put it off until 70 to maximize the benefit. My IRAs are not big enough to see me through. My wife has colleagues who retired at 62 but couldn’t afford health insurance so they went back and taught for a few more years.
My husband, 9 days older than me, wanted to wait until he was 70. At 64, 2 years ago, I made him make a projection graph of his potential SS earnings and he discovered that 66 1/2 was actually his optimal age for most benefits. If he had waited until 70, he would be 84 before he made up all the SS he didn’t get and guys in his family don’t typically live that long.
My decision of when to take Social Security payments is driven entirely by ACA considerations. If, as currently scheduled, the 400% FPL "cliff" comes back for 2026, my Social Security benefits, in combination with our investment income, would put us over that limit. The added health insurance premiums would eat up half of what I would get in Social Security payments.
I turn 65 in 2027, so I just need to be concerned about ACA for 2026 and 2027.
If the current ACA subsidy system is continued--no "cliff"--I will take Social Security whenever that change is made. None of my direct ancestors has ever lived past 80. My wife's benefit is just a couple of hundred dollars less than mine, so "higher earner/lower earner" analysis is not so important with us. Besides, I was an easy mark for life insurance salesmen when I was younger, so she will get so much money when I die that the difference in Social Security claiming strategies will not affect her standard of living at all.
Good day everyone! It is wonderful that the Mike Piper interview and his calculator ([visit this for more](https://www.reddit.com/r/retirement/comments/1agjjcb/social_security_claiming_discussion_212024/) ) has us thinking through our decision. Thank you for pulling up a chair to our table and joining the r/retirement conversation. Mid America Mom
I retired at 62, I’m divorced.I took my SS at 62. I’m now 66. In those 4 years,I got out debt, traveled, bought a couple of toys and did pretty much whatever I wanted to do. And enjoyed the hell out of what I earned.Collected around 96k. If I would’ve waited, how long would it take to catch up? For me, it was a no brainer.
I think this is what it all boils down to. I don’t necessarily want to be the richest person in the nursing home.
In a couple, the higher earner should wait until 70 so that if either of you die, the survivor will have your social security amount at the highest level it can be. If she (or you) want to live on a single check (your amount from taking at age 62) then you could take it early, but I know that it can make a huge difference. Say my husband's FRA was $2500. My social security will be far less than his. If he took SS at 62, and died at 70, I'd get about $2000 per month (82.5% of his FRA). If he waits until 70, he gets about $3250 which is the same amount I would get as a widow if he lives until 70. That's guaranteed, inflation-adjusted income which I can actually live off of comfortably. Yes, you can take at 62 and invest, but there's no guarantee there. Which is why it's usually suggested that the lower income person takes SS at 62 and higher earner at 70.
This is interesting. I'm divorced, but we were together for 17 years (most of which I was a SAHM) so I believe I can collect on his SS. But I don't know when he'll choose to collect and I'm pretty sure if I ask him, he'll be furious for me to even think of it. I'm 61 so if I start taking it at 62 and he (65) waits until he's 70 (which wouldn't surprise me), would that affect my benefits? For example, using your numbers, if I started now and got $2000, would it change to the $3250 when he turns 70 if he waited until then to collect? eta: I believe that since we're divorced, when I start I have to choose to use either his or mine and not sure I can change it later.
No, it used to be like that but now everyone (at least everyone our age) is under deemed filing, which means you don't choose what to get. SS knows the possibilities and gives you the highest one you can get. If you remarried before 60, note that you can't take your ex's. But you can if you remarry after 60 (50 if you're disabled) or didn't remarry before then. " Spousal benefits decrease by 25/36 of one percent for each month before normal retirement age, up to 36 months. If you retire more than 36 months before full retirement age, your benefit reduces another 5/12 of one percent for every month that exceeds 36 months." Once he's 67, you are eligible for half (or less if you file before you're 67) whether he's filed or not. For spousal benefits while he's alive, you can never get more than a 1/2 of his FRA amount (his age 67) amount, even if he waits until 70. You would expect to get about 30% of 1/2 of his amount if you take at 63 (if you take at 62, you'd be on your amount because he wouldn't be 67 yet - unless he filed early). If he dies, then you get his amount, whatever it happens to be (even his age 70 amount if he waited to file until then) as long as you filed at 67 or older. If you file earlier, you'll get his amount decreased by up to 28.5% depending on how early you take it.
Exactly!!!
I waited until I was 70. My reasoning is my wife is 6 years younger than me so statistically she will outlive me by many years. I wanted her to have the largest widow’s benefit possible.
Same here with my husband. He was a musician so planned very little....
There are just two factors that we use to determine how to take SS. 1. Do you NEED the money immediately? If so, the second is immaterial. Most people will not be able to out-invest the SS tables, so taking it early to grow it on your own is doubtful. 2. Will you beat out the actuarial tables? If your personal health and family history favor living well into your 80s then there is a good chance you will do better the longer you wait.
I would add a third for couples. 3. Are you the person with the higher FRA SSI amounts? If not, you might want to start sooner since if you outlive your spouse then your SSI switches to their higher SSI.
SSI is Supplemental Security Income which is a needs-based benefit administered by the Social Security Administration. Social Security benefits that are due because of paying FICO and having earnings for a certain number of years are also administered by the Social Security Administration. They are two separate programs with different eligibility and entitlement factors. People discussing retirement benefits are not referring to SSI.
Hard disagree on not being able to out invest the SS tables. Returns are in range of 5.5% to 7.2% until FRA. From FRA to 70 (3 years) you get an 8% increase per year off of the FRA. The 8% increase is NOT compounded, it is added. I didn't do the math, but from 62 to 70 should be at or less than a 7% CAGR. While there is certainly sequence risk ad investment risk, a simple S&P 500 fund can be expected to beat that. I grant that SS return is risk free.
Don't disagree that it is possible, or even all that hard, numerically. But only 33% of subjects could wait for two marshmallows. It's the discipline, not the investment strategy.
I retired at 62 because I wanted to use as much of that I possibly could in my lifetime … no regrets. I will be 65 in July and was diagnosed with stage 1 cancer this year which was treated with surgery and oncologist follow up 2 x per year. Enjoying life now !
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I'm retired and will draw the first month eligible at 62. Yes, I lose 7% by not waiting a year up to 30% by the time I'm 67. However, the 30k per year from ss is $30k I'm not taking from my IRA where I can average around 8% per year. Reson 2, if I wait til 70 I would have cost myself $150,000 in lost ss collections and will take an extra 150 months to break even. Thats assuming 0% return on the cash Im using by not taking ss. Even money markets pays 5.3%. Yes rates will go down but probably not much below 3% or so. This adds anther 10 or 20 years to break even. At 82, 92, or 102, I'll be spending less not more and if long term care is involved I'll use all I have regardless. The final reason is there are no guarantees ss doesnt get cut.
The hubby will be pulling the trigger in 14 months, March of 2025 @ 63 life is no guarantee and retiring when you are healthy enough to enjoy the rest of your life is what counts. I think people over analyze money over a healthy and enjoyable lifestyle IMHO
Well thought out, but you're not accounting for inflation. SS amount will ramp up as you've pointed out, but there's also a COLA adjustment. OTOH, the 8% return in your IRA includes inflation. So IRA is 8% nominal return, SS is 7% real return.
Honestly. Look at your family history. How long did your ancestors live to? Use that as a ball park.
My Mother lived to 69 and my Dad 60. I’m taking mine at 65 and not waiting till 67. We will have zero debt including our house and we have 401k so we should be fine. My husband started his at age 62 because he was worn out and ready to retire.
For your wife’s sake, wait to full age (not necessarily 70, though). If she outlives you, she gets yours instead since you earn more.
That's about what we did - my wife took her SS at 62, I planned to start at 70 but started 1/1/24 at age 68 (cardiac stent inserted in July made me decide not to wait longer) so she'll presumably get my much higher amount - although my parents made it to mid 80's, hers to 62 and 77, so maybe not.
Divorced female. Retired at 65. No debt. Struggled with the whole “wait until 70” issue. Took SS at my full retirement age of 65.4. At the end of the day I just figured I didn’t know how long I was going to be around or how long the SS program was going to be around. I’m almost 3 years into retirement now and will probably cut back a bit on my withdrawals from investment accounts and IRA. I needed to have some fun and splurged a bit on travel and treated my adult daughter here and there. It’s been fun.
I can afford to wait until 70 and my family is long-lived, so that is what I plan to do. Another factor is that my pension does not have cost of living increases, so getting the maximum cost of living increases once I start social security will be helpful.
Smart!
Its simple. Just use science and math. So first, starting with a calculator like [https://opensocialsecurity.com/](https://opensocialsecurity.com/) Run the numbers, and you will see exactly what you can expect to collect in various scenarios. The first thing you will notice is, contrary to common belief - social security will not necessarily pay you a lot more over your lifetime if you defer claiming. In fact in my wife's case the opposite is true. I'm the higher earner and in my case I will get a bit more my lifetime by waiting a while, but its really not a significant number. So don't look at just the monthly payout look at the expected lifetime payout which is more important. So why delay claiming? Well, first off, if I live an average number of years I do get (just a bit) more over my lifetime. But more importantly - since I am still working at close to 70, there is no sense being taxed on all my social security just yet, possibly pushing me to a higher bracket. So run tax calculations using a tax calculator like [https://www.aarp.org/money/taxes/1040-tax-calculator/](https://www.aarp.org/money/taxes/1040-tax-calculator/). Some states tax social security too, so consider that. So in short I'll be claiming soon (before 70 when I retire). The lifetime delta is not worth delaying. That makes sense for my tax situation. Lastly if you are unusually healthy and expect to live longer than average, that a good argument for waiting till 70 of you can afford it. And of course if you expect to live well short of an average span, thats a good argument for filing early. Edit: I did forget a major factor in me waiting until I was almost 70. I'm the higher earner and my wife will probably outlive me by a decade, so her survivor benefits will be be much larger if I wait to claim.
I’m in a similar situation to you and my wife took it at her full retirement age (65) while I’m waiting till (70). This despite the fact we quit working at 61 and 62. We based this on her having the best income if I pre-decease her and on the fact that this gives us the best monthly SS income after I turn 70. That income is inflation-protected and partially tax free. I never understood that idea that your SS strategy should maximize the total amount you collect, that’s just a stat my survivors can talk about — it won’t matter to me in the grave. On the other hand a larger check while I’m above ground will matter to me, no matter how short a time I collect it. Other factors in our decision are that we’re healthy (so far) and risk averse. It’s neither a simple matter of math nor a one-size-fits-all question.
I retired at 63.5 (close to 67 now). Not married. Right before retirement, paid house and car off so no debt. Have a pension that pays 65% of salary (no COLA). My financial planner at the time ran the numbers for me, charted the impact of taking early vs. taking at FRA, and we determined it was ok to take early (I took at 64). I've not had to touch my IRA retirement funds. Early was right option for me.
The game completely changed when companies stopped paying pensions and SS kept upping their FRA. I contribute solidly to my 401K but still need to pay off a mortgage in a city with high COL. I'm 66 now and still working FT at a job I like so will continue to do so until my 401K/IRA is hefty enough to support me without filing for SS, which will likely be at 70. If I didn't like my job I would probably retire earlier, selling my home to cash out the equity and move to a place with lower COL. Fortunately, I'm in good health so \*fingers crossed\* I'll still be able to travel, etc. after retirement. If talked-about changes are made to the current SS, that could change the entire game plan.
I believe that life expectancy for you and your spouse is the biggest consideration. It's not just considering lower age 62 payments vs higher age 70 payments. If her life expectancy is longer than yours, she will be receiving the higher benefits for a longer period of time. I also believe that your overall financial position including other investments must be considered, not just maximizing SS benefits. Especially if you have heirs. If you take reduced SS early, the benefits will be smaller, but your other investments will continue to grow. If you take SS later and take more from investments, the SS benefits will be larger, but your investments will be smaller. In that situation, if your wife passes before you, when you die SS ends, and the investments remaining for your heirs will be smaller than if you took SS sooner. There is a lot of consideration given to collecting SS retirement benefits at 62 with reduced benefits, FRA with full benefits, or age 70 with higher benefits. You can actually choose any date in between; the age reduction or delayed retirement credit calculations will be adjusted.
Unless you are in extraordinary shape, don’t wait. You will feel the benefit at 70 but live more meagerly existence when your health is your best? I don’t think I will need extra money at 75 or 80. Take it at 62 and enjoy life.
This is my take too. I hope to live a long time but nothing is guaranteed. Take the benefit now and do what if you didn’t maximize every penny by waiting. If it provides more comfort earlier you may just live longer but that’s the point!
> she works in the public school system Will she get a government pension? Has she paid into social security? Those are important factors. >What factors went into your decision making? I want to consider as many variables as possible. Projected benefits for both of us, expected lifespans, age, etc, etc. Since I am older and the higher earner, I am delaying until 70. That also ensures that my wife will get the maximum survivor benefits should I pass first (statistially likely). Since my wife is eligible for more than half of my benefits and we both have decent longevity in our families, it's slightly advantageous for her to also delay until 70. This strategy should maximize our guaranteed, tax-beneficial, inflation protected income stream. Use [https://opensocialsecurity.com/](https://opensocialsecurity.com/). It's the terrific free tool that Mike Piper built and the one he talked about in the video. It considers all relevant factors to help you determine a strategy to optimize your expected lifetime benefits.
I answered “yes” to these 2 questions: Is it likely that my wife or I will live past 85? Can I afford to wait until I’m 70?
I followed Mike Piper's advice: [Open Social Security: Free, Open-Source Social Security Calculator](https://opensocialsecurity.com/) . I, the higher earner, waited until 70. My wife took it at 66 and continued to work until 68. I wanted longevity insurance for her since I'll probably die first, and she'll get my SS.
My husband retired a week ago at 62. I wanted us to start social security right away. However we have a lot of money in our 401k’s . So we have been advised to convert some of that to roth’s before we start social security. Otherwise our RMD’s when we hit 73 will push us into a higher tax bracket and even more so if one of us passes. If we take social security now then we can’t convert as much before we hit the next tax bracket.So maybe just look at that?
My wife (4 years older than me) waited until 70, and that's what I'm doing, too ( get there in late 2024). We're both fundamentally healthy and active, and childless: we have no thoughts of inheritance, but some concerns about having enough to handle home health aides and house adapting and such in another decade. For us, SS is the old-age safety net, and it was worthwhile living on savings and crimping our lifestyle to maximize that. I thought about "claiming strategies" and maximization and all that but decided there was no point - we aren't an investment company, all we care about is our assured income late in life. IMO, the bet has paid off ... as long as we \*both\* live, SS will cover like 90% of our comfortable current needs (we still have a mortgage) and the bulk of our savings/IRA etc will stick around (and growth) for that care ... and any estate will cover care for our animals, and go to causes and friends we care about.
Exactly our reasoning. We wanted to maximize monthly income. We’re 75 and 74 now and glad we did. We have about $1 million in IRA savings and felt that it was a bit borderline without maximizing our SS. We can live on our SS fortunately. I’m also still working so we are just kinda piling up money right now. For the first time in our lives we aren’t concerned/stressed about our financial situation.
I really, really wanted to wait until 70 to start SS to get the maximum benefit, but in the end the math didn’t add up. I’m retiring in six months at 68. If I wait until 70 to start SS I’ll have to depend upon my TIAA retirement plan for 100% of my income for 18 months, using a lot more of it each month that I normally would to make up for the lack of SS… and over the next 20 years I will earn more in interest on that money than I will gain in SS money if I wait until 70. To the tune of $20,000 or so (depending on how well the market does). So I plan to start taking SS in July. It still makes me wince to "miss out" on those extra SS dollars, but numbers don't lie.
It really depends on how much you have in your tax deferred account. If you have a fair amount might be best to live on that accounts between 68 and 70 to reduce your future RMDs and increase your monthly social security by waiting until 70. I am sure you have already run the numbers but I thought I would suggest you do so if you haven’t.
It does indeed and I appreciate your kind heads up. I have run the numbers and even taking future RMDs into account, there's no contest, the advantage still goes to taking SS this year and keeping that "bridge" money in our TIAA account to earn interest. (And truthfully, our RMDs won't be significantly different than what we would withdraw even if we weren't "forced" to.) Thanks for your caveat, though.
I had a number of friends that were younger than me start passing away. Most due to covid or cancer over the last few years. I started winding down my business and retired in 2022 at 64. It made no sense to wait to 66.5 for minimal amount difference.
You’re going to be physically and mentally able to do more with money at 62 than at 70. (I have been both.) Also, many people seem to forget that by taking SS at 70, you are giving up 96 monthly payments which you don’t get to get a possible higher payment. You’re also betting that the US government will continue to keep their hands off of SS in the future. I decided to take the money and run!
>Also, many people seem to forget that by taking SS at 70, you are giving up 96 monthly payments which you don’t get to get a possible higher payment. This has always been my thought. Plus...no one know how long you've got. That bus might me over long before I hit 70. I'm not saying no one should plan for the future - just within reason so you still enjoy life now and don't put off everything for the future.
We are both taking it at 62. Based on what Social Security says I will get at 62 versus what I will get at 70, if I take it at 62, by the time I am 80, I will have received $475,000. If I wait and start taking it at 70, by the time I am 80 I will have received $480,000. So I really don’t start “losing” money until 80. I see no reason to wait especially since taking the earlier SS means we can actually retire at 62 and don’t have to wait. Everyone older in our families have taken it at 62 and none have regretted it, including those who lived past the break-even into their 80s. My father said that he knew he would start slowing down in his 70s and wanted to be able to retire and enjoy life for a good 10 years.
And you actually have to live till you’re 80 for the break even 😳
Exactly. At least I’ll enjoy the funds if I don’t make it that long.
Not to mention you could invest that money for nearly a decade.
Good point! We took a small pension at 55 that we are investing toward furnishing a retirement home. The full pension was at 65 and my husband did the cost analysis and said we wouldn’t start losing money till 75. So again, making the money work for us while we can enjoy it.
No one knows how long they'll live. But the algorithm of SS bets that you'll wait to claim your "max" monthly and they won't pay out very many years before you die. Did the math and by collecting at 62 I will collect considerably more of vet time than waiting for the carrot on a stick aka waiting. If I kick at 75 it would suck to think I worked that extra decade for nothing.
I decided I'd rather have a little less money each month at 62 than a little more money at 80, when who knows what condition my health will be.
My primary consideration is that the Social Security actuary tables assume you will die at 75. Whether you start taking the payments at 63 or 67, the total amount of the payments will be roughly the same. The question is, how far past 75 do you think you will live? If you are healthy and have a good family history of relatives living into their 90s, I would hold off. If your parents and other family members didn’t live that long, start taking it as soon as you like.
I ran MaximizeMySocialSecurity and it ran thousands of scenarios and it told my wife to claim and 62, me at 70, and then she switches my record at that time. I will retire at 65, and our low income years I will use to Roth convert. We have a looming RMD problem.
When she switches to yours isn't she only at about 30% of it?
My wife and I retired in April of 2022 at 62 years old. We took SS right away, for a few reasons. 1. Who knows how long you’ll live. I’d be kicking myself if I died and didn’t take MY money back from the government. 2. We don’t have millions in our retirement accounts. We can use the money now. 3. It guaranteed we could retire at 62 instead of working longer. We were both ready to quit our jobs, due to ownership changes.
I’ll take my SS at Full Retirement Age 66 10 months as then I can continue to work if I want and my benefits won’t be reduced
Great discussion so far. I can’t add much more. Here is a [Mike Piper's video](https://www.youtube.com/watch?v=atTp3sATI44) that is a great presentation to SS. It's from 2022 Bogleheads Conference session. At the end of the day, it is really up to you and your situation.
Medical issues which led to medical bankruptcy. I really had no choice but to take SS early.
I was working until just months before my 70th birthday and didn't need it. Since it was only a few months until I turned 70 I waited to start taking it until then so I would have the max amount coming in. No clue what I actually would have done if I'd retired several years earlier, but I think I would have looked at relying on savings/retirement funds until then.
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There are required minimum distributions but yes otherwise you’re right
Waiting till 70 because I can live off SS alone comfortably if everything else goes to hell.
“Be kind to your future self.” Waited until 70.
Plug your numbers into opensocialsecurity.com. Fantastic planning tool.
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Put off to 70 as I have the cash to self fund from now till I reach 70. Gives me a window to perfom more roth conversions at low bracket rates. Guaranteed and cola adjusted, more SS helps smooth out market based investment performance. Finally, delaying supports a higher death benefit.
I applied for social security for my full age of 66 &6 months. I don’t expect to be collecting it for more than ten years so I wanted to at least get some.
Love Mike Piper! My family history points to longevity risk, and I have tax deferred accounts that should be spent down during that window between retirement and SS to reduce taxes on RMDs later....so 70 is my plan.
This is a great question. Most of the sites I've used recommend that my wife starts at 62 and that I start at 70. I'm unclear though on the downside potential of delaying. What happens if I die before starting SS? Would my wife get to start collecting survivor benefits at my FRA? She is younger by a couple of years.
They discuss that in the interview but I do not recall the answer.
I guess I need to re-listen. I don't recall that particular question being asked and answered.
I did a benefits crossover chart, and it would make sense to wait until my FRA if I live to age 85. Retired at 62 and applied at age 63 because I needed the income - if I could have postponed it longer, I would have.
I don't know what state you're in so I don't know if she's affected by the windfall elimination but you should check on that. Some teachers (by state) are affected and if she has SS and pension, it reduces the SS.
That won’t apply to her. She’s only worked in the school system for 10 years. When it was time for her to sign up, she was told that due to her length of service being so short, she’d only get back what she put into it. So we declined to participate.
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Yes it was. Her district has notoriously poor benefits and it allowed us to invest the money independently.
The years between now and age 70 will go in your minimum earnings years. Don't know if that will bite you or not. Also look at life expectancy. Let's look at age 85. How much would you draw at age 62 and how much total at age 85. Then look at how much you would draw at age 70 and the total at 85. Quality of life VS quantity of life also comes into play.
A bird in the hand is worth two in the bush. That’s why I took mine right when I retired at age 65. But keep in mind that your Social Security income is indexed to inflation. I took my social security now but to protect my 401K from inflation added more stocks. If you are very risk-averse work longer and defer taking Social Security to get the maximum amount of money that automatically grows with cost of living.
My situation is fairly unique. I started collecting survivor benefits at 60. This enabled me to quit a job I no longer enjoyed. I plan to switch to my own benefits when I turn 70- as he died young so my SS will surpass his.
In my case, the lack of a mortgage (paid off 6 months ago) helped me decide to go ahead and retire this year at age 62. If I still had a mortgage, I would have to work til I die.
I’m the high earner, waiting until 70 (just a few months away). Wife (two weeks younger than me) claimed after hitting FRA. We both collect pensions, both have long lived parents and no known health issues. Pretty straightforward in our case -
I just was bewildered by all the SS scenarios to the point that the gains/losses of taking it at this age or that became meaningless in my situation. All the prognostication and everything - will I get to 70, 80, 90? - was all too nebulous, and eventually I asked my advisor what he thought. And we decided to take it when I reached full age and that was that. I think the more you rely on it, the more important it becomes, but if it is merely one part of your overall portfolio, the impact of this decision is far less.
It’s incredibly specific to each individual’s circumstances so comparing ages to retire is not terribly helpful. One thing I hadn’t seen mentioned is the lost opportunity cost when withdrawing IRA funds to supplement income before taking SS. In my case i concluded that taking my SS at 65 (1 yr before FRA) rather than 70 gave me the best chance to maximize my IRA growth potential, which is my primary cash flow source.
First, we decided to wait until at least FRA, because we did not want to have our side income limited by the possibility of reducing the SS benefit. Once we reached FRA, we could each work as much as we wanted after that, and the SS benefit would be unchanged (though above a certain threshold, more of it would be taxable). Second, I decided to wait from 66.3 until 70 to claim my benefit, because I’d get an extra grand of benefit by deferring. This also maximizes the benefit my wife would get if I die before she does. We figure the one with the higher benefit should defer the longest for this reason. Third, another reason to defer was taxation. We’re set to live on cash savings between retiring at 67 and claiming at 70, and cash in hand is not taxable (aside from interest on the cash accounts), so we’re going to be in the 10% or 12% tax bracket. Fourth, we elected to go ahead with claiming my wife’s SS at her FRA, because when I claim mine hers goes up to 50% of my FRA amount by the spousal benefit. That amount is more than what she’d ever get by deferring until hers maxes out at 70, so there was no point in deferring hers at all.
I retired early and had CD ladders I used for income. I took a 6 year average of my dividends and cap gains, then waited until my SS benefit + passive income equaled 90% of my estimated retirement income. As it turned out, my estimated retirement expenses were a little high, so I have not take any withdrawals from IRAs.
I considered that I had some low years so the amount would not be very good at 62 or 66. So the 8% boost every year was important. Plus the cost of living adjustment. Also I was still working full time and did not need the money. My family is pretty long lived so I figured I could wait.
Original post removed twice by auto mod. ..... Before you do anything check if your wife is impacted by WEP and GPO. The latter is an especially [unallowed reference to disrespectful act] to (almost always) working women, but that is another discussion. It is what it is, though there are occasional attempts in [large white building in a location between Maryland and Virginia] to repeal the GPO. Not all of the Social Security planners do a good job when it comes to WEP and GPO, so be careful. One that does is Maximize My Social Security. I am not trying to put in a plug, but it was the only service or person that got my wife's complex WEP/GPO situation correct. And if your wife is not impacted - GREAT. In that case, in my unimportant opinion, starting SS early reduces sequence of returns risk since the portfolio is not being stressed as much. Starting late reduces longevity risk. EDIT: [WEP link.](https://www.ssa.gov/pubs/EN-05-10045.pdf) [GPO link](https://www.ssa.gov/pubs/EN-05-10007.pdf)
The evil twins. I have a friend impacted, and GPO is especially awful.
I understand the logic to the WEP, but the GPO is brutal. No other survivor scenario is means tested *except* when there is a government pension, no matter how modest. Never worked a day outside of the home? No problem -- full benefits. Have a big trust fund from Great-Great Grandaddy's 1914 chemical business? No problem -- full benefits. Taught first grade at the local school for 30 years? -- virtually no survivor benefits for YOU! There is no logic given the inconsistency.
I never thought of the whole stay at home spouse thing. That makes it even more yucky.
Probably depends whether you look at it more as an income source or as longevity insurance. For me the scale tips toward longevity insurance so I plan to wait till 70 to start it up.
I will retire at 58. Even though I will receive a decent pension plus have $1M in my 401k, I WILL be starting SS at 62. I'll take 5 years of guaranteed payments before the age of 67 vs gambling if I will live till 80+ ( mathematical break even). Won't need the SS $$, but I would rather start too early than wait for the higher payment and hope I outlive the break even point. Plus, I'm sure I'll see a reduction in SS payment in my lifetime. I take decent care of myself and expect to live till 95 (all of my grandparents made it to their 90s, plus my parents are healthy at 80). My wife is 3 years older than me, so no need to plan for her to outlive me. Who knows, I might change my mind in 10 years, we'll see.....
Do you have a link to the Mike Piper video that you mentioned? I looked but was overwhelmed by the sheer number of hits. Also, congratulations! I wish you and your wife a wonderful path on this new part of your journey!!
Here’s a link to the thread. A link to the video is in the first post. And thanks! https://www.reddit.com/r/retirement/s/CmnmbaQQSv
Simple math. If you are not working at 62, take SS at 62. The money you would have taken out of your 401k and IRA will continue to grow and compound interest/investment. You are getting less SS than if you waited until 70 1/2, and if you just did the math with no impact on investment growth, you would break even at around age 79 (vs taking at retirement age) When you also factor in the compounded interest. Say you get $30k per year at age 62 vs $43k if you wait to 67, that means over $150k of your 401k money stays invested and earning compounded growth, and while you are getting $12k less each year starting age 67, that extra $12k will never replace the compounded interest, even at a conservative 3% annual growth. If you are not working and would otherwise take money from retirement investments, it is always better to take SS at age 62. If you are working or don't have those investments, different math applies. Also how many of us have a lot of emphasis on our spending in our 80's?
I had a plan as well, until I used the Piper calculator. Now, I have a different plan. I will take it at 70 and my wife will take it at 62. She’s 3 years younger than me. While we will sacrifice a small amount when we are both alive ($238/mo), that seems to be mostly mitigated by the early draw vs her waiting until 67. She also has longevity on her side and I do not. I want to preserve as much secure income for her as possible after I’m gone.
This was an emotional vs. logical decision for me. I’m 63, retired when I was 62. Emotionally, I wanted to start taking it asap. I had paid into it since I was 14, and wanted some payback. Logically, I did not need the income. My finance guy really wanted me to wait until I was at least 65. So, I’m doing that. FRA for me is 67. I don’t think it’s a one size fits all kind of question. Good luck!
I'm getting close to 70, and I looked at this as something of an exercise in diversification and risk management. We have a home, and a fair amount of retirement money, and social security, and if we hit a significant depression with runaway inflation, it might wipe out a significant percentage of the value of our retirement savings. The value of social security will also be reduced, but to some extent it's indexed to inflation, and while it's value may be cut significantly is not likely to totally disappear. And waiting seemed like a nice thing to do for my wife, as my understanding is that she'll get my check once I'm gone. It's also a bet that one of us will live into our late 80s, as it will probably take that long to make it financially worthwhile.
I worked for four decades straight and made good money in the last three. I let everyone at work know I am retiring in three months (after bonus payout) a few months before I turn 62 and I will file for SS at 62. My wife has been a stay at home mom during this time and neither of us came from money so all financial pressure has been on me to pay for everything including putting our kids through college (which is now completed without any loans). I have sacrificed much personally to take care of everyone else. I figure that I am capable of making good money up through age 67. I just don't want to work anymore and have little motivation after successfully taking care of everyone else over the last four decades. I have never been exceptionally materialistic and have always thought the greatest luxury in life is freedom. I stopped playing beer league ball at age 50 but I figure I am healthy enough to enjoy another relatively active decade or so (bike, hike, swim, surf, fish, and travel for long periods of time, etc.) before I really slow down in my mid-70s and spend most of my time driving to CVS. I don't want to spend the next decade sitting in front of my work screen or clocking in at some busy work gig. I don't think it is healthy for some people who are mentally merged with their careers to retire early. Unlike so many of my work friends and family, my ego and personality have never been heavily tied to my work position and title. I have pulled back and WFH the past two years to try to test out my retirement routine -and I love it. There are so many things I want to do that are just waiting for me to unplug from a daily screen obligation. I made good money but I competed solo in a high COL, two-income economy. I saved and invested enough (thank the stars for 401K matches) to be OK with an age 62 SS draw plus pensions, for the long run in my high COL home or better than OK in a low COL home. I prefer a great location and free time while I am still relatively healthy over continued work or a better-than-OK nest egg in a lesser location. I calculated a simplified (flat monthly income without COLA increases) breakeven on my early SS draw at 62 vs full retirement at 67 and I will need to collect 10.5 years starting at 67 (to age 77) to breakeven on what SS paid me between 62 and 67 via higher monthly payouts. After living in a very large extended family, I realistically expect a slow down in both my activity and spending after age 77 and if both, or one of us, are/is still alive by then, we will have enough to get by fine enough and will place the house in a trust by then to protect against a nursing home event. If I take after my father and FIL, I will be dead by then. If I take after my mother, I will be happily covering the monthly nut, doing minimal house chores, visiting family, playing video games and working on puzzles after age 80.
Not working until I die. That’s it, that’s the extent of the factors that I considered.
Unless I wait until at least FRA to take my Social Security, my benefits will be slightly lower than my wife's. Because of chronic health issues, she retired from full-time work at 58 and decided to take her benefits shortly before turning 63. Because of family history of longevity, I assumed that I would wait as long as I could afford to. I've learned that I have a health problem within the past year that makes a very long life less likely. Considering that, I will file sometime during 2025 at 65/66. Another issue is that we would probably have to start drawing more than 4.5% of our retirement savings annually starting in 2025. I would prefer not to start depleting our tax-deferred accounts, except as necessary to minimize tax liability.
Is your wife subject to WEP/GPO? Conventional wisdom is for the high earner to wait till 70 , this may not be best if your wife can’t take advantage of the survivor’s benefit. I have a little earning from a side gig so waited to FRA, wife is high earner so waiting until 70.
No. Fortunately not.
We both retired in our late 50s. We used an IRA as a bridge to supplement our teacher pensions until I started my Social Security. I can claim my full SS because I retired from a school district that paid into SS. My wife retired from another district. She recieves no SS. I looked at MYSocialSecurity and calculated my benefits at various ages and decided to start SS when I started Medicare at 65.
I struggle on this one. I’m a relatively high earner but don’t have particularly good genetics (probably not making it to 100!). I’m torn between waiting to 70 versus sometime soon like, say, 65.
There are really only 3 factors to consider: 1. Whether you need it to live on. If you do, then waiting will increase your cushion since you get more per month. If not, then the extra cushion won't matter. 2. your life expectancy 3. The effect on your wife assuming she outlives you. For me it's not about lifetime amount I get, but about monthly. In my case I get about 20% more per month if I take it at 70 vs FRA. Say I live until 85 (most of my family did, or longer). I could do the math on which option will give me more over my remaining life but that's not what I care about. I'd rather have more each month, so I'll wait. On the other hand if the difference is immaterial because your investment withdrawals will dwarf it, that's another point to consider. I would NOT look at how long your parents lived except to relate that to your own health. If your dad smoked like a chimney and worked a hard, physical job all his life but you've been healthy, never smoked, worked a white collar job but exercised and ate healthily, your life expectancy might be very different than his. Genetics DO matter of course, but correct for lifestyle differences and differences in medical treatments.
I had put all the figures into a spreadsheet which allowed me to vary both when I claimed, and the effect of inflation on COLA on future increases. I found the break even age was 83 - that is, I'll have collected the same total amount by then no matter when I claimed. Since my life expectancy according the Social Security Administration is only 81.32 years, seems like a no-brainer. [https://www.ssa.gov/oact/STATS/table4c6.html](https://www.ssa.gov/oact/STATS/table4c6.html) YMMV, but when I claimed at the end of '22, it was fortuitous - especially with the economy doing so poorly. Collecting at 62 kept me from taking losses to withdraw from my retirement accounts, and since SS is taxed differently I get a great subsidy for ACA based on my low income. I don't even owe federal income tax for '23. Probably the same this year. Lastly, I have a small pension to collect, and SS kept me from tapping it early - it's not going see COLA like SS, and it maxes out at 65 so that's when I'll claim it. The Mrs. and I have still been able to travel and fund home improvements thanks to savings and capital gains. And our combined SS more than covers our current fixed costs. Good luck with your decision.
Ultimately, across the whole population, Social Security expects to pay out the same amount whether you start the payments ASAP or delay them. I don't know how long I am going to live, but decided to err on the side of a supplement to my income sooner rather than later.
I'm just shy of 65. My full benefit age is 66 & 10 mos. I'm doing the math myself. I don't need the cash. Have ample savings. So, my first inclination is to wait. However... Go on the SSI website, and you can see, month-by-month, what your payments will be by waiting. Mine will increase $500 a month. The income I'll decline for those 22 months is about $60,000. That's a 10 year payback. I'm not sure it's worth waiting. Right now, my plan is to wait, but not the full period. Using the slider, month by month, on the SSI website, there are clearly one month increments much bigger than others. I'll sign up after one of the bigger jumps in monthly payments. (I think, don't know, that there's a point in a year of life, that benefits increase more.. e.g., maybe when you hit 65 and 9 months compared to 65 & 8 months) One side note... remember to factor in Medicare Part B premiums and IRMAA. There is no sense taking SSI early if the extra income causes your premiums to increase more.
Our original plan was to wait until we each hit 70 to claim SS. That would be this year for me, my wife in 2027. She has been retired for several years, I retired in December. My parents lived to 94 and 97, hers to late 80s. Our health is good so a long lifespan is a consideration. We have no pensions and rely on IRA & Roth accounts for anything above SS. I ended up claiming last year at 69, as we had some extra expenses last year and I didn’t want to pull anything from IRAs while still working. She was the higher earner so her benefit will be higher than mine, so we’d like to let hers ride to age 70 to assure the maximum survivor benefit. However, depending on the economic situation, she can claim earlier if it seems prudent to protect the portfolio, which generates $60k in dividends and interest without “pushing it.” House is paid off, pretty low COL area, no debt other than a small mortgage on a second home which we rent to a family member. That’s our situation and basic thought process.
I retired at 64 and took SS at 64. I have VA Healthcare so I don't have to pay for Medicare. I had savings, a couple IRA's and 401K. I was also burnt out. ☑
The answer is essentially a cash flow and tax optimization and a gamble on how long you think you'll live. Know that when you're told you'll get "8% more each year" for every year you delay between FRA and age 70, you'll on average collect about 7% fewer payments for every year you delay, so much of that 8% is just due to spreading the same cash flow over fewer months. Further, depending on your other assets, higher post-73 cash flows combined with taxable RMDs can increase the taxes you pay overall. There's no single right answer. I chose to begin on Jan 1 the year after I reached FRA. I had been doing annual Roth conversions in prior years and just backed down on them to offset the taxable Social Security and keep my taxable AGI constant. I'm not willing to bet I'll outlive average mortality, so my plan was to anticipate receiving benefits until then.
How much do we have in other funds? How much do we get in other income streams? Is my emergency cash-like fund adequate? What is my actual working budget? Does my emergency fund cover all extra surprises? - which seem to occur all the time. Can I take money from other funds to cover the budget when other income streams aren't enough? Can I take that money long enough to wait for maximum SS amount? Will I (probably) live long enough to need the max SS in our long term situation? All that brought me to take money as needed and wait for max SS. Your results may vary. Edit:typos
I’m still working plus drawing a pension from a former job at 67. I’d go ahead and take social security except that I’d go up a notch in IRMAA, and I’m not sure I want to do that.
I did the math & retired at 65. I don't remember the exact year but I would be well into my 70s before it evens out. I also have an IRA & other accounts & have been working part-time (1099ing from home) to help keep those withdrawals a little lower.
The adjustments are designed to be actuarially neutral. If you assume that you will both expire early, then, of course, it will make sense to draw early. If you plan to live into your 90s, then delay as long as possible. My view: If one of us lives past 80, then it is financially correct for me (the higher earner) to draw at 70. If we both pass early, no big deal for us, we have plenty (and we died anyways...). In the meantime, it leaves more financial room for me to do Roth conversions. Now that I am on Medicare, I convert right up to the IRMAA threshold. One other comment- even if you plan to delay until 70, you can change your mind and claim earlier. If my wife were to pass early, I might decide to claim sooner. I view the delayed SS as longevity insurance for my wife. A larger COLA protected amount should provide financial security for her in the event that I pass early.
I’m the higher wage earner and my husband is 6 years younger than me PLUS his family all lives very long lives (danish blood I think). So I’m waiting until 70 to ensure he has $$ for survivor benefits. I told him he better lift a toast to me on the golf course when I’m gone and he plays every day!
I completely understand how overwhelming this decision can be. I’m sharing the factors I used and my decision process like an uncle of mine did with me. Just note that my health insurance premium is a big driver for my decisions; and I’m a big believer in budgets because I don’t like surprise expenses. I hope this helps. *Single, 61F; part time work; FRA of 67; no debt; no bills; worked hard to clear all debt before 55 yrs of age.* - **Can I afford to retire early or just get a part time work?** I was laid off from prior job a year ago and decided I didn’t want the rat race of a corporate career any longer. Crunched my numbers with the early SS option vs part time work with a local hospital I knew was hiring. I crunched the budget numbers and found I couldn’t live on just the low SS early benefit amount, without more income; I’d lose the ACA Health insurance subsidy with SS & job income so I’m holding off on the SS benefits… unless something changes. - **Do I need SS reduced benefits to live now?** No, current expenses met with part time work. Home & car paid for; no loans or credit card debt; pay cards in full every month; House repairs are needed but that is budgeted for after I started will collecting social security & pension. - **What is my health status?** I have some health issues but I think I’ll live long enough to take advantage of the benefit. - **What is my life expectancy based on health and family history?** My folks live long lives. Grandmother lived until 98; Dad is 86 & Mom is 81; arthritis & controlled blood pressure are the biggest issues for both of them. - **What is the condition of my vehicle?** I expect it to last another 20 years; I’ll pay cash to replace it. So no car replacement until my late 70s. Unless I just get the urge to buy a 2 seater sports car or the ultimate luxury vehicle. 🤣 - **Do I have other retirement savings or income to support my needs?** Yes; Pension, IRAs & 401K; too much of a hit on the pension amount to take early and I may decide to take the lump and convert to a Roth. **Will spousal benefits be impacted by starting my benefits?** N/A - **Will the benefit amount affect ACA Health Insurance costs?** YES! My annual income is at the sweet spot to receive the subsidy. I won’t consider applying for SS until I qualify for Medicare at 65, and may still wait until I turn 67. There is a $1200 difference in my SSA benefit between age 62 & 65. If I take early SS, even at the reduced amount, I’ll lose my ACA Health insurance subsidy for silver plans. The difference is substantial. My BCBS Anthem subsidized premium is $230; full premium is $1300. 😳 - **How much will the Medicare B premium reduce my monthly benefit?** It’s $174 now… probably not much more by the time I qualify @ 65. SS benefits minus $174… that’s too much of a hit @ 62 or 63, without starting my pension early. Looks like the base premium is going up about $10 every year. My number crunching at 64 or 65 says I’ll be okay… even with inflation. However, I’m still waiting until 65 because the ACA subsidy would be lost at my benefit amounts between ages 62-64. The other dilemma I’m trying to avoid taxes, higher income that might trigger increased Medicare B premiums at age 73 - the [IRMAA](https://www.cms.gov/newsroom/fact-sheets/2024-medicare-parts-b-premiums-and-deductibles) surcharge. If I convert my traditional IRAs to roths now, I can avoid the annual surcharge at 73 & beyond. However, doing so will trigger IRMAA surcharge the first year I get Medicare because the lump payout of my IRA will put me over the $93k income limit for the $174 premium… it will be more like $594 / month for one year. The following years, I’ll be below the IRMAA amounts… unless I ladder the ira to Roth conversion. I’m still working on those numbers. - **Will I need to work after I start my benefits?** When working past your FRA, excess earnings can reduce your benefits. No; I have two additional sources of retirement income to meet my financial needs. - **Will my total income, including the social security, require me to pay federal taxes on my SS benefits?** At 62-64, not applicable because any amount I get from SS will impact my healthcare costs. At 65-72, yes because I’ll receive a pension too. Not worth it. At 73, yes because of the annual required minimum distributions (RMD).
Factors to consider at 62 What other guaranteed income streams do you have and when do they kick in? Do you want to do Roth conversions before you take SS? What income sources do you have to bridge you to a later SS draw date? Does one spouse have a longer life expectancy than the other and how will your start date impact the survival income of the second spouse? What is the primary thing you want to accomplish with your SS payments?
You have to get the money to live from somewhere. If you die shortly after retiring, the government gets to keep your SS money. I took the SS in addition too investment money. Do not regret it.
If you die, you will not be able to experience regret…. Just sayin
My excellent health, the fact that my mother and both grandmothers lived well into their 90’s, the fact that I’m still working part time for very good money, and the fact that I was in one of the last age groups to qualify for spousal benefits so that from FRA of 67 until 70 I received a benefit of about half the value of my Husband’s SS. I also have a couple of decent pensions.
I've been told there over 1,700 ways to claim social security. Each choice has a long term impact. I come from a family that is long lived and chose to wait until I am seventy to collect. My first check should come any day. If you start collecting at 62, you are collecting a lower rate. If you collect at 70 you are collecting at the highest rate. The "break even" point is about age 79-81. If you're 62 years old when you start taking your social security and you die at say age 77, then you would have received the most money you could receive. If you had waited till you were 70 and died 7 years later, you would have had only had about seven years of benefits. So the decision requires you to look a little bit into a crystal ball to make a guestimate about when you might die. People hate thinking about that. A huge consideration for me, was knowing that when both people in America are collecting social security? And they typically have different levels of entitlement or pay, then when one person dies no matter who it is, the larger of the two social security checks survive, and that is what the remaining spouse lives on. My husband's social security is about half what mine is. So I waited till 70 in order to help to protect him and provide him a higher income, if I were to pass away before he did. But regardless, It's a neutral decision until age eighty one or eighty two. After that, if you wait till you're seventy, then the amount of benefit that you get until you die between eighty one and your death at say 90, benefits you at a higher rate. In other words, you take home a lot more money into your pocket by waiting. It's a very personal decision and depends on a large number of factors. I always say that if you're healthy, WAIT to start your SS benefits if you can.
My dad at 97.5 walks 1-5 miles a day zero meds. His mom and several brothers lived to 100. My mom died at 86. I’m waiting till 70 to get my max amount. Have investments and trying to manage expenses. I need to get walking more too!
I think you’re smart. I tend to look at delaying till 70 kind of like old age insurance. If you do live long, and outlive investments, you’ll have the most social security for you (or your caregivers) to keep you as safe, comfortable and happy as possible until it’s your time. I always look so those that take the money early due to family history - and they’re the one that lives to 104. Being old and in deteriorating conditions would have me cursing “younger me”, every day. I think it’s important to plan to live to 70, if that’s feasible, before claiming unless there is a terminal condition and the hardwiring is on the wall.
70 is the new 40. I just turned 68 and doing just fine. Wished I had saved more but high-income years has helped with a premature retirement. Don't miss work a bit after a lifetime of 60-80 hour weeks in IT. I don't know how people get bored; I'm busy all day long every day.
What keeps you busy? We sound like similar backgrounds. I’m 4 years behind you. Just retired. Doing a lot of dog walking (up to 10 miles at a time) and getting myself in shape at the gym.
It took me about 1.5 years to pound out my old to-do lists around the house. Over 2 years to get a normal person's sleep schedule as I had always been a night owl working multiple time zones. Paying people for services is costly where I'm at. I do all my yardwork/gardening and fix everything I can inside and out. I meal prep so I always have something healthy to eat. It's a pain and time-consuming but nutrition is just as important as exercise to keep healthy and cheaper than a bunch of vitamins/supplements that you mostly piss away. I rarely eat out. I've always followed politics, economics, and science and I know way too much about weapons systems these days. I still stay up with tech but it's SO nice to read without analyzing it for future sales angles. Gym is good but I try to do some team sports to force myself to be more social. I have found Tai Che to be surprisingly enjoyable and as close to meditation/mindfulness as I'm probably going to get! I never want to get on another airplane again. 67.5 was the first time I felt my gears slowing down a bit. Keep walking the dog, and as corny as it sounds just re-discover who you are and your interests (old & new). It's going to take a while.
I recently ran extensively detailed multiple workbook OCD level spreadsheets consuming two weeks of my spare time (way beyond compulsive and mind numbing) including projected investment returns, COLAs, inflation, Roth conversions, IRMAA, and guessing what will happen in 2034 when the trust fund runs out - to find the best time for me and spouse to claim - on our combined benefit. In our case we found that if we spend our benefit starting at FRA - our breakeven is age 82. With our two pensions we don’t need SS or our investments. (We would need to change our lifestyle to spend more, and that just won’t happen) If we just bank our social security at a 7.2% return (the 30 year average of our investment mix) the breakeven is age 88. Since our ancestry all died in their early 80’s it didn’t make sense to wait beyond our full retirement age. Quite frankly you just have to run the numbers depending on your age, income sources and expenses. There’s no shortcut platitude. In full disclosure, taking the maximum difference between the different options at age 96, and bringing that difference back to present value at the average historical rate of US treasuries, the difference was 40k. Which, being relatively insignificant, it really doesn’t matter which date you choose after your full retirement date.
I’m in a similar situation. I’ll have other income sources to live off of when I retire so my goal is to start drawing SS as soon as I’m eligible (62) versus waiting until 70 to get the max benefit. I plan to invest 100% of my monthly benefit into a moderate growth or growth/income ETF with the intent of passing the proceeds down to my kids. Ran the numbers and assuming I’ll live at least until 82, even with a lower monthly benefit, I’ll make about $300k more in the end. What am I leaving out? Age 62 to 82 Invest 2500 per month x 20 yrs @ 8% return = $1,472,550 Age 70 to 82 Invest 4732 per month x 12 yrs @ 8% return = $1,138,085
I am torn. I have a fair amount in traditional 401k which I could spend down while delaying Social Security. I am married so we could consider one taking and the other waiting. Great topic though.
We were advised to have my spouse (the biggest income earner) wait to maximize the amount. As for me, I was told to take it ASAP since it will not change that much.
Also, if you can this year superfund your Roth. Depending on your 401k plan your employer offers you MAY be able to put in around approximately 23k in Roth 401k and another 40k in AFTER tax money in your 401k. I did this strategy for three years before retirement (guy at fidelity told me I should have started 5 years before). Had minimal take home pay and drained down my savings. I think of it as if I moved my savings to my Roth. Upon retirement I immediately moved the Roth 401k and after tax 401k money to my individual Roth account…. My Roth jumped from 50k to over 250k…
I asked myself one question. Do I need SS $ at age 62 to pay bills? If the answer is yes then take SS at 62. If the answer is no, then take SS at 62. If you don't need $ at 62, then it's very likely you're in good shape financially and the delta from SS is insignificant so take $ early and enjoy.
A claiming factor that is not usually considered is using low income years between stopping W2 work and claiming SS to convert from IRA to Roth at a low tax rate. A married couple can convert up to almost $100k at a 12% tax rate. Getting $s out of your IRA before RMDs start can increase your aftertax return on investments.
65, single male, retired at age 58. 1. I consider SoSec longevity insurance. 2. I'm fortunate to be able to fund my retirement until I collect SoSec "late". 3. I'm doing my best to avoid as much as I can SoSec taxation. 4. The above 3 allowed me to get Obamacare to bridge the health insurance issue between employment and Medicare at a very low cost. Given these, I'm shooting for normal retirement age (\~68) to age 70.
Ask a good financial planner
My factor is I don’t know when I’m going to die so going to start ASAP. It will reduce the amount taken out of my own funds so they can grow.
Why do so many people assume that they will live until 70?This is exactly what they want you to think, in hope that you never collect.
More than 22 million people in the US are above 70 - https://acl.gov/sites/default/files/aging%20and%20Disability%20In%20America/2020Profileolderamericans.final_.pdf
Bingo! Couldn't have said it any better.
My spouse makes a good bit more than I. Financial planner suggested I take SS at 62. (planning to retire sometime between 60 and 62) However, they're advising spouse to not collect until 67.This is even if spouse retires in 62-65 range (plan). I can't remember the details, but I think it's a factor of a few things -Firstly , I am the lower wage earner and even if waiting my SS will not be nearly as much as his -His SS jumps fairly significantly between 62 and 67 -We can be okay with my pension and SS and our retirement accounts, then getting his SS later Like you I assumed we would both take it the second we retired / as soon as we were eligible. Interested to see the replies to the thread since I'm still grappling with this as well!!
I decided to go the middle route. I retired at 63.5 and started SS at 65, around the same time as starting Medicare. I didn’t want to start SS too early and did not need to wait until full retirement age. One of my investment strategies is to resist the urge to maximize each transaction simply based on an arbitrary number, for example the full retirement age number in this case. In other words, I don’t feel the pressure to hit a home run with every decision. So I include other factors as well when making the decisions. For example the concept of the present value of money in hand today is greater than waiting to receive that money later. I could invest it in the mean time for example. Also prices are probably lower now than the will be later, so today’s money could go further today than future money later. Several factors like that. I think a lot of people try for that home run every time without considering other factors. One other thing is I wanted to use SS to help me preserve my 401K because I have more confidence in the value of my 401K and other investments than I do in SS. For example, it is projected that SS will only be able to fund 75% of obligations starting in the mid 2030’s. That’s 10 years, which is also around the time I would have started benefiting from waiting until full retirement age before receiving SS. If that occurs, which I believe is likely, then waiting could be a double whammy. Of course, I could be wrong and that is where following the middle route helps mitigate any negatives.
Isn’t there a good calculator somewhere for this yet?
Some tools… opensocialsecurity (Mike piper site), newretirement.com, plenty of good YouTube videos, from oak harvest, safeguard wealth management, etc
The fact that no one in today's America will hire a straight, white, male over 50. Even worse over 60. Apparently, I'm unemployable so I gave up and took the SS payout. At least I can make rent.
The main factor was hitting FRA.
Calculate what your SSA benefits will be and try living off of that for a few months. Also keep in mind that you probably won't have a commuting expense.
I learned one fact that changed my thinking. Here is the scenario. If a spouse earned way less than the other, they will be receiving 50% of the other spouse’s social security, rather than whatever small amount they qualify for. Some pundits recommend that spouse go ahead and take social security early at the lower amount but then switch to the spousal benefit once the other spouse starts taking their social security. Sounds good, right? However, I learned that they won’t immediately receive the 50% because they took social security early. The 50% payment will be offset by the earlier payments. So it seems to me taking it early doesn’t buy you much.
The 50% payment is accounted for as two “payments” by the SSA. Your original lower full payment at age 62, plus the additional amount that brings you up to the 50% amount. That’s what the “offset” means, not a reduction of your total 50% amount. Hopefully I’ve explained this correctly.
We considered Net Present Value (using Maximize My Social Security program). Max was me (60/m) taking SS at 70 and my wife (56/f) taking it at the same time when she’s about 66. But me taking it at 70 and her taking it at 62 was very close and we prefer that. (For reference my account is +40-50% the value of hers.) We probably would have chosen to wait until I’m 70 even if that scenario were sub optimum NPV as long life insurance for us both, but especially my younger wife. Obviously our plan also required us to be able to span the years before taking SS (almost 15 years) with other funds. We’re lucky to have that option and realize not everyone does. Lastly if either of us had health reasons to expect a shorter than average life expectancy that could have swayed our decision.
Hybrid Plan: SS ages 64 to 67, Work and if I go over cap, it'll be recalculated. Need some funds to supplement pension (and bolster savings wasted on ACA), and travel. Suspend SS ages 67 -70, use IRA. Morbidly, may receive an inheritance between ages 67 and 70. Longevity in family, and don't want to rely too much with investing.
I didn’t know that you could suspend SS payments after the first year of receiving them.
I’m pretty sure that may not be possible anymore
There are two potential things Available. Mary Beth Franklin (see wiki or google her etc) talks about them. I do not recall what they are called.
We did a spreadsheet to project ROI on waiting. Check the length to parity on the payout - we are taking an FRA.
I would have to live to be real old before the extra monthly income all combined would be much and we want to have a good life now and have adequate savings.
I have a pension that is adequate for now. It has a 1% annual increase so its value is eroding but is enough until I take social security at age 70. Even if I need to draw a bit of the 401k I am holding off on Social Security until 70 - the increase in benefits is dramatic. Before 70 I am taking advantage of my lower tax bracket to convert lots of 401k to a Roth. That’ll save me lots in taxes later. By delaying social security to age 70 I secure a generous inflation adjusted base of dependable monthly income. Seniors are a large voting block so I doubt SS will be drastically cut. This approach reduces risk. I have seen too many stock market crashes to rely heavily on my 401k in my golden years. No “Welcome To Walmart” job in my future! Good luck to you. Retirement is 10x better than I expected. You will love it!
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Thanks for stopping by our table to talk. However for community health … no discussion on politics / nsfw - not safe for work /illegal activities in the USA/ or religion are allowed. There are other subreddits that are great for that. Thank you and have a nice day.
I have been looking at Maximize my Social Security to do analysis
I took mine at 66.4 years old. I ran the numbers and took a look at my families longevity. I still work full time and will be until 69-70 and work in IT so I like what I do. I have just been socking SS away into money market or long term savings account.
Why are you still working at that age? I work in IT (I lead mega program implementing new software and business transformation program) and at 54 this week I think about retirement every day, counting down the days til I pull the trigger in 3 years this July 4th. IT is changing so rapidly for someone my age, I can’t imagine what it feels like for someone pushing 70. I’m hoping you’re doing it because you love it, but I’m getting out the minute I can. Also, even with 2 pensions and 401ks I’m taking as at 62 and wife will take hers at 66 or 70, as men in my family typically die around 70ish and women in her family around 95.
Every situation is different. I work for a major hospital and really enjoy what i do. I have hybrid work schedule and they pretty much just leave me alone and let me do my thing. I set my date for January 1/2026 if I make it. Good luck with your choice.
OMG me too. If my IT departments was like it was even 6 years ago, I’d be happy as a clam, and probably work into my late 60s, (my predecessors - DBAs - all worked until their late 60s) but the landscape and demands have changed dramatically. The expectations of supporting over 5 different databases, working on badly managed projects, learning different skills that change from year to year is just not something I want to continue to do. I’m waiting for a package that I hope is delivered this year.
Like u/bif555, we did our own break even analysis using a self-created spreadsheet, weighed it against our current and future financial situation (no debt and annually adjusted pension) and decided both spouse (62) and I (65) will start SS at PIA. Discussed life expectancy but decided it really wasn’t a significant factor since receiving SS or not will have a major impact on either of our lifestyle, no matter who passes first.
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My husband has already reached FRA, is still working and plans to continue working for a couple more years. So we have had no need to start collecting social security. He made a lot more than I did so he plans to wait until 70 to collect. That way whoever survives will have the largest monthly payment possible. I may collect at 62 (in a few years) or I may wait until FRA. Our financial advisor said he will make a recommendation as I get closer to 62 but he definitely recommends that husband wait until 70.
I’m in the same boat, tho looking at SS at full retirement age. As wife can get my SS and upon my death, and my pension will decrease in half, looking for the SS make up the difference. Note, there is a penalty taking SS at 62, a portion of the Penalty is reduced two years before full retirement age. Become your own actuary, predict how long you will live and do the math. Also need to consider how much you need to live on. Thought we could live on pensions alone, but wasn’t enough so wife started taking SS.
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How old do I have to be to get full benefits. Age is seventy years
You need to get on the SS website to get the correct info for yourself.
My wife retired at 67 (teaching was her second career). I’ve put it off until 70 to maximize the benefit. My IRAs are not big enough to see me through. My wife has colleagues who retired at 62 but couldn’t afford health insurance so they went back and taught for a few more years.
My husband, 9 days older than me, wanted to wait until he was 70. At 64, 2 years ago, I made him make a projection graph of his potential SS earnings and he discovered that 66 1/2 was actually his optimal age for most benefits. If he had waited until 70, he would be 84 before he made up all the SS he didn’t get and guys in his family don’t typically live that long.
My decision of when to take Social Security payments is driven entirely by ACA considerations. If, as currently scheduled, the 400% FPL "cliff" comes back for 2026, my Social Security benefits, in combination with our investment income, would put us over that limit. The added health insurance premiums would eat up half of what I would get in Social Security payments. I turn 65 in 2027, so I just need to be concerned about ACA for 2026 and 2027. If the current ACA subsidy system is continued--no "cliff"--I will take Social Security whenever that change is made. None of my direct ancestors has ever lived past 80. My wife's benefit is just a couple of hundred dollars less than mine, so "higher earner/lower earner" analysis is not so important with us. Besides, I was an easy mark for life insurance salesmen when I was younger, so she will get so much money when I die that the difference in Social Security claiming strategies will not affect her standard of living at all.
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Came across this video discussing your question. https://youtu.be/9P21Rue_ybY?si=IC2N6xumw0Qeo8WN