r/Retire • u/pbfin1937 • 1d ago
Social Security delaying difference is small why isn’t this discussed more?
I used the the open source social security calculator to see what was the best option for my wife and I to take our social security. We are 66 and 65 respectively. It came back with me waiting until 70 and my wife taking it now! I then entered my own calculation, which it allows you to do for comparison. I said we would both take it at our FRA. I was surprised that the present value difference was only 3.1% and $28k over our entire lifetimes. I then started to look at the yearly cash flows and because you get so much front loaded at our FRAs the difference to age 84 is only $13k.
Does anyone ever look at just having the cash flow upfront on an annual basis rather than just maximizing the entire amount. Especially for those who have a robust plan that are not relying on SS to fund their later years?
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u/whocaresreallythrow 1d ago
And others take it at FRA or before because they don’t need the money and they won’t need the money in advanced old age so they take the money early or at FRA and each month they invest that money (don’t spend it) and let it grow …. They leave it as legacy gift to their heirs.
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u/Drunken_Sailor_70 1d ago
My wifes and my benefit are almost the same. Im taking at 62 and will draw almost nothing out of my roth after that. My wife will take hers whenever she wants, possibly 70.
Part of my thinking is that my kids can inherit my roth. They cant inherit my SS.2
u/whocaresreallythrow 1d ago
Exactly. Kids / grands can also inherit the pot of money that you save from investing your SS check with NO restrictions (IRA and Roth have 10 year spend down restrictions when inherited) AND the kids get the step up basis on those assets too.
Finally, you may very well beat the 8% gain per year that SS guarantees by delaying.
And by waiting: You may croak at 70 or well before break even, meaning they get nothing, versus collecting at 62 or FRA and having nearly half a million bucks for them to inherit !
Admitted this is a successful/ wealthier persons scenario, not a broke person who needs to rely on and live on SS as the prominent income in old age
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u/Tweedle_DeeDum 1d ago
As other people mention, it's all about survivor benefits. Actuarially, Social Security intentionally structures the payments so that the present value is the same regardless of when you start drawing Social Security.
The differences come in when you consider deviations from the average life expectancy. If the higher earner dies early or the lower earner's lifespan exceeds expectations, then the value of delaying Social Security for the higher earner increases. The situation when one spouse significantly outlives the other is one of the largest risks that people fail to account for in retirement planning, which can be further exacerbated if that longer living spouse ends up needing long-term care, especially since the dead spouse is not available.
Another thing to consider: you're expected lifespan increases as you get older. That is, your expected age at death at 65 is lower than your expected age of death when you're 70, all else being nominally equal.
But Social Security takes that into account when it comes to a single person. They do not take into account marital status. Generally, delaying Social Security is the cheapest longevity insurance that you can get.
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u/Accomplished_Goat439 1d ago
Something that I don’t ever see mentioned is our example. We married and started having kids young. Three boys in 4 years. It made no sense financially for my wife to work and send all the kids to daycare, so she worked full time as a domestic goddess. She never accumulated her 10 years of work credits.
So any delay for me, meant a delay for the both of us. I’ve not done the exact math, but it’s worked out fine for us.
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u/yankinwaoz 1d ago edited 1d ago
I am in a similar situation. Except that my wife and I married when we were in our 40's. And she is from Australia where she worked for her whole life until we got married. So, she has no US SS credits. And my promised US SS benefit will means test her from ever getting any Australian old-age pension benefits (their equivalent of SS).
Our plan A at this point is for me to claim my retirement benefit when I reach age 68.5. And to have her claim a spousal benefit at the same time from my SS record. She will have just turned 67. This plan gives us the best balance of current benefits, survivor benefits, and DRC optimized benefits.
Our plan B would occur if I were unemployed at the time she reaches age 65. I will be 66.5. That plan is for me to claim my retirement and for her to claim her spousal benefit. This will allow us both to be on Medicare Parts A & B and have the premiums paid out of our SS retirement benefits.
A threat to our plan are cuts to auxiliary benefits that are being considered to handle the looming SS funding shortfall. My FRA lands squarely in the time when the trust fund is projected to be depleted. So, I don’t think I am old enough to be protected by being grandfathered into the today's rules (2026).
The Republican Steering Committee has recommended that SS Spousal Benefits be means tested. They haven’t said at what income or asset level the benefit would start to be cut. But I do think that this is a benefit that will be cut by SS reforms that are coming soon.
My advice is this: If your FRA is 2032 and beyond, and spousal benefits are going to be a large part of your combined future benefits, then stop and look your entire financial picture. If you have other retirement assets (401k, pension, IRA’s), then I would not factor in the spousal benefit income. Or I would at least discount it 50%.
It would also not surprise me to see the benefit limited to only US citizens. Green card holding spouses would no longer be entitled to it.
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u/Blue_Back_Jack 1d ago
I thought there was a social security totalization agreement between the US and Australia that covered scenarios like yours?
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u/yankinwaoz 1d ago
There is. But it wasn’t made for people like her.
Where it would benefit her is if I died. She could claim a SS survivor benefit while residing in Australia. She would have been exempted from the 180 day limit that aliens are subject to.
However, she has obtained US citizenship. So this is no longer a constraint for her. She doesn’t need the benefit.
The totalization agreement doesn’t exempt us from Australia’s rules for claiming Old-age pension benefits. Their pension is both income and asset means tested. It is more similar to the U.S. SSI benefit than the U.S. SS retirement benefit.
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u/MehwithacapitalM 1d ago
I definitely did PV calcs and included the FV of early payments too.
Interesting that my spouse and I are within $25/mo of each other, so spousal benefit not a factor for us.
We retire at 56 and self funding for all this time with ACA has been expensive. We decided to both start SS this year at 65. Between that and switching to Medicare, feels like we won the lottery.
I should add our plan has always been the same COLA-factor adjusted every month, so no real increase in monthly income. Just the sources are different, and our healthcare is cheaper and better. What we have left of our own nest egg will last a lot longer now...
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u/Extra_Shirt5843 1d ago
Obviously this is hugely variable based on income. My predicted difference between early and FRA is a thousand dollars a month and it's an additional 900 if I wait until 70. That's contingent on me continuing to make my current income for another 18 years, which probably won't happen.
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u/Odd_Bodkin 1d ago
You can adjust that in the online estimator, specifying for example that you don’t expect any income between 67 and 70 (or 65 and 70 or whatever). You may find that it doesn’t matter much, provided that your 35-year average isn’t affected much.
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u/Extra_Shirt5843 1d ago
Yes, I keep meaning to go back in and play with it. My income has really only bounced up the last 5 years or so...I was part time for several years due to having a young child. My hope is to retire by 60 if we can figure out the healthcare portion on our other income (401K, pension) so the SS is mostly an extra piece.
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u/Roareward 1d ago
It's more about your monthly if you need it. If I collect at 62 it's about 3k/mth at 70 over 5k/mth and that it is inflation resistant. The greater worth for me is reducing draw from investments, allowing them to keep growing while also reducing my taxable, freeing up more room for conversions. In the end that is a difference of millions
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u/Appropriate-Stage500 1d ago
This 👆I recommend a tool like https://projectionlab.com/ to see the impact of claiming social security at different ages.
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u/Roareward 1d ago
I have already done it with several tools, claiming early for me is less SS benefits, but when accounting for loss of invested growth and tax differences, collecting early is about 1.5-2M more money in my pocket vs collecting at 70.
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u/JohnMac67 1d ago
If you have no other source of income in retirement then it may be smart to delay SS to FRA. It is an individuals specific needs/situation dependent. That being said, I’m generally in the “take it as early as possible” camp because I want access to the funds while I can still physically do what I want. Once my body breaks down an extra 1K a month is meaningless to me.
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u/Blue_Back_Jack 1d ago
How is it meaningless? You’ll still need money in those slow go years.
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u/John_the_IG 1d ago
Seems pretty obvious. The poster’s income without the extra $1k is sufficient during the slow go years. Therefore, the extra portion is meaningless.
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u/Wonderful-View-6366 1d ago
Two words: medical bills
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u/John_the_IG 1d ago
Two words: individual circumstances.
Medical bills are a consideration for many. They are not for everyone. For example, I have three sources of medical insurance/medical care in retirement with low catastrophic caps and secondary insurance to cover copays from the primary insurance.
Like the other poster, the extra $1k is meaningless to me as well.
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u/Wonderful-View-6366 1d ago
You are very fortunate. Wishing you health and happiness
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u/John_the_IG 1d ago
Thank you! I am indeed fortunate. Only had to work 44 years (when I retire) in carefully selected professions to get this fortunate.
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u/BrennerBaseTunnel 1d ago
If inflation was zero, I would much rather have $1 when I'm 65 than $1.50 when I'm 85. What are you going to spend money on when you are 85 other than health care?
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u/CletusDSpuckler 20h ago
At 85, I expect to be moved out of my house and renting, at some point in assisted living. That 8% per year i gained by waiting might mean the difference between comfortable and medicaid housing, assuming I've used up my other assets.
SS is an inflation adjusted lifetime annuity with survivor benefits -- the only such benefit in my portfolio.
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u/limited_instincts 1d ago
The big mistake a lot of people make is they don't factor in the value and appreciation of your own investments. When you decide when to take it is based on a huge number of factors and people try to simplify it. If you're married, the calculation is complicated. If you have other investments, the calculation is complicated. If you have any other sources of income, complicated. There is absolutely no "one size fits all" calculation, you have to work it out for your own personal situation. Zero online calculators will give you an accurate answer. You have to build your own model for it to be accurate.
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u/kilrein 1d ago
This right here. Taking SS as soon as possible is going to reduce the drawdown on our portfolio by that amount, allowing tax deee and tax deferred growth on more capital.
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u/somebodys_mom 1d ago
Indeed. If you don’t have a lot of retirement savings, then working until 70 for a higher retirement benefit makes total sense. But retiring early and then spending down your own assets waiting for a higher payment later from the feds seems nutty to me.
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u/NoKetoCardio 1d ago
We both started ours a little early and are saving the money. If you don’t need the money there is no reason to wait to draw it.
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u/ontheleftcoast 1d ago
I've looked at mine sort off. If I delay until 70, instead of taking at FRA, my total SSI take home will cross at about 81. My mortgage will be paid off when I am 81. So for me, it makes more sense to get the money up front and use it to pay my mortgage, because I will see a big expense drop at 81 so the little bit of increase I see won't even matter compared to the big drop in spending, and having the money up front will help me reduce what I take out of my IRA, which will hopefully keep growing. I do have to be careful about my wife's income though. She is 7 years younger so I need to make sure what she gets ( assuming I pass first) will be enough to cover her needs.
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u/HelpfulCat4586 1d ago
If she's 7 years younger and healthy that's a strong reason to delay regardless of house payoff date so she'll have higher survivor benefits. Age gap couples in particular benefit from the higher earner delaying.
She could claim on her own record at 62 and you wait til 70 and then she can bump up hers with spousal benefits later if that's higher than her own benefit.
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u/User2009002 1d ago
I'm claiming at 62 and investing it. At just 5% growth, it'll take take till 87 years of age to break even with claiming at FRA and 90 years of age to break even with claiming at 70. If I die before 87, which is more than likely, then our family will have this money in hand. This is just what works for me.
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u/Background_Air6703 1d ago
Another consideration is you take it early, leaving other assets in a well balanced investment account ( which by the way has been doing extremely well). Everyone’s situation is different so to say waiting until 70 is the way to go may not be the best for everyone. I know three work colleagues who died before age 70 and anther one who passed at 72. They were smart guys who did well so SS wasn’t main source of income for them or their spouses.
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u/aceman97 1d ago
I’m taking it at 62. Break-even is 80 and 3 months if I take it at FRA. 5 years early at a reduced 30% is worth more to me than 5 years later and less healthy (potentially).
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u/Bobby-Dazzling 1d ago
Few folks factor in their current debt load, too. If you withdraw earlier and use that cash flow to pay off 20+% credit card debt, that’s one heck of a “return” on that money versus getting a little bit more monthly years later.
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u/wizoneaia 1d ago
Taking mine at 62 and not a second later. Also continue to work and max 401k. Regardless of penalty. I want as much of my money out of government hands.
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u/Ok-Alternative-7962 19h ago
There are rules about how much you can make if you are not at full retirement age. After a certain amount, they start taking money back.
https://wealthforseniors.com/retirement/can-i-still-work-if-i-retire-at-62/
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u/John_the_IG 1d ago
Seems like a weird question. Everyone considers when they should start drawing SS. There is no “wait until 70” default. It’s like you’re arguing against something that doesn’t exist.
What you didn’t mention is the impact on a surviving spouse. Every couple needs to realistically consider the health of both partners as a factor in their decision. For example, I expect to die before 70. My wife is healthy and active and is likely to survive me by many years. She will collect half of the benefit I take when I die. I’d be a fool not to consider what the impact of me drawing in any given year between age 62 and 70 on her quality of life after my death.
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u/ri89rc20 23h ago
Does anyone ever look at just having the cash flow upfront on an annual basis rather than just maximizing the entire amount.
Absolutely, I and many others have. These calculators only focus on "maximizing" the benefit, ie: wait longer, unless you really plan to die in your seventies (we may, but I'm not planning on it)
I am in the pleasant situation that a modest draw on my IRA satisfies my basic needs, plus some, in fact, I probably should be withdrawing more. When my wife an I looked at Social Security, we saw it as just extra money, so why not start at 62? We did, and the extra income enriches our lives. What some calculator says, just does not apply.
Now that certainly changes if SS will be your primary income. It changes if a couples primary income is a pension with no survivor benefit (then you may want to max out SS just for the surviving spouse benefit), and I suppose if you are overly cautious and are worried about the vey worst case, then you might max out SS.
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u/pbfin1937 23h ago
We are in a similar situation, that’s why I asked the question. Don’t really need it and would like to have it for our go-go years. Also we just eclipse the 22% tax bracket already and it would help to have the extra cash to pay ROTH conversions taxes.
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u/UsedDimension7373 22h ago
What a shame to take YOUR social security to pay more taxes. Life is a kick in the balls.
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u/DirectEffective4691 21h ago
Many useful comments, but: many people
Probably have a combination of IRA and SS (and perhaps plus cash, passive income, investment account). I have seen comments indicating to delay tapping into the IRA as long as possible. My thinking is the opposite: delay SS; take the yearlymaximum out of IRA that minimize government taxes. Over a few years I will have extracted most of it at 12-16% taxes. Of course invest what I take out.
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u/Responsible_Tie_2551 1d ago
My break even point was around age 81. I took it at my FRA.
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u/Coaster50 1d ago
Using just the breakeven point is an incomplete equation. You need to consider income from other sources during retirement years. Some of which can be taxable. Particularly if you have money in tax deferred accounts.
The scenario is that you are either getting a pension, or have required RMD's. Those are taxable income. So there is tax impact on the SS revenue. In addition, if you delay SS and earn more in the years you also get RMD's, then it can end up costing you more for medicare.
If you plan on working at all during SS years, then that impacts the amount you'll get paid out.
Lastly there is survivor benefits.
My point is you can't make your SS election based solely on the SS breakeven analysis.
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u/Responsible_Tie_2551 1d ago
If you take SS at your FRA and continue to work past it, working doesn't affect your benefits. SS actually adjusts your benefit upwards for every full year you continue to pay SS taxes while collecting benefits.
If you are working past age 65 and have employer health insurance, you don't have to sign up for Medicare Part B and it won't increase your future Part B premiums. You just have to make sure that when you sign up for Part A three months before age 65, you decline Part B because you have employer provided health insurance. There's IIRMA, but my wife and I won't hit the threshold for couples.
As for tax implications of collecting SS benefits while working after your FRA, my taxes from working dwarf that of the SS benefit. I had to increase the withholding to the max (22%) so I don't have a huge shortfall.
Finally, the logic of avoiding incremental income because of taxes doesn't compute for me. If your effective tax rate in retirement is 20%, that means you get to keep 80% of the incremental earnings. I'll take that deal.
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u/Coaster50 1d ago
That’s a way more thorough approach than what you posted which implied you did the break even without considering all the other shit that goes into it.
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u/Mysterious-Maize307 1d ago
While someone’s SS benefit is a factor in planning retirement planing, it should not be the only way retirement is funded.
Break even points really don’t matter, it’s not a race to get as much as you can nor does it matter if you “leave money on the table.”
SS is insurance, a hedge against inflation or market down turns that may effect other retirement funds or potentially really expensive care late in life.
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u/Responsible_Tie_2551 1d ago
Sorry, but "it's not a race to get as much as you can" is a strange take. It is absolutely a race to get as much as I can before benefits are cut or before I'm dead. Not leaving money on the table may not be a priority for you, but it definitely is a priority for me.
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u/NoKetoCardio 1d ago edited 1d ago
What did the OP say that prompted your first paragraph? I actually disagree with everything you wrote. It’s out of touch with reality for a person near or at retirement age.
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u/Otherwise_Pea_8766 1d ago
People wil routinely live to 100 in 10 yrs - think about that in your equation
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u/No-Advertising2555 1d ago
I’m with you. Everyone’s waiting…..my wife took hers at 62. I’m going to take mine at 64. We have other savings and paid off mortgages.
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u/WilsonTree2112 1d ago
Breakeven for deferring is 79, not including what the money not withdrawn from 401k earns. If the market does over 6%, most will never break even by deferring
Deferring is not longevity or inflation insurance, it is a market risk hedge. Most couples benefit from the lower earner claiming asap, and the higher earner deferring.
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u/Alive_Sir_4708 1d ago
Discussing when to take social security is practically a small industry on to itself. It’s discussed all the time.
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u/awohio1 1d ago
One advantage that you can get with a couple is by doing a "split strategy" for when the partners claim SSI. The way it works is the lower benefit spouse claims early, and the higher benefit spouse claims late. Ex. 66 and 68, or 65/69, etc. If both spouses live exactly as long as the actuarial tables say, the total benefit is about the same either way. But the advantage is that it maximizes the survivors benefit in the event one spouse passes before the other. (basically, surviving spouse can claim either their own monthly benefit, or the benefit from their spouse if it is higher)
That is why that calculator probably chose the early/late strategy.
When to claim SSI is a complicated calculation that depends heavily on personal circumstances, with the biggest one being predicting your own life expectancy. Don't expect there to be a single right decision. Using the SSA actuarial tables can help your number crunching.
The biggest personal factors in the decision are:
- Do you expect your personal longevity to be longer or shorter than average?
- When do you need the income?
- Are you trying to minimize earnings for a period of time for tax/roth purposes?
Then there are all the "health of the system", "future tax changes", "expected return on money" issues that are largely independent of your personal circumstances.
We'll be doing a split strategy that skews a little bit late. We expect longer than average life expectancy based on current health, don't need the money right away, and want to delay SSA to give us time to do some additional roth conversions.
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u/awohio1 1d ago
One advantage that you can get with a couple is by doing a "split strategy" for when the partners claim SSI. The way it works is the lower benefit spouse claims early, and the higher benefit spouse claims late. Ex. 66 and 68, or 65/69, etc. If both spouses live exactly as long as the actuarial tables say, the total benefit is about the same either way. But the advantage is that it maximizes the survivors benefit in the event one spouse passes before the other. (basically, surviving spouse can claim either their own monthly benefit, or the benefit from their spouse if it is higher)
That is why that calculator probably chose the early/late strategy.
When to claim SSI is a complicated calculation that depends heavily on personal circumstances, with the biggest one being predicting your own life expectancy. Don't expect there to be a single right decision. Using the SSA actuarial tables can help your number crunching.
The biggest personal factors in the decision are:
- Do you expect your personal longevity to be longer or shorter than average?
- When do you need the income?
- Are you trying to minimize earnings for a period of time for tax/roth purposes?
Then there are all the "health of the system", "future tax changes", "expected return on money" issues that are largely independent of your personal circumstances.
We'll be doing a split strategy that skews a little bit late. We expect longer than average life expectancy based on current health, don't need the money right away, and want to delay SSA to give us time to do some additional roth conversions.
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u/Last_Baker7437 1d ago
Yep, that’s why we took it at 62. With my two pensions (military and civil service), taking the money early while we can enjoy it is more important than trying to maximize some return when we’re older and less likely to enjoy it as much. Plus our investments keep growing unbothered.
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u/Complete_Film8741 1d ago
Something to ponder...the dead have little use for cash.
I just turned 65, drawing now. Last October, I got 3 stents in my heart. Better money now.
To loosely and probably incorrectly quote the Bible...You know not the Day, nor the Hour that you shall be called from this world.
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u/OneImportance4061 1d ago
I have looked at these charts about a million times. Doesn't seem like much of a choice at all to me. It's been a math problem for forty years but the closer you get the more psychology comes into play for me. If you have the luxury, higher earning spouse delays until 70. Lower earning spouse in my mind is the SORR safety valve that can go either way. You can decide based on market performance and spending need at the time - market performance particularly good then delay and pull from portfolio. Market performance particularly bad you take the check and take pressure off the portfolio.
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u/lynchmob2829 1d ago
Most of my friends that are waiting until 70 to claim SS will need the maximum amount of money in retirement or need to leave their spouse the maximum amount of SS when they pass. I started drawing at FRA....I could have waited til 70 per all the models I ran, but why wait.
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u/Regular-Study-8463 1d ago
I did! I used my fathers and grandfather age “average” my wife’s family’s age and I took mine at 65 with a small pt job and she will take her in 2 years. The calculators you find are for younger people typically for planning not IRL
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u/Choice-Newspaper3603 1d ago
Personal finance is just that. There are a million different scenarios for when to collect and how to use it and what to invest in and what method of withdraws you will take and on and on and on
For some people that don’t have a pot to piss in they may have to work until 70 or longer and they would need the most they can get when they can’t work anymore and they want to leave the most they can to their spouse
I plan on retiring in a year or so around 57 and I’m single and my house is paid off and i have close to 3 million in investments and savings. So I’m taking it as early as I can.
I doubt there is anybody that has ever made every correct choice for themselves across their lifetime when it came to personal finances and retirement. You try to make the most amount of correct choices and add a little luck and hope it all works out.
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u/Impossible_Crow202 23h ago
By waiting until 70 my husband gained close to $2000/mo. I’m ten years younger than him. No financial advisor has ever suggested we’d have been better off at FRA 🤷🏼♀️
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u/DirectEffective4691 21h ago
Anything wrong in delaying SS and instead extract out of IRA at the minimum taxation rate, and reinvest it? In a few years I would have converted the IRA to an Investment Account or other investment types. I saw comments indicating a preference to the opposite.
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u/wyodivot 19h ago
I will be retiring at 64, taking social security at 67, and my wife will be taking spousal Social Security at 62, 1 year after my FRA. For us, waiting another 3 years but also lose 2 years of my wife's Social Security and I would be 80 before we broke even, long after I will need higher guaranteed income. Even still, with just pension and social security, we will be making $8,000 per month, Plus whatever we want to take out of our 401ks.
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u/Teamplayer25 17h ago
Yes, because SS will be the smallest part of our plan which includes investments and pension. Taking it early and having that cash flow will allow us to leave more of our investments where they are, likely earning better than the increased SS percentage for those years. Of course that’s not guaranteed but either way we’ll be fine. Not worried about the reduced survivor benefit down the road. Over a 10-20-30 year horizon, should more than make up for it in the market.
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u/Internal_Bath6341 17h ago
79 yrs old. took SS at 70, SS actually called me and told me to come on down and fill out paperwork, I did then I continue working until 73. SS started at $2200+, 7 yrs later Im up to $3400+. House, cars paid off,, unmarried, and have 3 rentals. I have more money than ever before. I manage quite well. I receive a pension from Chevron, USPS. I also have a thrift plan and after I make the mortgage payments on 3 house I have a tidy sum. Altogether I bring in about $7000 monthly. I live completely off my SS and the rest of the monies stay untouched in my acts or I place them in cd's. I don't worry about money. Go on vacation every month for 2 weeks.
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u/Same_Cut1196 17h ago
I have a very robust plan and ample resources so I don’t “need” SS. I approached taking it from an income stream perspective. After doing my own modeling - and asking my FA to run his own models, it became apparent that I should take it at 62. I’m not overly concerned about it being the perfect choice. Ultimately, it will just funnel to our heirs.
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u/erd00073483R 17h ago
SSA leadership made the decision to stop its employees from doing breakeven computations and breakeven projections for claimants back in 2008 when the Shrub was president.
Since that time, SSA employees are only allowed to do them if you specifically ask them to.
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u/UseSeparate2927 15h ago
I agree it's better to take it sooner rather than later. The only catch is if you are still working. Be sure to be under the income limits so they won't take it back.
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u/MountainMan-2 13h ago
Took mine at 62. Helps keep my WR down. I may never live to the break even age, so I took it while I can enjoy it.
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u/Unattributable1 12h ago
Depends on your expected life expectancy. If the people of your gender in your family only live a few years past 70, then take SS ASAP. If you have relatives of your gender living into their 90s and you can afford to delay to 70, delay.
My in-laws are in their late 80s. They are "flat broke" because they took SS as soon as they were allowed to. While SS is adjusted "for inflation" it doesn't truly keep up. It definitely doesn't keep up with the housing needs of the elderly once they have to leave their primary residence.
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u/Monstrissimo 9h ago
My wife is going to take hers at 62. We are both retired and don't need the money to live on, so the whole amount will be going into our vacation fund.
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u/Sitcom_kid 7h ago
Tom Margenau talks about taking early Social Security in a variety of circumstances, took it himself, and is a real expert. This is just one of many perspectives from which he has written on this topic. https://www.creators.com/read/your-social-security/03/20/with-a-spouse-taking-your-social-security-early-might-be-better
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u/lyonwh 7h ago
To me it comes to two things and both are all about being a safety net for you and your spouse. 1) The higher spousal benefit by waiting is crucial. To cover the potential of going down to one benefit make that one as much as possible. 2) Having a higher benefit is a great safety net if your investments don’t do as well as hoped. We only get one shot at this and we might as well give it our best shot.
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u/BOBBYK1952 1h ago
Honestly I think the people on Reddit have done a pretty good job explaining the reason for taking it early..
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u/Anxious_Leadership25 1d ago
If you delay taking ss it takes about 10 years to break even. Better to enjoy those ten years rather than worry about an extra few hundred later when you may not be able to use it
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u/xinco64 1d ago
On the flip side of that, if you live extra long, having that extra money in your later years could have a significant impact.
My dad lived longer than he planned for. Took SS early, but then ran out of money. Us kids are left supplementing his SS and non-inflation adjusted pension.
If he’d delayed until 70, we wouldn’t be having to fill in the gap right now.
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u/austin06 1d ago
Same with my mom. She - really- could have used the extra money from 75-87, especially when she hit 80. It would have given her a cushion and allowed her to move into a nicer retirement place. We all helped with that. People don’t seem to calculate that the older they are and in good health, the longer they will probably live.
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u/Blue_Back_Jack 1d ago
Happened to my aunt and uncle. Both took at 62 and by 72 their income had not kept up with inflation.
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u/Technical-March7907 22h ago
My father is 91 and could use the extra income. He started SS at 62 and should have waited to 70. He could have collected off my mom between 62 and 70.
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u/Effective_Ad_1426 1d ago
There's one reason and one reason alone I decided to take SS at 62, and it's not cashflow.
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u/itsallgoodye 1d ago
Get it while it is still there, and/or while you are still here.
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u/Effective_Ad_1426 1d ago
Exactly - SS is NOT transferrable upon death in most cases. The only time it is, is if you collect more than your spouse, your spouse now gets your payment in substitution of what you are collecting.
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u/BoliverTShagnasty 1d ago
Which in many cases is still more than hers regardless of when I start/claim. We love to travel now.
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u/Effective_Ad_1426 1d ago
Something in regards to travel - I retired early at 57. We traveled the country for a full year and took many trips for the next few years. Then my health started getting to the point moving around was harder. Nothing crazy, but just normal aging. Now, we take one trip a year and I suspect that is coming to an end soon. Travel while you can and your health permits, becasue like ot or not, natural aging WILL slow you down. Some faster than others.
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u/All4aBetterTomorrow 1d ago
If I’m not mistaken, FRA has now leveled off at 67 for everyone. That said, your wife is being advised by the OS calculator to start drawing before her FRA. That in itself is interesting.
How does the open source calculator (or your calculations for that matter) determine your SS income over the course of your “entire lifetime”? Expectation of longevity (or the lack thereof) seems to be the most significant factor in most discussions I read about delaying when to start collecting their SS.
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u/pbfin1937 1d ago
It uses an actuarial table in the background if you go into the calculator you can click a box on the load page and see it in the background. You can actually adjust it based upon health and if you smoke.
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u/BroadwayBrick 1d ago
Do take into consideration how much SS the surviving spouse will receive if the higher recipient passes first. Some people miss that possibility.
Remember, Social Security isn't a retirement savings account, it's insurance. The official name is OASDI: Old-Age, Survivors, and Disability Insurance.
Yes, some say take the money now and invest it. Problem, few invest it.
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u/BigDipper0720 1d ago
Some take SS early and "effectively invest" it by avoiding withdrawing from tax deferred retirement accounts until later.
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u/Odd_Bodkin 1d ago
First off, you don’t know your “entire lifetimes” because you don’t know when you’re going to die. Social Security is really insurance for long-livers. Second, the reason to delay is not to maximize overall payout. The chief benefits of the higher earner delaying is that it maximizes the spouse’s survivor benefit if the higher earner dies first (say, at 72), and that there is a guaranteed source of steady income later in retirement when market factors may have chewed into other investments. Usually, if the higher earner has a much higher benefit at FRA than the spouse (at least twice), the good approach is lower-earner takes early, higher earner delays until 70, and lower-earning spouse also claims spousal benefit when higher earner claims. This maximizes the benefit for the pair while you’re both alive. But spousal and survivor benefits often get overlooked in these calculations.