Video on not taking social security at age 65

[CarbonToast]

He said you are heavily penalized if you earn more than $19K and are taking SS. I think he said you give back half of your SS payments. Does that $19K include investment income like dividends, interest and capital gains?

No, it's wages. From ssa.gov

When we figure out how much to deduct from your benefits, we count only the wages you make from your job or your net profit if you're self-employed. We include bonuses, commissions, and vacation pay. We don't count pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits.

 

[Pablo]

He said you are heavily penalized if you earn more than $19K and are taking SS. I think he said you give back half of your SS payments. Does that $19K include investment income like dividends, interest and capital gains?

Hmmm. It is earned income.

 

[Donald]

Working until 70 is nuts

But taking SS while still working might be nuttier

What if your 71 and still working? (Forgot to retire).

The screw job when working past 65 is you are still paying Medicare premiums, potentially getting Medicare benefits but paying IRMAA which is 2X my Medicare Part B premium.

One gets zero benefit from paying any Medicare premiums past 65. At least with SS they recalculate your benefits as you work longer replacing lower income years with higher income years.

And wife pays the same IRMAA I do because I work. Wife does not

 

[tbm5690]

Another significant factor to consider is the SS survivor benefit for a surviving spouse (and a divorced former spouse/dependent, under certain circumstances) after a SS recipient dies. The eligible survivor's SS payment may be increased to the higher SS amount if the deceased spouse was drawing the higher SS payment.

Social Security Survivor Benefits

This. My wife will most likely live into her 90s based on family history. I will likely go well into my 80s at a minimum but as a stay at home mom, even though she will likely return to the workforce in some capacity after kids are out of the house, my SS basically will cover the both of us. Of course at 34 I'm not planning on any SS whatsoever being a part of my retirement plan, but if it's still around at that point it's for her.

 

[doitmyself]

This. My wife will most likely live into her 90s based on family history. I will likely go well into my 80s at a minimum but as a stay at home mom, even though she will likely return to the workforce in some capacity after kids are out of the house, my SS basically will cover the both of us. Of course at 34 I'm not planning on any SS whatsoever being a part of my retirement plan, but if it's still around at that point it's for her.

Plan for none of your plans going as planned. Really.

Google AI Overview just gave me this really good definition:
A plan for none of your plans going as planned would involve: remaining flexible, having backup options for various scenarios, embracing spontaneity, and prioritizing adaptability to unexpected situations; essentially, expecting the unexpected and being prepared to adjust your course of action on the fly, rather than rigidly sticking to a set itinerary or schedule.

 

[alarmguy]

Social Security, I love the subject and have been into this subject for around 10 years. For once I THINK I can keep this short. (nope!)

1. You want to retire at 62 (or between 62 and full retirement age) and you can afford it. You can also afford or do not mind paying out of pocket for health insurance until you turn 65 or retired your income will still be too high for government contribution ACA health care.

2. You can't afford to retire at 62 because you haven't saved enough to do so

3. You love working and have no desire to retire

Simple stuff, Social Security income is a supplement to what you have saved up during your lifetime. That is it. No rocket science here.

My situation?
(Now 68 years old)
I knew I wanted to retire or scale back my insane work load at 62 and I knew I did not want to pay health insurance costs if I retired early.
When I say scale back, I actually enjoyed working and like working with people however more free time was dearly wanted.

One month before 63 I left my full time position. Started collecting Social Security
I applied for a part time position at a national bank, I exceed the earnings threshold but didn't care. At a certain point SS takes 50% of what you make once you pass the earnings threshold. (you get it back later on anyway once retired)
After three months (yes 3) 1 month of interview and yes again 2 months of background investigations (long story) I was hired. The reason I wanted this part time position was my wife is still working but not ready to just stop working. I enjoy being around people.

It WAS the dream job for me. 25 hour work week 9am to 2pm, 5 weeks (yes) of PTO including holidays and (yes again) full health insurance benefits. NO WEEKENDS and no holidays.
It wasn't really for the money I had a hard time mentally of retiring and paying full price for health insurance, still feeling young I loved this job. I actually 401k'd the maximum allowed for that period in the banks 401k program

At age 65 left the job, I did love the job and actually would have stayed longer however in a national change of policies I would have to start working 1 and up to 2 Saturdays a month.. Deal killing goodbye and fully retired at 65

So for those who want to retire this is REALLY SIMPLE STUFF. I mean, do the math for yourself
Everyone has different lifestyles and income requirements vary greatly.

 

[alarmguy]

Ok, let's take one case of a general average for many. (numbers are rounded off)

A.
Retire age 62 collect $2200 a month (keep in mind you have to pay health insurance until age 65)
At age 67 you collected $132,000 in social security income by retiring at 62

_______________________________________________________________
B.
Retire age 67 collect $3100 a month
You have collected nothing in social security income at this point, you are just starting out.
It will take 146 months = 12 years to catch up to the payments made to the person who retired at age 62

_________________________________________________________________

It's truly what is important to the individual. Like working? or need the money to maintain your lifestyle. All good, keep working.

Want to retire? Do the math, You really should not have to rely for much more than 1/3rd of your income if you retire is what I read. But do your own math everyone has a different perspective on lifestyle.

You also have the option to retire at any year after age 62 as benefit payment goes up on a month to month basis for each month you work past 62.
You can also bank your social security payments and collect interest on the money at age 62 if you don't need the income.

No one size fits all, so the debate is silly. Read the top part of this post over and over. Simple stuff.

If you can't retire at 62, work until you can. If you can retire at 62 keep in mind that Social Security is going to pay you $132,000 more than the person who waits until age 67. It will then take that person who retires at 67 - 12 years to catch up to the person who retired at 62 as far as Social Security payments, being you still are working that person will also have more income and savings.

Me? no regrets at all. The way I see it, waiting is gambling. I could afford to so I decided to start collecting at 63 believe it or not age 62 fly by so fast I forgot about retiring at 62 and also found out rental income is treated differently than paycheck income for SS income limits *LOL* Its been a while so check with an accountant.
I certainly hope to live well past 80 years old which would be my break even point between A. and B. But that doesn't matter to me. I can afford it. Actually I have not touched any savings since retiring. I do have rental income from another property.

Last and final (and this is why there is no right or wrong, no one in here can tell another what is right or wrong for them)
I beat my family history (mostly but not all) of heart disease and diabetes. My dad passed away at 70 years old, glad he retired at 62 and was able to enjoy life for a while before a heart attack in his driveway after a snowstorm. A sibling of mine, a little older is a train wreck with his heart and diabetes and will be a stretch if he makes it to 80, so I am glad he retired at 62 and is truly enjoying life in his early 70s now.
Me/ the youngest beat them all, my health as close to perfect as can be. I dont take medications, my heart performing at an EF score of 60 (perfect) and no diabetes.
So what happens? 6 months ago I am diagnosed with prostate cancer, first in my family. Started drug therapy 4 weeks ago and radiation starts on Monday. I am glad I retired to a part time job at 63 and fully retired at age 65 while still fully enjoying life. My doctor says I will be cured statistically for the next 15 years (meaning 90% of the people in my situation make it to 80 which is pretty good odds), still a shock and I am expecting to live much longer than that but I am glad I retired when I did. Now I have no clue how long I will live, life sneaks up on you fast.

Last but not least, at retirement age you are in your prime, chances are when much older you will not be spending as you do now living it up.

 

[Kestas]

Everyone's situation is different. I took my SS benefits at age 66 after the calculation showed I'd need 14 years to break even if I waited until age 70.

I too came up with the same calculation with straight money where 80 years old is the break-even point. Of course this doesn't account for the fact that you may be able to grow the money if taken earlier.

I'm personally waiting until I'm 70, which is in a year. One financial mentor told me it's a good thing to do if you don't have to need the money before then.

 

[CharBaby]

Once you’ve reached Full Retirement Age, you can make as much money as you want without penalty.
Once your spouse reached their FRA,(providing they get le$$ SS) the can now get 1/2 of yours. Again providing that 1/2 of yours is more than their own.
According to my tax consultant, SS is not considered earned income. Is this correct?

 

[Donald]

Once you’ve reached Full Retirement Age, you can make as much money as you want without penalty.
Once your spouse reached their FRA,(providing they get le$$ SS) the can now get 1/2 of yours. Again providing that 1/2 of yours is more than their own.
According to my tax consultant, SS is not considered earned income. Is this correct?

You pay federal income tax on a percentage of SS income. And state income tax in some states. And may find yourself paying a IRMAA depending on income.

 

[Greenbeforeblue]

He said you are heavily penalized if you earn more than $19K and are taking SS. I think he said you give back half of your SS payments. Does that $19K include investment income like dividends, interest and capital gains?

I don't claim to be in the know but my pension is more than 19k and I don't pay much tax on my SS. I'm 65 and have been getting it since age 62. Maybe it's 19k from a job and not from a retirement?

 

[Donald]

Also if you take it at 62 and after say a year you refigure and decide it was a mistake you can pay it back and wait for FRA or 70. They will recalculate and it will be like you never took it early.

You can also at FRA take it for a year and tell SS to put your SS on hold until you are old, say 70.

 

[alarmguy]

…
According to my tax consultant, SS is not considered earned income. Is this correct?

That is correct, with that said when it comes to tax matters if you’re doubting your accountant, ask another accountant or research on the government website because some people might be getting the right answer, but asking the wrong question for a particular circumstance

 

[CKN]

Another factor to be considered is,...... The worst day retired is better than the best day working.

Some on here don't get that......

 

[CKN]

My best friend and I each have financial advisors. His recommended taking SS at 65. Mine recommended 70.

My advisor’s read was that with a life expectancy of 82 (healthy male at age 65) you’d be ahead to wait.

The break even point for many is 80 years of age. So-yea-if you make "average" at 82 years of age, you would have been better off waiting. I retired at 55-haven't looked back. Health Insurance between 55 and 65 was a real expense.

 

[gfh77665]

Of the 4 of us who hung around during high school, 3 are dead. I'm the last man standing.

Good job! Stay vertical!

 

[gfh77665]

My situation is somewhat unique. I don't need SS, and likely never will, so the way I am tempted to "game it" is to take it early (62) and put 100% of the proceeds directly into an SP500 index fund which I would probably never touch. It would continue to fund a 401K like proxy for me for life. Over time its growth and dividend could exceed what I might get by waiting. I am thinking real hard about this.

 

[Dave Hess]

I also don’t need SS and it’s really not on my radar.

I’ve got a pension, voluntary pension, 401K and IRA to fund my retirement.
It’s a substantial amount of money (not bragging) and I earned every penny.

My SS will be invested for the grandkids 529 plans.

 

[Al]

Take it as late as possible. If you can easily live without it its a no brainer.

 

[spasm3]

Take it as late as possible. If you can easily live without it its a no brainer.

I think each person would have to evaluate that. If your genetics are not that good, take it early. I have a friend ( age 61 i think ) who is in great shape but all the men on his side of his family died before 80. His brother is gone, he has already had surgery for the same condition his brother had.

So he is wisely taking SS early, other wise he may not live to get much benefit.

My family history has longevity. My father is 85 , still works outside, mows, changes his oil. His mother lived to be 99. So if i take it early and i live that long, i might net less per month but more overall for my lifespan. But who knows, none of us are guaranteed tomorrow.

I am packing away retirement, as i don't want to outlive my money. But when to stop working ? I'm thinking i will stop at 65.