(USA topic) The grim psychology of deciding on when to take social security benefits

[prorose]

Well said! Turning 60 soon. Sick of working!

Obviously, everyone's situation is different and there are so many variables to consider, but in my case....I was just darn sick and tired of working. I don't think I could have gotten up one more morning past age 62 and gone into my high stress management position, so I was ready and happy to get out when I did; otherwise, the stress would have put me in an early grave. One's quality of life, health wise, can change over night; so why would anyone want to wait until 66 or 70, get the extra money and then not be able to enjoy his life and do the things that a 62 year old man could do?

I moved to Thailand in 2010, paid cash for a house and car out of savings and my total monthly budget is only $850. My wife and I live very comfortably and want for nothing, and every year things have gotten easier since the US Dollar has gotten stronger and I get more Baht each month. I lived comfortably when the exchange rate was 28+ to 1, and I have more liberties now that it's 35 to 1. I manage to sock back over $700 per month in SS savings, and in the past 5 years I have noticed very little inflation in the cost of living here in Thailand. I simply can't imagine that changing very much in the next 5, 10 or 15 years, and if it does I still have my excess SS to live off of without touching my other resources.

I have no regrets and am happy that I am out of the work force and living the dream. Wait until age 70 to take SS and you could be pushing up daisies the following day. It's all a big gamble since we're not promised tomorrow. Each has his own decision to make, but if you can afford to retire at age 62 and take SS, then find your financial balance in life and start living the dream while you still have your health.

[USNret]

Your wife is eligible for spousal and widow's benefits only if she is either a US citizen or has lived with you in the US after marriage as a green card holder for at least five years. I don't know about her or your child's eligibility for dependent's benefits.

If your wife is indeed eligible for spousal and widow's benefits then it behooves you even more to consider delaying since the widow's benefits that she eventually receives will reflect the Delayed Retirement Credits you earn by waiting. Since your wife is younger than you the difference in total benefits received over the course of her life would be huge.

She is currently on an immigrant visa and will submit her application for U.S. citizenship later this year.

[Boon Mee]

On the basis that I received 5 by-passes in 2005, I chose to retire in 2011 at age 64 1/2. I weighed out the genetic predisposition for heart issues (my Father, Grandfather, Greatgrandfather and all Uncles on my Father's side died of heart attacks). Figured I cheated death in 2005. Finances definitely played into the picture. Thus I am living in Thailand ... as I cannot afford to live on $2400 a month in the US. Half that amount is from SS, the other half from retirement savings and inheritance. Comfortable but no Mercedes. Happy camper thus far ... do promote the idea of extending Medicare coverage here as medical costs would be cheaper than returning to the US. Ha! That's right ... Why should they cover us here. They can save all the expense.

Yes I consider the chances of Medicare being extended to expats as very, very remote. There are definitely advantages to living in Thailand or lower cost countries for lower wealth retired people, but there are also disadvantages. You hit the big one ... no Medicare.

According to a Mod on TVF, we receive Medicare here in LOS!

[CaptHaddock]

Your wife is eligible for spousal and widow's benefits only if she is either a US citizen or has lived with you in the US after marriage as a green card holder for at least five years. I don't know about her or your child's eligibility for dependent's benefits.

If your wife is indeed eligible for spousal and widow's benefits then it behooves you even more to consider delaying since the widow's benefits that she eventually receives will reflect the Delayed Retirement Credits you earn by waiting. Since your wife is younger than you the difference in total benefits received over the course of her life would be huge.

She is currently on an immigrant visa and will submit her application for U.S. citizenship later this year.

By "immigrant visa" I assume you mean "green card." Very good for her to become a citizen. Now you should do the right thing by her and delay your SS until 70 so that she can get the boosted widow's benefit after you shuffle off the coil.

Even if you insist on applying a misguided break-even analysis to the SS benefits question, it should be apparent that with a younger wife it is a foregone conclusion that the break-even point will be reached by your wife. From the point of her own Full Retirement Age on if her base benefit is your age 62 benefit instead of your age 70 benefit (ignoring COLAs for this discussion) you would be costing her a lifetime 57% increase, guaranteed, inflation-protected.

So, that begs the question, exactly how much do you love your wife?

[4evermaat]

If you already have a pension elsewhere from one of your previous employments or a large nestegg, take SS pension early without blinking. Free money.

It is the people who only have ss pension as their sole income that are at most risk.

I suspect many people work freelance work anyway. Not sure if that is legal once you are collecting SS the max amount of income you can earn through employment.

Edited May 19, 2016 by 4evermaat

[little mary sunshine]

I retired to Thailand 7 years ago. I realized the

Big draw was health insurance. I have $45K in a

Special medical fund account. I add to it $225

Per month that I would've to pay for "gap"

Insurance that Medicare does not pay, additional

20%, plus annual deduction of $3,000, you pay.

I walk, swim, watch the salt and sugar, and

Most of,the time have a good diet, so far I have

Spent $1100 on medical expenses in the seven

Years, this includes the treatment 5 days out

Patient at private hospital for pneumonia three

Years ago....medical fund now exceeds $55K

So I feel the medical issue is covered!!

[Langsuan Man]

According to a Mod on TVF, we receive Medicare here in LOS!

Medicare is only good in the US

Medicare coverage outside the United States is limited.

In most situations, Medicare won’t pay for health care or supplies you get outside the U.S. The term “outside the U.S.” means anywhere other than the 50 states of the U.S., the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. This fact sheet explains some of the exceptions that would allow you to get coverage outside the U.S. under Original Medicare Part A (Hospital Insurance) and/or Medicare Part B (Medical Insurance).

When does Medicare cover health care services in a foreign hospital?

There are 3 situations when Medicare may pay for certain types of health care services you get in a foreign hospital (a hospital outside the U.S.):

1. You’re in the U.S. when you have a medical emergency, and the foreign hospital is closer than the nearest U.S. hospital that can treat your illness or injury.

2. You’re traveling through Canada without unreasonable delay by the most direct route between Alaska and another state when a medical emergency occurs, and the Canadian hospital is closer than the nearest U.S. hospital that can treat your illness or injury. Medicare determines what qualifies as “without unreasonable delay” on a case-by-case basis.

3. You live in the U.S. and the foreign hospital is closer to your home than the nearest U.S. hospital that can treat your medical condition, regardless of whether it’s an emergency. Remember, in these situations, Medicare will pay only for the Medicarecovered services you get in a foreign hospital.

source: https://www.medicare.gov/Pubs/pdf/11037.pdf

[MyFriend You]

There is a good book written by three Tax Lawyers, "for the rest of us" easy to understand, gives a lot of information minus all the spreadsheets, financial analysis, and ho hum, fall asleep scenarios. "Get What's Yours" Feb 15 an updated version coming to this year as there have been some major changes last Nov - An important one effects me and I am pissed:

The File & Suspend can no longer be done if you haven't reached full retirement age by 1 May 2016, like most, mine is 66, and my 66th birthday was not until 10 May 2016.............I called SS and asked if I could still do it since its only two days shy of the cutoff date?? They said 'No' I asked why isn't there any leeway for those born i May - they curtly said "Our Republican Congress decided 1 May, not 1 June is the cutoff date, anything else I can help you with??" Click, hung up on them.

Headed home to Honolulu next week, will visit in person, and yes, will start my benefit right away. I am considering opening a Bangkok Bank account so my SS check can be deposited directly via the New York branch, for my Thailand Mad Money. I don't need the SS to live on, but love nothing better than spending money.

[CaptHaddock]

There is a good book written by three Tax Lawyers, "for the rest of us" easy to understand, gives a lot of information minus all the spreadsheets, financial analysis, and ho hum, fall asleep scenarios. "Get What's Yours" Feb 15 an updated version coming to this year as there have been some major changes last Nov - An important one effects me and I am pissed:

The File & Suspend can no longer be done if you haven't reached full retirement age by 1 May 2016, like most, mine is 66, and my 66th birthday was not until 10 May 2016.............I called SS and asked if I could still do it since its only two days shy of the cutoff date?? They said 'No' I asked why isn't there any leeway for those born i May - they curtly said "Our Republican Congress decided 1 May, not 1 June is the cutoff date, anything else I can help you with??" Click, hung up on them.

Headed home to Honolulu next week, will visit in person, and yes, will start my benefit right away. I am considering opening a Bangkok Bank account so my SS check can be deposited directly via the New York branch, for my Thailand Mad Money. I don't need the SS to live on, but love nothing better than spending money.

The option to File and Suspend still exists to support its original purpose which was to permit a recipient of SS benefits to go back to work and suspend the benefits until he stops work again and earn Delayed Retirement Credtis in the meantime. What has changed beginning this month is that a spouse can no longer collect a spousal benefit on the primary SS recipient's earnings if he has suspended. If waits until age 70 to resume benefits she will have to wait until then also.

[CaptHaddock]

Your wife is eligible for spousal and widow's benefits only if she is either a US citizen or has lived with you in the US after marriage as a green card holder for at least five years. I don't know about her or your child's eligibility for dependent's benefits.

If your wife is indeed eligible for spousal and widow's benefits then it behooves you even more to consider delaying since the widow's benefits that she eventually receives will reflect the Delayed Retirement Credits you earn by waiting. Since your wife is younger than you the difference in total benefits received over the course of her life would be huge.

She is currently on an immigrant visa and will submit her application for U.S. citizenship later this year.

By "immigrant visa" I assume you mean "green card." Very good for her to become a citizen. Now you should do the right thing by her and delay your SS until 70 so that she can get the boosted widow's benefit after you shuffle off the coil.

Even if you insist on applying a misguided break-even analysis to the SS benefits question, it should be apparent that with a younger wife it is a foregone conclusion that the break-even point will be reached by your wife. From the point of her own Full Retirement Age on if her base benefit is your age 62 benefit instead of your age 70 benefit (ignoring COLAs for this discussion) you would be costing her a lifetime 57% increase, guaranteed, inflation-protected.

So, that begs the question, exactly how much do you love your wife?

Ooops! Big arithmetic mistake here! The increase that the wife would lose if he were to take benefits at 62 instead of 70 is 76%, not 57%.

[SpokaneAl]

Take it at 62. If you do not need it invest it. What you invest take out in the future to off set costs as they rise.Do not know American tax laws. But in Canada can invest in rrsp's and get a tax deduction for what you invest every year in rrsp. If there is something similar in US do that. at 62 take pension. Put money in rrsp and wait to use it,

Or invest and pay taxs on interest everything till you need it and can withdraw with no tax burden when you use it.

If you invested it all from 62 to 70 You would probably beat what waiting would give you plus keep your taxs down.

That is the challenge. Take and invest assumes that this strategy will generate a higher return than the annual increases built into waiting to take Social Security. While we have investments, and they have done well over the years, waiting on taking SS provides a guaranteed return.

I am not willing to bet on a higher investment return vs. those annual increases, which, between normal retirement age and 70 is 8% a year.

[lovelomsak]

If a person is in their 60's and only has SS to look forward to in retirement they should thank their lucky stars there is SS. How a person can go through life without any planning or personal responsibility and expect to survive should kiss the Flag every morning when they wake up when they are living off SS no matter when they start it. In reality it takes little effort to get something in life. Just go to work pay tax's and buy a house would be enough for most people to survive retirement.

[Langsuan Man]

There is a good book written by three Tax Lawyers, "for the rest of us" easy to understand, gives a lot of information minus all the spreadsheets, financial analysis, and ho hum, fall asleep scenarios. "Get What's Yours" Feb 15 an updated version coming to this year as there have been some major changes last Nov - An important one effects me and I am pissed:

The File & Suspend can no longer be done if you haven't reached full retirement age by 1 May 2016, like most, mine is 66, and my 66th birthday was not until 10 May 2016.............I called SS and asked if I could still do it since its only two days shy of the cutoff date?? They said 'No' I asked why isn't there any leeway for those born i May - they curtly said "Our Republican Congress decided 1 May, not 1 June is the cutoff date, anything else I can help you with??" Click, hung up on them.

Headed home to Honolulu next week, will visit in person, and yes, will start my benefit right away. I am considering opening a Bangkok Bank account so my SS check can be deposited directly via the New York branch, for my Thailand Mad Money. I don't need the SS to live on, but love nothing better than spending money.

Just remember if you go that route you will have to show up in person at your Bangkok Bank branch to obtain your "mad money" every month and the account will not be eligible for an ATM card , much easier to have your SS direct deposited into a US bank account and then transfer into your Bangkok Bank account in Thailand, thus eliminating the "proof of life requirement"

Most banks in the US will allow you to set up a "standing order" to make that transfer if you don't want to have to remember to do it

If you use a direct deposit service to receive funds from a US Government Agency, you must appear in person at a Bangkok Bank branch to withdraw the funds.

Bangkok Bank cannot authorize the withdrawal of funds from your direct deposit account by an appointed representative, or via ATM or any other electronic channel. You must appear in person at a Bangkok Bank branch to withdraw the funds. You can, however, open a normal savings or current account and transfer the funds from your direct deposit account to this account. You may then withdraw your funds as usual via ATM or any other electronic channel.

You can also opt to directly contact the US Government Agencies to send funds into your savings account with Bangkok Bank. However, we still need to request that you change your savings account to a Direct Deposit account. Failure to comply will result in Bangkok Bank not being able to deposit funds transferred from the US Government Agency into your account.

source: http://www.bangkokbank.com/BangkokBank/PersonalBanking/DailyBanking/TransferingFunds/TransferringIntoThailand/ReceivingFundsfromUSA/Pages/ReceivingFundsfromUSA.aspx

[Jingthing]

If a person is in their 60's and only has SS to look forward to in retirement they should thank their lucky stars there is SS. How a person can go through life without any planning or personal responsibility and expect to survive should kiss the Flag every morning when they wake up when they are living off SS no matter when they start it. In reality it takes little effort to get something in life. Just go to work pay tax's and buy a house would be enough for most people to survive retirement.

You said your peace, but this really isn't the place for morality lectures directed at people who only have SS to rely on at old age.

Personally, at least to start, I will have more than that, but there are no guarantees in life.

I agree social security is a very good program, and it wasn't designed to be the only source of retirement income, but in reality that's exactly what it's become for way too many people. You can kiss the flag if you want, I think of the visionary politics of FDR.

I don't know if all people who only live on S.S. exactly "expect" to survive on it, many obviously don't survive on it, but I reckon most do try!

[Jingthing]

Argue all you want. Just take your payments at 62, 66 and at 70. Do the math. I would have had to live to be 79 for the payments I got starting at 62 to match the payments I would get starting at 66. So, it amounts to betting if you will live to be 79. If I wake up one morning at 79, well, I guess I would just be happy to be 79.

Yeah, I don't think the calculation is quite as simple as that, but I hear the gist of what you're saying. Don't expect to live to 80. Obviously the biggest "losers" are people who take it early and really didn't need to and find themselves alive in their 80s and beyond!

I respectfully disagree. The biggest losers are those who work till full retirement age for the promise of a bigger monthly check, and then die 2 weeks later. I'll take the payout at age 62 & really start enjoying life.

Fair enough. That's obviously true if you die before claiming, whether at 62 or 70 you're a big loser with the program (and indeed ... dead).

[Boon Mee]

There is a good book written by three Tax Lawyers, "for the rest of us" easy to understand, gives a lot of information minus all the spreadsheets, financial analysis, and ho hum, fall asleep scenarios. "Get What's Yours" Feb 15 an updated version coming to this year as there have been some major changes last Nov - An important one effects me and I am pissed:

The File & Suspend can no longer be done if you haven't reached full retirement age by 1 May 2016, like most, mine is 66, and my 66th birthday was not until 10 May 2016.............I called SS and asked if I could still do it since its only two days shy of the cutoff date?? They said 'No' I asked why isn't there any leeway for those born i May - they curtly said "Our Republican Congress decided 1 May, not 1 June is the cutoff date, anything else I can help you with??" Click, hung up on them.

Headed home to Honolulu next week, will visit in person, and yes, will start my benefit right away. I am considering opening a Bangkok Bank account so my SS check can be deposited directly via the New York branch, for my Thailand Mad Money. I don't need the SS to live on, but love nothing better than spending money.

Just remember if you go that route you will have to show up in person at your Bangkok Bank branch to obtain your "mad money" every month and the account will not be eligible for an ATM card , much easier to have your SS direct deposited into a US bank account and then transfer into your Bangkok Bank account in Thailand, thus eliminating the "proof of life requirement"

Most banks in the US will allow you to set up a "standing order" to make that transfer if you don't want to have to remember to do it

If you use a direct deposit service to receive funds from a US Government Agency, you must appear in person at a Bangkok Bank branch to withdraw the funds.

Bangkok Bank cannot authorize the withdrawal of funds from your direct deposit account by an appointed representative, or via ATM or any other electronic channel. You must appear in person at a Bangkok Bank branch to withdraw the funds. You can, however, open a normal savings or current account and transfer the funds from your direct deposit account to this account. You may then withdraw your funds as usual via ATM or any other electronic channel.

You can also opt to directly contact the US Government Agencies to send funds into your savings account with Bangkok Bank. However, we still need to request that you change your savings account to a Direct Deposit account. Failure to comply will result in Bangkok Bank not being able to deposit funds transferred from the US Government Agency into your account.

source: http://www.bangkokbank.com/BangkokBank/PersonalBanking/DailyBanking/TransferingFunds/TransferringIntoThailand/ReceivingFundsfromUSA/Pages/ReceivingFundsfromUSA.aspx

Yup, it's not Rocket Surgery.

Fastest and least expensive method to transfer your SS to Thailand is thru Bangkok Bank NY - here. Arrives the 3rd of each month.

[wwest5829]

On the basis that I received 5 by-passes in 2005, I chose to retire in 2011 at age 64 1/2. I weighed out the genetic predisposition for heart issues (my Father, Grandfather, Greatgrandfather and all Uncles on my Father's side died of heart attacks). Figured I cheated death in 2005. Finances definitely played into the picture. Thus I am living in Thailand ... as I cannot afford to live on $2400 a month in the US. Half that amount is from SS, the other half from retirement savings and inheritance. Comfortable but no Mercedes. Happy camper thus far ... do promote the idea of extending Medicare coverage here as medical costs would be cheaper than returning to the US. Ha! That's right ... Why should they cover us here. They can save all the expense.

Yes I consider the chances of Medicare being extended to expats as very, very remote. There are definitely advantages to living in Thailand or lower cost countries for lower wealth retired people, but there are also disadvantages. You hit the big one ... no Medicare.

Certainly for anything serious, then I'm stuck as long distance travel back to the States would not be possible. Happened last December - heart attack. Cost me $11,000 at C. Mai Ram. Fortunately, BC/BS Seniors Policy covers me up to $5K if international.

A little boost to my Thai national hosts....Look, I do not want to dwell on my motorbike accident yesterday but do please read about the Thai reaction. As soon as I went down there were Thai people coming to help me, get me and the motorbike off the road. A Thai Policeman came with 4 emergency service personnel appearing with a medical kit, cleaning and bandaging my wounds. They said I had to go to hospital. Sooo, a call to the wife! The ambulance came and took me to Doi Saket Hospital where she was waiting. At the hospital the Doctor checked me, nurses cleaned the wounds and bandaged again. The ambulance took me home. Here is the kicker, my American friends. No charge for the initial, emergency crew, no charge for the ambulance and the hospital cost including 4 prescriptions and tetanus shot? $10.00 US. You see part of the reason I am here?

[Jingthing]

Another way to look this. I calculated what the monthly increase is for each month delayed before full retirement age 66 plus from age 62. Turns out to be under 10 bucks a month. Looking it that way makes delaying seem less tempting.

[Mansell]

What a great idea, work hard and buy a house....Wow! Never thought of that before.....Oh that's right a one bedroom condo where I lived was only a million dollars with a big down.......and I didn't want to work that hard and end up complaining that I couldn't wait to retire like many on here. I actually took six months off three separate times and traveled and surfed in many countries. And now I am living here enjoying my Golden Years without a lot of gold, but we are comfortable and happy. Like most things in life it is all about choices good or poor......there are no bad choices because usually we learn from them and next time make a better choice. Peace.

[Jingthing]

Buying real estate doesn't always work out. It's not always straight up. I did well in California but I think still most places in the U.S. haven't recovered from the crash. No biggie if you never move perhaps. But it's not only about choices but timing and luck, etc. as well. Capitalism can be brutal and it can also bring obscene rewards for not much work at all.

Edited May 19, 2016 by Jingthing

[Gary A]

It's possible that you think about finances too much. I retired at age 60. I rented an apartment in Jomtien. I have always been somewhat conservative and worried about having to live on a budget here in Thailand. I'd hate to have to live on a budget. I created a spread sheet, lived as I wished and kept a daily record of my spending, right down to 10 baht baht bus fares. After about four months of that, I was pleased to see that I had way overestimated my expenses. I then bought a nice condo and other than putting a substantial dent in my savings, it reduced my living expenses considerably. I haven't looked back since and when I started collecting my full Social Security, I was on easy street. I have no doubt that it would be the same if I returned to the US. I have no intention of returning to the US but one never knows. TIT!

[Jingthing]

Gary, dude, nice for you, but don't assume your personal situation is universal. BTW, I've never kept a formal budget in my life. That's not my style and not likely to change.

[SpokaneAl]

Gary, dude, nice for you, but don't assume your personal situation is universal. BTW, I've never kept a formal budget in my life. That's not my style and not likely to change.

My takeaway from Gary's thoughtful post is that it shows the value of planning. Long term and short term planning works, and even though one must be flexible and change when necessary, when a roadmap is developed and implemented, life choices can be better.

I am also a long term planner and am always amazed at the numbers of those I run into who don't plan and often take great pride in never planning and essentially winging it through life. When they reach retirement age they are often a bit regretful that they did not balance choices a bit better.

[Jingthing]

Funny, I read the post as personally dissing me for thinking about finances too much.

I admit I am probably extra sensitive of people who use "thinking too much" in a critical way.
People living in Thailand probably get my point.

I do get that you can overthink stuff ... in my view most people have the OPPOSITE problem.

It's possible that you think about finances too much.

In any case, I think it's obviously true that for many Americans approaching age 62, the decision to take S.S. early or not is a very big decision worthy of serious consideration. Taking it early is irreversible and like I mentioned before, I found a source that claimed a survey showed the majority who make that choice end up REGRETTING it. So I take that as a red flag ... not that it means it still isn't the best (or only realistic) choice for many people.

I would say it's much much less of an important decision for people (OK possible tax consequences), sadly not me, of great wealth and/or income, and in such cases whatever S.S. timing decision they made wouldn't have any impact on their life, so they could just flip a coin.

Edited May 19, 2016 by Jingthing

[JimGant]

Another way to look this. I calculated what the monthly increase is for each month delayed before full retirement age 66 plus from age 62. Turns out to be under 10 bucks a month. Looking it that way makes delaying seem less tempting.

The penalty for age 62 early retirement, with full retirement age of 66, is 25%. In order for this to be only a $10 difference, your full retirement monthly check would be $40, and your early retirement check would be $30.

What line of work were you in?

But I assume you meant 48 times 10 = $480 monthly difference for the 4 year wait. An increase of nearly 17,000 baht per month ain't chump change.

[JimGant]

. But better yet, if I retire on SS, then the baby ALSO gets SS benefits until age 18 to the tune of 50% of my full retirement benefits -- even if I am drawing reduced benefits. AND... The wife will get even more benefits until the girl turns 16 since she is the care provider. In other words, the two of them combined will get more SS than I will, cuz I'll be drawing the reduced benefits of early retirement.

AND...if you were married to your former wife for over 10 years, and she is 62 and hasn't remarried -- she qualifies for the spousal benefit.

No wonder the bloody program is paying out more than it's taking in.....

[Jingthing]

Another way to look this. I calculated what the monthly increase is for each month delayed before full retirement age 66 plus from age 62. Turns out to be under 10 bucks a month. Looking it that way makes delaying seem less tempting.

The penalty for age 62 early retirement, with full retirement age of 66, is 25%. In order for this to be only a $10 difference, your full retirement monthly check would be $40, and your early retirement check would be $30.

What line of work were you in?

But I assume you meant 48 times 10 = $480 monthly difference for the 4 year wait. An increase of nearly 17,000 baht per month ain't chump change.

My birth year penalty exceeds 25 percent. People younger, the penalty gradually increases. Also, don't assume the difference between early and full retirement is 48 month. In my case, it's more. You see it's different based on your birth year.

Anyway, I'm back and forth on this, but the life expectancy thing seems quite important to me. I can't logically expect to live past 80 meaning, if that's true there isn't a big downside to taking it early. As others have mentioned, if you do have savings/investments (and I do) and you're going to spend down from them to delay benefits, those investments may earn during that period, so spending down loses that opportunity.

Yes, I know, I know, it's grim and depressing to have a retirement plan based on being confident of dying "on time" but I think can handle it.

Edited May 19, 2016 by Jingthing

[hawker9000]

I, too, think that this is not a decision that should be governed by what you believe your life expectancy to be and a "breakeven" analysis. I would rather never "break even" with the government but have needed extra benefits arriving every month in older age, than not have the benefits I need even though "ahead" on paper with Uncle Sam. So the "when to start" decision, at least for me, is more about what I need to live on and when I expect to need it, than about when I expect to die... But I guess you actually could always take the "unneeded" benefits taken started earlier, and simply annuity-build with rather than spend them, until that full-benefits or later date when you would otherwise have finally started collecting your SS. At Age 78, you should then theoretically be ahead WRT the government payout to you and actually have an additional income stream from that annuity that perhaps even more than compensates for the reduced benefit over the rest of your longevity. I doubt most people would have the self-discipline to actually follow through with the annuity-building regimen rather than spend the benefit though..., especially if their financial habits and retirement planning were always such that there WEREN"T provisions made by them for pensions and/or OTHER income streams in old age besides SS. Such people then arrive at age 78 "ahead" WRT Uncle Sam, but with a reduced monthly SS benefit on which they're totally dependent that's less likely to make ends meet than would've otherwise been the case.

Those of us who have other income sources besides SS to rely on are probably best off with a middle road approach. Start collecting at the full retirement age (but not later), and if you don't have any immediate need for the money, accumulate it in something relatively safe, and make an additional future income stream, emergency fund, or legacy out of it.

[CaptHaddock]

Funny, I read the post as personally dissing me for thinking about finances too much.

I admit I am probably extra sensitive of people who use "thinking too much" in a critical way.

People living in Thailand probably get my point.

I do get that you can overthink stuff ... in my view most people have the OPPOSITE problem.

It's possible that you think about finances too much.

In any case, I think it's obviously true that for many Americans approaching age 62, the decision to take S.S. early or not is a very big decision worthy of serious consideration. Taking it early is irreversible and like I mentioned before, I found a source that claimed a survey showed the majority who make that choice end up REGRETTING it. So I take that as a red flag ... not that it means it still isn't the best (or only realistic) choice for many people.

I would say it's much much less of an important decision for people (OK possible tax consequences), sadly not me, of great wealth and/or income, and in such cases whatever S.S. timing decision they made wouldn't have any impact on their life, so they could just flip a coin.

Actually, filing for SS is indeed reversible. The option to file and suspend remains available. What changed this month is that a spouse can no longer collect spousal benefits if the primary beneficiary has suspended. But that's not the issue here. If you repent of your decision to take early you can suspend and resume earning Delayed Retirement Credts up until age 70 at which point there is no point in foregoing payments that would be lost forever.

[lovelomsak]

Take it at 62. If you do not need it invest it. What you invest take out in the future to off set costs as they rise.Do not know American tax laws. But in Canada can invest in rrsp's and get a tax deduction for what you invest every year in rrsp. If there is something similar in US do that. at 62 take pension. Put money in rrsp and wait to use it,

Or invest and pay taxs on interest everything till you need it and can withdraw with no tax burden when you use it.

If you invested it all from 62 to 70 You would probably beat what waiting would give you plus keep your taxs down.

There is no advantage or logic in retiring early and investing your SS payments. Unless you are debt free and your annual expenses are less that what your SS income is, there is no advantage or tax shelter benefits.

I quess I assumed to much here. I assume people in their 60's are free and clear of debt a long time ago,if not very poor planning.My plan is based on debt free and controlled living costs.At 62 till 70 if it is all invested I am sure it will add greatly to a persons networth and financial stability .All the money invested is after tax dollars only the interest is taxable.I did something very much the same but with Canada pension.I could take at 60 to 65. Took at 60 saved $20,00 a year at end of 5 years or 65 years of age I had an extra $100,000 added to my financial portfolio.What ever interest I get every year from that is taxable but the $100,000 has tax paid on it already. So i receive cash every year from the $100,000 plus i keep my pension coming.The interest and pension will mostly match what I would have got at 65 direct from pension if I waited.I get about the same amount and still have $100,000 I did not have at 60. Of course if I draw on that I reduce my income in the future,but if left would definitely cover funeral costs.