Why I'm waiting for 70!
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- Опубликовано: 13 фев 2021
- If you are facing the question of whether to apply for Social Security at 62 or wait for maximum benefits at 70, this video will outline my thought process behind my decision to wait for 70.
Sure, some break-even calculations say why wait? But if you have a spouse counting on spousal benefits and more, the calculations could change.
I am not a financial professional, so take this video as entertaining ideas from one educated consumer to another. Always do your own due diligence and seek professional counsel for your specific situation. 
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Also check out newest video on the subject: Should My Wife File at 62? ruclips.net/video/Gz3qFhAnKpA/видео.html
I took SS at 70. Best financial decision of my life. But I salute anyone who can retire early.
I have talked to many people who took social security at 62.The most popular reason,is because, they say you don't know how much longer they will live,and want to get the money now,while they are still alive and can use it.They say ,there is no guarantee, you will see tomorrow,and you could die and get nothing.
Longevity may run in your family. It you do live into your 80s and 90s, wouldn’t it be better to have a larger benefit that will increase with COLAs? Those who retire with strong pensions may not care as much, but for many retirement savings are in 401ks and IRAs without guaranteed returns.
@@US_ARMY_25_INF._DIV. and how many that did?
Make your choice and then live with it.
It's a multivariate decision that cannot be taken lightly. If your spouse is ten years or more younger than you then you should wait until you are 70. Why, because her or his benefit will be higher in the long run. Like I said it is a not a decision to be taken lightly and you can't decide then hire an RIA to assist you with the decision pluses and minuses.
PS - This (waiting until you are 70) depends on if your spouse is still working, you both are on his or her medical and dental insurance, and savings outside your retirement money. You can also, like I did, get a monthly withdrawal from your 401k for expenses, if necessary.
Will they be disappointed if they don’t die ten years later
@@IwasRetiredjust because people in your family live does not always mean you will. And also it depends on what can kind of work a person does. Someone with a hard phisically demanding job their body are worn out. Working untill your 70 if your phisically worn out can not enjoy retirement. Just because people live longer does mean there quality of life is good.
Most people can either not afford to wait or they can't delay the gratification of getting their benifits now. I'm waiting until 70 for both my pension and social security. By waiting I'll be sure to be very comfortable into my 90's. It scares me that so many seniors have made no effort in their prime earning years to prepare for retirement. I wish everyone well, but I'm the little pig that built my home from brick and laid in supplies for the long winter.
Well put!
You have Zero guaranty When you will expire…
@@MichaelOliver-ry7fj my two newest vids prove that higher wage earner that waits assures better spousal and survivor benefits. It is different for single filers though.
Waited until 70! Now getting 4550 a month! When wife files we will get 80k a year from SSI! Sweet!
And you have maxed the survivor benefit for your wife with a benefit that will get a COLA every year. Waiting pays in most cases.
Took it at 70. Best for us
Pretty awesome and elaborate presentation! Thank you.
Glad it was helpful!
Seems to me that most people that wait until 70 to take SS do so because they have to--because they have no other savings and need the full benefit. So, they keep working up until that age. Many people that I know took the benefit as soon as they could and still work part-time. This way, they get to cut back to part-time work, have more free time and still have enough to make ends meet. Others will take it early because they don't need a full benefit and because they want it while they are still alive and don't know how long they will live. Still others will take SS early simply because they can afford to stop working early and SS isn't their only retirement income. There is no WRONG decision. Not everyone wants to work until 70 and not everyone will be able to work to 60 or 65, let alone 70. The choice is purely personal.
For me, the decision when to apply for Social Security was separate from the decision to retire (or accept that I was retired.) Too many people assume you must file for Social Security when you stop working, no sooner, no later. Pushed into a forced early retirement, I approached the decision knowing that I had other assets to hold off on Social Security until 70. It is purely a personal decision. If I had retired on time with a larger inflation-protected pension, I might take Social Security early. But for us, the larger benefit for a married couple recognizes Social Security's benefits as longevity insurance.
You are exactly right! Most folks don’t see the wisdom in wanting till 70 to draw SS. I’m the higher earner and my spouse is 3 years younger, I’m a CPA and still working, don’t need the SS now but waiting till 70 mainly because I want my wife to get my survivor benefits if I pass 1st.
Also the Medicare site does not show the choice to pay without social security but just have to call them. This would be good to hear from the youtube educators. I am not going to make videos.
I retired at 60 and I’m waiting on Social Security until 70. I have money and investments, a paid off house and no debts. My wife is 11 years younger than I am and she is retired too. But her work record is not as full as it should be for Social Security. The plan is for me to draw at 70 and she will draw when she turns 65 and goes on Medicare. Then when I pass on, she will inherit my much larger benefit for the rest of her life.
Wrong. We have $1.6 M in IRAs and two pensions. Still waiting until 70 for both. Solves longevity risk, sequence of return risk and rate of return risk.
One other note is all us old-timers should be very afraid/concerned about inflation. It is the biggest retirement planning killer and currently my biggest annual "expense"...loss of purchasing power of my savings. Really it is a tax.
One other non-financial note: Don't retire without a personal plan. Not working means a lot more time to fill each day. Relaxing a bit more is fine but you will soon need some purpose or goal(s) to keep you off the couch. Quickest way to a short retirement is to just sit down and fade away.
And that’s why I follow inflation news and the Fed! It is a big worry. And Social Security will have a COLA for later years that will help keep up. Thanks for watching.
Unless you have invested and have passive income coming in, with high inflation (like we have now) no way can you retire on a small IRA payout and small SS check. Additionally, once you take SS, you are limited to only making around $1,300/month before they start deducting your SS check on a 2/1 basis which turns into a headache reporting it and them sending letters "we overpaid you" now give it back with interest. There should be no limit on how much you make after taking Social Security.
Nice analysis. I am waiting to age 70 years to collect Social Security because I am planning to work until that age. And if I don't work until age 70, I will live on my own savings until age 70.
Thanks. My original plan was to work until 65 but collect SS at 70. An unexpected start of retirement at age 59 worked out for me though. Now I'm just turning 65 and moving to chapter two of my retirement.
You must have a desk job because most people that are out there busting their ass breakdown by the early 60 if they are lucky.
@@SamSam-dy3ct Correct. A desk job. I am one of the lucky ones.
@@robertjohnson4401 Only desk job people can retire at 66-plus the rest go on disability and then social security at the earliest. That is the reality of the American dream,
I have known roughly about twenty five men that did not make it to sixty five
Also another thing I’m taking into account for retiring at 50 and taking Social Security at 62,
my younger years I have more mobility, more fire in my belly for more hiking, backpacking, mountain biking, diving, hunting and other feral activities. As we get older, we do less, spend less, oatmeal is cheap
What does early retirement have to do with collecting Social Security 62?
You are allowed to save for early retirement and take advantage of retirement accounts and are progressive tax system
@@johngill2853
Many ways to skin a cat John.
@@coastalhillbilly3419 I agree
But I don't agree on advising other people to take it early because they can eat oatmeal later on in life. But at least you didn't tell them they can eat cat food
But seriously just save enough to have a good retirement (not eat oatmeal when older)
@@johngill2853We are all adults at 18 and have 30 to 50 years to plan for retirement, we should consider taking the same care, discipline and responsibility with our own finances and budgets as we do with our employers.
Also it’s a work in progress, policies, personal situations change, knowledge base expands and evolves, for instance you and others give some good arguments for and against social security at 62.
Personally I had not factored in IRA RMDs and additional Social Security taxes that would likely come along with it, it may very well be to our advantage to take after 62 and spend down our IRAs. I’ll keep digging and researching, it’s quite interesting trying to solve the tax Rubix Cube.
I will add my main regret so far is paying down a 3.6% home loan to almost zero for two reasons, our CDs are paying more than our loan is costing us, I figured this would happen but main regret is those additional after tax dollars could have kept us in a super low tax and college tuition bracket for many more years.
@@johngill2853I agree with you. Living our golden years in poverty is not very golden. It’s a huge decision.
It takes over 40 years to get full SSI at age 66, and only 4 more years to get 132% of SSI at 70. As long as you have good health or a lower earning spouse who would get you SSI at death, its a smart move. 82 is the break even. And if you die before 82 you wont miss the money you didn't get...
Thanks for watching. A couple corrections: SSI, or supplemental security income is the needs based program. SSA or SS is the benefits you earn through work history for yourself and your dependents. And your work history of 40 credits, roughly quarters of the year for full time, qualify you for retirement benefits. Obviously more you work more benefits you may receive. And then benefits are reduced for claiming early or increased for waiting after FRA.
One thing that you did not mention is the effect taxes have on your SS. If you should unfortunately have a large IRA balance and need to make Roth conversions to limit RMDs, the taxes on those IRA distributions are going to take a big bite out of your SS. I chose to convert as much from my IRA to Roth as I can (limiting my overall tax to around 15%) in the years before I start SS at 70.
With a small pension and continuing taxable income from interest and dividends, I'm afraid 85% of our Social Security will be taxed once it starts, regardless of strategies. But if you are lucky enough to manage income, completing Roth conversions before Social Security starts at 70 also lessens the taxable Social Security. Were you able to reduce the taxable share of Social Security to 50% or lower?
@@IwasRetired Haven't got there yet. But, with my IRA to Roth conversions each and every year I'll always be taxed on 85% of my SS no matter when I start collecting, unless the rules change.
Once you complete your Roth conversions, your taxes should decrease since Roth withdrawals are not taxed, reducing your taxable income and the amount of tax imposed on your SS.
Since I have a large pension and investments, I am waiting. Also because I am making Roth IRA conversions, and my IRMMA penalty for medicare would be higher now. Even though I am penalized for not taking medicare, I get the money back with higher SS benefits. Waiting to 70.
“Not taking Medicare?” Separate decision. I took Medicare at 65. The penalty for not filing when you are first eligible is steep! Unless you are still covered at work. See my videos on that subject!
@@IwasRetired The penalty is only 10% per year which is only 16$.
www.medicare.gov/basics/costs/medicare-costs/avoid-penalties How are you covering health care? Are you still working and covered by a qualifed plan? If so, you can avoid the penalty. If you aren't why delay Medicare enrollment? By the way, that penalty applies every year thereafter! and there are separate penalty amounts for Part B and Part D insurance premiums.
I have personally known about twenty five men that did not make it to sixty five
Another great video and advice…
Thanks brother 👍🏽🇺🇸
Good stuff. Thanks! I'm waiting to 70 for survivor benefits, too. My wife is filing at 66 and 8 months (FRA)...
People don’t wait because they’re (rightfully) concerned they’re going to kick the bucket before receiving ANY benefits after paying into SS their whole working lives.
If you are concerned about that and need the money, by all means file early. But if you have survivors who will depend on your benefit, or if you believe you will enjoy a long retirement, wait for it! I am nearing my FRA and ran the numbers again. Be sure to look for that update too. ruclips.net/video/DWAv-h6_bbM/видео.html
I have known about twenty five men that did not make it to sixty five
Thank you for answering some of my questions …with real,life examples …
Thanks! Also check out my update on this subject: ruclips.net/video/DWAv-h6_bbM/видео.html
I am now 71, retired at 66 and started SS at 70. My wife is 4.5 years younger than me and was a stay-at-home Mom. My delaying SS has given us great financial security going forward. Also, right after retirement not having SS allowed us to buy zero cost ACA insurance for my wife prior to her starting Medicare. I am very grateful SS gave us such flexibility.
Thanks for watching! I wish we could have done that but necessary income here in NJ meant ~$800/month for my wife's ACA insurance. I covered that dilemma in "Catch-22" video in my Getting Ready for Medicare playlist. Nearly as much for her alone, as for the both of us "when I was 64!"
@@IwasRetired I was lucky to understand the value of a Roth IRA early on and save there. That allowed me to bridge living expenses until SS start and still showed enough low income for zero cost ACA for my wife. What a great deal. Thanks for the comment. I like your videos and subscribed.
I will likely wait until age 70 to take benefits. I am 62 now, and still working full time.
I think with 8% growth per year, and my wife 3 years younger, that’s the best choice for me.
The fact that you pay tax on 85% of benefit also contributes to social security being a good pension source. So want to get the max payout, and will try to stay healthy while pursuing longevity
Pursuing longevity sure beats the alternative! Thanks for following the channel.
The experts who I believe know what they're talking about and make common sense. So to speak. Tell you if you can afford to take it at 62. Take it but ultimately, if you cannot, then you have to wait till sixty seven or seventy
You know,I'm 2 years older than my husband I'm 65 and he is 63.I am glad you put this video out.Im Not filing probably till 70 I intend on working as much as I can untill then.We had some serious set backs in the past 10 years and pretty much had to start all over buying house repairing credit ect.I am thinking that if I work another 5 years that will boast my Years I did not work as much So I can still pay in till 70.And neither of us are wanting to just go home and wait to die.We dont have grandchildren and our 1 daughter is 43.So we are just going to pay off all our stuff and stay as active as we can.Noone knows what the future is My Dad died when he was my age and still working full time.I want to just live and do what I do untill I'm not here anymore.My husband feels the same way..We are not retiring untill we are forced to.So survivors bennifits is an Excellent reason.Who knows I might be Betty White!
Thanks for sharing. You should also look at my Catch-22 video on ACA and Medicare, one for each. The age gap is the issue! In your case, you only have two years for the ACA Catch-22. I'm four years older than my wife.
Great video! I'm six years younger than my husband, so a lot of what you said was pertinent to my situation. Thanks for sharing this.
Thanks for watching! I have a few more videos on Social Security benefits for couples. We are still waiting to file.
@@IwasRetired Great to hear. I just subscribed so I don't miss them! Thanks.
I am very impressed by your presentation skills and spreadsheet comparison modeling. Excellent job. Thank you.
Thank you for watching the video! Hope it helps in planning a successful DIY retirement!
@@IwasRetired yes it does.. I am retired since November of 2022 and I am on Medicare supplement plan G. I am entertaining to switch to Plan N but the saving in my area right now is not a big deal. Thanks again for your hard work and feedback.
I think there is a financial mistake that most are making. Everyone is only looking at the total amount of money that is coming from social security when comparing the income differences of age 62 versus 70.
But the mistake is that no one is adding in the income that you would receive if you continue to work while waiting to reach age 70.
For 8 years of not retiring, you are still making your normal income.
If you can continue working past Full Retirement Age, more power to you! However, most people who are retired discover they retired sooner than they expected. Health or job loss could launch a retirement. In those cases, it may not be feasible to work into your 70s. In my career, I was retired at 59. Could I have continued to work in some capacity? Yes. But it would not have been my chosen career. Ageism is a real threat in many fields. So my choice is for a married couple facing the choice between 62, FRA, and 70. It pays to wait for 70.
You & I are the same age & I’ve been following your videos & we’re of like mind on things. I’ll continue working through next year, & then hang it up. You left a couple of things out in the discussion of why people don’t wait until 70, like we plan to do. One of those things is taking the benefit anytime after 62 & then investing it. If anyone did that over the past 5-7 years, they would have been way ahead with even a moderate risk portfolio. If I decided to collect today, there’s no way I could reasonably expect to get those kind of returns for the next 5 years. I’d rather have the yearly 8% increase. The other reason I’m waiting is because I have substantial savings in deferred tax accounts, so no sense mixing in SS benefits that will be subject to tax. It’s important for others in similar situations to ours that they live off of those deferred tax accounts & convert whatever they can to Roth………BTW, my second home is in OCNJ. I’m pretty sure you’ve been there!
Thanks, Mark, for pointing out some additional reasons to wait for 70. I agree, there is no need to rush to pay the tax on 85% of our SS benefits. Many married couples with a pension and tax-deferred RMDs will easily be over the low thresholds and have to pay tax on 85% of their benefits. And while I've been to OCNJ, I'm not sure I've been to your second home. ;)
Excellent breakdown! Also, if you've made it to retirement age, your odds of reaching the break-even point is pretty high.
Funny you should mention that! Be sure to watch tomorrow's video....
People are so focused on the break even so that they maximize what the government pays them. They’d be better off finding jobs that they like enough to continue working until at least FRA. And they need to consider how they’re going to live on what they’re going to receive. Strangely many people will tell you that they can’t live on SS. You would think that they would have tried to live on the expected SS amount before quitting their jobs.
Keep in mind when you retire and when you file for Social Security are two separate decisions. Sometimes, you get no choice on the first. I know. I was retired. But I'm waiting for 70 because I have done the math. And I have saved enough to fund from age 59 to 70 on my own to use SS as longevity insurance.
@@IwasRetired yes and most importantly if you are before FRA collecting SS and working, you’ll end up losing some of that SS income if you work too much.
One of the biggest mistakes is to take social security at 62 while still working and start living off the combined income that pretty much assures you’ll never retire. This form of lifestyle creep is very dangerous to your retirement.
Lots of problems with working and filing at 62, including the earnings cap that will suspend benefits.
I went to SS two weeks ago and will start my age 70 benefit in September. What surprised me was the woman at SS made me an offer. I wasn't prepared for it. She said that I could take $95 less each month (pmt is 2387) and for giving that 95 up I would get a payout of $4700. I'm not sure if the $4700 is correct because I did not write it down. I said no thanks I want the $95. Is seemed to me that I would be harming myself to do that. Why? The $4700 would be gone by the end of the year. There's never enough. The $95 will always be there for me. I enjoyed this video.
Thanks for watching, and thanks for the caution against that "money up front" offer from Social Security. You made the right call! I've done a lot of reading on that attempt to buy down what you have waited to receive!
@@IwasRetired Thanks for the reply. I am looking forward to your video's. Will try and follow your spreadsheets. Thanks again!
Great start. I am generally in agreement and independently am on a similar path.
A couple of constructive criticisms/suggestions.
Add a section or new video on the impact of taxes on your Social Security choices. Include some info on IRA/401k/Roth withdrawals and RMD's and where to target these retirement accounts balances to manage your tax bracket in retirement with SS in mind.
Also your inputs on inflation are way off. Use some more realistic inputs. Maybe Monte Carlo for 2% to 12% inflation for the next 20-30 years.
I liked your point of a guaranteed 8 % gain per year in your SS "annuity" which is very good compared to similar commercial annuity products. Kicker is 8% annuity benefit growth per year and (somewhat) inflation protected also. This is an extraordinary combination of benefits. On top of that your COLA is applied to a larger base when you delay so your annual increases are more dollars.
Great point on survivor benefits. Spousal benefits: please mention recent changes to the plan if your spouse has a government pension. Hard to get much of a spousal benefit if she does.
Not sure but I think if you are projecting income streams out a long way into the future there should be some compound discount factor applied to future payments as well as inflation adjustments.
I enjoyed your video. Info was clearly presented and brought a lot of info to the Public Square.
Thanks!
Thanks for watching. Take a look at some of my other videos for lessons learned. Can’t speak to government pensions and Social Security since I haven’t dealt with that issue but other videos tackle my strategies for withdrawals.
My view is if I wait to collect and bet on living longer and I am right I will be happy when I am old and my decision works out. If I am wrong and die before the break even, I won’t know I was wrong since I will be dead. Also, I currently have other assets including an inheritance to get me to 70 without SS but if I live until 90+ the higher SS with larger Cola adjustments is a nice insurance policy. I do understand the other argument that is you can collect early and invest or travel more while you have the health and energy so it’s not a slam dunk.
Thanks for sharing!
Liked and subscribed.
Thanks!
Thank you. I wrestle with this. My benefit will be much higher and as luck has it, I am 2.5 years older than my wife. I think I might wait until 70 and as she will be almost 67 then we file and go the distance if we can. I do wonder if she should collect in her own name sooner, even at 62, and then get the reduced step-up spousal raise when I file at 70 and she is 66 and 4 months? As a cavate we do have pension income and decent savings, so this is not a "we need it to live on" decision but more of a long-term keeping up with inflation decision.
My later videos cover some of this. Model with a free tool, Open Social Security or New Retirement, but create scenarios with variables that make sense for you And decide what is best. After that, don’t look back!
@@IwasRetired Thank you, I'm watching it now!
People who lose their teeth later in life eat alot of processed food because it doesn’t require alot of chewing. If you eat processed food, you lose your teeth because you’re not chewing. You have to chew your food or the bone becomes soft from lack of pressure to teeth. Its the same for all your bones. If you are inactive, your bones get brittle from lack of resistance. I’m not trying to coddle the feelings of people with poor health at 62. They did it to themselves. Doctors know better, but they are after your money. They want to keep you alive, but telling you the truth could vanquish their cash cow if your “feelings” are hurt. Most people take SS at 62. Cognitive decline and arthritis from animal fat diets makes working past 62 a struggle. Vegetarians, pescaterians and even vegans, are working longer and maintaining remarkable cognitive function and flexibility in range of motion job requirements. Exercise is oxygenating your body. The breakdown of your body is lack of oxygen and lowered ph from poor diet. People could EASILY work to 70 IF they had a decent diet and did aerobic exercise. In many Asian countries its not uncommon to see VERY old men working in the fields harvesting food. They are at ages American men have long since retired and became incapable of trimming a rose bush, much less digging holes with a shovel.
By the time he's 82-1/2 how much money is he going to need? Most people I know that are 82-1/2 don't spend much money cause they are too old to travel and enjoy life.
No spousal benefit for us as our social security benefits are equal. No male in our family has EVER lived past 83 one of the five brothers in this generation passed at 73. 🤔
Obviously, you need to plan with what you know about your family history. But also consider longevity risks. You may outlive your siblings. Will your plan work if you do live to 90? Compare scenarios for this to be sure. BTW, my Dad died at 61, my older brother died at 67. I know about family risks. But my plan is looking at the what ifs. My grandmother died at 95.
Great explanation of a complicated topic. I am 63. Work by choice not by necessity and am leaning heavily toward taking SS at 70. However we have the means to retire tomorrow if I choose to. My problem? I love my job and have too much fun doing it. I did try out retirement at 58 but got bored after 6 months. I am not a workaholic but love having challenges which keep me young-minded.
Good to hear! Thanks for viewing and continue your journey to a secure future.
I've known roughly twenty five men that did not make it to sixty five
What if they reduce the benefit amount before you retire? If you already have a settled amount and received your checks then you will be grandfathered into the old system and protected from these changes. I retired early and put my SS check in investments and by the time I was FRA (Full Retirement Age) I made three times more than I could have received at age 70. I also had a couple of near-death situations that could have stopped it all. Now I'm 68 and enjoying my retirement while I'm still young enough to enjoy it with a $12k a month income with only $2949 from SSA for the rest of my life. Life is too short to waste just waiting for money. My life is more valuable than a little 8% a year. I would suggest getting a second or third job and paying more into the SS system your last three years before you retire to receive a larger SS check. Your SS check is based on how much you put into the system. Good luck and wishing you a happy retirement while you are young enough to enjoy it.
That $2,949 a month goes up with a COLA each year, right? Filing early and investing worked out for you, but anyone trying that should beware sequence of return risk. Keep in mind that retiring and enjoying life while you can and filing for Social Security are two separate decisions. I retired at 59, enjoyed travel pre-COVID, and I've said it was the best decision I never made. I was retired. I'm just getting back to traveling again and have comfort knowing that when I file at 70, I'll have another COLA adjusted income source to go with a very small pension. The rest of the retirement funds are protected with a three-bucket system to stay invested in equity as another hedge on inflation late in retirement.
Note, the graph is for someone who is born in 1954 or before. Those between 1955 and 1959 will see the additional benefit at 70 go down from 32% to 26% in a step down form over those years. That being said waiting until 70 still makes sense because if they do have to cut in 2034 the amount is estimated to be around 21%. That still leaves you slightly ahead of your FRA benefit. A question I have, does it make sense for both spouses to wait until 70 if their benefits are not that much different? Let's say the difference in FRA is about $500. Should the lower earning spouse take a spousal benefit, or take their benefit at FRA instead of waiting?
I'll have to go back to my notes on the graphs. On spousal filing options, opensocialsecurity.com is a great free engine. One spouse filing early can be advantageous.
Never ever factored into these "62 or 70" discussions is the working income of those 8 years. Typically very high income years with little debt, hopefully.
What should be taught AT ONCE is for people to make sure at 35....40 they are in a career or vocation they really enjoy. By 50-55 transforming that career into some kind of a part time business on the side. Unleashing the creative talents we all have to meet the challenges of our 60 & over years. Filing at 62 to live on tomato soup & crackers is not a plan.
I'm 1 month away from my 68th birthday. I retired at ags 65 but I plan to file at 70. I'm still healthy. I'm living off distributions from my IRA. I have converted some of my IRA to a ROTH. I want to minimize the money that I have left in my IRA before RMDs start at age 73. I plan to spend all my IRA and ROTH savings between age 70 and 80. This is because out of 5 man age 65, only 3 of those are still alive at 80 and at most, 1 is alive at age 90. Meaning, a lot of suffering and dying happens after age 80. But, if I'm lucky or unlucky enough to live past age 80, then the maximum benefit from social at age 70, of likely $5000 a month, should cover my expenses during my decrepit years.
My strategic withdrawal strategy is designed to use our retirement savings for OUR retirement. If there is some left over for a legacy, fine, but we also have paid-up life insurance that will provide additional benefits for heirs. Waiting until 70, and my wife waiting until FRA for spousal benefits, means we will take maximum benefits, with COLAs for the rest of our lives.
@IwasRetired Yep. I'm single, no kids. I have 2 brothers, and they have their own family. But, they both have plenty of their own money. So yes, I'm going to enjoy my 70+ years. The only thing that will limit my income for now is the threshold income to minimize the Medicare Plan B monthly fee. That income is just under $100K of taxable income a year for singles. ROTH distributions will not impact that or the provisional income calculations with social security payments in the future. That is why I currently live out of IRA and let the ROTH investments build until I have a need to have income over that $100K Medicare threshold in any given year, e.g. new car or house.
Social Security is the opposite of life insurance. With life insurance you have to die to have it collected. With social security you have to be alive to collect it. Many couples earn roughly the same amount so the spousal benefit is not a factor. If your worried about your spouse a twenty your term policy at age 50 will protect them for those 20 years where the money is most needed.
See my video on My Whole Life. ruclips.net/video/P-qZrb-a3G4/видео.html
I have permanent life insurance because it was right for my strategy.
It is there to replace a portion of my pension since I elected a 50% survivor option. SS benefits though immediately provide 100% of my benefit as a survivor benefit. Even for women who are dual-eligible, they will receive survivor benefit if it is larger. You are right that an increasing share of women are dual-eligible, and a growing share earn enough not to need a spousal benefit. But a significant share of Baby Boomers do rely on spousal benefits to at least top off. Younger generations may indeed have different claiming strategies.
www.ssa.gov/policy/docs/chartbooks/fast_facts/2022/fast_facts22.html#page22
I am almost 61. I would like to wait til 70 if possible. That way between pension and SS ....I would have 97% income replacement compared to working. But I retired at 56 and not sure if I can make it til 70 on the pension and savings. Going to try though.
I use the three bucket system to ensure I can wait until 70. And coincidently, there are nine years in my Bucket 1 and Bucket 2.
The SS payouts regardless of what age you take them are equal. Take it early and you get more smaller payments. Take it later and you get fewer larger payments. SS should not be evaluated by itself. One needs to consider taxes, other investments and more. Break even analysis is not the full picture. It's a NPV value of future cash payment analysis. Remember "Money Doesn't Grow on Fees".
For me, maximizing survivor benefit for when I’m gone was more important that NPV. Net future value for your loved one. I know I will have done what I can to do that!
So many say 62! Other say NO!Wait until 70! I'm thinking split the difference and take it at 65 w Medicare? I am 61 so no spouse concerns.
As a single retiree, the choice is really yours alone. Map out your retirement budget taking at 65 and then 67, your FRA. Don’t do it at 65 for Medicare billing alone. I found it very easy to set up auto pay from a checking account. Do it because your cash flow will work by taking it early. Or wait if the larger benefit will help later in retirement.
Here is the problem with your thought process. Waiting until 70 to collect your Social Security does not always get you more money, in fact more often than you might think you get less money. Don't get caught in that trap that more per month means more total money. It doesn't. There is only one way for you to know if waiting will get you more money and that is if you already know the date you will die. I retired 7 years ago at age 62 and began taking my Social Security right away. Why? Simple there is no way to know that waiting will get you more money. The reason you get less at 62 is because you will draw the money for a longer period of time. It's not magic, it's just math. By taking the money at 62 I will already have recieved 48 payments before the person who waits until age 66 and a full 96 payments before before the person who waits until age 70. So here is the real truth. If you die before age 80 I win. If you die after age 80 then you win. It's just that simple. All the other numbers are just BS. The one truth you need to know is that more per month does not mean more total and less per month does not mean less total. This is not a case of of "the person who dies with more money wins". Money is not now, nor has it ever been, or will it ever be the most important thing.
Yes, you are right if the decision is simply how much money I will collect. But as the end of this video explains, I'm making this decision to wait for 70 to maximize the survivor benefit for my wife, who will likely survive me. I've provided for my family. And waiting will mean the highest survivor benefit for her.
@@IwasRetired Again, you have no way of knowing that unless you have the date of her death as well. Look everyone needs to do what is best for them. There is no magic formula because we simply don't have all of the information we need in advance. The best thing any of us can do is to run all the numbers and do what we think is best. My experience has been if you are only running the numbers base on best outcomes, you may not be making the best decisions. At the end of the life simply is not all about the money. Once you have more money than you will ever spend it's time to stop thinking about the money and make the days you have left the best ones they can be. Truth be told I'm not worried about my wife. She made more money than me and her monthly benifit is higher than mine. The single biggest reason I retired at 62 is not because I needed the money. It wasn't even because of my health. It also wasn't because I think the money will run out. Heck, the money isn't there now. It's just made up money. The single biggest reason I retired at 62 is because my wife thought I was working too hard and she wanted me to retire. When your wife asks you to retire, you retire. Truth be told, this video should not be telling people to wait because they will get more money. That simply isn't the truth and there is no way to know what the truth is. It's all a guessing game. Unless you know the date of your death you simply can't know which choice is the best. I took the "it's my money and I want it back" approach. Argue all you want about monthy payments, but I have been retired 7 years now and have not touched a dime of my ritirement money. At this rate, how long will my retirment money last. If you said it will last until I die you are correct and it does not matter when I die. Truth be told, at the end of the day, it's not about the money...It's never about the money.
Exactly
No one dies and says I wish I would have worked longer.
@@willsr.9154 I ran an interesting experiment this morning. Does it pay to wait? The numbers say no. I looked at the local obits this morning. 80 percent of the people listed there died at less than 80 years old. That means that the folks on that list who took the money at 62 recieved more money than the people who waited until age 70. My break even point was 79 years 8 months. I took the money at 62 for none of the reasons you state. I took the money because it's my money and I wanted it back as soon as possible. You are telling people it's best to wait till age 70 and you have no idea if that is true, or not because you don't have all the numbers you need to know that. Unless you know the date of a person's death, you can't know what's the best decision to make. It's not that complicated. In fact, it's 8th grade math. Do you really think the Social Security has your best interest in mind when they offer you that "incentive to wait". They do not. They do it because it's better for them. Never forget that. The idea that "it pays to wait" is simply false.
I have known roughly about twenty five men that did not make it to sixty five
I know so many single people who started collecting their SS at 70 but continue to work "full-time" past age 70. I guess a lot of their SS and/or their paycheck will go to IRS, right? How much SS will they lose? How much of their paycheck will they lose?
Earnings test only applies up to the Full Retirement Age. Now, the combined income formula (1/2 of SS benefits plus other income) means more of the Social Security will be taxed at your tax bracket, but if you are earning and receiving benefits, just count on 85% of your benefits being taxable anyway.
@@IwasRetired So, it's better not to work FT past 70, right? Since 85% will be taxed and so little SS will be left, right?
@@morgane8947 No, 85% of your Social Security will be included in your taxable income, at what ever your tax bracket. Since IRS has never changed the thresholds for 50% and 85% of SS included in taxable income, more and more recipients need to count on 85% of benefits being taxed along with your pension and IRA withdrawals.
how can i get your calculating format I've always believed on waiting to 70
I have put spreadsheets on the Google Site linked in the About section. There is also a video about the spreadsheets in the playlist. I work in Numbers but had to translate them to posts them to share to Google Sheets.
I really want to take social security at 70. But I’ve been on social security disability at 64 and now I’m the full retirement age of 66 1/2. Because I’ve been on disability they automatically switch me to social security then.
Yes and a very valid reason to take at FRA. Prayers for a successful retirement.
I am waiting for 70 for my benefits. I currently get survivor benefits but get a substantial increase at age 70. Everybody's individual circumstances are different. There is no one right answer.
Totally agree! Every person needs to weigh all the factors for their circumstances.
Nicely done, one question, what if "jane" had a small ss benefit, and took it at 62, what happens to the spousal benefit then? If her spouse waited till fra? Does she get an increase?
Yes, but the formula includes a reduction in spousal benefits because Jane started her own benefit at 62. opensocialsecurity.com This website has a great free calculator to determine optimal filing. I just ran similar numbers to my example and assume Jane had PIA of $950, she could start receiving $697/mo at 62, and then bump up to add a spousal benefit of $556/mo when her husband files at 70.
@@IwasRetired ahh, thanks so much. Your explanation is excellent
Have you factored in what the government could do with the upcoming digital currencies?
In a sense, digital currency is already here. We live in a world of credit cards, auto payments, and C2C electronic payments. It won't factor into my Social Security claiming strategy.
Okay thank you.
When I was working I had a Meetup for web designers and half or more were older men that were forced into retirement because of bad corporate practice. Demographics show cancer rates increase greatly in your 60s so corporations let men go before then. I wanted to work to 70 but I was retired at 65. I couldn't find work so what choice did I or these men that I worked with have? Ageism is real.
I know. I was retired, at one month before 59. But fortunately, I spent my 50s saving and paying down debt. I was ready for a forced landing of my retirement.
I too was retired. At age 63 I lost my job. I like you thought I wait until at least FRA. Then I was informed that my benefit amount would not increase after I quit work because I was not paying into SS any more. I would only get the yearly COLA if any. Are you sure the benefit will still grow at 8% even if you are not paying into Social Security? Thanks!
Yes your benefits are set by your 35 top earning years. But you do get COLA whether you receive the benefit or not. Go to your my social security account to see your benefit amounts.
The annual COLA adjustment is figured into your SS benefit amt starting with the year u turn 62 ..regardless of whether u file at 62, 65, 67, or all the way to 70. This is true even if u quit working at 55, at 58, or at 60 (ie regardless of age u stop working).
@@bhinbayoucity5691 Thanks for clarifying.
@@IwasRetired… No cola between age 60 to age 62 also the AWI stops in the year you turn 60 . So no cola or wage indexing from age 60 to 62.
I am 68 I filed at 66 and 2months to show more income for a condo other wise I would have waited for 70
Thanks for pointing out another reason that makes when to file such a personal decision!
What about the potential loss of your income for the three years between 67 and 70. This is guaranteed income and you could be a lot more risky or with your investments.
Social Security credits increase payment by 8% a year while you are waiting for 70. In the meantime, I'm spending down Tax-Deferred balances resulting in lower RMDs later in retirement. While equity investments might do better over those three years, they also may do worse. I'll take the guaranteed 8% return by waiting for 70.
See this video on why I don't take the benefit at 67 and invest it. ruclips.net/video/fx3NaqcORKk/видео.html
I'll do at 65.. i dk when i will die
The three reasons not to wait: (1) you have saved enough or have a generous pension (2) your health won't permit continuing to work (3) you can't find a job that pays enough to live on
Not only will benefits increase 8 percent a year for each year that you wait after age 62, but there will be COLA that isn't calculated into the published schedules. In 2022 the future COLA looks to be significant. That's likely to continue giving the current economy.
If I die before I reach age 70, I'll be with Jesus. If I continue working until age 70 I'll maximize my benefits . Then, I may live more than 20 years beyond 70 as did my father, who was healthy and active until the end. Work isn't a prison, its a privilege. I'm not going to plan to retire as long as my 401K and IRA are doing poorly.
Thanks for sharing your views. If you need to file early, that's right for you. Also, if you wait until 70, you will maximize benefits. Sounds like that is still your plan. Note to all, the COLA is calculated into your future benefits, but yearly. For instance, my FRA benefit just went from $3,104 to $3,374 with the latest COLA, with similar increases in projected age 70 benefits. Each year, until I claim at 70, I expect that to happen. You DO NOT need to claim early to get your COLA!
If you view work as a privilege, do it as long as you want. But know that you can also be forced to retire early, and choose to delay SS benefits to age 70 if you have built up enough savings to manage. That is the path I am traveling.
I know another guy who is working well past 72 and contributing to a 401K because he gets to delay RMAs if he is actively employed in the plan. And he loves his work.
Personal finance is personal!
@@IwasRetired i did not know that I could delay RMD at age 72 in a 401K if I was still sctively contributing to the 401K plan.
I've listened to quite a few experts that I trust. And they say if you can afford to take it at 62. Take it but obviously, if you cannot, then you have to wait till sixty seven or seventy
What if we dont live until 70?
Your survivor gets the survivor benefit as if you had filed at age of death so my wife will get the highest survivor benefit I could give her.
How Sad for people to have to keep working until the are 70.
Freedom means the freedom to continue to work if you want. I know some people who do work into their 70s. But when you apply for Social Security is completely different from when you stop working. For me, I had the choice of trying to find another job at 59 or to recognize I had the freedom to retire and begin my next chapter. I also had the freedom to choose to wait until 70 to file for Social Security.
If waiting for seventy is good why don't you wait till ninety two?
For each year between Full Retirement Age and 70, your benefit amount increases by about 8%. You only earn these benefit increases until age 70. Conversely, you are penalized for taking Social Security before FRA, between age 62 and your FRA.
82 : how many people live to be 82?
www2.census.gov/library/publications/decennial/2020/census-briefs/c2020br-07.pdf Latest report from 2020 Census, about 6% of the U.S. population is 85+ years old. And reports show aging of U.S. population so who knows what percentage that will be by the time you are 85? I look at Social Security as longevity insurance. What happens if you are among the number reaching old age?
Well "
No one died before 70 and said i should of worked longer...
62 is it for me tomorrow is no promise and you never got to enjoy the fruits of your labor.
When you stop working and enjoy retirement, and when you file for Social Security, with a COLA increase guaranteed for the rest of your life, are two separate questions. If you have savings to take you from 62 to 67 or 70, then those are the choices you can make on when to begin Social Security.
Why did I choose to retire at 62? Because I couldn't afford to retire at 52. 😂
Well, I beat you. I retired at 59, but I decided to use Social Security for longevity insurance.
Y wait do u know when I will die
No, and that is the point. Suppose I die at 95? Won't I look smart with the maximum Social Security benefit with a COLA for 25 years? I view Social Security as a longevity insurance for our retirement. And filing later maximizes spousal benefits for my wife too, which will also get COLA for the years she is collecting that. And I'll give her the highest survivor benefit -- with a COLA -- that I can based on my actions. When she collects that will be up to someone far above my pay grade!
@@IwasRetired what if u die at 70
@@bruceeigsti5274 My wife will get maximum survivor's benefit with COLA for the rest of her life, plus all the inherited wealth. Then unfortunately, she will be in a single tax bracket, but she will manage. Meanwhile, I'll be sitting pretty up there!
I have personally known about twenty five men that did not make it to sixty five, including my godfather bobby, who died at sixty one, never saw a cent
Exactly @@US_ARMY_25_INF._DIV.
Take Social Security at 70, but start doing Roth conversions long before that!
Yes, but without triggering any unintended consequences, like higher ACA prices, or tripping into the next tax brackets, or triggering IRMAA.
Healthy ? Enjoy your work ? Wait til 70. My work is done here.
Well my channel tells the story of what happened when I was forced into retirement. Even if you like your work, you may not get a choice. And when you start Social Security is a separate decision.
@@IwasRetired People collect at 62 because they hate their work. Decisions they make at 25 ....30 come back to haunt them soon thereafter. Once married with a kid or two they can't leave the job they hate.
To ward off the frustration they eat poorly, smoke, drink or smoke weed.
Setting up our current epidemic of 55+ year old people in terrible physical condition crawling to 62 counting the hours til they can collect. Very sad.
Take it early and invest it. That way if you die your heirs get the money 💰. Also, you are always better off taking it and invest it. Not many people tell you that....I wonder why??
Hi, Bruce. For me, the survivor benefits were the tipping point. I like the idea of a longevity investment that grows 8% a year between FRA and 70. I did the math and came up with my decision. If you can beat those odds, more power to you.
Delaying your SS benefit gives you a government guaranteed rate of return of 8% a year....show me an alternative investment that is that attractive
Never ever factored into the 62-70 equation : That $ 8 years of income. Typically pretty high earning years. A great $ launching pad into retirement at 70. Also- if I drop dead on my 70th birthday , oh well. At least my wife will get my much higher 70 soc sec pmt. She can sleep a little better at night & visit the grandkiddies more often. 62 is way too young. Healthy folks will see mid 90s.
No male in our family of five ever lived past 83 one passed at 73.
People file early because they are obese and lazy. They don’t expect a long life because they didn’t take care of themselves. If you have had surgeries, or you have lost teeth by the age of 62, you better retire. But if you weigh the same as you did as a senior in high school and have your own teeth, you probably are having good health and might consider retiring much later.
A little harsh! Please be respectful to those who may need to file at 62 for health or financial reasons. And why so pre-occupied with teeth!
I know around 3 guys who wanted to wait till 70 they all died at 68 NEVER COLLECTING A PENNY. WHO ARE YOU WORKING FOR?
My wife! Maximum survivor benefits will be given to her by my decision to wait until 70. If I die at 68, I will give her a surivor benefit as if I had filed at death. If you are single, the math may change in favor of FRA, but for many married couples, especially with one spouse who relies on spousal and survivor benefits, it makes sense to wait.
Sorry I don’t agree with your opinion life is not guaranteed
Nor is your ability to know how long you might live. A COLA benefit in your advanced years may make a difference.
Sounds like you failed and want a lower expected outcome for you and others.
Huh?
I’m sick about this. I took mine at 65 and I should have waited until 70. Kick me now.
After the first 12 months there is no looking back. Find a way in your financial plan to make your retirement work for you. There is always something you can control. Like expense ratios!
Thank you for your answer. I am now 70 and I never gave this one minute’s thought until I went to visit a friend 3 days ago. I think my husband and I are ok financially - not great. We put 3 kids through college and post graduate school and that decimated our portfolio. I was more concerned about being able to give my kids a little extra toward the end.