My thinking is: 1. I know how long my parents lived (into their 90s) 2. I know that SS goes up 6% every year until full retirement age 3. I know that SS goes up 8% every year after that until age 70 4. I know that SS adjusts for Cost of Living 5. I know that it can be difficult/stressful/risky to achieve that gain via investments 6. I know that I don't NEED SS income at the present time 7. I know that health care toward the end of life can be very expensive 8. I know that the longer I wait, the more my spouse will get via the Survivor benefit if I leave the party, early. None of us know how long we'll live - I choose to interpret this as "best to plan as though you'll live to 100." (Imagine running out of money at age 87 and trying to find a job. Based on the above, I'm waiting as long as possible.
Social Security is longevity insurance, or in other words, insurance providing payments to ensure you will not be broke in old age. With this insurance focus in mind, plan on no Social Security. Delay claiming as long as possible up to age 70. After age 62, if times are getting tough and you need it, then claim SS. Otherwise as you approach age 70 then claim it for the max benefit. If you are married, even more important to wait as long as possible. Or if you are wanting to give away money (while alive or dead) then claiming SS as early as possible might increase the amount you can give away.
EXACTLY! it's better to have more $$ when you need it than to have extra $ when you really don't need it. I'm retiring at 69.5 and even then waiting to 70.
SS Trustee reports funding issue around 2033. Under current law 23% benefit haircut…Means Testing could be implemented and haircut could be larger for those with “Means” (assets and/or income). Cannot model mathematically as we do not know future policy but a definite consideration in the decision
A big factor to me is the 50% withheld when you earn too much taking SS prior to your FRA. I see longevity in my family and currently in my mid 60’s, I plan to retire when I am 67. No income limit and I can also draw SS that January. Most people don’t even mention that. A double income my final year of working! If money is tight, I started drawing at age 66 and some months. If I chose to continue working, it’s a double income as long as I want to work. It then pushes out that “break even” point beyond 82 for me. I feel it’s important to be debt free when we retire. No house or car notes. There is talk of potentially getting a retirement package when I am planning to retire. If I take a jibe somewhere else, I could triple dip in the income pool for a year.
The spending smile is misleading too most people It's a statistic that is only as relevant as the study relates to you. Not all studies are including your situation For example the spending smile applies more to high net worth individuals than lower income individuals
Social Security is the base from which all other retirement income planning should be considered. That's why it's called a leg in the stool of retirement planning.
You've done some great analysis, well qualified (a better word than disclaimed, e.g. "keep in mind that this is only measuring..." or "this may be adversely affected by..."). Good work. I wonder about the Smile, You say a decrease of 1% per year, but inflation is more than that, so I was stumbling over whether the 1% is "after" or additive(I know you attempted to reference that very point).
Thank you. This was well thought out and presented. You touched on the lower earning spouse still collecting at 62. Is this usually or always the better case for most people? I am looking at this from a decent pension income and one spouse having earned 10X what the other did (they were home often and worked part time later on -Raising children, which was far more important to us). Thanks again.
I need to be careful to not give specific advice on this channel , in general, if the lower earning spouse is done earning (avoid earnings test), then it makes sense for one person to claim early… but not in every situation.
Hello Mr. Nick - Interesting concept and will look at your white paper. I would seem that waiting until 70 to Social Security (ignoring break-even) would give you greater annual capacity for total spending dollars especially during downturns in the economy, recessions or stagnation. Would you consider doing a more detailed video on full retirement age and 70? Thanks and great Job on the video.
It seems to me that it depends a lot on how big your portfolio is versus your SS basis. SS increases are roughly cost of living. Portfolio increases will beat this in the long run. Taking SS early gives you 8 years more for what you’re not using to grow.
Thank you for this video. My question is if I retire at age 62, for example, and delay collecting social security until age 67: does the amount of social security go up (or remain the same) if I collect social security at age 67 if I no longer work between my retirement at age 62 and collecting at age 67, thus no longer "contributing" to the "pot."
You’re welcome! If you wait to claim, it goes up by reason of the early penalty being lifted. This is separate from earnings contributions to the system.
Id rather have it when I can enjoy it at 65. Are you going to make it to 80? Also COLA helps with inflation. If you haven’t planned and are without substantial retirement accounts then maybe wait.
Let’s say a person’s social security would be $2,000 a month if he takes it at age 63. but he doesn't take it and it goes up 8%..so if at age 64 the amount would be $2,000 + 8%- or $2,160? And then if person waits until age 65 the monthly would be $2,160 + 8%- or $2,332?
Okay who knows when your expiration date is. Further by delaying Ss benefits you are actually physically contributing to to own higher benefits through work place deductions
I plan around worst case. So I take my current rent and add what my medicare would be then divide by .80 to factor in possible social security cut. That way I know I will at least have a place to live and cover the medicare cost. My biggest fear is being old and homeless. Using my social security statement 67 would be the earliest I would want to take it. Since I have nobody to rely on, and not a large savings, safety is my only concern.
My question. My wife died on active duty while we were in the Navy. When I reached age 62, I was allowed to take survivor benefits. I approach age 64 in Aug/2024. I could take my FRA SS at age 67, or age 70. I do receive retirement income from the Navy after nearly 30 years on active duty. Better to take my own at age 67 or age 70. I also have funds invested. Thanks.
Thank you for the question and your service. I can’t give specific advice on this channel beyond general education- but a question that may get you closer to your answer is “who am I delaying my social security for?” That being said , the principle from the video will probably still be true- more SS helps during the worst times. Yet- the difference in benefits felt (by waiting)may be less impactful or relevant.
I would have never taken it if they were going to take money what is it a dollar or two dollars for every dollar you make over a certain amount I'm trying to encourage my friend to get it now and may not be around when he's 70
Question,,after you get a social security desabibility report review, do they still send you a letter, even though you have a online account,,the reason i ask its because i can't get into my ss online account since i changed phones..
Top 2 criteria is your financial health and physical health. If both physical and financial health are good then I will delay taking my social security until 67 or 70 and if married then the breadwinner will delay taking the SS. If there is a bear financial market when I initially retire then I will modify my spending to draw down as little of my funds as possible without downgrading my standard of living.
Both my spouse and I our now retired and never paid so much for healthcare between our private insurances and reap off Medicare payments.must also consider this😂?!
Bottom line everyone’s situation is different. Married not married, Children no children, caring for elderly parents etc etc etc. My FRA is 67 and I was born in 67 kinda cool 😎. Start investing early in life and keep debt in check. At the end of the day it’s all a gamble.
Good question. Because 65 is not anyone’s full retirement age. However, the principle would still apply, ie. 65 would provide more resilience protection in bad times than say age 62.
"Desired, planned lifestyle." One of the foundational keys to financial success is living within a budget. If you haven't been doing that, and refuse to do that during retirement, then your odds of living a calm, peaceful financial plan during retirement are severely compromised. If you understand what a budget is, and can follow one, then 90% of what you talk about in this video is just that...talk. If you want to have a REAL discussion, mention how the SS surplus runs out in 8 years or so, and then they will only pay out around 78% of the promised benefit. SS has always been a huge rip-off to working class people, but it's going to get even worse.
Unless you’re in poor health there’s no real reason to take SS early. The question then becomes SS at FRA or 70. With 70 being prudent for the highest bread winner. However if the market takes a sudden down turn and you have an unfavorable sequence of returns. Then it might make more sense to take SS before 70. Giving the markets and your IRA time to recover before RMD’s kick in at 73 or 75. It really depends on sequence of returns between 67 and 70.
Well you've got to be healthy enough to make it to 67. If you can avoid cancer car accidents and cardiovascular disease then of course it makes sense. But if you have any health conditions or you live a dangerous lifestyle take the money when you can
My birth year is 1954. 6 months before I turn 65 I was able to apply and get full benefits. I also have degenerative thoracic cervical disc disease. Well that's too bad because at age 65. I guess I shot myself in the foot on not entitled to any SSDI. But they can give it all to the illegals because that's next
Most people are dying early. Let's see if you are a public employee you can retire at 55 and get full pension. If you are the average Joe by the late 50's you pray to God you make it to 62. Because your back is wacked and your crippled.
In economics we talk about “opportunity cost.” I took mine at the earliest moment because inflation of the currency supply is expected to become a hyperinflation event as the dollar dies, and the sooner dollars will buy a lot more gold and silver than the later dollars. When economic laws are in play worldwide and can’t be stopped, it’s time to take cover. Some seniors may want to get a reverse mortgage while they can and have a few ounces of gold to pay the taxes, insurance, and remaining balance. It won’t take much if you buy real money with bad currency, now, and can wait for a historical-scale blink of an eye. Real social security is, and always was, loving friends and family. Government programs have no tender mercies and a reputation for breaking contracts and other promises.
My thinking is:
1. I know how long my parents lived (into their 90s)
2. I know that SS goes up 6% every year until full retirement age
3. I know that SS goes up 8% every year after that until age 70
4. I know that SS adjusts for Cost of Living
5. I know that it can be difficult/stressful/risky to achieve that gain via investments
6. I know that I don't NEED SS income at the present time
7. I know that health care toward the end of life can be very expensive
8. I know that the longer I wait, the more my spouse will get via the Survivor benefit if I leave the party, early.
None of us know how long we'll live - I choose to interpret this as "best to plan as though you'll live to 100." (Imagine running out of money at age 87 and trying to find a job.
Based on the above, I'm waiting as long as possible.
Social Security is longevity insurance, or in other words, insurance providing payments to ensure you will not be broke in old age. With this insurance focus in mind, plan on no Social Security. Delay claiming as long as possible up to age 70. After age 62, if times are getting tough and you need it, then claim SS. Otherwise as you approach age 70 then claim it for the max benefit. If you are married, even more important to wait as long as possible. Or if you are wanting to give away money (while alive or dead) then claiming SS as early as possible might increase the amount you can give away.
Well said , those who plan or who are able think about doing these things when they can.
EXACTLY! it's better to have more $$ when you need it than to have extra $ when you really don't need it. I'm retiring at 69.5 and even then waiting to 70.
Good point !
SS Trustee reports funding issue around 2033. Under current law 23% benefit haircut…Means Testing could be implemented and haircut could be larger for those with “Means” (assets and/or income). Cannot model mathematically as we do not know future policy but a definite consideration in the decision
Who gets $6,000 a month in social security. I've never heard anyone getting that much.
Both spouses combined.
First time viewer, great presentation style!
Thank you kindly!
A big factor to me is the 50% withheld when you earn too much taking SS prior to your FRA.
I see longevity in my family and currently in my mid 60’s, I plan to retire when I am 67. No income limit and I can also draw SS that January. Most people don’t even mention that. A double income my final year of working! If money is tight, I started drawing at age 66 and some months. If I chose to continue working, it’s a double income as long as I want to work. It then pushes out that “break even” point beyond 82 for me.
I feel it’s important to be debt free when we retire. No house or car notes.
There is talk of potentially getting a retirement package when I am planning to retire. If I take a jibe somewhere else, I could triple dip in the income pool for a year.
Thanks for commenting!
The spending smile is misleading too most people
It's a statistic that is only as relevant as the study relates to you. Not all studies are including your situation
For example the spending smile applies more to high net worth individuals than lower income individuals
Social Security is the base from which all other retirement income planning should be considered. That's why it's called a leg in the stool of retirement planning.
Agreed .
I was just watching a video on this topic. Has me thinking I will delay until FRA
Good!
You've done some great analysis, well qualified (a better word than disclaimed, e.g. "keep in mind that this is only measuring..." or "this may be adversely affected by..."). Good work.
I wonder about the Smile, You say a decrease of 1% per year, but inflation is more than that, so I was stumbling over whether the 1% is "after" or additive(I know you attempted to reference that very point).
Thank you. This was well thought out and presented. You touched on the lower earning spouse still collecting at 62. Is this usually or always the better case for most people? I am looking at this from a decent pension income and one spouse having earned 10X what the other did (they were home often and worked part time later on -Raising children, which was far more important to us). Thanks again.
I need to be careful to not give specific advice on this channel , in general, if the lower earning spouse is done earning (avoid earnings test), then it makes sense for one person to claim early… but not in every situation.
Hello Mr. Nick - Interesting concept and will look at your white paper. I would seem that waiting until 70 to Social Security (ignoring break-even) would give you greater annual capacity for total spending dollars especially during downturns in the economy, recessions or stagnation. Would you consider doing a more detailed video on full retirement age and 70? Thanks and great Job on the video.
Will do! And thank you for the feedback.
It seems to me that it depends a lot on how big your portfolio is versus your SS basis. SS increases are roughly cost of living. Portfolio increases will beat this in the long run. Taking SS early gives you 8 years more for what you’re not using to grow.
Could also look at the impacts of RMDs on their $1.5 M of pre-tax assets at age 75. Spending assets down early by not drawing SS until 70 helps.
Very common tax planning strategy. Thanks for pointing that out !
Thank you for this video. My question is if I retire at age 62, for example, and delay collecting social security until age 67: does the amount of social security go up (or remain the same) if I collect social security at age 67 if I no longer work between my retirement at age 62 and collecting at age 67, thus no longer "contributing" to the "pot."
You’re welcome! If you wait to claim, it goes up by reason of the early penalty being lifted. This is separate from earnings contributions to the system.
Id rather have it when I can enjoy it at 65. Are you going to make it to 80? Also COLA helps with inflation. If you haven’t planned and are without substantial retirement accounts then maybe wait.
Let’s say a person’s social security would be $2,000 a month if he takes it at age 63.
but he doesn't take it and it goes up 8%..so if at age 64 the amount would be $2,000 + 8%- or $2,160?
And then if person waits until age 65 the monthly would be $2,160 + 8%- or $2,332?
Okay who knows when your expiration date is. Further by delaying Ss benefits you are actually physically contributing to to own higher benefits through work place deductions
I plan around worst case. So I take my current rent and add what my medicare would be then divide by .80 to factor in possible social security cut. That way I know I will at least have a place to live and cover the medicare cost. My biggest fear is being old and homeless. Using my social security statement 67 would be the earliest I would want to take it. Since I have nobody to rely on, and not a large savings, safety is my only concern.
My question.
My wife died on active duty while we were in the Navy.
When I reached age 62, I was allowed to take survivor benefits.
I approach age 64 in Aug/2024.
I could take my FRA SS at age 67, or age 70.
I do receive retirement income from the Navy after nearly 30 years on active duty.
Better to take my own at age 67 or age 70.
I also have funds invested.
Thanks.
Thank you for the question and your service. I can’t give specific advice on this channel beyond general education- but a question that may get you closer to your answer is “who am I delaying my social security for?” That being said , the principle from the video will probably still be true- more SS helps during the worst times. Yet- the difference in benefits felt (by waiting)may be less impactful or relevant.
I would have never taken it if they were going to take money what is it a dollar or two dollars for every dollar you make over a certain amount I'm trying to encourage my friend to get it now and may not be around when he's 70
I have a fixed income, how do i factor this in
Question,,after you get a social security desabibility report review, do they still send you a letter, even though you have a online account,,the reason i ask its because i can't get into my ss online account since i changed phones..
You might need to wait a few days and answer their security prompts to get access again.
My view is I want to optimize the highest about in later years since I have cash flow now.
Smart!
Top 2 criteria is your financial health and physical health. If both physical and financial health are good then I will delay taking my social security until 67 or 70 and if married then the breadwinner will delay taking the SS. If there is a bear financial market when I initially retire then I will modify my spending to draw down as little of my funds as possible without downgrading my standard of living.
Sounds like a plan!
If your spouse will only receive half your benefit does it pay to wait after 67 since her benefit will not increase any further?
Hypothetically, your PIA will still grow and increase her half/part (depending on if she takes it early or waits.)
Both my spouse and I our now retired and never paid so much for healthcare between our private insurances and reap off Medicare payments.must also consider this😂?!
Bottom line everyone’s situation is different. Married not married, Children no children, caring for elderly parents etc etc etc. My FRA is 67 and I was born in 67 kinda cool 😎. Start investing early in life and keep debt in check. At the end of the day it’s all a gamble.
Why 62, 67 and 70? Why was the option of 65 not included? Thank you.
Good question. Because 65 is not anyone’s full retirement age. However, the principle would still apply, ie. 65 would provide more resilience protection in bad times than say age 62.
80 is not worth it because youll spend a bit more in younger retirement…i.e. at 70 go travel with the higher ss income
My mom made it to 96. It's about how u take care of yourself
So true !
"Desired, planned lifestyle." One of the foundational keys to financial success is living within a budget. If you haven't been doing that, and refuse to do that during retirement, then your odds of living a calm, peaceful financial plan during retirement are severely compromised. If you understand what a budget is, and can follow one, then 90% of what you talk about in this video is just that...talk. If you want to have a REAL discussion, mention how the SS surplus runs out in 8 years or so, and then they will only pay out around 78% of the promised benefit. SS has always been a huge rip-off to working class people, but it's going to get even worse.
Unless you’re in poor health there’s no real reason to take SS early. The question then becomes SS at FRA or 70. With 70 being prudent for the highest bread winner. However if the market takes a sudden down turn and you have an unfavorable sequence of returns. Then it might make more sense to take SS before 70. Giving the markets and your IRA time to recover before RMD’s kick in at 73 or 75. It really depends on sequence of returns between 67 and 70.
Thanks for commenting!
Always take at 62. If a question, just invest the payment. It will grow probably more.
If you're married, you have to consider the effect of the age you begin to collect social security and your spouse
So true.
Take it at 66, if you are still working. Invest it or pay off debt, if needed. Don’t forget you have to pay tax on this income, too.
Math is the most poorly taught subject in the US . That’s easy to confirm when you see the huge percentage that take social security at 62.
Well you've got to be healthy enough to make it to 67. If you can avoid cancer car accidents and cardiovascular disease then of course it makes sense. But if you have any health conditions or you live a dangerous lifestyle take the money when you can
Yes, life expectancy does play into the decision!
I’m still working and taking social security stack it deep age 69
My birth year is 1954. 6 months before I turn 65 I was able to apply and get full benefits. I also have degenerative thoracic cervical disc disease. Well that's too bad because at age 65. I guess I shot myself in the foot on not entitled to any SSDI. But they can give it all to the illegals because that's next
Another way to keep us poor.
I want to retire at 65 not at 66 and 10 months.
Most people are dying early. Let's see if you are a public employee you can retire at 55 and get full pension. If you are the average Joe by the late 50's you pray to God you make it to 62. Because your back is wacked and your crippled.
In economics we talk about “opportunity cost.” I took mine at the earliest moment because inflation of the currency supply is expected to become a hyperinflation event as the dollar dies, and the sooner dollars will buy a lot more gold and silver than the later dollars. When economic laws are in play worldwide and can’t be stopped, it’s time to take cover.
Some seniors may want to get a reverse mortgage while they can and have a few ounces of gold to pay the taxes, insurance, and remaining balance. It won’t take much if you buy real money with bad currency, now, and can wait for a historical-scale blink of an eye.
Real social security is, and always was, loving friends and family. Government programs have no tender mercies and a reputation for breaking contracts and other promises.