What's the best age for an American born in 58 to retire wrt SS?

[SiSePuede419]

 

This is only an example. YMMV. I ran the numbers.  Check my math.

 

Let's say you're an American who was born in 1958, so that means you can start to collect Social Security at age 62, at the earliest.

 

Let's say your birthday is October 1st.

 

That means your "full" SS payment begins at age 66.8 months (for Americans born in 1958).

 

Social Security, 1958 birth year, 

Age 62 = 10/1/20 (earliest)

 

66.8 months = full = 6/1/2025

 

According to the IRS, if you retire sooner than 66.8 years old, your benefits are reduced by:

 

6/1/24 =  6.67% reduction

6/1/23 = 13.24% reduction

6/1/22 = 20.01% reduction

6/1/21 = 25.00% reduction

6/1/20 = 28.36% reduction

 

Now, let's say, for example, your full benefit is $2000/month.

 

How much you actually get (in Baht) depends entirely on the exchange rate throughout your retirement.

 

Just to make things simple, let's say the rate is fixed @ 29B/$1USD.

 

Then,

66.8 = 6/1/25 = $2000.00 = 58,000/month

65.8 = 6/1/24 = $1866.60 = 54,131/month

64.8 = 6/1/23 = $1735.20 = 50,320/month

63.8 = 6/1/22 = $1600.00 = 46,400/month

62.8 = 6/1/21 = $1500.00 = 43,500/month

62.0 = 6/1/20 = $1432.80 = 41,551/month

 

________________

 

Versus 62.0, # years to net out at higher rate

 

62.8 = 41,551*8 = 332,408/1949 = +14.2 = 76.10 years old

 

63.8 = 41,551*20 =831,020/4849 = +14.3 = 77.11 years old

64.8 = 41,551*32 =1,329,632/8,769 = +12.6 = 77.2 years old

65.8 = 41,551*44 =1,828,244/12,580 = +12.1 = 77.9 years old

66.8 = 41,551*56 =2,326,856/16,449 = +11.8 = 78.4 years old

 

Since the average life expectancy is around 78, if you want to optimize SS income, retire at age 62.

 

Comments?

 

Conclusion: Life is short.  You only know your birthday, not your "deathday".  Retire as soon as possible, if you can afford to. How much do you need to live in Thailand?  It's not how much you make, it's how much you spend. Keep your expenses as low as possible. Live below your means.  Save as much as you can, because inflation eats away at fixed incomes, year by year. How long are you planning on living?  Are you feeling lucky, punk? ????

 

[tonray]

Yes, which is exactly why I'm taking mine this summer when I hit 62. Of course I have to wait one month until my first payment. Life is short..I want to enjoy the years when I feel good and reasonably healthy instead on banking on higher payments so I can afford a posher wheelchair

Edited January 12, 2020 by tonray

[Jingthing]

There have been several posts about this. It's a question that keeps coming up and will continue to do so.

 

Some points I've learned --

 

The majority of Americans take it at 62.

 

A significant percentage of them take it then for questionable reasons.

 

The best reasons are:

 

You need the money now. (No choice.)

You have a serious or terminal disease.

 

A bad reason is:

Worry the system won't be there when you need it (younger people excepted)

 

Keep in mind the "break even" age is adjusted to be totally fair to the system and the benefit receiver. It's about age 78. It's quite objective based on actuarial data. 

 

If you live past 85 the early take decision will hurt you badly. 

 

People tend to underestimate their longevity but obviously many overestimate it to. 

 

If you take it early and work there will be a penalty if you make a certain amount until full retirement age.

 

There is no right and wrong answer for everyone. It is VERY personal.

[metisdead]

Moving to the Home Country forum. 

[HuskerDo]

42 minutes ago, Jingthing said:

There have been several posts about this. It's a question that keeps coming up and will continue to do so.

 

Some points I've learned --

 

The majority of Americans take it at 62.

 

A significant percentage of them take it then for questionable reasons.

 

The best reasons are:

 

You need the money now. (No choice.)

You have a serious or terminal disease.

 

A bad reason is:

Worry the system won't be there when you need it (younger people excepted)

 

Keep in mind the "break even" age is adjusted to be totally fair to the system and the benefit receiver. It's about age 78. It's quite objective based on actuarial data. 

 

If you live past 85 the early take decision will hurt you badly. 

 

People tend to underestimate their longevity but obviously many overestimate it to. 

 

If you take it early and work there will be a penalty if you make a certain amount until full retirement age.

 

There is no right and wrong answer for everyone. It is VERY personal.

"The best reasons are:

 

You need the money now. (No choice.)

You have a serious or terminal disease"...……..

 

You forgot the best of the best reasons. You saved well during your younger years and have planned a long time to be able to retire at age 62. Taking SS at age 62 even tho you don't need the money allows you to invest it or splurge on something for yourself or a loved one. I took it at age 62 and that combined with my company pension and dividend income gives me far more than I need. I currently live on about 50% of my income allowing me to save the other half. When a person turns 70 they are required to take a certain percentage from their IRA. At that point I'll be living on about 35% of my total income. I'll then begin gifting money to others. It's a comfortable position to be in and I'm grateful for it. It all comes down to planning but as you say there is no right or wrong answer. Some people need more. Some people cherish less in life. It indeed is very personal.

 

 

[SiSePuede419]

NEUROSCIENCE NEWS: The meaning of life – a psychologist’s view

"...we find the meaning of life when we “wake up” and experience life and the world more fully. In these terms, the sense that life is meaningless is a distorted and limited view that comes when we are slightly “asleep”.

https://neurosciencenews.com/meaning-life-15448/

 

 

[Why Me]

Another reason to take it early is that then you don't have to touch the equal amount you have invested, say in the market, where it's going to be growing a lot faster than in Uncle Sam's lock box (ref. Al Gore).

[IAMHERE]

For Americans that wait until 70 1/2 to pull money out of your 401K/IRA; beware of going over $87k per year.  If you have 401k/IRA monies and room under the $87K MAGI cap then move some monies from there into a ROTH while you can. If you do not take Medicare Part-B then the $87k MAGI limit doesn't effect you. If you are over that $87k limit then good on you, you did well.

I started to collect SS at 63 1/2. Now I wish I'd waited. For most it is a <deleted> shoot as to how long you live or don't live past about age 78.

I do believe that there will be an adjustment to SS this decade and the benefits will be lowered for all and lowered still more via a means test.

Edited January 13, 2020 by IAMHERE
spelling

[sfokevin]

You can create an online account with the Social Security Administration and view your contribution history and get an estimated benefits payout...

 

 https://www.ssa.gov/myaccount/

[1FinickyOne]

Another x factor that is left out of most equations would be the % that the SS money might earn if well invested... 

[rwill]

I took mine at 62, just starts this Jan.  When I did the math if I waited until 67 it would take 13 years to get back the money I would have got for the previous 5 years.  That would put me at 80 to break even.  I might not even be alive then.  Plus as others have mentioned if you invest that money it would make an even greater difference.

 

I am not sure why the original poster added the complexity of converting it to baht.  That can change in a wide range over time.

Edited January 13, 2020 by rwill

[newnative]

     I took mine at 62 and have absolutely no regrets.  Life is, indeed, short and gets shorter with each passing year.  

[cycolista]

Another thing to bear in mind is if the recipient has an under age child the child is entitled to 50 percent of the amount that the recipient receives until the child reaches age 18. 

[AAArdvark]

One other reason to take it early is if you have just lost your job.

 

One other consideration is if you continue to work.  Any significant income from work will reduce the amount you get each month.  However, the closer you are to "full" retirement, there will be less and then no further deductions.

[IAMHERE]

4 hours ago, sfokevin said:

You can create an online account with the Social Security Administration and view your contribution history and get an estimated benefits payout...

 

 https://www.ssa.gov/myaccount/

My local ISP is from Chonburi, SSA won't let me access their site.  If I use the VPN that OPERA browser has then I can access the SSA site. YMMV

 

2 hours ago, cycolista said:

Another thing to bear in mind is if the recipient has an under age child the child is entitled to 50 percent of the amount that the recipient receives until the child reaches age 18. 

About $700 is the monthly benefit for a child. I'm guess the poster is saying if you are receiving SS and die, then your child will get 50%.

 

1 hour ago, AAArdvark said:

One other reason to take it early is if you have just lost your job.

 

One other consideration is if you continue to work.  Any significant income from work will reduce the amount you get each month.  However, the closer you are to "full" retirement, there will be less and then no further deductions.

That money is 'withheld' and the SS calculates with a formula to see that you do get that money eventually. When that eventually is I'm guessing starts at your full retirement age. You lose it for a time and it gets paid to you in the future.

[PumpkinEater]

1. Determine if you want to work further past 62. Remember there is a maximum amount that you can earn while on SS, and that SS amount is reduced above the max amount.

2 The longer you wait the more you get BUT are taxed more as well so the larger amount may not really be that much larger...

 

cheers!

[Jingthing]

30 minutes ago, PumpkinEater said:

1. Determine if you want to work further past 62. Remember there is a maximum amount that you can earn while on SS, and that SS amount is reduced above the max amount.

2 The longer you wait the more you get BUT are taxed more as well so the larger amount may not really be that much larger...

 

cheers!

For lower income people social security income often turns out to be tax free.

It's based on formulas which people should look up.

You're correct of course that if you plan to work between age 62 and full retirement age you'll get hit badly if you earn over the limits. 

[Max69xl]

18 hours ago, SiSePuede419 said:

NEUROSCIENCE NEWS: The meaning of life – a psychologist’s view

"...we find the meaning of life when we “wake up” and experience life and the world more fully. In these terms, the sense that life is meaningless is a distorted and limited view that comes when we are slightly “asleep”.

https://neurosciencenews.com/meaning-life-15448/

 

 

Are you moving to Thailand for good, I mean selling your house/apartment? Do you have any savings or is your pension all you have? 

[SiSePuede419]

On 1/12/2020 at 8:22 PM, Jingthing said:

There have been several posts about this. It's a question that keeps coming up and will continue to do so.

 

Some points I've learned --

 

The majority of Americans take it at 62.

 

A significant percentage of them take it then for questionable reasons.

 

The best reasons are:

 

You need the money now. (No choice.)

You have a serious or terminal disease.

 

A bad reason is:

Worry the system won't be there when you need it (younger people excepted)

 

Keep in mind the "break even" age is adjusted to be totally fair to the system and the benefit receiver. It's about age 78. It's quite objective based on actuarial data. 

 

If you live past 85 the early take decision will hurt you badly. 

 

People tend to underestimate their longevity but obviously many overestimate it to. 

 

If you take it early and work there will be a penalty if you make a certain amount until full retirement age.

 

There is no right and wrong answer for everyone. It is VERY personal.

Even if you live past 85 years old, the decision to retire early won't "hurt you badly".

 

Here's why...

 

Because you will have gained years of TIME to spend doing whatever you want.

 

Of course in the long run, you will get less money.

 

So what?

 

Nobody on their deathbed says their one regret in life wasn't spending more time at the office working.

 

Almost everyone says they regret not spending more TIME with their family.

 

BOOM.

[SiSePuede419]

Are you moving to Thailand for good, I mean selling your house/apartment?

 

No.  Nothing is permanent in Life, except change.  You need to anticipate change.

 

I will keep my modest size home in America (I live BELOW my means, intentionally).

 

Maybe my wife will kick me out.  Who knows?  I will have the security of always having a place to go back to.

 

Probably will sell my 8 year old car.

 

If I need to come back to America in order to work for extra money (I'm a consultant), then I can easily buy a 10 year old Toyota for $4K-8K on credit, after I start my consulting gig and have two paystubs.  Until then, I'll rent a car, as needed.

 

When I want to go back to Thailand, I will have money in my pockets and can then sell my car for maybe a $2K loss.

 

Do you have any savings or is your pension all you have? 

 

I usually run up $2K - $3K in debt buying airline tickets, hotels, gas, food, etc when driving across America coming back to my home after I finish working a consulting gig.  

 

I usually manage to save up about $10K when working, pay off my Credit Card balance to $0 and send up to 10,000B each week back in Thailand for living expenses, insurance, Thai car payments, etc.

 

Yes, I have a modest size 401K retirement savings account.

 

No, most people in America don't get pensions.  Corporations destroyed that leg of the financial retirement stool back in the 80's in order to enrich Wall Street with 401K money.

[Kentwants2run]

My parents are in both in their 90's so I'm going to wait until 66.8.  As someone earlier stated, you take a beating if you live past 85.  I can live without it for a few years as I don't plan on dying anytime soon...

[HuskerDo]

31 minutes ago, Kentwants2run said:

My parents are in both in their 90's so I'm going to wait until 66.8.  As someone earlier stated, you take a beating if you live past 85.  I can live without it for a few years as I don't plan on dying anytime soon...

" As someone earlier stated, you take a beating if you live past 85"...… not so. It depends on how you plan. Besides you'll be spending a LOT less at age 85 and thereafter. Pretty much hanging out at home (or at the retirement center). Little to no travel. Fewer meals out. Adult diapers, oatmeal and prune juice aren't all that expensive. ????

 

"I don't plan on dying anytime soon"...… exactly how many people do yet it happens.

[gamb00ler]

On 1/12/2020 at 5:28 PM, sfokevin said:

You can create an online account with the Social Security Administration and view your contribution history and get an estimated benefits payout...

 

 https://www.ssa.gov/myaccount/

You can also download a Windows program (anypia) from -->HERE<-- to calculate your exact SSA benefits.  To use this program you need to know your contributions for every working year.  Those numbers are available online once you establish your SSA account.

 

ANYPIA will allow you to see the impact of changing the benefit start date.  The program is updated at least annually.  The data you entered will be saved in a file that you can use in the updated program.  I create a few files with all my contribution data but with different retirement dates to make comparison quick and easy.  The output of the program is a little confusing at first but once you understand the terms used (google helps with this) it is quite useable.  I believe there is also an old style windows help file included if you download the installer version (calculator.msi).

 

You can PM me if you're having difficulties with it.

[gamb00ler]

On 1/12/2020 at 11:25 PM, Jingthing said:

For lower income people social security income often turns out to be tax free.

It's based on formulas which people should look up.

You're correct of course that if you plan to work between age 62 and full retirement age you'll get hit badly if you earn over the limits. 

The total amount withheld from your SSA because your salary exceeds the income limit will be returned to you once you stop working or fall below the limit.  It may take up to 15 years for you to recoup ALL the benefits withheld.  It is unclear if you are entitled to any interest on the withheld funds.

 

[cmarshall]

Most Americans cannot afford to delay SS benefits once they have stopped working.  This group has no choice to make.  A small number of Americans are financially capable of funding their retirement without SS benefits at all.  For this group, their choice to delay or not just doesn't matter.  There remains a relatively small number who can afford to delay for whom the decision may be important, but unfortunately most of them are constitutionally disinclined to delay gratification generally.  So, they will take benefits at 62 and feel good about it until sometime down the road when the survivors may begin to wish they had more income.

 

Only about 3% of recipients delay until age 70 including me.  I could afford to fund my lifestyle without lowering my standard of living between stopping work at 61 and collecting at 70.  By doing so I effectively "bought" more of the SS annuity (nearly double) that will last as long as I am alive, but also my younger wife, who is eligible for benefits on my SS earnings record.  By the way, it is only true that delayed benefits are actuarially neutral for unmarried recipients.  For those of us with a wife the Delayed Retirement Credits are far better than neutral.

 

I am delighted with my results so far, even at this early stage.  My age 62 benefit would have been around $1600, while my benefit this month was $3236.  

 

An annuity is the only financial asset that we cannot outlive and among annuities SS is far and away the best, because of COLAs and spousal, dependent, and survivor benefits, which are either expensive or not available at all with private annuities.  It is noteworthy that among the take-it-early advocates none of them mentions the unique, good-til-the-grave benefits of an annuity, as though they have failed somehow to grasp that this is the critical point.  But then we know from other studies that most people vastly overrate their own investment ability.

 

All of my friends and acquaintances who are well-educated with substantial investment assets, i.e. the financially sophisticated ones, have delayed or are delaying their SS benefits. 

 

The advice of most economists on the subject is: if you can afford to wait, wait.

[JimGant]

54 minutes ago, cmarshall said:

For those of us with a wife the Delayed Retirement Credits are far better than neutral.

Depends on the wife. Gotta Thai wife who didn't live as your wife for five years in the States, thus not qualifying for spousal or survivor benefits? Well, then, figure things as a bachelor -- with the proviso that, unlike having a US wife with survivor bennies (whose SS bennies would also increase by sponsor waiting 'til age 70), your wife gets nothing if you wait until 70, then croak the next day. So, if you can afford to wait until age 70, then you can afford to collect at age 62, and allocate those funds to a Thai wife account. This is particularly germane for those whose SS payments are pure gravy, regardless of when they decide to take it. But, it can also apply (and maybe should, if you like your wife) if your next car needs to be used, and not new.

[cmarshall]

18 minutes ago, JimGant said:

Depends on the wife. Gotta Thai wife who didn't live as your wife for five years in the States, thus not qualifying for spousal or survivor benefits? Well, then, figure things as a bachelor -- with the proviso that, unlike having a US wife with survivor bennies (whose SS bennies would also increase by sponsor waiting 'til age 70), your wife gets nothing if you wait until 70, then croak the next day. So, if you can afford to wait until age 70, then you can afford to collect at age 62, and allocate those funds to a Thai wife account. This is particularly germane for those whose SS payments are pure gravy, regardless of when they decide to take it. But, it can also apply (and maybe should, if you like your wife) if your next car needs to be used, and not new.

Even in that case you are betting against the odds.  The Social Security Actuarial Life gives an expected remaining life span for a 62 year old male as 20 years, which means that well more than half will survive until past age 70.  

 

https://www.ssa.gov/oact/STATS/table4c6.html

 

However, if you are pursuing what in game theory is called "minimaxing," i.e minimizing the chance of the worst case, rather than maximizing the expected, outcome, then you could make the case for taking benefits early against the possibility of dying before 70.  I wouldn't do it myself, because you would be giving up a lot of upside to assure at least the minimum benefit. 

Edited January 15, 2020 by cmarshall

[JimGant]

2 hours ago, cmarshall said:

Even in that case you are betting against the odds.  The Social Security Actuarial Life gives an expected remaining life span for a 62 year old male as 20 years, which means that well more than half will survive until past age 70.

Croaking at age 70 is an extreme example for emphasis. But, for the Thai wife without SS benefits, and assuming you invest those SS payments from age 62 wisely, she'll be better off well into your 80's than if you had waited until age 70 to draw.

 

There is no cookie cutter scenario fitting the majority of situations. Worst case for the gravy SS recipient, I guess, would be living until age 98, with too many assets in equities, which head south; inflation a la Reagan, at 13%+; no indexed for inflation pension streams (other than SS); and an assisted living facility that keeps doubling its fees. I'm afraid if I planned my retirement with this worst case situation in mind, retirement would suck big time.

[cmarshall]

20 minutes ago, JimGant said:

Croaking at age 70 is an extreme example for emphasis. But, for the Thai wife without SS benefits, and assuming you invest those SS payments from age 62 wisely, she'll be better off well into your 80's than if you had waited until age 70 to draw.

 

There is no cookie cutter scenario fitting the majority of situations. Worst case for the gravy SS recipient, I guess, would be living until age 98, with too many assets in equities, which head south; inflation a la Reagan, at 13%+; no indexed for inflation pension streams (other than SS); and an assisted living facility that keeps doubling its fees. I'm afraid if I planned my retirement with this worst case situation in mind, retirement would suck big time.

And assuming that your investments are successful, which is not always the case.  Most investors suffer from overconfidence which may be exhibited by assuming that your investments will only go up.  Keep in mind that as we age our investing skill is inevitably going to decline along with all the rest of them.  Unlike a SS annuity.

 

https://www.cbsnews.com/news/how-overconfidence-hurts-investors/

 

You are the one who is planning for the worst by sacrificing likely future gains to insure that if you die soon, your wife will get at least some benefit from your SS payments.  My own planning is for the expected outcome, not the worst case.  

 

Your assumptions are too complicated to model mentally.  So, your conclusion may or may not be correct.  When I was planning my own retirement I ran dozens of scenarios through the best lifetime financial planning tool I could find, which was Esplanner from esplaner.com and which I recommend.  Just because it's too complicated to model mentally the results were surprising in some respects, delaying SS benefits being one of them.  Modeling does not predict the future.  You and I predict the future.  Model shows what your assumptions actually would mean for the future.

Edited January 15, 2020 by cmarshall

[JimGant]

17 minutes ago, cmarshall said:

You are the one who is planning for the worst by sacrificing likely future gains to insure that if you die soon, your wife will get at least some benefit from your SS payments. 

Actually, the wife, a US citizen with 35 years employment there, has her own SS benefits. My example was a heads up for those with Thai wives not eligible for SS benefits. This scenario certainly *DOES* change the modeling for age 62 vs age 70 beginning years for SS. This is something peculiar to expat communities and not something I've seen discussed in mainstream articles about when to take SS benefits.

 

Should you see a model addressing this situation, please share.