The Best Reason Not to Wait to Take Social Security

The Best Reason Not to Wait to Take Social Security - by Donna Rosato/ Retirement/ Money/ Time.com

"Q: I am 68 and my wife is 65. We’re both retired but my pension doesn’t cover our monthly expenses. I haven’t taken Social Security yet. But I have some health issues. I have substantial savings, growing at 2% to 3% a year. Does it make more sense to take Social Security now or withdraw from my savings and let Social Security benefits grow for two more years? – Jeff Rainer

A: It depends on how serious your health issues are. But there are other important factors to consider too, says Thomas Mingone, a managing partner at Capital Management Group in New York..."



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Richard

My wife is turning 65 in Dec. She was set to wait until she was 66 to take SS and get $100/mo. more. Then a financial adviser told her that it would take 9 years to reach her break even point if she took it at 65. She decided not to wait.

Can't get the link to open.

I started my Social Security at the normal retirement age. Then it was 65. It is now 15 years later and I don't regret it. My view was that yes, I could miss out on a higher benefit by waiting but if I lost that bet I would have won the bigger bet; i.e. living longer. I still feel the same way.

George

At 62

Started mine at 62. I've always been a good saver and invested and really didn't need SS to live. I've invested all of it for the past 3 years and am happy for the extra money I've had to invest the past 3 years. I have taxes taken out of it and it has worked well for us. My wife will have her own so the future looks fine for us.

There is more to it if you are married. One person can take the spouse benefit and have income until a later age where they can collect a higher benefit. Also, the survivor benefit makes a difference for a spouse that has longetivity in their family.

My husband will wait to take his at 70 since we are hedging both our lives on it, i.e., if I outlive him, I will switch to his. I will take mine at 62 and since my PIA is high, my amount at 62 is already higher than half of his at my full retirement age. SS strategy is different for everyone depending on their ages and each SS earning credits etc.

When I saw the topic -- I half expected the first screenshot to be of a person's death certificate. My husband passed away at the age of 61 and it still irks me to think of all the dollars he contributed to SS over his lifetime -- that he will not collect. I'm living on an adjusted amount which includes some 'widows' benefit, but because my own SS was reasonably high there wasn't much more added by his. I even contacted his ex-wife to let her know she can collect under his account -- but she is not old enough yet.

Enough on that. I am wondering if anyone reading this is 'SORRY' they didn't wait longer to collect.

mpumilia said:

Can't get the link to open.

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It opened fine for me with the Firefox Browser.

What Browser are you using to try to open the link?


RICHARD

Opened fine here using Silk browser. But really the equation is a bit of a crapshoot between age 62 and FRA based on your own estimate of your life expectancy. Everyone's calculation is a little different of how long the higher monthly income will take to outstrip the earlier start. I think that 9 or so years would be pretty close.

Then again, if one is 62 and loses their income, there is not much choice but to begin taking their SS retirement income. So be it.

Jim

Got it to open. I am using Firefox. Don't know what the problem was.

I have mentioned before- I think of Social Security as our annuity. A large amount of money we threw into a pot in the hopes of collecting an income stream for the rest of our lives in our old age, with the whatever we don't get back going back into the pot and not our heirs.

I do not have a pension and hubby has a small one you could never live on, which is why we will take the lump sum when the time comes- if they even allow it then or if the money is still there. Who knows with these companies? Who knows what will happen in the next few years with health and our jobs and our ability to even cope with working and commuting, which is really getting to us physically right now. Who knows if we can even continue to work at least until we can get Medicare? Who knows if we can continue to pay the high NYS property and school taxes- what our expenses could be going forward? Who knows if we can sell our house to move somewhere less expensive or what type of care we might need? Who knows when one of us may pass?

We plan to work until our full retirement ages- 66 and 67 - ugh! Not what we would have really wanted. )I am 59; hubby is 61). We plan to put off taking Social Security until we are 70. Use our savings to try to live- and maybe using one of the SS strategies for married couples. That's the plan, but life happens. We need to get a fee only financial adviser in the next year or two to help us out with this whole thing. My head hurts just thinking about it. Wish we could ditch our jobs and start our retirement life right now!

b2bailey said:

When I saw the topic -- I half expected the first screenshot to be of a person's death certificate. My husband passed away at the age of 61 and it still irks me to think of all the dollars he contributed to SS over his lifetime -- that he will not collect. I'm living on an adjusted amount which includes some 'widows' benefit, but because my own SS was reasonably high there wasn't much more added by his. I even contacted his ex-wife to let her know she can collect under his account -- but she is not old enough yet.

Enough on that. I am wondering if anyone reading this is 'SORRY' they didn't wait longer to collect.

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I don't blame you.I think this is so horrible and unfair.

To the OP, you can apply for SS. Then your wife can apply for your SS not hers (it will be 50% of your SS), as long as she is not working. Then you suspend your SS until you are ready for SS. Read a lot about this because I'm at full retirement age and wanted to know what my options were. I was waiting until age 70, but just got laid off from work. I was given the option of 50% of my husband's SS or my own. Couldn't take his because I might find a job. And you can't take a husband's SS and work... Because I was at full retirement age I was given the option of 6 months lump sum and then my SS would start. I took the lump sum which was in my bank account in two days! I opted to start SS because I don't know when my next job will be. At my age, I can work and draw full SS without any penalties. I wanted to wait until 70 but life sometimes throws a curve ball. Hope this helps.

Sharon

sunshine3330 said:

To the OP, you can apply for SS. Then your wife can apply for your SS not hers (it will be 50% of your SS), as long as she is not working. Then you suspend your SS until you are ready for SS. Read a lot about this because I'm at full retirement age and wanted to know what my options were. I was waiting until age 70, but just got laid off from work. I was given the option of 50% of my husband's SS or my own. Couldn't take his because I might find a job. And you can't take a husband's SS and work... Because I was at full retirement age I was given the option of 6 months lump sum and then my SS would start. I took the lump sum which was in my bank account in two days! I opted to start SS because I don't know when my next job will be. At my age, I can work and draw full SS without any penalties. I wanted to wait until 70 but life sometimes throws a curve ball. Hope this helps.

Sharon

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What is the 6 months lump sum about?

It was because I was at full retirement age. I had the option to take the lump sum and start SS OR wait until January 2016 and receive a larger monthly SS without a lump sum. It was also explained there would be a cost of living adjustment in January, so decided not to wait. There really wasn't much difference in the monthly payment. Also when SS calculates my earnings next year for 2015, my monthly SS will be adjusted again. Because I'm unemployed and need the money, I took the lump sum route. I'm trying not to touch my 401K since it took a hit recently due to the market and hope it will bouce back. And yes, I was surprised when given the lump some options.

Passepartout said:

...Then again, if one is 62 and loses their income, there is not much choice but to begin taking their SS retirement income. So be it.

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No, there is always choice. Certainly depends on personal situation, but I'm trying to exit work by age 60 and put off SS to age 70 (FRA 67). I have another 10 years to soak up employer match and invest otherwise and ratchet down living expenses also. Maybe I need to work longer or go PT in a semi-retirement scenario, I'm flexible, but I'm not counting SS in my retire in 10 years plan, it's instead safety net to invoke when needed.

The original question was certainly a good reason to take SS early. I want to wait until I need it.

I took it early, this year in May, age 63, as I found myself working a lot.

I decided to fit work in around my travel and relaxation time instead of trying to squeeze travel & enjoyment into my work schedule.

It's wonderful. Walking the beach, gardening, travel, biking - even picked apples and raspberries today.

Will rent a house in Ireland and France next year.

Now, I draw from a few income streams; SS, small monthly withdrawals from IRAs, rental income and fee-for-service consulting services. The primary residence has been paid off for a long time and the cottage is supported by its own rent. So, am living within my needs, but below my means.

Life is good.

My reason :

i may find myself in similar circumstance but if you collect early Don' t you have to pay tax on SS benefit if you earn more than $14,000/yr?

Beaglemom3 said:

I took it early, this year in May, age 63, as I found myself working a lot.

I decided to fit work in around my travel and relaxation time instead of trying to squeeze travel & enjoyment into my work schedule.

It's wonderful. Walking the beach, gardening, travel, biking - even picked apples and raspberries today.

Will rent a house in Ireland and France next year.

Now, I draw from a few income streams; SS, small monthly withdrawals from IRAs, rental income and fee-for-service consulting services. The primary residence has been paid off for a long time and the cottage is supported by its own rent. So, am living within my needs, but below my means.

Life is good.

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Radmoo,


The first year rule is a little different. I semi-retired mid-year having earned a lot through May.

http://www.investmentnews.com/artic...year-rule-for-working-while-collecting-social
Here's the SSA explanation: https://faq.ssa.gov/link/portal/340...bout-earnings-in-the-first-year-of-retirement

Next year will be different, but I'm all set. Still can consult, but a lot less.

There's not a tax, as I understand it, but a reduction of benefit if you go above your monthly limit.

0

Radmoo,

Forgot to say that income from IRA/Keoghs aren't counted, nor is rental income, against your SS benefit.

https://faq.ssa.gov/link/portal/340...nt-account-affect-my-Social-Security-benefits http://www.ssa.gov/planners/retire/rule.html

http://www.aarp.org/work/social-sec...tion-in-current-social-security-benefits.html


They are exempt incomes (from SSA). As you know, you'll have to pay whatever taxes to the IRS on them, though, depending on the type of account (except Roth and a few other investment vehicles).

sunshine3330 said:

To the OP, you can apply for SS. Then your wife can apply for your SS not hers (it will be 50% of your SS), as long as she is not working. Then you suspend your SS until you are ready for SS. Read a lot about this because I'm at full retirement age and wanted to know what my options were. I was waiting until age 70, but just got laid off from work. I was given the option of 50% of my husband's SS or my own. Couldn't take his because I might find a job. And you can't take a husband's SS and work... Because I was at full retirement age I was given the option of 6 months lump sum and then my SS would start. I took the lump sum which was in my bank account in two days! I opted to start SS because I don't know when my next job will be. At my age, I can work and draw full SS without any penalties. I wanted to wait until 70 but life sometimes throws a curve ball. Hope this helps.

Sharon

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I think the wife has to be at full retirement age, however, in order to collect on her husband's.

sptung said:

What is the 6 months lump sum about?

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I think she got a severance package from her employer?

mpumilia said:

I think the wife has to be at full retirement age, however, in order to collect on her husband's.

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The husband has to be at full retirement age (FRA), before the wife can collect the spousal benefit. If the wife is less than FRA, she could collect sooner, but at reduced benefit. If the husband doesn't want to start collecting until later than the FRA, he can do a file and suspend so his wife can start collecting her spousal benefit.

Reverse the genders above if the husband wants to collect spousal benefit from his wife.

Wait until 70 or collect sooner? What's the worst scenario for each case? If you wait until 70 and you and your spouse both die young, you may not have "maximized" the amount you got from the government, but who cares? You're both dead. If you collect sooner, and one of you lives a very long time, you may not have enough money to live on. That's what scares me.

Just in case I do live a very long time, I'm going to wait until I'm 70 to collect. I'll do a file and suspend at 66 so my wife can start collecting her spousal benefit. Fortunately, I won't need the extra money before I'm 66. I can understand why people collect early if they really have to have the extra income.

radmoo said:

Don' t you have to pay tax on SS benefit if you earn more than $14,000/yr?

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I don't know what the cut-off is but SS is tax free up to some level of income. Above that it is taxable. $14,000 sounds low to me.

George