Rukh O'Rorke
Junior Associate
Joined: Jul 4, 2016 13:31:15 GMT -5
Posts: 9,985
|
Post by Rukh O'Rorke on Feb 2, 2021 9:22:15 GMT -5
Unless you absolutely need the money to live on, whether to claim SS early or wait is basically a bet on your life expectancy. If you can get by on investments and expect to live well into your eighties, then wait and claim later. If not, then claim earlier and keep more money in investments. I always figured we'd live about the same age as our parents and grandparents, 80s. Then our siblings started dying... in their 60s. It makes me very glad hubby retired early and we are able to check some things off our bucket list while our health is still (relatively) good. Don't wait too long, people. Condolences on your siblings. This is a bit sobering for me. Most of my elderly relatively lived into their 90's, and I do make assumptions. If I know I would leave here in my 60's or even 70's, I'd be putting in my notice today....
|
|
Rukh O'Rorke
Junior Associate
Joined: Jul 4, 2016 13:31:15 GMT -5
Posts: 9,985
|
Post by Rukh O'Rorke on Feb 2, 2021 9:24:59 GMT -5
I'm amazed you all track your numbers so well. I never really bother. thank you for this! I just can't track it like this, and when I downloaded everything for the year - well - there is almost no categorizing the ~5k in charges at amazon. some is food!
|
|
Rukh O'Rorke
Junior Associate
Joined: Jul 4, 2016 13:31:15 GMT -5
Posts: 9,985
|
Post by Rukh O'Rorke on Feb 2, 2021 9:39:18 GMT -5
But how do you bring in the 20-30k/year in your 50s if not working and not pulling from investments? I meant through primarily PT work. My average salary for the 4 years thru June 2020 was $106k (this is the number my pension will be based on), so it doesn't seem unreasonable to think I can manage to do something for 20k/yr. I just can't continue the way things are now. I took a 20k pay cut last June to escape the job I'd been in for 18 years in an effort to reduce stress. That was somewhat successful in that my blood pressure went from being in the pre-hypertension range for many years to being consistently in the high normal range now. But I still have 0 quality of life because of my work. My health, home, and relationships are in shambles.
I just got an offer of part time work from someone I worked with in my old department. I'm taking her up on it, but it's only a few hours a week, so maybe $4k/year. She mentioned my former supervisor also wants me back (to work with a different team than the one I left). I like that team and I think he'd be okay w/PT. But it's a big learning curve that I'm not sure I'm up for any more, so IDK.
The other possible source of income is my condo. I don't want to stay in this area permanently and had hoped to try living in different places in the US and in other countries for a few years to figure out where I want to settle down. I could rent out my condo during that time to clear another $5-6k in income. However, aside from the obstacles thrown up by the pandemic, there is the problem of my older cat. I can't bear the thought of making him leave the only home he's ever known and he does not travel well. I know it's ridiculous to base such major decisions on a cat, but the sad truth is, he is the only living thing in the world that I seem to be capable of making happy. I don't want to let him down.
oh my gosh, Jen we are so twinning! except - no pension for me, and cats not so very old but not up for living in a cybertruck and touring the country like I have a hankering for. Also, sfh rather than a condo, so more difficult to rent out in this area, but something I've been considering. Will probably stay put for the cats and will resist acquiring more....but you never know. seems more strays these days, and we have captured these two, but if we are able to coax them in, we do....
|
|
countrygirl2
Senior Associate
Joined: Dec 7, 2016 15:45:05 GMT -5
Posts: 16,715
|
Post by countrygirl2 on Feb 2, 2021 10:27:42 GMT -5
If hubs had not gotten the good job he did, I would have had to work. He is regretting not working out of the union hall up here when he first came back. We just enjoy working, I know he does. Also now we are earning nothing from our other investments so we may need to scale back on spending.
We do have a lot of expenses. But remember I was raised by parents that worried about money as they struggled until their older years. And hubs was raised by savers, so we are just careful.
Our son is the same. If his wife didn't spend the boy would be worth a couple million dollars by now. But he will have a good pension and social security. And if he retires from DOD he is talking about contracting like he did in the past.
Believe me you will spend more in retirement if you do anything at all.
But I do realize we have more income then many people who are working.
|
|
CCL
Junior Associate
Joined: Jan 4, 2011 19:34:47 GMT -5
Posts: 7,571
|
Post by CCL on Feb 2, 2021 10:59:59 GMT -5
I'm glad to hear this worked out for you -- it's what I'm hoping for! I'll turn 56.5 in December. If things go according to plan, I won't HAVE to touch any retirement accounts until age 74. If I can bring in 20-30k/year for at least a few years, I should be able to avoid pulling anything from taxable investments and continue contributing 7k/yr to my Roth IRA.
But how do you bring in the 20-30k/year in your 50s if not working and not pulling from investments? We figured we could always work part-time, if needed. I decided a monthly transfer from the 401k was the best option for us. We wanted to travel and have fun instead of work lol. I can always cancel or reduce it, but, so far, we haven't needed to. I do think we got lucky with the markets. Overall, we still live pretty cheap, too. We downsized the house, then refinanced, which cut our housing costs roughly in half. We don't have cable. I still cook almost everything at home from scratch. It wouldn't bother me to not buy new clothes for a year.
|
|
CCL
Junior Associate
Joined: Jan 4, 2011 19:34:47 GMT -5
Posts: 7,571
|
Post by CCL on Feb 2, 2021 11:06:06 GMT -5
But this it through, I took mine at 62, a dumb move and lowered my SS 25% from now on. And I believe it would lower hubs 25% if I'm the survivor. I would work till age 66 if I were you. I would have but circumstances prevented me and I paid dearly. But you still have lots of money every month, what would you really gain quality of life-wise by having 25% more SS?
Besides, all that money has been coming in for all those extra years. There are plenty of ways to have benefited from it.
|
|
TheOtherMe
Distinguished Associate
Joined: Dec 24, 2010 14:40:52 GMT -5
Posts: 26,962
Mini-Profile Name Color: e619e6
|
Post by TheOtherMe on Feb 2, 2021 11:15:31 GMT -5
She is saying that if she takes the SS and invests it, she has to take the same amount out of investments to make up for not having the SS to spend. She ends up in the same place, at best. The whole idea of investing the SS is silly for someone who needs more than the SS amount to live on. It makes no sense to take with one hand and replace with the other. You are introducing an extra complexity with no benefit, and probably a worse outcome due to taxes. But again - the ss increase is guaranteed and investment returns are not, and that could be a major consideration. The trade off wouldn't work in all situations, although if the stock market is not doing well - withdrawing more each month also comes with drawbacks. SS increase is not guaranteed--such as 2010, 2011 and 2016 when it was 0
|
|
|
Post by minnesotapaintlady on Feb 2, 2021 11:19:34 GMT -5
But again - the ss increase is guaranteed and investment returns are not, and that could be a major consideration. The trade off wouldn't work in all situations, although if the stock market is not doing well - withdrawing more each month also comes with drawbacks. SS increase is not guaranteed--such as 2010, 2011 and 2016 when it was 0 She meant the increase from what you draw at 62 vs. what you would draw at 70. Although, I guess technically that isn't guaranteed either.
|
|
TheOtherMe
Distinguished Associate
Joined: Dec 24, 2010 14:40:52 GMT -5
Posts: 26,962
Mini-Profile Name Color: e619e6
|
Post by TheOtherMe on Feb 2, 2021 11:21:01 GMT -5
I don't think anything is guaranteed when it comes to social security.
|
|
tallguy
Senior Associate
Joined: Apr 2, 2011 19:21:59 GMT -5
Posts: 14,107
|
Post by tallguy on Feb 2, 2021 12:57:47 GMT -5
So if you take it at 62 and either invest and/or don't withdraw from investment that money, you get to 70 with an increased kitty of nearly 180k, and if you use the 4% withdrawal rate to keep the kitty bumb in perpetuity, you get 599/month extra "spend", so 1193+599 = 1792 month as the alternative to 2182, which is 390 less per month but with $179,734.44 to tap into if/when needed, and $179,734.44 to leave to heirs. Byt of course - you may not get the 11% a year annualized return, and other things may make the bigger check at 70 worth it. But those are all unknowns. So, after a good nights sleep I went back to the beginning of where we diverged and realize we've been saying the same thing the entire time. Yes, she was on the right track early, but then got onto the idea that you were going to claim SS and still take the $3000 from investments, which is where I said that she misunderstood the response. That was never your intent. Here is where it went wrong: And:
|
|
Rukh O'Rorke
Junior Associate
Joined: Jul 4, 2016 13:31:15 GMT -5
Posts: 9,985
|
Post by Rukh O'Rorke on Feb 2, 2021 14:20:31 GMT -5
But again - the ss increase is guaranteed and investment returns are not, and that could be a major consideration. The trade off wouldn't work in all situations, although if the stock market is not doing well - withdrawing more each month also comes with drawbacks. SS increase is not guaranteed--such as 2010, 2011 and 2016 when it was 0 not the topic - the increase payout on waiting to collect.
|
|
Rukh O'Rorke
Junior Associate
Joined: Jul 4, 2016 13:31:15 GMT -5
Posts: 9,985
|
Post by Rukh O'Rorke on Feb 2, 2021 14:23:02 GMT -5
So, after a good nights sleep I went back to the beginning of where we diverged and realize we've been saying the same thing the entire time. Yes, she was on the right track early, but then got onto the idea that you were going to claim SS and still take the $3000 from investments, which is where I said that she misunderstood the response. That was never your intent. Here is where it went wrong: And: huh? just. no.
|
|
jerseygirl
Senior Member
Joined: May 13, 2018 7:43:08 GMT -5
Posts: 4,698
|
Post by jerseygirl on Feb 2, 2021 15:57:48 GMT -5
Good employer- never heard of retirement at 60 then employer giving supplemental equivalent to SS till 62 Excellent retirement medical coverage too!
You mentioned employer required to cover or pre pay retirement- Post Office?
|
|
ajmom
Initiate Member
Joined: May 7, 2017 12:46:28 GMT -5
Posts: 62
|
Post by ajmom on Feb 26, 2021 13:51:21 GMT -5
This topic is really interesting! Taking SS out at 62, 67, or 70
What about taxes? Depending on your income , your SS will be taxed if you take it out at 62...Won’t it be taxed again if you invest it and take it out later? I really don’t know — just asking the question!
Or are you doing a Roth with that money? What are you investing it in?
This is interesting to me, as I am retired, and was planning on waiting till 67 or 70 to take the money... But there is also the thought that by 2032 they will only pay out about 75 percent of benefits because of problems with it? Will they fix the system by then? I believe they even have this disclaimer on the estimate of benefits....
Anyway, I know how the federal retiree benefits work because I worked there. I don’t know anything about social security, though, so am interested in what others have to say who understand it better than I do!
|
|
CCL
Junior Associate
Joined: Jan 4, 2011 19:34:47 GMT -5
Posts: 7,571
|
Post by CCL on Feb 26, 2021 19:28:41 GMT -5
Yes, for us, most of our SS will be taxed. What I've been doing the last few years is converting traditional IRA dollars to Roth. I expect tax rates to go up in the future, so I prefer to pay it now while in the 12% bracket.
My long-term capital gains rate is 0% right now, so most of my dividends and capital gains are at 0%. That may change in the future, but hopefully I will have all my IRA converted to Roth before that happens.
|
|
giramomma
Distinguished Associate
Joined: Feb 3, 2011 11:25:27 GMT -5
Posts: 21,150
|
Post by giramomma on Feb 26, 2021 19:43:44 GMT -5
This is interesting to me, as I am retired, and was planning on waiting till 67 or 70 to take the money... But there is also the thought that by 2032 they will only pay out about 75 percent of benefits because of problems with it? Will they fix the system by then? I believe they even have this disclaimer on the estimate of benefits.... No. They won't.
|
|
|
Post by minnesotapaintlady on Feb 26, 2021 20:02:50 GMT -5
I think they'll do something, just like they did back in the early 80's when costs exceeded income. Probably increase retirement age for the younger folks and/or means test benefits. There's way too many voters in the over 50 age category.
|
|
CCL
Junior Associate
Joined: Jan 4, 2011 19:34:47 GMT -5
Posts: 7,571
|
Post by CCL on Feb 26, 2021 20:15:19 GMT -5
I'm with minnesotapaintlady. I don't think they'll change much with SS. Maybe raise the retirement age, increase contribution amounts or tax more than 85%.
|
|
Lizard Queen
Senior Associate
103/2024
Joined: Jan 17, 2011 22:19:13 GMT -5
Posts: 14,659
|
Post by Lizard Queen on Feb 26, 2021 20:19:25 GMT -5
There's too many people who will have little more to live on than SS to cut it after a certain date. Plus, how unfair is that to pay fully the people that have already been getting it, and not give the full amount to newbies? The younger people would/should revolt in that case.
|
|
Deleted
Joined: Mar 29, 2024 9:32:44 GMT -5
Posts: 0
|
Post by Deleted on Feb 26, 2021 20:36:25 GMT -5
To answer the OP- you don't wanna know what I spend in retirement! Its a high number but it's sustainable in my case. Investments have increased by 4%/year AFTER withdrawals since my retirement almost 7 years ago.
I approached it from the other direction when making the retirement decision. What would our household income be with a 3% withdrawal rate and DH's SS and could we live on that? We were losing my employer health insurance so had to sign DH up for Medicare B and the prescription plan and I had to get ACA but we were also not going to be saving for retirement anymore and that was a big chunk of change. It was manageable. DH was already getting SS and I was 61. I did not file at 62- people in my family tend to live a long time so I wanted the higher amount. DH died when I was 63 so I get Survivor benefits anyway.
I may start collecting on my own record at 69, so one year from now. That would get me another $15K/year. Frankly, I don't need it and a lot will evaporate in extra taxes including the nasty IRMAA surcharges. I'm just concerned about future tax increases, SS decreases and the prospect of even more taxes when I start RMDs. May as well get in a year or tow before all that happens.
|
|
laterbloomer
Senior Member
Joined: Dec 26, 2018 0:50:42 GMT -5
Posts: 4,347
|
Post by laterbloomer on Feb 27, 2021 8:54:37 GMT -5
@athena53 you told me earlier in the thread 🙂 You are higher income than me, but it did help remind me of the categories to think of.
|
|
Deleted
Joined: Mar 29, 2024 9:32:44 GMT -5
Posts: 0
|
Post by Deleted on Feb 27, 2021 10:00:04 GMT -5
Oops. Didn’t read all 175 posts!
|
|
laterbloomer
Senior Member
Joined: Dec 26, 2018 0:50:42 GMT -5
Posts: 4,347
|
Post by laterbloomer on Feb 27, 2021 13:55:40 GMT -5
Oops. Didn’t read all 175 posts! 😄😄
|
|
countrygirl2
Senior Associate
Joined: Dec 7, 2016 15:45:05 GMT -5
Posts: 16,715
|
Post by countrygirl2 on Feb 27, 2021 23:56:13 GMT -5
I think we will be fine no matter what. We could sure reduce our spending a lot and still be ok. Hubs and I pretty much get whatever we want. And I could quit buying cars.
I wanted to cut back now and move to town. But I watched hubs around here for a week with nothing to do and he can't handle it. He was walking the floors or out helping people. In town what would he do? One of the reasons I gave up on moving, if he is healthy enough to be active, let him. If something happens to him, then I can move or get some kind of help here I guess. That decision will be made whenever.
Hubs took his at 69 which was a big plus. And while he was working he was a high earner, so DD and I traveled and had a lot of fun, so that was good. I took mine at 62. But its ok, no matter what happens. The only thing that will kill us is him getting into a nursing home for dementia. That would clean me out in a few years and is a real possibility.
|
|
countrygirl2
Senior Associate
Joined: Dec 7, 2016 15:45:05 GMT -5
Posts: 16,715
|
Post by countrygirl2 on Feb 28, 2021 12:13:11 GMT -5
And actually pretty cheap living out here taxes $2k and insurance about the same. So unless we got a much smaller place wouldn't be less. So this is an economical place to live.
|
|
countrygirl2
Senior Associate
Joined: Dec 7, 2016 15:45:05 GMT -5
Posts: 16,715
|
Post by countrygirl2 on Feb 28, 2021 15:56:33 GMT -5
Yep, Athena that's what we looked at what we wanted in retirement. My husband was saying oh we can save those RMD's, I said are you crazy, with the taxes we will have to pay, no we won't. Well, no surprise to me, no we are not. It really increases your taxes that's for sure.
Our son is fortunate I explained that to him, He is not like us, he has the option of an after tax plan, we did not as hubs made to much. So anything he has from small before tax plans he has had at other places he worked he is rolling into tax paid and paying the taxes. He knows how much of ours is going to taxes. I envy him, he will have a pension and SS and if he gets out of work or retired from his job, he can work as a contractor as his specialty is really in demand. His BIL is doing that 2 pensions and working from home now, so a good deal.
But I still marvel at what MPL has done. She is doing great.
|
|
countrygirl2
Senior Associate
Joined: Dec 7, 2016 15:45:05 GMT -5
Posts: 16,715
|
Post by countrygirl2 on Feb 28, 2021 15:59:39 GMT -5
But then I was just looking over our taxes for last year and our CPA spells out the tax rate and effective tax rate. It's only about 12%. Indiana is 4%. This year will likely be higher with sales of properties but that is not the norm.
|
|
|
Post by The Walk of the Penguin Mich on Feb 28, 2021 18:46:31 GMT -5
But then I was just looking over our taxes for last year and our CPA spells out the tax rate and effective tax rate. It's only about 12%. Indiana is 4%. This year will likely be higher with sales of properties but that is not the norm. Is the sale if your properties going to affect your IRMAA?
|
|
countrygirl2
Senior Associate
Joined: Dec 7, 2016 15:45:05 GMT -5
Posts: 16,715
|
Post by countrygirl2 on Feb 28, 2021 23:28:19 GMT -5
It may, I wonder, we should have put one in this year. But the one couple needed to get in the house and the other was wanting the land quickly too. We talked about it. But the Texas sale had no recapture and the Indiana sale isn't going to have much so I hope not.
If it does won't be this year but the next.
We only escaped it when hubs retired because it was a life changing event, we fought that for almost a year until we found someone with SS that understood it.
|
|
seriousthistime
Senior Member
Joined: Dec 22, 2010 20:27:07 GMT -5
Posts: 4,679
|
Post by seriousthistime on Mar 1, 2021 11:50:35 GMT -5
I've gotten hit with a large IRMAA for this year. I appealed due to a life-changing event, and I'm waiting to see what happens. I understand it can be a fight. At best, this year, I think it will net me a one-bracket reduction. Next year, maybe 2 brackets.
I'm collecting SS as a divorced ex-spouse (married for at least 10 years, divorced for at least 2 years), so I get half of what he would get at his full retirement age. Later this year I turn 70 and will file for my own benefit, which will triple the amount of SS I collect.
I understand they changed the law on this, and if you were born in 1954 or later you don't get a choice of filing for spousal benefits vs. your own earned benefit. You file for a SS benefit and get whichever yields you a higher amount.
I retired at the end of last year. I still haven't fine-tooth-combed my finances yet. Life has been crazy since then.
Logging onto YNAB in a moment...
|
|