Social Security- take early or later?

[georgina]

For us, we decided DH would wait until 70. His parents both lived until 94 and we see it as more of an insurance policy for old age. For me, half of his is more than mine would be, but I am 8 years younger so need to wait until my full retirement age to start collecting I believe.

I'm a little confused about this. All my research says that if you paid into MC for x amount of time, part A is free. You do have to pay for Part B but you can opt out of it. Part A is hospitalization and Part B is doctor's visit's etc. You can also bump up to Part C and D or get private to supplement. There is a standard cost for part B, which of course goes up if you are making a higher income. Also, from what I understand you have no choice when you turn 65 except to take Part A, I know my boss was spitting mad about it when he turned 65 but found out his supplemental costs were actually going to be less than the company insurance so he was o.k. with it. He still doesn't draw SS and he is way into his 70s.

Why isn't he taking SS? The amount does not continue to increase after that age. He's just throwing away money.

I see I cross-posted with focusondisney!

 

[starry_solo]

I’m collecting at 62

 

[wishicouldgomoreofte]

- My best advice: make an appointment with a financial advisor or accountant who specializes in Social Security. A one-time, one-hour appointment should be enough. Make it clear that you only want to talk about one topic: WHEN is the optimal time for me, given my financial circumstances? Lay out all your details and say, "Math it up, Dude." You only get to make this decision once, and it'll affect the rest of your life, so an expert opinion is worthwhile.

Good advise. Now how do you find one? Pick one out of the hundreds of post card solicitations, or seminars? Throw darts?

 

[MillauFr]

If you take it early and invest the money your breakeven point will be in your late 80s. I'm taking it early. One in the hand is worth two in the bush in my opinion.

 

[rangerxenos]

I’m no where close to having to make a decision on this but just heard some people talking about it. If you take it early, you get less. But if you wait, will you get it at all??? So, do you make a spreadsheet trying to calculate where the breakeven point is? I’m just curious what you think.

If you have a financial advisor, they would be the one to talk to about this. If you don't, you should have one! (speaking as someone who works in finance.) There are many things to take into account when deciding when to start collecting.

 

[MrsPete]

Take the advice of knowledgeable people to make a determination on taking SS. But, on your 65th birth month, Medicare sends you a bill if you are not on SS. Payments are about $400+ every 3 months (at least for me). The DH company health insurance stopped for me on day one of my 65th birth month also, because Medicare kicked in. So, look into the hidden repercussions of SS and Medicare.

Kinda true:

Medicare A is free to pretty much everyone, but it only pays for hospitalization.
Medicare B costs, and it pays for doctor visits, etc.
Medicare D costs, and it covers prescriptions.
Medicare Complete is a combination of the above (and is probably your best bet).

You can sign up for Medicare at age 65.
Of course you want Medicare A at 65 'cause it's free, but you might or might not want the other types. If you're still working or if you have coverage from another source, you might choose not to pay for those other options.

If you're 65 and have only Medicare A, you'll pay nothing -- so no payment.
If you're 65 and drawing SS benefits, they'll deduct the cost of your Medicare B, D or Complete from your SS check.
If you're on Medicare but not yet drawing a SS check, they can't deduct -- so you have to pay outright.

One thing to keep in mind, they are saying by 2035 the social security trust fund will run out of money and benefits will probably be cut by 23%. How that cut will happen, who knows? Will it only be for future retirees or will it affect current retirees too?

Several thoughts:
- SS isn't in a trust fund.
- Experts disagree on whether SS is solvent long-term or not.
- No one can say what will happen in the future.

Why isn't he taking SS? The amount does not continue to increase after that age. He's just throwing away money.

True.

I’m collecting at 62

What's your reasoning?

Good advise. Now how do you find one? Pick one out of the hundreds of post card solicitations, or seminars? Throw darts?

How do you choose any professional? Ask around among friends. Search online, read reviews, call, ask about services and see which person seems most likely to serve you best.

 

[scard192]

For us, we decided DH would wait until 70. His parents both lived until 94.

that is the one variable that does concern me. None of us have any way of knowing how long we will live, so how long our retirement money will need to last.
my Dad lived to 85, but my Mom died at 73. she was only 7 years older than I am now.

 

[SuzanneSLO]

It can be hard to find an advisor to just look at your social security strategy because it’s hard for most advisors to compete with the available online tools. Maximizemysocialsecurity.com, created by Larry Kotlikoff is $40, and opensocialsecurity.com, created by Mike Piper, is free. Both have books, which may be available at your public library.

And in any case you need to obtain the record of your earnings from Social Security.

 

[snappy]

The advice I received and follow is to project that your assets need to last until you are 100, regardless of personal or family history. The risk of running out of money is scarier than having excessive assets left over to leave to heirs, especially with the uncertainty of future health care cost increases. The difficult thing is to balance all of this with enjoying retirement.

 

[scard192]

The advice I received and follow is to project that your assets need to last until you are 100, regardless of personal or family history. The risk of running out of money is scarier than having excessive assets left over to leave to heirs, especially with the uncertainty of future health care cost increases. The difficult thing is to balance all of this with enjoying retirement.

my guy at Fidelity ran 39 algorithms; everything from best case to worst case. I have a lovely bound report.
I am not all that concerned with leaving assets to my heir (just the one child) but if she ends up with something that would be nice. She'd rather have her Mom for more years and less money when I am gone.

 

[Anthony1971]

Don't really care that much about what age I take Social Security it is the Health Insurance that really matters and that is at age 65.... Bottom line is if you can afford to pay for Health coverage on your own at age 62 than retire and get a part time job... if you can't well the miniscule amount you get from social security will not make a big difference in your life and you will pay taxes on a higher income amount so might as well wait until at least 65 when you can get health coverage. and if you are not comfortable at that point 67... No one can answer another for another person without knowing their assets. You can: 1. research on your own and find out what you are comfortable with putting aside to be able to retire at 62 2. speak with an advisor or 2 or 3.... anyone who take the advice of an advisor without doing research first and after is about what that person is suggesting may be setting themselves for failure... now your goal and know the risks and decide what is best for yourself convey that information to an advisor..... if you can not stomach losing 50% or more of your money that may take 10 years to recover or worse don't put your money in the stock market....if you know you will likely never save the amount for your goal in cash and can deal with the stock market ups and downs than the stick market is right for you......

 

[MillauFr]

If you have a financial advisor, they would be the one to talk to about this. If you don't, you should have one! (speaking as someone who works in finance.)

The problem is the industry is so rife with fraudsters and con artists I've found it better to educate myself. Plus the compensation structure for most advisors is either way too expensive or in conflict with the goals of the clients. I mean charging someone 1% yearly fee to mange their money? That is outrageously high for someone who has several hundreds of thousands of dollars invested.

 

[tvguy]

The problem is the industry is so rife with fraudsters and con artists I've found it better to educate myself. Plus the compensation structure for most advisors is either way too expensive or in conflict with the goals of the clients. I mean charging someone 1% yearly fee to mange their money? That is outrageously high for someone who has several hundreds of thousands of dollars invested.

Education is a good thing. But to be honest, since 1% is the industry standard, I would be more worried about someone who charges less.

 

[SuzanneSLO]

Edudation is a good thing. But to be honest, since 1% is the industry standard, I would be more worried about someone who charges less.

For most people, paying 1% means paying the advisor 25% of their available spending from investments (assuming a 4% withdrawal rate in retirement). That is a huge cost that many simply cannot afford. Especially when most advisors cannot guarantee any greater return to justify the high cost.

 

[tvguy]

For most people, paying 1% means paying the advisor 25% of their available spending from investments (assuming a 4% withdrawal rate in retirement). That is a huge cost that many simply cannot afford. Especially when most advisors cannot guarantee any greater return to justify the high cost.

Certainly a perspective I never would have considered.

 

[amcnj]

From what I had read, social security payment amounts are determined so that IF you live to the average expected age, you will draw the same amount of money no matter what age you begin collecting. Naturally if you live longer than average, waiting will net you more from SS, if you live less, starting earlier is better. But of course we can only make educated guesses as to our life expectancy.

And as others have pointed out, strategies can differ if you are married and depending on what benefits your spouse also is entitled to, as well as inheritance considerations (preserving your assets by using social security earlier).

 

[Flamingeaux]

DW just turned 62 and she started getting hers a week ago. Because of her health issues we made the decision to start collecting when she hit 62.

 

[loves to dive]

You will take the larger of the 2 payments: either your own or half of your spouse‘s benefit. There used to be an option to start with your spouse’s; let your own grow & then change to yours. But that option is no longer available. You will of course be able to collect survivors benefits if it is higher than your own.



Well, he is just skipping money for no reason. If you don’t start collecting, benefits will increase until you turn 70. After 70, your monthly benefit will be the same no matter when you start collecting. And there is no penalty no matter how much you make at that age. So there is absolutely no benefit to him to not collect.

I'm sure it has to do with tax implications to him since he still works and draws a salary from the company. His wife did start drawing her part of his at 65 because she didn't work much during the years. He has enough money to last him and his wife through their lifetimes and they have no kids.

 

[Miffy]

You will take the larger of the 2 payments: either your own or half of your spouse‘s benefit. There used to be an option to start with your spouse’s; let your own grow & then change to yours. But that option is no longer available. You will of course be able to collect survivors benefits if it is higher than your own.

Just wanted to comment on a fine point about this. If the spouse who would be collecting the spousal benefit was born before January 1, 1954, this option is still available.

Also wanted to comment on another poster's information that if you earn more than a certain amount of money, the social security benefits that you'd be collecting would be reduced. This is true only if you start collecting before your full retirement age, and even then this sort of reduction would apply only to the years between then and your full retirement age (FRA). If you start collecting at or after your FRA, your earnings do not affect your social security benefit amount.

Not only that, but--now stay with me here, since it's kinda complicated--if you were to start collecting your social security at or after your FRA and the income that you were currently earning surpassed your earnings for any one of your 35 best-earning years (which form the basis of your social security benefit), then the amount of your social security payment would continue to rise, as you would be "replacing" lower-earning years even though you were collecting your benefits already.

This is all described on the government social security site. You don't have to take my word for it! I just know this stuff because I did a lot of studying over the last year or so. It is complex and everyone's situation and needs and desires are different.

Just a small warning about consulting a financial advisor: a lot of financial advisors make their living selling all kinds of financial instruments. Be careful and make informed decisions.

 

[rangerxenos]

Good advise. Now how do you find one? Pick one out of the hundreds of post card solicitations, or seminars? Throw darts?

If you do your research, you can check ratings of both firms and individual advisors. Ask friends and family who they use, and if they like them. Depending upon your employer, you might actually have some resources available to you through work. Check with your HR department on that.