Social Security? HELP!

[bucktalk]

I will be considering attaining access to social security in the next few years. But I am unsure of what age is best to being drawing from social security. Some are adamant about withdrawing at age 62. Others seem to think waiting until 70 is best.

Can anyone share what age you started drawing from social security and do you have any regrets about the age you chose to begin that withdraw? Any suggestions/help will be appreciated!

[BBatesokc]

Nowhere near the age for me to be considering it yet (47), but several people in my family are. It always seems to come down to their current financial situation. Are you still working? Have a significant savings? Do you have current income sources other than a traditional job? Do you have a pension or retirement? Health okay?

My close family members have all elected to wait; but that seems mostly driven by the fact they are still active and working, in good health, have multiple income streams (work, rent houses, stocks, retirement/pensions, etc.) and have a family history of living long lives (grandfather is in his 90's and drives, plays golf and maintains his own property, house and rent house).

Might be worth seeking advice from a financial planner. I consulted with one years ago because I'm self employed and the changes they had me make will ensure a good retirement.

[king183]

You should definitely seek the advice of a financial planner, but I can tell you this:

If you take Social Security at 62, you will see a massive reduction in your Social Security income. Most people do not fully understand how big the reduction is until they start receiving the checks. Generally, you should only consider this option if you have significant retirement savings that will can draw upon--approximately enough to cover 80% of your pre-retirement income--and your major debts are paid off. If you don't have significant retirement savings and you take SS at 62, there is a very strong chance you will have to return to work to supplement your SS income. You also need to consider your healthcare costs. Your Medicare premium will be deducted from your SS check, lowering the amount you have to live on.

Waiting until you're 70 will provide you with a much larger SS check that will better supplement your other retirement savings as this. Generally, this is the best option if you have little retirement savings savings.

There is a third option, and that is taking SS at full retirement age, which is 66 years and 4 months (if you're entering retirement this year). That provides you with full benefits. Though it is lower than benefits at age 70, it's significantly higher than benefits at 62.

[Jersey Boss]

There are a myriad of options when it comes to filing for SS benefits. If you were born between 1947 and 1954, inclusive, full benefits start at age 66. If you were born post 1954 you can go to the SSA website to determine at what age you are entitled to full benefits. Delaying filing for benefits past your full benefit age will result in an increase of the monthly benefit which maxes out at 130% at age 70. You will get an increased % for every year past full benefit year that you delay, not to exceed 130% at age 70. If you are married there are other things to consider as one spouse can claim benefits off the others account in certain circumstances. As others have pointed out there are a lot of ways to maximize your benefit and your spouses benefit based on when and how you file. A benefit counselor will be able to guide you and your spouse in the direction best suited for your individual circumstance. As an aside you are eligible for Medicare at age 65 regardless of your year of birth. If you are not ready to see a counselor there is a book titled Social Security Made Easy that can provide you with way more information than I can.

[shawnw]

I'm under the (perhaps false) impression that whether you retire at 62 or 72, you're getting "effectively the same amount of money in total", but at 62 it's having to be disbursed over more years and so it's smaller amount per disbursement?

[Rivalyn]

I'm under the (perhaps false) impression that whether you retire at 62 or 72, you're getting "effectively the same amount of money in total", but at 62 it's having to be disbursed over more years and so it's smaller amount per disbursement?

Yeah, basically since it's all based on us living to a certain average pre-determined age.

That being said, I've always helped family look at SS a little more fatalistically. If you're in good health and don't need the money, hold off as long as possible. If you're in poor health, grab it as soon as possible.

Last item of note, if you take it before full retirement age (66 up till those born to 1954 [calculations in a previous post]) and are still working, they will subtract your income from your social security benefits. For my mom, she still made enough money that she wouldn't get anything if she had tried to take it early so she had to wait till 66 at which point there's no income comparison.

[mkjeeves]

Life expectancy in the US for men is 79+ and 81+ for women. I believe the break even point between taking it early or later is around that age.

[Jersey Boss]

https://www.ssa.gov/benefits/retirement/estimator.html

But even if you live a normal lifespan, you may not come out ahead if you delay. To see if waiting might make sense, go to the Social Security estimator to compare the benefits you would receive at different claiming ages. Add up the income you would receive by claiming early, then compare it with claiming later. That way, you can calculate how long it would take your benefits at age 70 to equal what you would get by taking a smaller benefit at age 62. The point where taking benefits early or late work out the same is your break-even age.(http://time.com/money/2791474/delayi...-may-not-work/)
https://www.ssa.gov/planners/calculators/( These are other calculators that SSA provides for other unique situations- definitely worth looking at.)

[Jersey Boss]

Life expectancy in the US for men is 79+ and 81+ for women. I believe the break even point between taking it early or later is around that age.

Checking out the numbers for Oklahoma comparing nationally and then go to the numbers comparing Oklahoma counties.

http://www.worldlifeexpectancy.com/u...ife-expectancy

http://www.worldlifeexpectancy.com/u...by-county-male

http://www.worldlifeexpectancy.com/u...-county-female

[ctchandler]

Bucktalk,
I am 74 and I retired at age 60 due to my late wife's health problems. A lot of things to consider, first I could (and can) afford the decrease in the amount. I could have waited till I was 65 or 66 because we had a fairly large amount of private funds for retirement. So, I made the decision to start drawing SS at age 62. My wife died at 61 and even though she drew SS disability for about three years, when she died all of the money she would normally drawn at retirement age was gone. I did see a financial advisor and that's probably the best advice I can give you because my situation is probably different than yours but I just wanted to tell you what we did. Also, don't forget medical, you won't be eligible for Medicaid till you are 65. I had pretty good company insurance as a retiree so it wasn't a problem for me. If you don't have good insurance available and can't afford private insurance it would be best to wait till at least age 65. Just some thoughts. First thing to do is see a financial advisor. Usually they will explain the options and help you for no charge. They want your business (as they should) and will hope that you sign up with them after they provide you with good information.
C. T.

[Laramie]

You may begin at 62 (earliest age to collect benefits) because the money (12 monthly payments per year) you accumulate. If you have other income and don't need SS, you could do what my brother did when he turned 62--bank those checks; let them grow interest and/or invest part or all of those funds.

Who knows how long you'll live past 62. ...At 62, you receive 75% of SS retirement or delay collection of those benefits until you reach 65 - 67 or longer. IMO, You take a risk for every year you delay.

I've had many friends who retired, a few died before he/she reached 65, never received a penny from Social Security. One friend started drawing teacher retirement from the State, passed away at 64; he did get to enjoy a number years on TR but decided to wait for his 65th year to draw benefits for a larger payout. Unfortunately, he never collected a penny from SS.

How often do you get your Social Security statement?

You'll receive a statement once every five years from age 25 to 60, then annually until you start receiving benefits. The statements are mailed three months before your birthday. But you can get a benefit estimate anytime with a My Social Security account, https://www.ssa.gov/myaccount/ Jan 6, 2017 --SSA

Create an account and sign in using this https://www.ssa.gov/myaccount/ or the above link in the quote:

[mugofbeer]

As a financial advisor, most all info above is correct and advice is good. If you are married, there are multiple strategies to consider so look up Certified Financial Planners in the city and they can help you with as little or as much as you want them to do. They are covered by strict fiduciary standards and a code of ethics by both their governing society and Federal regulatory agencies so you can be assured you will get the best advice. A CFP will act as a quarterback and won't necessarily carry the ball if you want extensive help so don't be surprised if you are referred to a specialist.

[Jim Kyle]

I'm under the (perhaps false) impression that whether you retire at 62 or 72, you're getting "effectively the same amount of money in total", but at 62 it's having to be disbursed over more years and so it's smaller amount per disbursement?

"Same amount ... in total" doesn't really mean much in the real world. You can only spend what's in your pocket today, plus whatever you want (and the lender will permit you) to put on a credit card or a loan. Past income is already spent, and anticipated future income doesn't actually exist until it gets here.

That said, I'm quite glad that I stayed in the workforce, although self-employed, until reaching the age of 65. For me, that was the full-benefit threshold. Now, 23 years later, I'm still getting the full amount although I long ago went through the total of my contributions over the years. And i hope to continue so long as I remain alive, even though I'm well past the lifespan envisioned by the program's founders. Finally, I'm still paying into it through Self-Employment tax, every April, even though my Net Taxable Income has been zero for several years!

My wife, OTOH, took her retirement two months early, after the folk at Social Security advised her that the reduction for doing so would be less than one month's payment over a 20 year period! Relief from a quite stressful job was far better for her (and for me too) than holding out would have been!

Your mileage, of course, will vary.

[bucktalk]

Thanks for much for the input from everyone. You have mentioned several things in which I had not considered. I appreciate your opinion and time to give me additional thoughts for further consideration.