I want every penny coming to me... (and I don't need the $$ now), so I am waiting until my FRA to tap it.
What is the significance of SS full retirement age?
- Thread starter Dave1027
- Start date
I started taking SS at age 62. I did the math-I would have to live to 80 years of age to regret not taking it at full retirement age.......
I maxed out my contributions many years-so what I get isn't a pittance even taking it early.
Waiting to take it later-only to die at 80ish years of age (statistically).
Doesn't make sense to me....
I believe The actuarial job is to pay the same amount of money out overtime irrelevant of when you retire, based on statistical charts. So they make a determination on when you will die, and then they divide the amount by that number of years. So in theory, if you lived to exactly the theoretical death age, you would collect the same amount, irrelevant of when you start. That is my understanding of what the actuaries do at least.
What?
There are statistics that state once you reach certain " age milestones" you will live more years-and even have a healthy life-again for the age group.
https://www.ssa.gov/oact/STATS/table4c6.html
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Tom, my earlier post was wrong. I finally found a source that spelled it out without being ambiguous.
SSA handbook, Section (Paragraph?) 407, Amount of Widower's Insurance Benefits. 407.1
"The widow(er)'s insurance rate equals 100% of the deceased worker's primary insurance amount plus any additional amount the deceased worker was entitled to because of delayed retirement credits."
Primary Insurance Amount (PIA) is what you get at FRA. In your case, you should get 100% of her higher amount, which is her PIA plus delayed credits.
Phew, good news for me too.
https://www.ssa.gov/OP_Home/handbook/handbook.04/handbook-0407.html
This is very true...one should not base your retirement plans on an oil forum. All the money saved buying .25 cent clearance oil should be used to talk to a certified financial planner.
Most of the calculations on break even points concerning when to start SS don't take into account the time value of money. I did a spreadsheet assuming taking SS at 64 (when I retired), investing the payments, then withdrawing from that investment account after reaching FRA an amount equal to make up for the 16% lost by taking it two years early.
With an investment return of above 5%, I always came out ahead taking it early, even if I lived to over 100. At a nominal investment gain (S&P500 average) of over 8% the account would continue to grow nicely, even after the withdrawals. The spreadsheet however didn't take into account income taxes, COLAs or survivor benefits.
In spite of this conclusion, I delayed starting SS until I was almost 70. I didn't need the payments to live on and I used the in-between time to convert part of my IRA to a Roth IRA at a low tax rate. Plus my wife gets a higher payment if I go first. If SS payments get reduced because the trust fund runs out, it will have been a bad decision, but I think that is a low probability event.
With an investment return of above 5%, I always came out ahead taking it early, even if I lived to over 100. At a nominal investment gain (S&P500 average) of over 8% the account would continue to grow nicely, even after the withdrawals. The spreadsheet however didn't take into account income taxes, COLAs or survivor benefits.
In spite of this conclusion, I delayed starting SS until I was almost 70. I didn't need the payments to live on and I used the in-between time to convert part of my IRA to a Roth IRA at a low tax rate. Plus my wife gets a higher payment if I go first. If SS payments get reduced because the trust fund runs out, it will have been a bad decision, but I think that is a low probability event.
I may be COMPLETELY off base in my thinking. This is what I have been throwing around. I am 52 years old. I'm hoping to fully retire at 62 (not working at all) at the latest and waiting to pull from SS till 70 (to maximize it). In my head, all I need my 401K to do is bridge the time I retire to the time I take SS. If I retire at 60, that would mean 10 years.
True, but your statement implies that Social Security will be your only income once you turned 70.
The longer you wait to take it the more $$$ you get....I took mine as soon as I could. Had I waited I would be getting 1000 more a month.
Lesson learned..too late.
Lesson learned..too late.
Hermann
Site Donor 2023
My FRA was 66 and glad I waited the 1 year after Medicare started. Had no income that year except investments and I was able to get 15K out of my 401K without paying taxes on that money. Only spent $12K on living that year and went on two vacations. Everyone skins their cats differently.
I doubt that many (if any) of us on BITOG could live comfortably with only a SS paycheck after turning 70 years old. The 401K and other savings/pension/dividends are normally used to supplement the SS amount to maintain a comparable quality of life.
I am absolutely with you on those thoughts. Maximum benefit is at age 70, any lower age is less than the maximum.
I certainly hope you are correct.
I wonder what the difference is between a widow and survivor.
I used to think the same way. Unexpected health issues forced me to reconsider. (mitochondrial dysfunction, sec adrenal insufficiency, thyroid failure, mixed connective tissue disease, and muscle failure)
61 is just a couple months away, and I hope to collect at 62. If for some reason I earn money, SS will simply reduce my benefits and pay more later. That's a non issue.
More importantly, I can do what I want with SS income. Let's say I invest at 5% per/yr long term, I would have a nice sum at FRA. And since I have retirement accounts that earn little to nothing (don't ask) maybe the right thing is to pull money from those accounts for living expenses starting in Jan 2025.
