Thread: Social Security at 62?

Breakeven analysis is important, but everyone's circumstances are unique.
Remember to consider income tax impact on taking SS vs.. investments.
Also, if you care about leaving a legacy to children or charities you obviously cannot leave SS benefit to
those when you die. If you draw down investments (TSP/IRA/401 K) for income while postponing claiming SS,
you are taxed at 100% and are depleting any potential legacy..
Lastly, by 2030, SS,Medicare,interest on 18-22 trillion dollar Federal debt will consume ALL of Federal budget.
Big changes will have to be made to social programs, possibly including means testing (reduced benefits based in income).
Politicians continue to say, "those 55 and over will not be impacted" by any changes, but can you take that to the bank ?

Originally Posted by Dutchy

Breakeven analysis is important, but everyone's circumstances are unique.
Remember to consider income tax impact on taking SS vs.. investments.
Also, if you care about leaving a legacy to children or charities you obviously cannot leave SS benefit to
those when you die. If you draw down investments (TSP/IRA/401 K) for income while postponing claiming SS,
you are taxed at 100% and are depleting any potential legacy..
Lastly, by 2030, SS,Medicare,interest on 18-22 trillion dollar Federal debt will consume ALL of Federal budget.
Big changes will have to be made to social programs, possibly including means testing (reduced benefits based in income).
Politicians continue to say, "those 55 and over will not be impacted" by any changes, but can you take that to the bank ?

So - claiming SS at 62 instead of drawing on TSP/401K/IRA gives one a tax advantage plus possible legacy to heirs (either by investing SS benefits or conserving TSP).

Get What's Yours: The Secrets to Maxing Out Your Social Security: Laurence J. Kotlikoff, Philip Moeller, Paul Solman: 9781476772295: Amazon.com: Books


Why Social Security’s advice is often wrong


https://finance.yahoo.com/news/why-s...ail&soc_trk=ma

Originally Posted by hotwings

Good read on "Why taking SS at 62". You need to read the comments as well..

Social Security: Why Taking Benefits at 62 Is Smarter Than You Think

He has some good points... but his life expectancy number isn't realistic.
"But here's the thing that's important to keep in mind: According to the latest data, the average lifespan of an American is 79.8 years old. And for men, it's only 77.4 years compared to 82.2 years for women."

but that's from birth. So you are including everyone that never retired. The statistic you'd really want to know is average lifespan of an American that made it to 62.

From the SS website (http://www.ssa.gov/planners/lifeexpectancy.html):
According to data compiled by the Social Security Administration:

• A man reaching age 65 today can expect to live, on average, until age 84.3.
• A woman turning age 65 today can expect to live, on average, until age 86.6.

I crunched a lot of numbers on this topic as I was curious. Definitely a lot of variables.

Life expectancy is probably the #1 factor, but very hard to predict.

The biggest factor that I don't see people mention is what you expect your annual retirement income/expenses to be, as that is not money that can be invested (at least not very long).

I found that the plan to take payment early and invest it, pivots at a 7.5% return.

At whatever age you choose to start taking SS payment, if you invest that money, you'll have to average a 7.5% return annually to keep up with the annual payout had you waited until 70. At that point you would be ahead by how much you were able to accumulate prior to age 70, and that would stay the same. If you average less than 7.5%, what you were able to accumulate will erode relative to the age-70 payments. Greater than 7.5% would put you further ahead.

From Money magazine:

Social Security: Choosing the Claiming Age That's Right for You

As mentioned, estimated life expectancy is the ultimate factor in most cases to deciding whether to take it early or to wait. Whether or not expenses in the afterlife are covered is a question that goes beyond the topic of this forum. As a 63 year old, I've done some research. The best info I've found will take some reading. Check out "Get What's Yours" by Lawrence Kotlikoff - excellent and detailed analysis. Make sure to dig into this, especially if you have been married for at least 10 years, then divorced and not re-married before 60. Ex-spouse benefits are not intuitive and can be very profitable in the right situation. There is also a "file and suspend" technique that you should understand. Don't take blanket advice from know-it-alls on this one. It all depends on your situation. Good luck.

Originally Posted by Greybeard

As mentioned, estimated life expectancy is the ultimate factor in most cases to deciding whether to take it early or to wait. od luck.

Exactly, GBeard. Life Expectancy is the ultimate key. The only problem is we can only guess, or hope that the actuaries are correct.

Don't forget genetics play a huge role in longevity. My mother is 87 and my Dad was 81 but chain-smoked his way to an early grave. I chose to draw at 62 due to our countries present leadership. Check your state. Georgia exempted 30k of my retirement this year. It will rise at age65.

Learn to Plan for Retirement Like a Pro-Kiplinger

Three Scenarios of taking benefits at 62 (with a 25% reduction) or at 66 (for the full amount).

You'll quit working and claim at 62 and then lose all of your savings in a stock market crash.
You'll claim at 66 and die the next year, leaving money on the table.
You'll live to 100 and beat the system.."

Hi jaybro61, just curious...what age did you retire?

Originally Posted by jaybro61

Don't forget genetics play a huge role in longevity. My mother is 87 and my Dad was 81 but chain-smoked his way to an early grave. I chose to draw at 62 due to our countries present leadership. Check your state. Georgia exempted 30k of my retirement this year. It will rise at age65.