Tim et al,
Recently on the TMF Retirement Investing board, intercst made a 12/5/2015 post about “Social Security Misconceptions That Impact Taxpayers” by a retired IRS research analyst who proffered that it doesn’t make sense to delay your SS benefit.
http://ssmisconceptions.solutions/
This post stirred a thread with a whopping 122 posts
http://discussion.fool.com/dont-wait-take-soc-security-now-32020…
of which IMO the following three were most noteworthy:
ptheland response to comment: Can someone bottom line this for me?
If you need Social Security to keep from eating cat food, take it at age 62.
If you don’t need Social Security at all, take it at age 62.
If you keep working from 62 to 67 and make more than $45k a year, you may as well wait until you stop working. You’ll have to give it back anyway.
If you are terminally ill, take it as soon as you can.
If you don’t fit one of those, you’ll have to do some thinking and analysis.
ItsGoingUp response to comment: And people who know that a dollar today is not the same as a dollar 8 years from today.
It’s simplistic to compare simply the number of dollars today and in the unknown future. But your implication is that inflation is the only relevant factor. In fact, there are a few things that can make dollars in the future much more valuable than dollars today.
Deflation is the obvious counter-possibility to inflation, but I don’t think that’s the important one. The real possibility is that the money is just much more useful to the individual in the future. At 62, if it’s the case that you have a $150K/year income and taking SS would add $30K/year then how useful is it really? But if, by some unfortunate chance, your income and savings disappear (fraud, mismanagement by dementia, identity theft, family disasters, etc.), then getting $40K/year because you put off taking SS until later will be a substantial improvement over $30K.
This is my situation. I’ve retired early with plenty of money to cover my needs (and wants). I won’t need any SS payments when I turn 62. So I’ll just wait until I do need it and take the higher amount then. I look at it as insurance in the case of disaster, and absent disaster it just won’t make much difference to me. If the insurance ever is needed, having it be more money with be a very good thing.
Only people who know how to do simple math.
When it comes to money the math is never simple. To get it right you always have to apply some personally defined utility function. It changes with time and fortune.
Goofyhoofy response to comment: 1 fear in retirement - outliving your money. The person that plans to take their SS at 70 is less likely to outlive their money, all else being equal. Even if my personal and family medical history were to suggest I will only live to 83, I still am going to plan (insure myself) against the posibility of such being wrong by planning to take SS later.
What is it you think you’re going to be doing when you’re 89? Jetting to Rio? Building a cabin on Lake Champlain?
My father just died at age 94. He was in a retirement home which promised to care for him “as long as he lived”, even if his assets ran out. (He had to have some assets on the way in to be depleted first, of course.) Dad had a portfolio of almost $2m, so no worries.
Mrs. Goofy’s father is still alive at age 92, and has recently over into a retirement home which has the same policy. He had less than $300,000 in assets, but they still took him. At $10,000/mo (nursing care) it will be gone in a few more months, but he will stay there until he dies, and the home will take his Social Security check as payment for however long that time left to him is. As he took it early, the check is less, but it ensures a retirement in this lovely home, with daily entertainments, decent food, movies, and companionship.
Meanwhile people are denuding themselves in their 60’s in the hopes of living to age 94, when they need be wheeled around by an aide, drooling at the mouth, so they can have a bigger Social Security check - which will be taken by the home regardless.
Bah. You can still have a full and active life in your 60’s and 70’s (and this is where somebody chimes in and says “But my Aunt Gertrude travelled to France when she was 87!” as though that’s typical.) Take the money while you can do something with it, not when all you get to do is sign it over to someone else.
Since my mom is 91 and in good health and last weekend our family celebrated my mother-in-law’s 104th birthday (she is amazingly in good physical and mental health), chances are my wife and I have long life genes [ http://www.newsweek.com/long-life-imprinted-genes-centenaria… ] and may be around a loooong time, barring any life threatening maladies or events. I started my Social Security benefits at age 66, when I retired with traditional IRAs, a company pension, and a 401K (all employer stock) that I rolled over to an IRA. My wife initially wanted to continue working to age 70, but decided to retire at age 68, when her company merged with another; she retired with an IRA and a company 401K rolled over to an IRA and started her Social Security benefits.
I’ve advised younger colleagues and friends, if they haven’t, to open IRAs (preferably Roth) and contribute the allowable maximum. Likewise, if their employers have 401K plans.
Regards,
Ray
BTW, the Retirement Investing board is excellent with savvy contributors.
but I have read many along with your knowledgebase. I’ve found we have some things in common in that we’re both retired, do not have a pension, and require IRA distributions to live on. I do however have the luxury of having a wife with a teacher’s pension.