US Social Security @ 62 or?

[cmarshall]

3 hours ago, Yellowtail said:

 If Social Security was going to be my only source of income, I would have held out as long as I could to maximize my payment. 

 

This is correct.  If you don't have enough assets to be able to take investment risk, then you should max out the SS annuity, so that you at least will never go broke.  But those with little in the way of assets are probably least able to delay SS benefit.

[Jingthing]

2 minutes ago, cmarshall said:

 

This is correct.  If you don't have enough assets to be able to take investment risk, then you should max out the SS annuity, so that you at least will never go broke.  But those with little in the way of assets are probably least able to delay SS benefit.

Yes and that is the main totally legitimate reason why so many people claim early -- because they need the money.

[cmarshall]

4 minutes ago, Jingthing said:

Yes and that is the main totally legitimate reason why so many people claim early -- because they need the money.

 

Quite true.  Those who cannot afford to wait are to be excluded from the discussion of when to take SS.  Also, those who are rich enough that their SS benefits are unimportant.

[cmarshall]

12 hours ago, Yellowtail said:

$1,000 invested in an index fund at 62, will likely be worth a lot more than a $1,000 Social Security payment at 65 that has been adjusted for inflation...

 

Naive on two counts: overestimation of investing ability and grasping the most important feature of the SS annuity, which is, that it is, for most of us, the only asset that we cannot outlive.  

 

[Jingthing]

14 minutes ago, cmarshall said:

 

So, let's bring back poverty levels for the elderly from the 1930's?  Because you are so concerned about the poor?   

 

Let them eat them cake or pushing grandma out to sea on some ice comes to mind.

[Yellowtail]

19 minutes ago, cmarshall said:

So, let's bring back poverty levels for the elderly from the 1930's?  Because you are so concerned about the poor?   

 

You seem to like to make stuff up, and then when you get called on it you make up more stuff. 

 

I want to minimize poverty for everyone. 

[Yellowtail]

21 minutes ago, cmarshall said:

 

This is correct.  If you don't have enough assets to be able to take investment risk, then you should max out the SS annuity, so that you at least will never go broke.  But those with little in the way of assets are probably least able to delay SS benefit.

 

People with little in the way of asset AND no that no longer work. If someone has no savings, but does have a pretty good job, it makes sense for them to continue working.

 

If people have no savings and are unable or unwilling to continue working, they have little choice but to start drawing. 

[cmarshall]

3 minutes ago, Yellowtail said:

 

You seem to like to make stuff up, and then when you get called on it you make up more stuff. 

 

I want to minimize poverty for everyone. 

 

 

Is it possible that you're unable to grasp cutting off 33% of the income of the elderly would not bring back the 30's?

 

[cmarshall]

2 minutes ago, Yellowtail said:

 

People with little in the way of asset AND no that no longer work. If someone has no savings, but does have a pretty good job, it makes sense for them to continue working.

 

If people have no savings and are unable or unwilling to continue working, they have little choice but to start drawing. 

 

The discussion is about retirees.  Try to stay on topic.

[Yellowtail]

16 minutes ago, cmarshall said:

 

Naive on two counts: overestimation of investing ability and grasping the most important feature of the SS annuity, which is, that it is, for most of us, the only asset that we cannot outlive.  

 

 

Overestimation of who's investing ability? I was commenting I why I felt it made more sense for people that don't need the money to draw early than people still working that have no savings. The person that has little or no savings at 62 really should maximize the Social Security payment. I think it safe to assume that the people that are retired and don't need the money at 62 likely know how to invest it, at least well enough to outpace inflation. 

 

Your second "count" is a non sequitur. Regardless of when you start drawing, you still cannot outlive it. 

[Yellowtail]

36 minutes ago, Jingthing said:

Yes and that is the main totally legitimate reason why so many people claim early -- because they need the money.

 

I think many people claim early because it makes economic sense, whether they need the money or not, You said you ran the numbers yes? I know I did and I would have been a fool to wait. I hope I'm wrong, I hope I'm 95 wishing I'd have held off until I was 66....

[Yellowtail]

17 minutes ago, cmarshall said:

 

 

Is it possible that you're unable to grasp cutting off 33% of the income of the elderly would not bring back the 30's?

 

 

I never said I wanted to cut people off of Social Security. That is typical of people like you. You lie, and when you get caught lying you move on and lie about something else.

 

Is it possible the you're not able to grasp eliminating as something other than full-stop cut everyone off? 

 

I've been arguing that I felt linking the cost of living increases for Social Security recipients to the inflation rate was unfair, as it is not really reflective of the real inflation most Social Security recipients suffer.

 

Your response was that "it sucks to be poor" ha-ha or some-such, and now you're accusing me of not caring about the elderly. 

[riclag]

I took it at 66 ! I'm happy I waited because it's costing more to live here!

You also must think about paying for Medicare part B,  at the required age . Its small money for some but if you're only making less than 1200 its something to consider  imop.

Edited April 10, 2021 by riclag

[Yellowtail]

1 hour ago, cmarshall said:

 

The discussion is about retirees.  Try to stay on topic.

 

And yet another lie. The topic is not about retirees, it is about Social Security and when to take it. 

 

You want seem to want to make stuff up and swing the topic however you see fit, and then when you get called on your BS you cry "off topic". Typical. 

 

 

 

 

[Jingthing]

5 minutes ago, Yellowtail said:

 

And yet another lie. The topic is not about retirees, it is about Social Security and when to take it. 

 

You want seem to want to make stuff up and swing the topic however you see fit, and then when you get called on your BS you cry "off topic". Typical. 

 

 

 

 

Well people that are considering claiming at 62 and still.working are hopefully aware of the financial penalties involved in that. 

[Yellowtail]

12 minutes ago, Jingthing said:

Well people that are considering claiming at 62 and still.working are hopefully aware of the financial penalties involved in that. 

 

Yes, but if they have little or no savings at 62 it's not likely they have much of a handle on anything financial.

 

I'm drawing Social Security still doing a little consulting and I have not been penalized. 

[CharlieH]

Your posts have been removed again.

Anymore political deflection and you will BOTH be suspended.

[cmarshall]

12 hours ago, Yellowtail said:

 

I never said I wanted to cut people off of Social Security. That is typical of people like you. You lie, and when you get caught lying you move on and lie about something else.

 

Is it possible the you're not able to grasp eliminating as something other than full-stop cut everyone off? 

 

I've been arguing that I felt linking the cost of living increases for Social Security recipients to the inflation rate was unfair, as it is not really reflective of the real inflation most Social Security recipients suffer.

 

Your response was that "it sucks to be poor" ha-ha or some-such, and now you're accusing me of not caring about the elderly. 

 

If the adequacy of the COLA adjustments is your concern then you should support the Democrats' plan to change the inflation measure from the current version to one that specifically measures the inflation that retirees experience, such as healthcare costs.  Your suggestion to eliminate SS does not amount to the same thing and would indeed result in widespread poverty among retirees.

[cmarshall]

On 4/7/2021 at 2:16 PM, Jingthing said:

Here's a contrarian thought. 

 

Mainstream advisors usually give out moralizing lectures pointing out that many people claiming it at 62 shouldn't have.

 

Sure thats true but they fail to mention that many that wait until 65 or 70 shouldn't have either. Many will be waiting and die before claiming. 

 

As far as the social security administrators are concerned that's rather ideal.

 

At least for individuals, SS is actuarially neutral, which means that the SSA is indifferent to when you claim.  SS is an insurance program to protect the elderly from poverty.  As such it is designed to provide about an inflation-protected 40% of earnings income during retirement.  True pension systems more typically target 80%.

 

So, SS is an insurance program.  Hence, the term for your Full Retirement Age benefit as "Primary Insurance Amount" or "PIA."  If you didn't die poor, whenever you did die, then SS was a success for you.  It is not an investment program.  

[Pib]

And a great little insurance program Social Security is when a person looks at how much they get in return assuming a normal life span for the amount they paid in during  their work life.

 

Before a person actually starts drawing SS they receive an annual SS statement showing what the individual and his employer(s) have paid into SS and Medicare over the years...and it gives an estimate of the person's SS month retirement benefit.    Have you ever wondered how long it takes for your monthly benefit to effectively repay you for SS taxes you paid?   Well, if you haven't, you should as you recover taxes paid quickly. 

 

But for the purpose of SS retirement let's just look at what "You, the individual paid in SS taxes" for your future SS insurance/retirement benefit.  Don't look at what your employer(s) also chipped in for SS taxes and don't look at Medicare taxes because that's money your employer(s) paid (not you) and Medicare is for medical care....money you did not get (nor would have got as additional pay most likely if SS/Medicare didn't exist). 

 

On your annual SS statement look where it shows how much SS taxes "You" paid...not what your employer chipped in, not Medicare taxes, etc. See below partial redacted cut and paste from one of my old annual SS statements. 

 

Now divide that "SS taxes You Paid" by your estimated monthly benefit.   You will find out all the SS taxes You paid will be recovered in approx 3 to 4 years, give or take a little depending on each individual as each individual had different career earnings, retired at different ages, etc. 

 

Like for a person who starts drawing SS at say age 65, they should fully recover all SS Taxes they paid by around age 68 to 69 give or take a little.  For me, it took approx 3 years and 3 months to recover all SS Taxes I paid over my work career.  I'm not going to bitch about that....and I'm now a little past that 3 years, 3 months recovery time. Now my monthly SS payment is pure profit from the taxes I paid and I hope to have many more years (hopefully decades) of life ahead of me (knock on wood--my head).

 

And if you just can't stand the thought of not including SS taxes your employer(s) chipped in and strongly feel it should be considered in the recovery time, then your recovery time is around 6 to 8 years.   I hope most of us think we will live for more than 3 to 8 eight years after we start drawing SS.  

 

When it comes to people who moan about how SS does not cover the cost of living, well heck, it was never intended to do so as a person was still expected to have other savings/investment income going into SS retirement and/or have some part time employment.   SS never was meant to provide 100% of basic retirement income needs (or desires/wishes)....maybe next lifetime but it will take a BIG increase in SS taxes to achieve such.

 

When a person should start drawing SS benefits depends on the individual.   Some simply need the money at the earliest age....some don't need it at the earliest age but simply want it....this is usually the begin the benefit at age 62 crowd.     Some want to begin it at age 65 when they begin Medicare and then suddenly have that new month Medicare premium bill.    Some want to wait to full benefit age which varies from individual to individual but is 66 for people born 1943 to 1954.   Some want to wait till age 70 to max-out benefits. Many reasons people choose different retirement ages as it's a highly personal decision based on the individual's needs, desires, and beliefs.  

 

[cmarshall]

1 hour ago, Pib said:

Don't look at what your employer(s) also chipped in for SS taxes and don't look at Medicare taxes because that's money your employer(s) paid (not you) and Medicare is for medical care....money you did not get (nor would have got as additional pay most likely if SS/Medicare didn't exist)...

 

When a person should start drawing SS benefits depends on the individual.   Some simply need the money at the earliest age....some don't need it at the earliest age but simply want it....this is usually the begin the benefit at age 62 crowd.     Some want to begin it at age 65 when they begin Medicare and then suddenly have that new month Medicare premium bill.    Some want to wait to full benefit age which varies from individual to individual but is 66 for people born 1943 to 1954.   Some want to wait till age 70 to max-out benefits. Many reasons people choose different retirement ages as it's a highly personal decision based on the individual's needs, desires, and beliefs.  

 

Economists such as Prof. Larry Kotlikoff of Boston U view the employer's contribution to SS as just deferred compensation that belongs to the employee.  The theory is that were they not required to contribute to SS, employers would have to raise wages by the same amount to compete for workers.  It's not a theory shared by employers like the Koch Brothers who have been trying to destroy SS for years just to avoid having to make the employer's contribution.  My own view is that all of the contributions in my name are and have always been my money.  Not a nickel of my benefit comes from the US govt itself or the (income) taxpayers.    

 

Yes, we owe a lot to FDR and his Sec'y of Labor "Ma" Perkins.  American SS appears to pay out a lot more than the British National Insurance or the Canadian Pension Plan, as I understand them.  And, unlike the Brits and Canadians, Americans pay no penalty in their benefits for moving abroad.  That's a big advantage.

 

On the other hand, the Dutch have a true national pension plan that pays about 80% of employment earnings enabling retirees to maintain their accustomed standard of living in retirement, not just to avoid poverty.  

 

As to when to start SS, everyone is certainly entitled to his own preference in the matter.  What everyone is not entitled to is his own arithmetic.

Edited April 11, 2021 by cmarshall

[Pib]

1 hour ago, cmarshall said:

On the other hand, the Dutch have a true national pension plan that pays about 80% of employment earnings enabling retirees to maintain their accustomed standard of living in retirement, not just to avoid poverty.  

 

And they pay dearly for it in HIGH taxes....some of the highest taxes in the world....but that is the socialist road they have chosen...right or wrong.

[Pib]

 

From the SSA website....average age for people starting SSA retirement benefits.

https://www.ssa.gov/policy/docs/program-explainers/benefit-claiming-age.html

 

Quote

 

Retired workers' average claiming age has been slowly increasing:

• In 1998, before the FRA increase affected age-62 claimants, the average age for a retired worker to claim benefits was 63.4 (men) or 63.5 (women).
• The average claiming age for retired-worker benefits changed little between 2000 and 2008, as the incremental FRA increase for workers attaining age 62 in those years gradually began to increase the maximum benefit reduction for early claiming.
• However, between 2008 and 2018, the average claiming age increased from 63.6 to 64.7 for men and from 63.6 to 64.6 for women.

 

 

 

[cmarshall]

6 minutes ago, Pib said:

And they pay dearly for it in HIGH taxes....some of the highest taxes in the world....but that is the socialist road they have chosen...right or wrong.

 

Yes, they have high taxes, but in addition to providing a true national pension system, those taxes also pay for education through university.  They also have a health-care system whose costs are covered by private insurers who are however, not-for-profit.

 

Comparing taxation between the Netherlands and the US is complex.  Dutch income tax marginal rates are higher than the US, but when you add in state income taxes, local income taxes such as New York City, and the insurance payments for healthcare which are the highest in the world, I am pretty sure that real taxes in the US are higher and the benefits less.   And then there are hidden costs in the US such as the fact that healthcare costs are the leading cause of bankruptcy, while bankruptcy for such costs seems to be unknown throughout the rest of the wealthy countries.

 

If the US were as socialized as the Netherlands, I might still be willing to live there.

[Pib]

The SSA remains neutral as to when a person should begin retirement benefits but they do offer various views, statistics, etc., to help a person decide.   Below SSA webpage gives such insight.

https://www.ssa.gov/policy/docs/rsnotes/rsn2016-03.html

 

And here's one snapshot from above webpage showing when people started benefits as of 2015...as you will see the approx two-thirds of people start benefits before full retirement age with the biggest percentage by far starting at age 62.

 

 

 

 

 

[cmarshall]

15 minutes ago, Pib said:

The SSA remains neutral as to when a person should begin retirement benefits but they do offer various views, statistics, etc., to help a person decide.   Below SSA webpage gives such insight.

https://www.ssa.gov/policy/docs/rsnotes/rsn2016-03.html

 

And here's one snapshot from above webpage showing when people started benefits as of 2015...as you will see the approx two-thirds of people start benefits before full retirement age with the biggest percentage by far starting at age 62.

 

 

Those statistics would help a retiree to decided when to start his own benefits in the same way that sales of shoes by shoe sizes would help him decide what size shoe to buy.

[ubonjoe]

19 hours ago, CharlieH said:

Your posts have been removed again.

Anymore political deflection and you will BOTH be suspended.

And again.

If it happens again this topic will be closed.

[Jingthing]

2 hours ago, cmarshall said:

 

Those statistics would help a retiree to decided when to start his own benefits in the same way that sales of shoes by shoe sizes would help him decide what size shoe to buy.

Good analogy.

 

Expanding on that, if you're:

 

-- Broke azzed

 

-- Perhaps sickly

 

-- And not working anymore or working but making under the penalty level

 

Quite likely the claim at 62 shoes will fit you well.

 

If not take some more time to consider other shoe styles.

 

 

Edited April 11, 2021 by Jingthing

[gamb00ler]

4 hours ago, cmarshall said:

 

Economists such as Prof. Larry Kotlikoff of Boston U view the employer's contribution to SS as just deferred compensation that belongs to the employee.  The theory is that were they not required to contribute to SS, employers would have to raise wages by the same amount to compete for workers.  It's not a theory shared by employers like the Koch Brothers who have been trying to destroy SS for years just to avoid having to make the employer's contribution.  My own view is that all of the contributions in my name are and have always been my money.  Not a nickel of my benefit comes from the US govt itself or the (income) taxpayers.    

 

Yes, we owe a lot to FDR and his Sec'y of Labor "Ma" Perkins.  American SS appears to pay out a lot more than the British National Insurance or the Canadian Pension Plan, as I understand them.  And, unlike the Brits and Canadians, Americans pay no penalty in their benefits for moving abroad.  That's a big advantage.

 

On the other hand, the Dutch have a true national pension plan that pays about 80% of employment earnings enabling retirees to maintain their accustomed standard of living in retirement, not just to avoid poverty.  

 

As to when to start SS, everyone is certainly entitled to his own preference in the matter.  What everyone is not entitled to is his own arithmetic.

My thoughts are well aligned with yours on the matter of who has funded my SS benefits.

 

You are only partially correct regarding Canadians receiving reduced pension benefits after moving abroad.  There are two components to Canadian retirement benefits; CPP (Canada Pension Plan) and OAS (Old Age Supplement).  CPP is very similar to SS in that it is funded from and benefits are determined by worker contributions.  OAS is funded by revenue from income tax.  OAS benefits may be reduced or eliminated if recipient has not lived in Canada for 20 years after age 18.  AFAIK there is no reduction in CPP benefits paid to expats.

 

CPP paycheck deductions are a smaller percentage of wages than the SS deductions.  As a Canadian working in US for a Canadian company I could choose either CPP or SS deductions.  I chose CPP.  The smaller CPP deductions naturally produce a smaller benefit than SS would.  When I became self employed I paid SS premiums.

 

I started CPP/OAS @ 65 and will start SS @ 70.  SS will penalize me (WEP) for having two pensions.

Edited April 11, 2021 by gamb00ler

[JimGant]

47 minutes ago, ubonjoe said:

And again.

If it happens again this topic will be closed.

Who are we talking about here? I had a perfectly researched article comparing age 62 to 70 initiation of SS -- without any politics -- and it was removed. Plus, it gave food for thought for those expats married to Thais that don't qualify for SS. I know we can't criticize the mods -- but sometimes it's necessary.....