Did you know that you can suspend Social Security benefits between FRA and age 70?

[Jingthing]

I didn't know about this until a few months ago.

Your (later) benefit increases 8 percent per year and it increases each month that you suspend.

This is obviously different than delaying your claim in the first place because of the timing, must be after FRA, before age 70, and your claim is already done, you just tell them to restart before age 70 or it will start automatically again at age 70.

 

If you can afford it, what's the downside?

 

Well if you're opting for Medicare Part B, you need to pay that directly rather than having it deducted from your social security.

 

Can You Suspend Social Security and Restart Benefits Later? (aarp.org)

[Jingthing]

More info:

Benefits Planner: Retirement | Suspending Your Retirement Benefit Payments | SSA

 

I assume that if you suspend payments that you STILL get any colas during that period, correct?

 

So for example, in a year with a 3 percent COLA you'd get 11 percent more, 3 plus 8.

[KhunLA]

"If you can afford it, what's the downside?"

 

The obvious, you die before collecting anything.   Although now, that is only 3 years from FRA, for those born 1960 & onward, and life expectancy is a bit better, and 75 now for white males..   

 

Myself, born 1954, life expectancy then was/is 67.7 years old, and almost became a reality.  A simple med procedure about that time, prevented that, death, or at least will make remaining life normal.

 

For myself, 8% X 4 years, wouldn't make much of a financial difference, as I don't need, spend all of what I receive now.   Does make qualifying for the Thar retirement visa/extension easy, but that's about it.

 

As far I'm concerned, that 8% doesn't even keep up the 'true' inflation, and better to have it now, and invest it, than let the govt hold on to it, and it's literally worth less, due to inflation, than having it now and investing.

 

An example of simple investment, would be 4 years of the $27,600 = $110,400.   Which I could buy 2 rental properties, Section 8 those, and generate ~$2000 a month, for $20k a year income.   Beats the hell out of that 32% over 4 years, as now over 85% increase.

 

Smart investing would be a better return than any 24% or 32% (3 or 4 yrs) that Soc Sec would give you in the future.

[Jingthing]

4 hours ago, KhunLA said:

"If you can afford it, what's the downside?"

 

The obvious, you die before collecting anything.   Although now, that is only 3 years from FRA, for those born 1960 & onward, and life expectancy is a bit better, and 75 now for white males..   

 

Myself, born 1954, life expectancy then was/is 67.7 years old, and almost became a reality.  A simple med procedure about that time, prevented that, death, or at least will make remaining life normal.

 

For myself, 8% X 4 years, wouldn't make much of a financial difference, as I don't need, spend all of what I receive now.   Does make qualifying for the Thar retirement visa/extension easy, but that's about it.

 

As far I'm concerned, that 8% doesn't even keep up the 'true' inflation, and better to have it now, and invest it, than let the govt hold on to it, and it's literally worth less, due to inflation, than having it now and investing.

 

An example of simple investment, would be 4 years of the $27,600 = $110,400.   Which I could buy 2 rental properties, Section 8 those, and generate ~$2000 a month, for $20k a year income.   Beats the hell out of that 32% over 4 years, as now over 85% increase.

 

Smart investing would be a better return than any 24% or 32% (3 or 4 yrs) that Soc Sec would give you in the future.

I have plenty of other money aggressively invested.

8 percent plus COLA that is a sure thing for part of my assets is pretty appealing.

When you die, it doesn't really matter what you did anyway as long as you didn't run out of money before then.

I'm on the fence but one thing I really like about getting more from SS and less from the eventually REQUIRED IRA withdrawals at about age 73 is that IRA is taxed fully while social security income is taxed less than fully based on a formula.

On the other hand! As far as Thai taxation I don't have a clue yet. It seems to me pension income will probably be exempt but "IRA income" possibly not.

[Max_Headroom]

I expect cuts in social security payments in addition to perpetual growth in money supply. My thinking is that those on the bottom end will have less or nothing taken. I'll draw at 65. No reason to push it out + 8% for waiting each year is nothing when you're paying tax on it (in two countries) and at best have twenty years of healthy, relatively active life.

[Max_Headroom]

On 6/27/2024 at 12:32 PM, Jingthing said:

REQUIRED IRA withdrawals at about age 73

 

I think it's 70. You might check that

[Jingthing]

4 hours ago, Max_Headroom said:

 

I think it's 70. You might check that

No.

It's later.

 

https://www.fool.com/retirement/plans/ira/distributions/

 

What are required minimum distributions for IRAs? 

Required minimum distributions (RMDs) are mandatory withdrawals that you must take from all of your retirement accounts, except Roth IRAs, beginning in the year you turn 73.

[Jingthing]

4 hours ago, Max_Headroom said:

I expect cuts in social security payments in addition to perpetual growth in money supply. My thinking is that those on the bottom end will have less or nothing taken. I'll draw at 65. No reason to push it out + 8% for waiting each year is nothing when you're paying tax on it (in two countries) and at best have twenty years of healthy, relatively active life.

Yeah the expected cuts unless they reform it are scary. A fix is easy but would require bipartisan action which is the maybe impossible part.

[Max_Headroom]

1 hour ago, Jingthing said:

Yeah the expected cuts unless they reform it are scary. A fix is easy but would require bipartisan action which is the maybe impossible part.

 

My expectation is the fix will be means test + further inflating USD + 5-15% haircut.

[Max_Headroom]

1 hour ago, Jingthing said:

No.

It's later.

 

https://www.fool.com/retirement/plans/ira/distributions/

 

What are required minimum distributions for IRAs? 

Required minimum distributions (RMDs) are mandatory withdrawals that you must take from all of your retirement accounts, except Roth IRAs, beginning in the year you turn 73.

 

Oh, Roth is 73?? Didn't know. Standard IRA is 70 - yes?

[Jingthing]

14 minutes ago, Max_Headroom said:

 

Oh, Roth is 73?? Didn't know. Standard IRA is 70 - yes?

No! 73 for traditional.

There is no withdrawal required for Roth.

[Jingthing]

19 minutes ago, Max_Headroom said:

 

My expectation is the fix will be means test + further inflating USD + 5-15% haircut.

I seriously doubt that.

[Max_Headroom]

7 minutes ago, Jingthing said:

No! 73 for traditional.

There is no withdrawal required for Roth.

 

Got it. I know the answer is somewhere on the internet but since I have your attention...

 

I recall reading something about when you start deducting money from your IRA that it needs to be withdrawn on consistent basis and I believe that also might mean more or less regular, consistent amounts.

 

So, do I look at my IRA and figure out how much I want to basically withdraw annually until it's depleted? Or, is it up to me what I withdrawal annually?

[Jingthing]

1 hour ago, Max_Headroom said:

 

Got it. I know the answer is somewhere on the internet but since I have your attention...

 

I recall reading something about when you start deducting money from your IRA that it needs to be withdrawn on consistent basis and I believe that also might mean more or less regular, consistent amounts.

 

So, do I look at my IRA and figure out how much I want to basically withdraw annually until it's depleted? Or, is it up to me what I withdrawal annually?

 

For Traditional, you can withdrawal as little or as much as you want after age 59 1/2 (before there is a penality) until the age of required minimum withdrawals.

You need to consult charts to determine your specific required minumum.

There is no consistency rule. 

I think you might be talking about mainstream financial advice saying that at the starting age of your "retirement" that you should start at 4 percent withdrawal and then step up a little bit annually to account for inflation for the purpose of PROBABLY avoiding ever running out of money while alive. In other words as you get older that will rise to 5 percent, etc.

But in reality there is no logical reason to keep those levels if you don't need the money to live in and markets are way down, etc.

Or, on the other hand, there may be very good personal health/financial reasons to increase with withdrawal percentage one or multiple times.

So those suggested guidelines are really just suggestions, and everyone would be wise to monitor their own personal situation. 

[GypsyT]

No need to do anything. He, Trump, will do it for you. Permanently.

 

https://www.yahoo.com/news/republicans-confirm-plan-let-social-182011026.html

 

[GinBoy2]

This is one of those tricky ones.

 

None of us know when we're going depart this mortal coil, and you're spinning the roulette wheel to see how much in total you're going to get back from the system.

 

I'm just aging into Medicare, but I going to delay picking up social security for another year.

 

I don't want to retire yet, tried it once already and I was bored outta my mind.

 

Problem with working and pulling SS before FRA (66 and 10 months in my case) is you lose 1$ of SS for every $2 you earn over $24K.

 

So I figure I'll do another year until I'm 66, then 10 months of them ripping me off I'll live with.

 

My Medicare Part B, I'll pay them directly, and I've signed up for Part C with Wellmark (Blue Cross), which surprisingly also covers me for my time in Thailand for up to $50K for a bargain $64/Month.

 

Ultimately the bottom line is as I said before, none of us know when you are gonna die. You might be dead by tomorrow lunch time, or battle on into your 90's

 

Also, if you pick up SS early at 62 it's a huge drop from FRA.

 

FRA to 70 huge increase, but not sure I'm prepared to wait out my longevity to make that equation worth while.

 

This is my retirement profile, can't go backwards, but at 62 it dropped like a stone

[Jingthing]

To be clear the topic here is about suspending benefits after FRA when you already have an active claim.

Not about deciding when to start an initiial claim.

[GinBoy2]

I 'think' delaying or suspending does the same thing.

 

You just move suspended payments into the future.

 

Which again, brings in that 'when will I die' question.

 

It's a conundrum which I don't think any of us has an answer

 

Unfortunately my friend as we all enter the final chapter of our lives, there is no definitive answer, and we're back to that roulette wheel of life

 

Delay, suspend, pick your poison

[Jingthing]

The rules are different. 

Most everyone knows about delaying.

Suspending is rarely discussed.

[GinBoy2]

4 hours ago, Jingthing said:

The rules are different. 

Most everyone knows about delaying.

Suspending is rarely discussed.

That is true.

 

I didn't know you you could suspend payments after you have elected to take SS.

 

I think it's also little discussed that if you lose payouts after you take SS but work over the $24K limit you get those $ back after you  get to FRA.

 

I think the Government hopes we'll all be dead or too infirm to figure it out