I don't believe I've ever heard anyone else say, out loud, that delaying taking Social Security is a risk mitigation strategy. That's a tremendously useful way to think of it.
Excellent video! Yes. More details please on delaying SS and incorporating Roth conversions and the Monte Carlo sequence of returns. You’re my favorite financial planner online!
We keep watching your videos, and this one stands out as one of your best ones. This is one of the best breakeven analyses I have seen. Typically, one tries to match contributions to benefit in an attempt to recover the money paid over time. In here, you have expanded the breakeven to look at the growth of the benefit and portfolio and the survivability of the portfolio. A little surprise at the result as most people use the life expectancy as the basis for the life of their portfolio and benefit return over time. Interesting. One thing not covered was the portfolio allocation. 10% avg. Return is for a 100% stock allocation. Not for a 60/40 or 50/50. We took my SS at FRA for the reasons you stated, but also because we understood that the RMDs would be a poison pill to the tax deferred accounts. We have been converting to Roth using the tax bracket gap as determinant of the amount for conversion. Thank you for a video well done.
Eric - I love the detail and analysis that you put into these videos. Another suggestion for a SS claiming video is when the lower earning spouse will claim the spousal benefit. Under current rules, the spousal benefit can't be claimed until the number holder (higher earning spouse) claims. While the higher earner does gets delay earnings credits for waiting, the spousal benefit does not grow past FRA. Using simple a simple spreadsheet, by me claiming at 68 vs 70, the breakeven is to age 89. While I will take a small reduction, the capturing of 2 years of spousal benefits really changes the numbers. Of course, having one spouse die early adds another level of complexity to the outcome.
Here is a thought. Take SS early and use that to live on and withdraw the same amount from your 401k and convert it to Roth. The result is that at age 70 you have the same amount in your 401k as you would have if you delayed SS and used your 401k to live on. Going forward you have smaller SS checks, but now you have both tax deferred and tax free accounts that you can use to make up the difference, being strategic on where to pull the money from to minimize taxes. You can also invest more aggressively in the Roth account potentially increasing the tax free bucket and further pushing out the break even.
Eric - excellent detailed presented that is very challenging with so many variables. Like the focus on remaining balance impact after your break even age. I am fortunate and have a good pension (non- inflation adjusted) therefore took at FRA. If I did not have pension would have waited until 70 since I am in good health. Keep up the great analysis!!
I’m retired at 60 and plan on taking SS at 62. I plan on investing my SS into high return/high risk stocks. It’s what got me to retire early. Everyone’s situation is different.
Excellent analysis! Agree that delaying SS is a risk mitigation tool. Missing on the scenarios was dynamic allocation since SS represents a Bond allocation to the overall portfolio. This means that the allocation of investmentable assets needs to be more equity. In our case we have gone all the way to 75% equities after SS at FRA.
Here are some thoughts for a future presentation: One limiting factor faced by some people is the "family maximum" imposed by SSA. If an unmarried couple are both previously widowed and each qualifies for high benefits (either their own or as survivor) then they would face a significant reduction in total benefits by getting married. This completely nullifies the 8%/year SS increase from deferred filing, and presents a strong disincentive to remarry. Adding in either Roth conversions (
I took the money and ran - into investments. If you look at stocks as the least risky investment (5 to 10 year mindset), and most productive with dividends and capital gains, logically this makes most sense. Simply put, I am confident that I can beat a 8% annual return. Of course, most people let emotions rule, and love that 8% step up, inflation adjusted. PS - stocks are inflation adjusted too, only they use corporate pricing power.
I bet you will be successful too! It sounds like you know what you're doing. However, less savvy folks won't be able to do what you can do. I am getting the feeling they are the majority of folks searching for answers on what age to take ss. Another reason why you will beat the 8% is if you take it early you will have all those hundreds of thousands of $ dollars prior to you waiting til age 70 going to work for you for 8 years prior to age 70. I prefer to do the 66.6 age, 70 is way too long to wait, but 62--depending on your ss amount, is too small, at least mine was. The difference for me was $11000 (62) vs $18000 (66.6). Good luck to you.
There are really too many variables to cover all the possibilities. I'm not a fan of those static models either. "Here's something that we absolutely know WILL NOT HAPPEN". Let's base our retirement goals on it. Monte Carlo is a great tool and the dynamic plans give you a much better idea of what might happen over time. Good video.
Another great video! Thanks Eric! I would be interested in seeing more of the calculations in a follow-up video. I would also be interested in seeing a similar video where the subject has to use ROTH funds to delay taking SS. Love your vids - Thanks again!
Thanks Terry! Talk me through what you mean regarding using Roth funds to delay SS… is this because the subject has all or most in Roth? Are they earning a ACA subsidy?
@@SafeguardWealthManagement Yes, two thirds of our IRAs have already been converted to ROTHs. We plan to convert the remaining third by 2024 - avoiding IRMAA. My wife and I are 62 and 65 respectively. We expect to start her SS when we have completed the conversion, and mine at 70 (unless the market drops - then I might claim earlier). I also have a medium sized pension which is adjusted for inflation. If I delay my SS until 70, we would start out paying taxes on about 40% of our combined SS once I start drawing. I am less comfortable using ROTH funds (once everything is converted) than I am using IRA funds to support our lifestyle. I would be interested in a video contrasting using ROTH funds for expenses to delay SS with just claiming SS shortly after FRT and saving more of the ROTH. Her SS at FRT would be $2500/month and mine would be $2935. We have medical insurance covered through my old job (I'm already retired), so we have no need for ACA. Sorry - I got a little wordy on the response.
@@terryadams1830 the value of both Roth and 401k would help in modelling your run out in retirement. Given you have a pension and health insurance in retirement, you should be in excellent shape and should not be losing sleep!
@@marka9073 Thanks for your reply. I am sure we are in better shape than most approaching retirement. I kind of feel like I'm on the verge of suggesting Eric run the numbers for me specifically... which is not my intent. I've got all the coarse work done on my retirement planning and could use a video (or comments/ideas from others, such as yourself) on the final details - such as the advisability of using ROTH money, pension, and wife's SS to fund our expenses until I claim SS. Alternatively, I could stay within the 12% bracket with my IRA withdrawals and stretch the IRA funds out until I am closer to 70. Doing that would expose me to paying taxes on the full amount (or near the full amount) of my wife's SS and is likely to result in paying more state income tax. IAC, you may have noticed that I am three years older than my wife, and (barring a massive drop in the market) I plan to delay my own SS until 70 so she has that "reliable" funding stream after I pass (my SS would basically supplant hers when I pass). At any rate, the ROTH is approximately $500K and the IRA/401K is approximately $300K. We also have timberland worth about $400K which is likely to be sold in 10-15 years. House ($300K) is paid for. Thanks again for your interest.
@@terryadams1830 Our Roth/401k are in exact opposite proportions as yours. I'd trade if we could... Given you plan to convert all over the next 2 years that's 150k plus pension and any other income. That may put you over IRMA and certainly higher tax brackets. For me I would spread out your 401k withdrawals unless you need this income due to expenses. As far as withdrawing from Roth it is 100% tax free and won't have any impact on your taxes that I'm aware of. There are reasons to keep some tax deferred funds and one of those is if you need to show some income to qualify for ACA subsidies, but sounds like you have employer health care and the. Medicare when turning 65 yrs. So drawing from Roth should have no tax implications going forward. That the main reason to have made this Roth conversions. The only thing I can see that would make you pay taxes on SS is your pension income.
Since SS is an annuity, I am curious if you were buying an annuity in the open market at age 62, what the cost would be for an immediate annuity vs a deferred annuity with payment starting at 67 or 70 and compare that to SS. The challenge is trying to find an apple to apple comparison with a COLA and survivor benefit
Great video and I know these get pretty complex but I would like to see this analysis from FRA vs.70 plus the tax impact vs tax deferred withdrawals, as I live in a state with no income tax on SS income.
Your presentations are excellent ! This one caught my eye as am trying to decide whether I should claim at 68 or 70, most videos compare 70 v 62 yrs. Any generalizations you can make for us oldsters? Think I might be overthinking this, 42% of ss will be taxable at both 68 and 70, no survivor benefits for anyone. Delaying seems to make me wait until about 88 if inflation is 3% , though the insurance benefit if I get to that age will be substantial. Thoughts?
I'm going to take mine at 66.6 FRA and bank it in a high-yield savings, then live off my Qualified dividends. High-yield savings isn't the best "investment," but the money is available and will add it to my other savings and keep this as my elderly care for later on. I've already got a lot of stock so not want to invest any more $ in stocks. So to cash it will go! I think the high-yield savings are at 2% right now and I think they're go up to 3%. I will be sure not to let my AGI get over the threshold so that I'll not have to pay any taxes on my qual divies and only the 12% on my ss. In my particular situation waiting til 70 is too long. I'd say if you have major gains to come and if it will take you a few years to "do cleanup" before your ss arrives, then age 70 would be a good choice. Also, I am an example of someone who doesn't work, single, no kids, so an inheritance is not really front and center in my situation, don't have any retirement accounts like 401k, ROTH or any of that. I haven't had to work for 10 years (live off stock qualified dividends). There is coming a large COLA for 2022 which will put ss for me at $18k per year. *But if I was married I'd wait til 70 if I could afford it so that it would add up so then my spouse or kids would have it.* I'd also wait til age 70 if I had a ROTH or IRA or other retirement accounts and use them first, then fall back on the ss after age 70. IMO the only reason to take it super early at 62 is if you truly know you won't live long and if you don't have enough income to live on. But if you have income to live on and you're single then go for it at 67 or 70. I suppose I could wait til age 70 but have decided to do it at age 66.6 because it's stressful and overwhelming just learning and studying all the plans and scenarios to choose from. I know that it's causing me heart palpitations and sleepless nights at age 65, I can just imagine how confusing and overwhelming it will be at age 70! So I'm going to do it at 67. For me it's actually 66.6. Studying the medicare and signing up for Medicare was overwhelming enough! So just wanting to get ss out of the way at 66.6 is one of my reasons. The other is all that money not being collected for 8 years if I wait til 70. Thanks for listening, thought I'd just share my opinion in case it helps someone else out there, as reading other people's comments have also helped me.
All the talk of 62 vs 67 or 70? I want to Split the difference and take it at 65 w Medicare? Bigger checks than 62 but sooner than 67? As I near 65 I can push it back depending how things are going at that time? I'm 61 Today! I plan to retire at the end of May this year! I have a pension and will use IRA as Bridge to 65.
I have 403b, Roth, HSA, and taxable brokerage accounts, in that order of value. I plan to retire at 63 with total portfolio of about 1.6m, with approx 1.1m of that will be in the 403b. I am leaning toward delaying SS until 70 and living on the 403b for the interim 7 years. However, complicating things a bit, I want to do some Roth conversions during that 7 years as well, hopefully a 50k conversion each year until age 70. In this scenario, I expect the 403b to last at least until age 80 before it runs dry, at which time I can begin using some of the HSA funds to cover living expenses, and then move on to the Roth if I need to. Anyway, I'd love to see a similar video that discusses how having multiple account types impacts delaying (or not delaying) SS. Great video!
@@_-Karl-_ That's debatable. Personally, I think the Roth is king. However, if you have a lot of healthcare expenses in younger years, you can cover those expenses out of pocket and save the receipts and take the HSA withdrawals much later to cover living expenses, totally tax free. Fortunately, I am in very good health but that means have had almost no healthcare expenses, so that trick won't work for me. Once you pass age 65, HSA funds can be withdrawn exactly like a traditional IRA funds and are taxed at income rates. It's not ideal, but I'm fine with it since I want to preserve my Roth for legacy. Also, living expenses in those last years of life tend to be relatively low, except for health care.
Would love to see the benefit of a lower, older earner delaying taking SS based on the higher, younger earner taking their SS @ 62 with widow benefits in mind i.e. lower earner takes SS @ 65 when higher earner takes SS @ 62.
Just to throw in a few confounding factors. I want my wife to have my higher survivor benefit when I die, I'm 4 yrs older than her, so I want to wait until 70. I also want to maximize my Roth Conversions in the 12% tax bracket, if I had SS income, that will lower the amount I can Roth Convert.
@@jwall62 That's not true. "If you wait past FRA, you earn delayed retirement credits that will increase your eventual payment. That delay will also raise your spouse’s prospective survivor benefit, which is based on what you were drawing from Social Security." This from a AARP site. I did a search using "does taking social security early affect survivor benefits" And get many hits, Make sure that it says Survivor benefits and not spousal benefits. You absolutely do increase you surviving spouses benefit by waiting past FRA.
@@jwall62 I'm glad you found a source. I tried twice to post a Social Security Administration link, but RUclips kept removing my post. It wasn't easy to find anything on SSA, and even what I found was reference note, #6 on a write up mostly about other SSA things.
Great video as always, Eric! Regarding delaying SS benefits until FRA or even age 70, and given that this year's COLA of almost 6% with no end to inflation in sight may be an indicator of what to expect in the next few years, are the COLAs that one would get between 62 and FRA/70 added into future benefit calculations (perhaps via the indexing of earnings), or will one lose out on those COLAs by delaying? For example, take the extreme case (I hope) of annual COLAs of 8% until I reach 70, and no additional earnings between now and then, would I in effect get a similar annual benefit at age 70 either way (and lost out on several years of potential benefits I could have collected in the interim)?
My question is, what happens if someone takes Social Security at the age of 62, invests every penny of it, and keeps working until their FRA? So keep working for 5 years and investing the Social Security in their portfolio for those 5 years.
I believe if you keep working and start SS at 62, the government will reduce your SS based on your income, although this goes away at FRA. So, you won’t have much SS to invest.
if you take retirement early, you can still work, but there are limits to your earnings. SO basically, you suggest taking retirement but then continuing to work full time -- you can't do that. With the earnings limits (for age 62--FRA), working over a certain level will reduce your retirement checks, and the more you make over the threshold the lower retirement check you'll be due. Your scenario that you describe isn't permitted the way SS retirement works.
Somewhere there needs to be discussion about planning for the 30% haircut on Social Security benefits that current law and projections say is coming around 2032 to 2034. Maybe that's already in another video?
It will never happen. There are too many elderly people who vote. It’s an easy fix. They are just waiting until it becomes a crisis. Then they can come to the rescue and play like they are heroes.
I don't believe I've ever heard anyone else say, out loud, that delaying taking Social Security is a risk mitigation strategy. That's a tremendously useful way to think of it.
I think of it as the annuity I was forced to purchase. Might as well use it as such.
Inflation-adjusted income is very difficult to beat compared to an unpredictable market, thanks to Eric for another outstanding video.
Agreed! And thank you David!
Excellent video! Yes. More details please on delaying SS and incorporating Roth conversions and the Monte Carlo sequence of returns. You’re my favorite financial planner online!
We keep watching your videos, and this one stands out as one of your best ones. This is one of the best breakeven analyses I have seen.
Typically, one tries to match contributions to benefit in an attempt to recover the money paid over time. In here, you have expanded the breakeven to look at the growth of the benefit and portfolio and the survivability of the portfolio. A little surprise at the result as most people use the life expectancy as the basis for the life of their portfolio and benefit return over time. Interesting.
One thing not covered was the portfolio allocation. 10% avg. Return is for a 100% stock allocation. Not for a 60/40 or 50/50.
We took my SS at FRA for the reasons you stated, but also because we understood that the RMDs would be a poison pill to the tax deferred accounts. We have been converting to Roth using the tax bracket gap as determinant of the amount for conversion.
Thank you for a video well done.
Eric - I love the detail and analysis that you put into these videos. Another suggestion for a SS claiming video is when the lower earning spouse will claim the spousal benefit. Under current rules, the spousal benefit can't be claimed until the number holder (higher earning spouse) claims. While the higher earner does gets delay earnings credits for waiting, the spousal benefit does not grow past FRA. Using simple a simple spreadsheet, by me claiming at 68 vs 70, the breakeven is to age 89. While I will take a small reduction, the capturing of 2 years of spousal benefits really changes the numbers. Of course, having one spouse die early adds another level of complexity to the outcome.
Here is a thought. Take SS early and use that to live on and withdraw the same amount from your 401k and convert it to Roth. The result is that at age 70 you have the same amount in your 401k as you would have if you delayed SS and used your 401k to live on. Going forward you have smaller SS checks, but now you have both tax deferred and tax free accounts that you can use to make up the difference, being strategic on where to pull the money from to minimize taxes. You can also invest more aggressively in the Roth account potentially increasing the tax free bucket and further pushing out the break even.
Eric - excellent detailed presented that is very challenging with so many variables. Like the focus on remaining balance impact after your break even age. I am fortunate and have a good pension (non- inflation adjusted) therefore took at FRA. If I did not have pension would have waited until 70 since I am in good health. Keep up the great analysis!!
I’m retired at 60 and plan on taking SS at 62. I plan on investing my SS into high return/high risk stocks. It’s what got me to retire early. Everyone’s situation is different.
Excellent analysis! Agree that delaying SS is a risk mitigation tool. Missing on the scenarios was dynamic allocation since SS represents a Bond allocation to the overall portfolio. This means that the allocation of investmentable assets needs to be more equity. In our case we have gone all the way to 75% equities after SS at FRA.
Yes, this can be a big factor in the break even. Will be adding this variable in with future videos
Here are some thoughts for a future presentation: One limiting factor faced by some people is the "family maximum" imposed by SSA. If an unmarried couple are both previously widowed and each qualifies for high benefits (either their own or as survivor) then they would face a significant reduction in total benefits by getting married. This completely nullifies the 8%/year SS increase from deferred filing, and presents a strong disincentive to remarry. Adding in either Roth conversions (
I took the money and ran - into investments. If you look at stocks as the least risky investment (5 to 10 year mindset), and most productive with dividends and capital gains, logically this makes most sense. Simply put, I am confident that I can beat a 8% annual return. Of course, most people let emotions rule, and love that 8% step up, inflation adjusted. PS - stocks are inflation adjusted too, only they use corporate pricing power.
I bet you will be successful too! It sounds like you know what you're doing. However, less savvy folks won't be able to do what you can do. I am getting the feeling they are the majority of folks searching for answers on what age to take ss. Another reason why you will beat the 8% is if you take it early you will have all those hundreds of thousands of $ dollars prior to you waiting til age 70 going to work for you for 8 years prior to age 70. I prefer to do the 66.6 age, 70 is way too long to wait, but 62--depending on your ss amount, is too small, at least mine was. The difference for me was $11000 (62) vs $18000 (66.6). Good luck to you.
Very much enjoyed your RUclips video. Excellent graphs!!
Would love to see more deep dive videos on this topic! It seems to be the most critical and irreversible decision for retirement.
There are really too many variables to cover all the possibilities.
I'm not a fan of those static models either. "Here's something that we absolutely know WILL NOT HAPPEN". Let's base our retirement goals on it. Monte Carlo is a great tool and the dynamic plans give you a much better idea of what might happen over time.
Good video.
Another great video! Thanks Eric! I would be interested in seeing more of the calculations in a follow-up video. I would also be interested in seeing a similar video where the subject has to use ROTH funds to delay taking SS. Love your vids - Thanks again!
Thanks Terry! Talk me through what you mean regarding using Roth funds to delay SS… is this because the subject has all or most in Roth? Are they earning a ACA subsidy?
@@SafeguardWealthManagement Yes, two thirds of our IRAs have already been converted to ROTHs. We plan to convert the remaining third by 2024 - avoiding IRMAA. My wife and I are 62 and 65 respectively. We expect to start her SS when we have completed the conversion, and mine at 70 (unless the market drops - then I might claim earlier). I also have a medium sized pension which is adjusted for inflation. If I delay my SS until 70, we would start out paying taxes on about 40% of our combined SS once I start drawing. I am less comfortable using ROTH funds (once everything is converted) than I am using IRA funds to support our lifestyle. I would be interested in a video contrasting using ROTH funds for expenses to delay SS with just claiming SS shortly after FRT and saving more of the ROTH. Her SS at FRT would be $2500/month and mine would be $2935. We have medical insurance covered through my old job (I'm already retired), so we have no need for ACA. Sorry - I got a little wordy on the response.
@@terryadams1830 the value of both Roth and 401k would help in modelling your run out in retirement. Given you have a pension and health insurance in retirement, you should be in excellent shape and should not be losing sleep!
@@marka9073 Thanks for your reply. I am sure we are in better shape than most approaching retirement. I kind of feel like I'm on the verge of suggesting Eric run the numbers for me specifically... which is not my intent. I've got all the coarse work done on my retirement planning and could use a video (or comments/ideas from others, such as yourself) on the final details - such as the advisability of using ROTH money, pension, and wife's SS to fund our expenses until I claim SS. Alternatively, I could stay within the 12% bracket with my IRA withdrawals and stretch the IRA funds out until I am closer to 70. Doing that would expose me to paying taxes on the full amount (or near the full amount) of my wife's SS and is likely to result in paying more state income tax. IAC, you may have noticed that I am three years older than my wife, and (barring a massive drop in the market) I plan to delay my own SS until 70 so she has that "reliable" funding stream after I pass (my SS would basically supplant hers when I pass). At any rate, the ROTH is approximately $500K and the IRA/401K is approximately $300K. We also have timberland worth about $400K which is likely to be sold in 10-15 years. House ($300K) is paid for. Thanks again for your interest.
@@terryadams1830 Our Roth/401k are in exact opposite proportions as yours. I'd trade if we could... Given you plan to convert all over the next 2 years that's 150k plus pension and any other income. That may put you over IRMA and certainly higher tax brackets. For me I would spread out your 401k withdrawals unless you need this income due to expenses. As far as withdrawing from Roth it is 100% tax free and won't have any impact on your taxes that I'm aware of. There are reasons to keep some tax deferred funds and one of those is if you need to show some income to qualify for ACA subsidies, but sounds like you have employer health care and the. Medicare when turning 65 yrs. So drawing from Roth should have no tax implications going forward. That the main reason to have made this Roth conversions. The only thing I can see that would make you pay taxes on SS is your pension income.
This guy deserves more views.
Hey Eric! Great video. Any chance you will do one around SS strategies when a married couple has a 10+ year age gap?
Since SS is an annuity, I am curious if you were buying an annuity in the open market at age 62, what the cost would be for an immediate annuity vs a deferred annuity with payment starting at 67 or 70 and compare that to SS. The challenge is trying to find an apple to apple comparison with a COLA and survivor benefit
Outstanding video! Yes, I'm very interested in further SS calculations, with IRAs, with Roths, with RMDs. Many thanks!
Depending on the portfolio, taking SS later could mean an 85% tax vs a 50% or no tax on SS benefits.
Great info. I’d like to see an example with a smaller portfolio. Maybe showing the minimum required for it to work.
Get SS as soon as you can. Older age may bring health issues . Its your money, take it as soon as you can.
Great video and I know these get pretty complex but I would like to see this analysis from FRA vs.70 plus the tax impact vs tax deferred withdrawals, as I live in a state with no income tax on SS income.
Your presentations are excellent ! This one caught my eye as am trying to decide whether I should claim at 68 or 70, most videos compare 70 v 62 yrs. Any generalizations you can make for us oldsters? Think I might be overthinking this, 42% of ss will be taxable at both 68 and 70, no survivor benefits for anyone. Delaying seems to make me wait until about 88 if inflation is 3% , though the insurance benefit if I get to that age will be substantial. Thoughts?
I'm going to take mine at 66.6 FRA and bank it in a high-yield savings, then live off my Qualified dividends. High-yield savings isn't the best "investment," but the money is available and will add it to my other savings and keep this as my elderly care for later on. I've already got a lot of stock so not want to invest any more $ in stocks. So to cash it will go! I think the high-yield savings are at 2% right now and I think they're go up to 3%.
I will be sure not to let my AGI get over the threshold so that I'll not have to pay any taxes on my qual divies and only the 12% on my ss. In my particular situation waiting til 70 is too long. I'd say if you have major gains to come and if it will take you a few years to "do cleanup" before your ss arrives, then age 70 would be a good choice. Also, I am an example of someone who doesn't work, single, no kids, so an inheritance is not really front and center in my situation, don't have any retirement accounts like 401k, ROTH or any of that. I haven't had to work for 10 years (live off stock qualified dividends). There is coming a large COLA for 2022 which will put ss for me at $18k per year.
*But if I was married I'd wait til 70 if I could afford it so that it would add up so then my spouse or kids would have it.* I'd also wait til age 70 if I had a ROTH or IRA or other retirement accounts and use them first, then fall back on the ss after age 70.
IMO the only reason to take it super early at 62 is if you truly know you won't live long and if you don't have enough income to live on. But if you have income to live on and you're single then go for it at 67 or 70. I suppose I could wait til age 70 but have decided to do it at age 66.6 because it's stressful and overwhelming just learning and studying all the plans and scenarios to choose from. I know that it's causing me heart palpitations and sleepless nights at age 65, I can just imagine how confusing and overwhelming it will be at age 70! So I'm going to do it at 67. For me it's actually 66.6.
Studying the medicare and signing up for Medicare was overwhelming enough! So just wanting to get ss out of the way at 66.6 is one of my reasons. The other is all that money not being collected for 8 years if I wait til 70.
Thanks for listening, thought I'd just share my opinion in case it helps someone else out there, as reading other people's comments have also helped me.
All the talk of 62 vs 67 or 70? I want to Split the difference and take it at 65 w Medicare? Bigger checks than 62 but sooner than 67? As I near 65 I can push it back depending how things are going at that time? I'm 61 Today! I plan to retire at the end of May this year!
I have a pension and will use IRA as Bridge to 65.
My husband will take at 67 or 70, and we'll his his SS to pay the taxes in his 401K
I have 403b, Roth, HSA, and taxable brokerage accounts, in that order of value. I plan to retire at 63 with total portfolio of about 1.6m, with approx 1.1m of that will be in the 403b. I am leaning toward delaying SS until 70 and living on the 403b for the interim 7 years. However, complicating things a bit, I want to do some Roth conversions during that 7 years as well, hopefully a 50k conversion each year until age 70. In this scenario, I expect the 403b to last at least until age 80 before it runs dry, at which time I can begin using some of the HSA funds to cover living expenses, and then move on to the Roth if I need to. Anyway, I'd love to see a similar video that discusses how having multiple account types impacts delaying (or not delaying) SS. Great video!
@@_-Karl-_ That's debatable. Personally, I think the Roth is king. However, if you have a lot of healthcare expenses in younger years, you can cover those expenses out of pocket and save the receipts and take the HSA withdrawals much later to cover living expenses, totally tax free. Fortunately, I am in very good health but that means have had almost no healthcare expenses, so that trick won't work for me. Once you pass age 65, HSA funds can be withdrawn exactly like a traditional IRA funds and are taxed at income rates. It's not ideal, but I'm fine with it since I want to preserve my Roth for legacy. Also, living expenses in those last years of life tend to be relatively low, except for health care.
it really depends on what your expenses are and if you have debt, and if you have a pension ( is it inflation adjusted)
I'd be interested in other videos similar to this topic.
Awesome, thanks for the feedback!
I liked this video and would like to see more like it
Eric you sound just like Jeff Cavaliere of Athlean-x 😁 just different advice 👍
I'm familiar with Jeff. Hard to tell when its your own voice but I can hear the similarities haha
Would love to see the benefit of a lower, older earner delaying taking SS based on the higher, younger earner taking their SS @ 62 with widow benefits in mind i.e. lower earner takes SS @ 65 when higher earner takes SS @ 62.
Will certainly cover this in future videos and break even analyses! Thank you for the feedback
Does this also include RMDs, taxes and Medicare calculations?
This specific video does not. We plan to add complexity to this breakeven analysis in future videos but use this video as a “baseline”
How do justify the reason to delay SS considering the fact that average life span is 80 y?
Question : I am 61 and could have a Lump Sum pension for $450,000 or a monthly payment of $2,140 . Which one should I take?
Just to throw in a few confounding factors. I want my wife to have my higher survivor benefit when I die, I'm 4 yrs older than her, so I want to wait until 70. I also want to maximize my Roth Conversions in the 12% tax bracket, if I had SS income, that will lower the amount I can Roth Convert.
Survivor benefit would be based on your FRA not on your benefit at age 70.
@@jwall62 That's not true. "If you wait past FRA, you earn delayed retirement credits that will increase your eventual payment. That delay will also raise your spouse’s prospective survivor benefit, which is based on what you were drawing from Social Security." This from a AARP site. I did a search using "does taking social security early affect survivor benefits" And get many hits, Make sure that it says Survivor benefits and not spousal benefits. You absolutely do increase you surviving spouses benefit by waiting past FRA.
@@mavamQ You are correct, thanks for the clarification
@@jwall62 I'm glad you found a source. I tried twice to post a Social Security Administration link, but RUclips kept removing my post. It wasn't easy to find anything on SSA, and even what I found was reference note, #6 on a write up mostly about other SSA things.
@@mavamQ yea, I missed the whole survivor vs spousal benefit differences.
Great video as always, Eric! Regarding delaying SS benefits until FRA or even age 70, and given that this year's COLA of almost 6% with no end to inflation in sight may be an indicator of what to expect in the next few years, are the COLAs that one would get between 62 and FRA/70 added into future benefit calculations (perhaps via the indexing of earnings), or will one lose out on those COLAs by delaying? For example, take the extreme case (I hope) of annual COLAs of 8% until I reach 70, and no additional earnings between now and then, would I in effect get a similar annual benefit at age 70 either way (and lost out on several years of potential benefits I could have collected in the interim)?
Thank you! COLAs adjust all benefits, both delayed as well as benefits taken early. So you aren't missing out on COLA by delaying.
My question is, what happens if someone takes Social Security at the age of 62, invests every penny of it, and keeps working until their FRA? So keep working for 5 years and investing the Social Security in their portfolio for those 5 years.
How much over $18,000 do you make? Look up what they take back
How much will your investment make?
I believe if you keep working and start SS at 62, the government will reduce your SS based on your income, although this goes away at FRA. So, you won’t have much SS to invest.
if you take retirement early, you can still work, but there are limits to your earnings. SO basically, you suggest taking retirement but then continuing to work full time -- you can't do that. With the earnings limits (for age 62--FRA), working over a certain level will reduce your retirement checks, and the more you make over the threshold the lower retirement check you'll be due. Your scenario that you describe isn't permitted the way SS retirement works.
Somewhere there needs to be discussion about planning for the 30% haircut on Social Security benefits that current law and projections say is coming around 2032 to 2034. Maybe that's already in another video?
It will never happen. There are too many elderly people who vote. It’s an easy fix. They are just waiting until it becomes a crisis. Then they can come to the rescue and play like they are heroes.
$2 Million portfolio lol. Poor folks will have to skimp along.