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

[JimGant]

But in the example cited the couple never divorced.

Right. I certainly wasn't clear that Nancy's example (still married) wasn't the optimum situation.

[MajarTheLion]

Of course the best way to play this is to have planned and saved your entire life so that it's not much of a dilemma. Unfortunately, Americans in general are lousy savers and too many end up with limited options as they near retirement. Worse yet, those of us who have planned and saved usually end up chipping in for people who didn't plan and save, paying for the various social programs these not-very-wise people enjoy as a reward for not handling their finances well and not planning for their future. Frankly, it's getting a bit tiresome.

Fortunately for me and many others who lived beneath their means and saved, there's nothing grim about this situation at all. I simply take an educated guess at my lifespan, do the math and choose the age that most likely pays out the most cash.

Edited June 12, 2016 by MajarTheLion

[SpokaneAl]

The assumptions posted here and elsewhere that the majority of US senior citizens are poor, and with little or no assets seems to be false . . . https://www.washingtonpost.com/opinions/obamas-social-security-failure/2016/06/12/84082af0-2d9d-11e6-9b37-42985f6a265c_story.html

Edited June 14, 2016 by SpokaneAl

[CaptHaddock]

The assumptions posted here and elsewhere that the majority of US senior citizens are poor, and with little or no assets seems to be false . . . https://www.washingtonpost.com/opinions/obamas-social-security-failure/2016/06/12/84082af0-2d9d-11e6-9b37-42985f6a265c_story.html

This is another piece by Robert Samuelson who is on a long-term crusade to reduce SS benefits. The economist Dean Baker has responded to Samuelson's attack on SS in the past and responds to this piece here:

In fact, there is useful information in this survey and it goes in the opposite direction of Samuelson’s complaints. If we look at recent and near retirees, the group between the ages of 50 to 64, we see a sharp decline in their sense of satisfaction over the period since the survey began in 1972. In 2014, the most recent year in the survey, just 25.2 percent of those in this age group expressed satisfaction with their financial situation. This is down from 38.4 percent in 1972 and a peak of 41.4 percent in 1978.

If we are talking about cutting Social Security this is the age group that we should be looking at because they would be the ones most directly affected. No one is proposing substantial cuts in benefits for the current group of retirees.[1] If we want to reduce benefits for the program, these are the people who will be seeing lower benefits in retirement with little chance to adjust for it during their working careers.

http://cepr.net/blogs/beat-the-press/robert-samuelson-resumes-the-attack-on-social-security?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+beat_the_press+%28Beat+the+Press%29

[Jingthing]

Yeah, I noticed that chart was averaged back in time a long time to better times, so rather meaningless for many. More recent over 50's are much less likely to have any other private pension than S.S. Due to the relatively recent economic / housing meltdown, many more likely to have lost their owned homes in foreclosures and long term unemployment during normal working years compared to older people. Of course it's very individual. Inheritances are a factor too.

The harsh reality is that even though S.S. most certainly wasn't intended to cover all retirement income, for a significant percentage of older people, that's how it turns out.

[hawker9000]

i didn't have any choice....a accident and a infection in my leg caused by that accident forced me to reitire in 2010 at age 64.

if i could have waited unril age 65 i would have had 100% of my benefits.

At 64 all I could get was 75% of my benefits.

It is still enough to retire in Thailand....but not enough to livr in the U.S.A.

Still i am better off than some.

That's interesting but something doesn't sound right.

If you took it at 64 and your full retirement age was 65, the penalty for taking early would really be much less than 25 percent. 25 percent is a typical penalty for taking it really early at 62.

Agreed. Shouldn't it be more like about 8% per year? Or are we talking about SSDI (the disability benefit) here instead of the retirement benefit?

[CaptHaddock]

The 2016 Social Security Trustees Report is out. The outlook over the projected seventy-five year period has improved, especially for Medicare. Of course, the right-wing scare machine will not be publicizing this news.

The positive side of the picture is that the projected shortfall in the Medicare program is now much smaller than had been projected in 2008. At that time, the Trustees projected a shortfall in the program equal to 3.54 percent of payroll. This brought the combined projected shortfall for the two programs to 5.24 percent. In the most recent report, the projected shortfall for Medicare is just 0.73 percent of payroll, bringing the combined projected shortfall to 3.39 percent of payroll.

This means that the longer term shortfall projected for these programs together is now considerably smaller than when President Obama took office. The reason for the decline in the projected Medicare shortfall is a slower projected rate of health care cost growth. This is undoubtedly attributable in part to changes implemented as a result of the Affordable Care Act (ACA). While the size of the impact of the ACA on health care cost growth can be debated, it is clear that the combined finances of these programs looks better in 2016 than when President Obama took office.

http://economistsview.typepad.com/economistsview/2016/06/the-2016-social-security-trustees-report.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EconomistsView+%28Economist%27s+View%29

[Boon Mee]

Right wing scare machine? Doubt that. As Jack Webb would say: "Just the facts Ma'am"

Obama is gutting Medicare

"Under the guise of “reform,” President Obama is dismantling Medicare — dooming seniors to needless pain and disability and shortening their lives."

http://nypost.com/2016/06/21/obama-is-gutting-medicare/

Continuing to "Fundamentally Transform America"

[CaptHaddock]

Right wing scare machine? Doubt that. As Jack Webb would say: "Just the facts Ma'am"

Obama is gutting Medicare

"Under the guise of “reform,” President Obama is dismantling Medicare — dooming seniors to needless pain and disability and shortening their lives."

http://nypost.com/2016/06/21/obama-is-gutting-medicare/

Continuing to "Fundamentally Transform America"

NY Post? Murdoch's rag? Has no credibility whatever.

[Boon Mee]

Well, Medicare is a moot point for any of us 'Merkins living in LOS.

No dog in this fight!

[MajarTheLion]

NY Post? Murdoch's rag? Has no credibility whatever.

So then the New York Times is lying as well????

http://www.nytimes.com/2016/05/23/us/politics/medicare-drug-payments-cuts.html?_r=0

Of course, these coming cuts are in addition to the half trillion dollars the Obama cartel already slashed from Medicare to fund his health care scam. So are you enjoying your $2,500 per year savings?

Edited June 23, 2016 by MajarTheLion

[CaptHaddock]

NY Post? Murdoch's rag? Has no credibility whatever.

So then the New York Times is lying as well????

http://www.nytimes.com/2016/05/23/us/politics/medicare-drug-payments-cuts.html?_r=0

Of course, these coming cuts are in addition to the half trillion dollars the Obama cartel already slashed from Medicare to fund his health care scam. So are you enjoying your $2,500 per year savings?

The NYT has more credibility. But I see we are talking about reduction of drug payment benefits, which we know the Bush administration passed as a sop to the drug industry, including the extraordinary and ridiculous requirement that Medicare administration is forbidden from negotiating drug prices. i.e. they can charge whatever they want. Indeed, while the Repubs are generally opposed to Medicare, they strongly support the Bush drug payment provisions along with the drug companies themselves of course. US drug costs are the highest in the world.

My interest in the drug benefit provisions of Medicare is limited since I don't expect it to affect me here. Still, it's obvious that the drug benefits need to be reformed to enable Medicare to control costs.

[Gary A]

I was always curious why Medicare is useless for expats but expat civil service retirees are covered. It appears that retired government employees are better than the rest of us.

[Jingthing]

Please try to channel political debates to the many election threads. This thread is mostly meant to be about timing decisions for claiming s.s. benefits.

[Rhys]

Entitlement? Take it or not take it...use it or lose it. Up to you as always... hmmm make sure something is there..

[CaptHaddock]

I was always curious why Medicare is useless for expats but expat civil service retirees are covered. It appears that retired government employees are better than the rest of us.

The retired civil servants are better than you and the retired military are better than you. Corporations are also better than you since you pay federal income tax on your worldwide income while corporations, despite being statutory persons, pay federal income tax only on repatriated earnings, not worldwide income.

[SpokaneAl]

I was always curious why Medicare is useless for expats but expat civil service retirees are covered. It appears that retired government employees are better than the rest of us.

The retired civil servants are better than you and the retired military are better than you. Corporations are also better than you since you pay federal income tax on your worldwide income while corporations, despite being statutory persons, pay federal income tax only on repatriated earnings, not worldwide income.

No one is better. Some were career military or civil service, and others travelled a different direction. We all made choices in life and those choices have implications. Edited June 23, 2016 by SpokaneAl

[thaihome]

I was always curious why Medicare is useless for expats but expat civil service retirees are covered. It appears that retired government employees are better than the rest of us.

The retired civil servants are better than you and the retired military are better than you. Corporations are also better than you since you pay federal income tax on your worldwide income while corporations, despite being statutory persons, pay federal income tax only on repatriated earnings, not worldwide income.

The fact that US citizens have to report worldwide income is not the same as paying tax on worldwide income. I haven't paid a dime in US tax on foreign income in 18 years, dispite having a reported income of over $200k in every year.

TH

[Jingthing]

This might be relevant to this topic for older people that hope to start working again because they need the money.

It's a statement by Mike Huckabee, not a politician that I admire, but that's not the point.

He said that in these times when people over 50 lose their jobs, over 90 percent of them will not find work again for the rest of their lives.

Not sure how accurate that is but no doubt it's a problem.

Of course some might think it's time to stop working anyway and does that mean the same level of work or ANY work?

Obviously, if you can still have work when older, you are more likely to be able to delay claiming your S.S. benefit.

Edited June 23, 2016 by Jingthing

[CaptHaddock]

I was always curious why Medicare is useless for expats but expat civil service retirees are covered. It appears that retired government employees are better than the rest of us.

The retired civil servants are better than you and the retired military are better than you. Corporations are also better than you since you pay federal income tax on your worldwide income while corporations, despite being statutory persons, pay federal income tax only on repatriated earnings, not worldwide income.

The fact that US citizens have to report worldwide income is not the same as paying tax on worldwide income. I haven't paid a dime in US tax on foreign income in 18 years, dispite having a reported income of over $200k in every year.

TH

So, your point is that because some expats manage to avoid income tax on foreign earnings that the taxability (not mere reportability) of foreign income has no effect? Or is your point that what's important is only what affects you personally?

[timendres]

This might be relevant to this topic for older people that hope to start working again because they need the money.

It's a statement by Mike Huckabee, not a politician that I admire, but that's not the point.

He said that in these times when people over 50 lose their jobs, over 90 percent of them will not find work again for the rest of their lives.

Not sure how accurate that is but no doubt it's a problem.

Of course some might think it's time to stop working anyway and does that mean the same level of work or ANY work?

Obviously, if you can still have work when older, you are more likely to be able to delay claiming your S.S. benefit.

Seems contrary to: http://e.businessinsider.com/public/6979222

[CaptHaddock]

This might be relevant to this topic for older people that hope to start working again because they need the money.

It's a statement by Mike Huckabee, not a politician that I admire, but that's not the point.

He said that in these times when people over 50 lose their jobs, over 90 percent of them will not find work again for the rest of their lives.

Not sure how accurate that is but no doubt it's a problem.

Of course some might think it's time to stop working anyway and does that mean the same level of work or ANY work?

Obviously, if you can still have work when older, you are more likely to be able to delay claiming your S.S. benefit.

Seems contrary to: http://e.businessinsider.com/public/6979222

What that graph shows is that older workers are hanging onto their jobs much longer than in the past, probably more out of economic necessity than the joy of work. However, if you lose your job over 50 you aren't going to get another one. The unemployed over 50 crowd has composed a larger share of long-term unemployed consistently since the Great Recession.

[drm200]

I am 61 and am eligible to begin drawing social security soon. I calculated the break-even age for my situation and found it to be near 78.

So financially it may be better for me to wait, if I live longer than 78. Regardless of that, I am going to begin drawing social security as soon as possible ... Financially, I do not need it now. But I figure that if i die before I am 78 .. I will have more to pass on .. because I've spent less of my own money .. So I'll take the money now.

The decision is that simple for me ...

Edited July 2, 2016 by drm200

[Jingthing]

Well, thanks for that. A good example of the legacy factor. Different for those who care about that than those that don't.

[tonray]

I am taking it at 62 , I am currently 58. My reasoning...I do not want to work anymore than I need to. At my current rate of spending in BKK (I am a cheap Charlie) I can stop working at 59 (next year) and the savings that I use to support that 3 years will be replaced by the excess of my monthly SS/Pension combo over real expenses in less than 4 years. So by age 66 I would have replaced monies used to stop working earlier and start adding to my savings at age 66. Life is too short to work until the day before you die.

[Jingthing]

Covers the same topic.

The comments section is pretty funny.

The regret rate for taking early (62) they report I think is maybe lower than I thought:

https://www.washingtonpost.com/news/get-there/wp/2016/07/04/a-quarter-of-recent-retirees-would-delay-social-security-if-they-had-a-do-over/?hpid=hp_hp-cards_hp-card-business%3Ahomepage%2Fcard#comments

Many financial advisers recommend that people wait until 70, very few do. In fact, most people don’t even wait until full retirement age, and end up taking it as soon as they are eligible – at 62.

Well, a new survey says that, given the chance, a quarter of Social Security recipients would take it later than they did. But that also means that most would not change their decision – for a variety of reasons.

Primary reason to take early based on perception of lower life expectancy lower than I would expect:

• They didn’t think they would live long enough to optimize benefits (12 percent recent, 16 percent 10+)

Edited July 5, 2016 by Jingthing

[taxout]

As I understand Social Security, you have a "normal" retirement age that varies a bit based on the year of your birth. If you start taking Social Security a year after your "normal" retirement age, your benefits should be increased by an amount equal to 8 percent of "normal" age retirement benefit. So if you'd get $1000/month starting at your "normal" age of 66, you'd get $1080/month starting at age 67.

But that's not what the Social Social estimator is showing for me. Indeed, it shows just a tiny increase between starting Social Security at my "normal" retirement age and starting it a year later.

Has anyone else calculated their estimated benefits on the Social Security site and found this anomaly?

Edited July 6, 2016 by taxout

[SpokaneAl]

The increase year over year is smaller between 62 and full retirement age (66 for me) and then increases 8% a year between 66 and age 70. I have calculated that to be correct and compared those numbers to what is proved by social security and it proves to be correct.

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[taxout]

Odd. In my case, there's a very significant shortfall from what it should be in the year following full retirement age, then smaller shortfalls each year till age 70, when the payment is exactly what it should be.

Looking around for an explanation, it seems -- oddly -- that where your birthday falls in the year may affect this. Mine is towards the end of the year. Is yours towards the start?

Point is, if the numbers Social Security is giving me are correct, there's practically no advantage waiting a year to take benefits.

[SpokaneAl]

The numbers are calculated based on birth day and not calendar year. Perhaps you may want to relook. https://www.ssa.gov/policy/docs/ssb/v74n4/v74n4p21.html

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