teen persuasion
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Post by teen persuasion on Nov 15, 2019 15:53:37 GMT -5
I just read the linked article. It's got some errors in it.
Um, no, full retirement age is NOT 70, and you cannot receive an 8% bonus for claiming AFTER age 70.
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saveinla
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Post by saveinla on Nov 15, 2019 16:13:18 GMT -5
Based on this thread, I went to ssa.gov to check my numbers - when I go to the retirement calculator and put zero earnings from now on, it still gives me the same estimate if it would if I work for the rest until retirement.
Anyone notice this? Is there a better calculator that I can use?
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tallguy
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Post by tallguy on Nov 15, 2019 16:47:54 GMT -5
Pretty sure DH will start drawing his SS at age 62 in 4 1/2 years. The he will switch over to getting 1/2 of mine when I retire, likely at 67 in 9 years. Our situation is different than most in that my amount is more than double his, and I am 2 years younger. So he might as well start getting his as soon as possible, then we maximize when we start mine, probably as late as possible. Also DH has some chronic health issues, so likely to die before me. I also have a pension from previous job that I was at 20 years. It is a good amount but my only option is to start at 65. You should check the rules on that. My understanding is that if one claims early SS benefits on their own record, their spousal benefits will also be reduced for age so he would not receive 50% of yours. The deeming rules may also apply, where filing for one benefit would deem him to be filing for all benefits for which he is eligible.
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MN-Investor
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Post by MN-Investor on Nov 15, 2019 18:20:54 GMT -5
Based on this thread, I went to ssa.gov to check my numbers - when I go to the retirement calculator and put zero earnings from now on, it still gives me the same estimate if it would if I work for the rest until retirement. Anyone notice this? Is there a better calculator that I can use? I stopped working in 1999 and saw the same thing. And when I went to the Social Security office after my sweetie passed away in 2018 to see what would work best for me, my payments from my earnings would have been that amount that had stayed the same over the years.
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saveinla
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Post by saveinla on Nov 15, 2019 18:36:30 GMT -5
Based on this thread, I went to ssa.gov to check my numbers - when I go to the retirement calculator and put zero earnings from now on, it still gives me the same estimate if it would if I work for the rest until retirement. Anyone notice this? Is there a better calculator that I can use? I stopped working in 1999 and saw the same thing. And when I went to the Social Security office after my sweetie passed away in 2018 to see what would work best for me, my payments from my earnings would have been that amount that had stayed the same over the years. Thanks. So it is better to go and ask them based on what we are planning? If I am going to get that amount regardless of when I stop working from now on, I can quit my job
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MN-Investor
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Post by MN-Investor on Nov 15, 2019 18:50:50 GMT -5
I stopped working in 1999 and saw the same thing. And when I went to the Social Security office after my sweetie passed away in 2018 to see what would work best for me, my payments from my earnings would have been that amount that had stayed the same over the years. Thanks. So it is better to go and ask them based on what we are planning? If I am going to get that amount regardless of when I stop working from now on, I can quit my job Don't take my word for it. Talk to someone at a social security office and find out what they say based on your scenario.
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haapai
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Post by haapai on Nov 15, 2019 19:08:26 GMT -5
I looked up the article that was linked, and quickly ran into this, the first full paragraph of text. I've italicized the quoted text for clarity.
How Social Security Works
To qualify for Social Security in the first place requires 40 work credits or approximately 10 years of work. If you have 40 work credits, you are eligible to claim Social Security once you reach age 62. The full retirement age, however, is 70, and you can only receive 100% of your benefits if you wait until then to claim. If you claim earlier, you will receive less, and if you claim after age 70, you receive an 8% bonus for each year that you delayed claiming. That bolded bit, that states that the full retirement age is 70, is garbage. Full retirement age is a term that means something and for the vast majority of folks my age (50) and everyone younger than me, full retirement age (FRA) is 67. Filing at 70 maximizes social security benefits but it is not the same thing as filing at full retirement age.
I'm not going to spend much more time analyzing an article that bobbles something so elementary in the first paragraph.
ETA: My apologies to teen persuasion and any other posters whose BS detectors went off and posted before me. I'm really confused as to how something this slipshod showed up on Investopedia.
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alabamagal
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Post by alabamagal on Nov 15, 2019 20:04:16 GMT -5
Pretty sure DH will start drawing his SS at age 62 in 4 1/2 years. The he will switch over to getting 1/2 of mine when I retire, likely at 67 in 9 years. Our situation is different than most in that my amount is more than double his, and I am 2 years younger. So he might as well start getting his as soon as possible, then we maximize when we start mine, probably as late as possible. Also DH has some chronic health issues, so likely to die before me. I also have a pension from previous job that I was at 20 years. It is a good amount but my only option is to start at 65. You should check the rules on that. My understanding is that if one claims early SS benefits on their own record, their spousal benefits will also be reduced for age so he would not receive 50% of yours. The deeming rules may also apply, where filing for one benefit would deem him to be filing for all benefits for which he is eligible. Will definitely check on that, but pretty sure he will do it at 62. I used model on AARP and that is what it said to do to maximize lifetime benefit. We would not be doing it because we needed money at 62.
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tallguy
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Post by tallguy on Nov 15, 2019 21:00:34 GMT -5
You should check the rules on that. My understanding is that if one claims early SS benefits on their own record, their spousal benefits will also be reduced for age so he would not receive 50% of yours. The deeming rules may also apply, where filing for one benefit would deem him to be filing for all benefits for which he is eligible. Will definitely check on that, but pretty sure he will do it at 62. I used model on AARP and that is what it said to do to maximize lifetime benefit. We would not be doing it because we needed money at 62. There is a very good site where readers' questions about Social Security are answered. This question is raised often. Here is one with an answer that seems applicable. linkEssentially, his benefit is reduced for age because he claimed early. If he switches to spousal benefits after reaching FRA, he does not get a full spousal benefit. He gets a partial spousal benefit added to his own reduced benefit. If he were to switch to spousal benefits BEFORE reaching FRA, his partial spousal benefit would also be reduced for age resulting in even less money each month.
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Post by Deleted on Nov 15, 2019 21:17:10 GMT -5
Based on this thread, I went to ssa.gov to check my numbers - when I go to the retirement calculator and put zero earnings from now on, it still gives me the same estimate if it would if I work for the rest until retirement. Anyone notice this? Is there a better calculator that I can use? It does your highest 35. So it would be the same if the others are 0.
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tallguy
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Post by tallguy on Nov 15, 2019 21:30:36 GMT -5
Based on this thread, I went to ssa.gov to check my numbers - when I go to the retirement calculator and put zero earnings from now on, it still gives me the same estimate if it would if I work for the rest until retirement. Anyone notice this? Is there a better calculator that I can use? It does your highest 35. So it would be the same if the others are 0. The problem though is that the ssa.gov estimate assumes that you will continue to earn the same (last reported) amount until your full retirement age, so the estimate should not be the same. On the other hand, once you have a full 35-year history the estimate will not change much unless the new year replaces a MUCH lower value year. As I recall, I entered my history when I was considering retiring. When I discovered that continuing to work for several more years would only increase my benefit amount by about $16*, the idea of staying at my job lost a certain amount of appeal. * I think that was the number, but don't recall for certain.
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schildi
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Post by schildi on Nov 15, 2019 22:39:27 GMT -5
Delete. Formatting was messed up.
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schildi
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Post by schildi on Nov 15, 2019 22:41:20 GMT -5
If we use 90 and expect 0% return, we should take the payout at 70. That holds true from 0-2.5% returns. If we expect 2.6%-5.2% then we should take it at full retirement (66). Anything higher we should take it at 70. If we use 95 as an appropriate age, we should take the payout at 70 if we expect 0-3.7% returns. If we expect 3.8%-5.9% then we should take it at 66. Anything higher we should take it at 70. Hoops, you meant "at 62" for the numbers in bold above, right?
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schildi
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Post by schildi on Nov 15, 2019 22:48:08 GMT -5
Hoops, did you use the numbers from the article for your calculations? I deleted my spreadsheet from yesterday that included returns, but with 0 returns, the cut even is at about age 82 with having received a total of $540,000 or so. In case of a spouse that didn't work, how does waiting help in the event of an early death of the breadwinner vs. taking the money early and investing it? (I am trying to get more and more educated about this)
Yes, I am assuming the money is not needed before age 70, I should probably have mentioned that in the OP. My plan would be to retire somewhere between age 55 - age 60, so even before the age of 62. Ideally, I would have enough to never need SS, so my calculation is to max what we get for those who are benefiting after me and my DW are gone.
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schildi
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Post by schildi on Nov 15, 2019 22:50:21 GMT -5
Pretty sure DH will start drawing his SS at age 62 in 4 1/2 years. The he will switch over to getting 1/2 of mine when I retire, likely at 67 in 9 years. Our situation is different than most in that my amount is more than double his, and I am 2 years younger. So he might as well start getting his as soon as possible, then we maximize when we start mine, probably as late as possible. Also DH has some chronic health issues, so likely to die before me. I also have a pension from previous job that I was at 20 years. It is a good amount but my only option is to start at 65. Yeah, that's my thinking also. It should not matter for the math if you get only half of the max, or whatever percentage.
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schildi
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Post by schildi on Nov 15, 2019 22:56:31 GMT -5
I looked up the article that was linked, and quickly ran into this, the first full paragraph of text. I've italicized the quoted text for clarity.
How Social Security Works
To qualify for Social Security in the first place requires 40 work credits or approximately 10 years of work. If you have 40 work credits, you are eligible to claim Social Security once you reach age 62. The full retirement age, however, is 70, and you can only receive 100% of your benefits if you wait until then to claim. If you claim earlier, you will receive less, and if you claim after age 70, you receive an 8% bonus for each year that you delayed claiming. That bolded bit, that states that the full retirement age is 70, is garbage. Full retirement age is a term that means something and for the vast majority of folks my age (50) and everyone younger than me, full retirement age (FRA) is 67. Filing at 70 maximizes social security benefits but it is not the same thing as filing at full retirement age.
I'm not going to spend much more time analyzing an article that bobbles something so elementary in the first paragraph.
ETA: My apologies to teen persuasion and any other posters whose BS detectors went off and posted before me. I'm really confused as to how something this slipshod showed up on Investopedia.
Doesn't really matter for the math, if the amounts are correct, right? Or even just the relative amounts. The point wasn't to analize the article, just a few numbers.
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countrygirl2
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Post by countrygirl2 on Nov 15, 2019 23:45:22 GMT -5
The earliest age you're allowed to collect Social Security is 62, but claiming early comes at a cost. If you take benefits before reaching your full retirement age, you'll lose 6.67% of your full benefit amount for up to three years and then 5% a year thereafter. So if your full retirement age is 66 and you claim benefits at 62, you'll reduce your payments by 25%.
On the other hand, if you delay Social Security past your full retirement age, you'll raise your benefits by 8% each year up until age 70, at which point the incentive to hold off runs out. So if your full retirement age is 66 and you wait until 70 to take Social Security, you'll increase your payments by 32%.
Hubs was 69 and it increased his a bunch. Sadly his highest earning years were worked overseas and were not counted in his earnings, they didn't pay in on SS. But he had maxed out in most of his working years so he was fine.
If you talk to SS, be careful, you can call 2 or 3 times and in some cases get 2 or 3 different answers.
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schildi
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Post by schildi on Nov 16, 2019 2:39:27 GMT -5
The earliest age you're allowed to collect Social Security is 62, but claiming early comes at a cost. If you take benefits before reaching your full retirement age, you'll lose 6.67% of your full benefit amount for up to three years and then 5% a year thereafter. So if your full retirement age is 66 and you claim benefits at 62, you'll reduce your payments by 25%. On the other hand, if you delay Social Security past your full retirement age, you'll raise your benefits by 8% each year up until age 70, at which point the incentive to hold off runs out. So if your full retirement age is 66 and you wait until 70 to take Social Security, you'll increase your payments by 32%. Hubs was 69 and it increased his a bunch. Sadly his highest earning years were worked overseas and were not counted in his earnings, they didn't pay in on SS. But he had maxed out in most of his working years so he was fine. If you talk to SS, be careful, you can call 2 or 3 times and in some cases get 2 or 3 different answers. Of course the amount is reduced when you start drawing earlier. But you draw for more years, and get your money earlier.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Nov 16, 2019 8:51:20 GMT -5
You aren't just talking about drawing SS at age 62. You are talking about retiring at age 62 because your earnings impact your benefit negatively if you are still working. This was exactly my thought. A lot of people don't have enough money saved to completely retire at 62. Yes, some commentary wasn't clear about taking ss and retirement. Aside from cookies! If I retire at 62 or earlier, I'll take it at 62. If I continue working I won't. Not sure about if I semi retire with some money coming in. That would take a lot of mathy stuff to make the decision.
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giramomma
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Post by giramomma on Nov 16, 2019 9:18:35 GMT -5
The earliest age you're allowed to collect Social Security is 62, but claiming early comes at a cost. If you take benefits before reaching your full retirement age, you'll lose 6.67% of your full benefit amount for up to three years and then 5% a year thereafter. So if your full retirement age is 66 and you claim benefits at 62, you'll reduce your payments by 25%. On the other hand, if you delay Social Security past your full retirement age, you'll raise your benefits by 8% each year up until age 70, at which point the incentive to hold off runs out. So if your full retirement age is 66 and you wait until 70 to take Social Security, you'll increase your payments by 32%. Hubs was 69 and it increased his a bunch. Sadly his highest earning years were worked overseas and were not counted in his earnings, they didn't pay in on SS. But he had maxed out in most of his working years so he was fine. If you talk to SS, be careful, you can call 2 or 3 times and in some cases get 2 or 3 different answers. Of course the amount is reduced when you start drawing earlier. But you draw for more years, and get your money earlier. That assumes that you live a long time.
In the past 18 months at work, two of my coworkers passed away prematurely. One passed away in her 50s, and one passed away at 66/67. The one that passed away at 66 was going to retire from work in the next year or so.
And my coworker that died at 66/67, he was running marathons in his 50s and hiking in his 60's because that was easier on his body. So it wasn't because he was 100lb overweight with untreated diabetes that did him in.
Someone else I know, her husband died unexpectedly at 72 at a farming accident. Someone that amply saves for retirement that can retire at 62 from their job, is taking a reduced SS for 5-10 years, is that really going to make much of a difference?
My grandparents didn't make it to 65. I think my parents will make it to 75. I'll be lucky if I make it to 85. I'm seeing people around me die younger than they should. I don't want to make assumptions about how long I'll live, because I'm betting, I'm going to be wrong.
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OldCoyote
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Post by OldCoyote on Nov 16, 2019 10:21:53 GMT -5
Here was a nice surprise, because I am still working at 72, I get a raise on my SS because I am still paying into SS!!
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haapai
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Post by haapai on Nov 16, 2019 10:48:24 GMT -5
Here was a nice surprise, because I am still working at 72, I get a raise on my SS because I am still paying into SS!! That only happens if your current social security earnings exceed one of your 35 best-earning years after indexing. But yes, it's a nice little feature that surprised me when Liz wrote something about it last week. I'd never heard about this quirk before. Unfortunately, the taxation of social security benefits if you make more than a certain amount may seriously erode the value of this perk. Still it could be helpful for persons whose 35 best years include years of no or very low income.
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countrygirl2
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Post by countrygirl2 on Nov 16, 2019 11:33:43 GMT -5
Yep, I had rental income turned in for years under my name and it helped increase my SS. I took mine at 62, sorry I did. Did not really need it and the larger amount now would sure be welcome. Guess it just depends on your outlook.
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OldCoyote
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Post by OldCoyote on Nov 16, 2019 12:29:13 GMT -5
A little thing that I did, that you can no longer do was called apply and suspend, When my wife was laid off her job,
I did that, She started receiving money from SS even when she did not apply. That was good for thousands of free dollars!! When I turned 70, my SS automatically kicked in with no penalty!!
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Apple
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Post by Apple on Nov 16, 2019 12:47:29 GMT -5
A little thing that I did, that you can no longer do was called apply and suspend, When my wife was laid off her job,
I did that, She started receiving money from SS even when she did not apply. That was good for thousands of free dollars!! When I turned 70, my SS automatically kicked in with no penalty!!
It looks like you can still suspend payments, but it will also suspend payments to a spouse. Nice loophole you were able to use for a while though! From USNEWS: Suspending might change how I do things... I'll have a pension and a healthy retirement account, and I've thought of taking SS at 62 since the "break even" will take 17 years (SS at age 67) or 20 years (SS at age 70). However, I might look at what suspending will do for me, take advantage of letting my retirement investments grow for a few years, then pause SS and let that grow. Will be a mix of markets, health, desire for expensive travel, ability to still suspend SS in the future, etc, that determines if I go that route. I see that things could go a few ways for me. The likely route, if I live a long, fairly healthy life like my grandparents, is that I retire at 57, spend some money getting myself set up for everything I want (a nice little rv/camper/whatever for road trips, a wood shop, some nice quilting/sewing machines, some expensive travel overseas...) and then a few years of having what I wanted already paid for, and just doing maintenance, some upgrades, some less expensive trips, and then my later years, when I need 24 hour care (I do not plan to burden my son with this, my plan is to have the money necessary to cover my expenses). So, taking SS for some fun stuff for a few years, putting it on hold for a few years when my spending is down, and then starting it up again to help cover more costs of long-term care later in life. Everything just needs to work out that way for me
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teen persuasion
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Post by teen persuasion on Nov 16, 2019 12:53:28 GMT -5
Hoops, did you use the numbers from the article for your calculations? I deleted my spreadsheet from yesterday that included returns, but with 0 returns, the cut even is at about age 82 with having received a total of $540,000 or so. In case of a spouse that didn't work, how does waiting help in the event of an early death of the breadwinner vs. taking the money early and investing it? (I am trying to get more and more educated about this)
Yes, I am assuming the money is not needed before age 70, I should probably have mentioned that in the OP. My plan would be to retire somewhere between age 55 - age 60, so even before the age of 62. Ideally, I would have enough to never need SS, so my calculation is to max what we get for those who are benefiting after me and my DW are gone.
It's complicated. If the deceased spouse dies before FRA and before claiming SS, the widow is eligible for up to 100% of PIA (reduced if widow claims before FRA). If deceased spouse dies after FRA but before claiming SS, the widow is eligible for up to what the deceased spouse's SS would be if claimed on the day he died. If deceased spouse died before FRA and had already claimed SS, the widow is eligible for up to 82.5% PIA, or up to his actual SS percentage if greater (example 85%). When the widow claims may further reduce her SS, if she claims before FRA. The widow can claim as early as age 60, but would receive only 71.5% of whatever amount she was eligible for at FRA. So if the higher earner claims early, the widow's SS benefit is at least 82.5% if the widow waits until FRA to claim. If the higher earner dies early before claiming SS, the widow's benefit is 100% if the widow waits until FRA to claim. If the higher earner dies after FRA, the widow's benefit is whatever the deceased spouse's SS benefit would be as of his death, increasing 8% every year beyond FRA, maxing at age 70. If FRA is 67, max is 124%. If FRA is 66, max is 132%.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Nov 16, 2019 13:13:17 GMT -5
I stopped working in 1999 and saw the same thing. And when I went to the Social Security office after my sweetie passed away in 2018 to see what would work best for me, my payments from my earnings would have been that amount that had stayed the same over the years. Thanks. So it is better to go and ask them based on what we are planning? If I am going to get that amount regardless of when I stop working from now on, I can quit my job Was it in error? Or did you already have 30 years and were not replacing low earning years with higher ones?
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Post by Deleted on Nov 16, 2019 14:39:59 GMT -5
On the early retirement board I see several common reasons people start at 62. They need it. They expect a shorter-than-average life span. They don’t want to tap their savings yet. They don’t know how the program will change and don’t want to lose out.
My decision was pretty simple. DH started at FRA and died when I was 61 so I hadn’t filed. I get Survivor Benefits in his record. My own would be close tho the max and I’ll file at age 70. Min died at 85 and Dad is still around at 88 so it’s a decent bet for me.
I am encouraged by the number of husbands here who waited to collect so their wife would get higher Survivor benefits. A friend had to file at 52 even though she was working PT because her DH decided to retire and the only way they could make it work was for her to file as well. I feel bad for her- it’s a short-sighted decision (they din’t have a lot of savings) and most likely she’ll end up paying the price.
Those glaring errors teenstweensandatot pointed out are a stark reminder of how much crap masquerades as advice.
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schildi
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Post by schildi on Nov 16, 2019 15:39:56 GMT -5
Let's assume what our plan is: - retire at 55 - 58 years of age - have enough saved that (theoretically) we would never need SS money to live (we are on track to get there, I think)
With the above assumptions, would you: (a) start drawing $2,265 at the age of 62 or (b) wait until age 70 and draw $3,790? I think (a) would make more sense.
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teen persuasion
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Post by teen persuasion on Nov 16, 2019 17:10:49 GMT -5
Let's assume what our plan is: - retire at 55 - 58 years of age - have enough saved that (theoretically) we would never need SS money to live (we are on track to get there, I think)
With the above assumptions, would you: (a) start drawing $2,265 at the age of 62 or (b) wait until age 70 and draw $3,790? I think (a) would make more sense.
With those assumptions, I'd choose (b). If I'd saved enough to retire early (longer retirement to fund, longer term for things to possibly go wrong), even planning to hopefully never need the SS payments, I'd look at them as insurance. Insurance to provide annual income in the worst case scenario where my savings are depleted. If I end up needing that annual income, I want it as large as possible. My answer is also colored by family longevity. Mom is nearly 80, dad is nearly 90, both are healthy and active. Both have living older siblings in their nineties, still active and traveling. My maternal great aunt lived to 102. So I'm not afraid of waiting to claim SS and missing out by dying young - I expect to live a long time, and figure I'll collect more by waiting for the bigger payout. But mostly I view it as insurance.
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