Originally Posted By: CKN
Originally Posted By: Wolf359
Originally Posted By: CKN
The last ten years (55 to 65) of your working life adds practically nothing to your total SS benefit amount.
I retired at 55 based solely on my own investments. Still have a while until early SS benefits at age 62-6months.
IMHO SS was never meant to be 100% of your income for retirement-but a supplement to what you saved for this event.
Did you go to the SS benefits website and see what the difference is between collecting at 62 and at 70? I think it boils down to how long you're planning on living, it makes more sense to wait til you're 70 if you're going to live past 79, otherwise you get more if you collect at 62 and die before then. Average life expectancy in the US is about 78 years, however if you reach 62, you've avoided many other causes of death at younger ages so depending if you're male or female, add another 20-22 years.
Yes. I do know how much more you get the longer you wait. However, I am still collecting at 62 years-6months. I can continue to enjoy RETIREMENT MORE-with the additional monies sooner than later. It's not a matter of how much more money in the long run. So if I waited I would have more money but possibly be too sick/frail to travel. Sorry- I retired early because I have seen too many people die early after their 65ish retirement goal.
It basically boils down to whether you need the money or not. If you need it, then it makes sense to start collecting it earlier. If you don't need it then it makes sense to wait longer. I know several people in their 60 and 70's where an extra $1k or more per month won't really do anything for them as they're still quite loaded without it.
As for those who don't think it'll be there when you're 80, well all they have to do is make some minor tweaks to the system so it'll be there later. It's not so drastic that you'd get nothing, there might be a cut in benefits or maybe there won't be cost of living increases.
Here's one quick article at:
http://www.topretirements.com/blog/finan...prise-you.html/
Spousal Benefit
One day during a tennis game Solman’s friend and Social Security expert Larry Kotlikoff told him that he was entitled to nearly $50,000 in spousal benefits. Solman, the seasoned economic correspondent, was shocked that he didn’t already know this strategy (although he has since collected on it). Basically the strategy for 2 working adults who are of approximately the same age works this way. At age 66 one spouse, presumably the higher earning one, claims and suspends her Social Security benefit. When the 2nd spouse turns 66, he files for the spousal benefit (50% of Spouse 1’s full retirement benefit at age 66). At age 70, Spouse 1 claims her benefit, getting 8% more each year for waiting past age 66. Spouse 2 drops the spousal benefit and claims on his own benefit at age 70. The advantage of this strategy is clear – both spouses get their maximum benefit at age 70, but the couple also gets the spousal benefit from age to 66 to 70 on one person. In the case of an earner whose SS benefit is $24,000, those 4 years of spousal benefits add up to $48,000. According to Solman, Americans are leaving at least $10 billion in unclaimed spousal benefits like this on the table every year.
“What is Your Worst Case Scenario?”
Think about that question, because we didn’t get it right. According to the authors the correct answer is not that you die soon after you start collecting and lose out on your fair share. It is unfortunate that you didn’t get to live a long life and that you lost out on some money, but worse things could happen. Nor is the right answer that you held out for the maximum benefit at age 70 but died before the break-even point – once again you are dead and it doesn’t matter. The real answer to the worst case scenario is this: you live too long, exhaust your savings, and spend years living in poverty on a smaller than it had to be SS benefit. With our increased longevity, this is the most serious problem that most of us face. In fact in the March 4 New York Times there is a quote from The Center for Retirement Research at Boston College: “…more than half of all American households will not have enough retirement income to maintain the living standards they were accustomed to before retirement.”
So how do you overcome that problem?
The best way to avoid running out of money in your 80s, 90s, and even 100s is to claim your Social Security benefit as late as possible. For a variety of reasons a very high number of folks take SS at age 62, the earliest they can claim a retirement benefit. But every year you wait to claim will put more money in your check. If you can put it off to age 70, either by working, spending less, or using your savings, your monthly check will be 76% higher than at age 62. Yet surprisingly, only 2% of people do this. Think about that 76% bump – with the average benefit currently about $12,000 a year, by waiting you can turn that into $21,120, which by the way, is indexed to inflation. That is a huge difference for people who live into their 90s. For higher earners, the extra dollars are even greater.
Too many claim too early, and lose out
Solman and Kotlikoff, along with their co-author, financial journalist and aging expert Philip Moeller, believe that the vast majority of people claim their benefits too early. There are of course good reasons to file before age 70. One is because you have nothing else to fall back on: you are unemployed, have no savings, and will starve otherwise. Another is that you and/or your spouse have a life threatening illness – there is no point in delaying (but even then don’t forget that if the deceased spouse is the higher earning, the 2nd spouse is eligible for 100% of that higher benefit for the rest of his/her life). Many others claim early because they don’t know any better, or they are afraid the system is going to run out money and they will lose out.
