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Thread: Retirement Talk - Deciding When to Claim Your Monthly Social Security Benefits

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    Default Retirement Talk - Deciding When to Claim Your Monthly Social Security Benefits

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  3. #2

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    Default Re: Retirement Talk - Deciding When to Claim Your Monthly Social Security Benefits

    My ‘advice and recommendation’ flies in the face of ‘conventional wisdom’ on when to take SS benefits.
    It’s simple. Start taking SS benefits as soon as you are eligible, and no longer working. Simple.

    Why???

    Lots of reasons.
    1) Your FERS Fed retirement has always been based on the ‘3-legged stool’ approach. Why not follow that plan?
    2) If you die before taking SS, you lose it. Yes, there are some death benefits, but mostly they are minimal.
    3) It will take you another 12-15 years to just break even from an earlier start to distribution, even though it is ‘less’ per month than a later draw. (see #2). Try it out yourself. Add up the yearly payout in the 2 scenarios, and see how long it takes to break even.
    4) Don’t trust Congress! They are continually looking for $$. Either by limiting SS or by reducing the Fed FERS Retirement program.
    5) ‘Bird in the hand...’. Even if you don’t really NEED it yet, if you control it, you will have a much better chance of getting a better return on it. (See also #4)
    6) If you go back to work, you can suspend payments (or Not). Anyway, the way SS is set up, you will receive the same amount of funds no matter when you start taking it, as long as you live to your mortality table date (approx 85). This affects several of the previous points!
    7) Enjoy your $$ while you are still ‘young’. Really, what are you waiting for?

    Me and my wife followed our own advice on this. She retired and started taking SS at 62. I retired and started taking SS at 65.

    AND, some of the same points guided me in deciding to switch to FERS from CSRS back in 1984. I was told that only 400 people nationwide made that switch. Biggest reason? If the government wants you to do it, it probably favors THEM. So am I happy I switched, looking back? YES!! Sure I would have gotten a larger pension had I stayed in CSRS. But then, I wouldn’t have over $1MM in the bank. So, a lot of the same points do, in fact, apply.

    By the way, I am NOT a Financial person. Only a retired Federal Civilian Engineer. Good luck on your decisions! ____
    There are 10 types of people in the world. Those who know binary, and those that don't!!
    Retired on December 31, 2018!!

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  5. #3

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    Default Re: Retirement Talk - Deciding When to Claim Your Monthly Social Security Benefits

    If you start collecting SS before your Full Retirement Age (FRA) and are still working you could be penalized depending on how much you make working full time. So you have to take that into consideration. Also those that retire CSRS do get a reduced SS check because of WEP (Windfall Elimination Provision). Hopefully in the near future Congress will eliminate the provision. They have talked about it for years.
    May the force be with us.

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  7. #4

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    Default Re: Retirement Talk - Deciding When to Claim Your Monthly Social Security Benefits

    I plan to start taking it as soon as I retire. I was a smoker for most of my life, so...
    Scott Harrison
    Senatobia, MS

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  9. #5

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    Default Re: Retirement Talk - Deciding When to Claim Your Monthly Social Security Benefits

    Quote Originally Posted by uscfanhawaii View Post
    My ‘advice and recommendation’ flies in the face of ‘conventional wisdom’ on when to take SS benefits.
    It’s simple. Start taking SS benefits as soon as you are eligible, and no longer working. Simple.

    Why???

    Lots of reasons.
    1) Your FERS Fed retirement has always been based on the ‘3-legged stool’ approach. Why not follow that plan?
    2) If you die before taking SS, you lose it. Yes, there are some death benefits, but mostly they are minimal.
    3) It will take you another 12-15 years to just break even from an earlier start to distribution, even though it is ‘less’ per month than a later draw. (see #2). Try it out yourself. Add up the yearly payout in the 2 scenarios, and see how long it takes to break even.
    4) Don’t trust Congress! They are continually looking for $$. Either by limiting SS or by reducing the Fed FERS Retirement program.
    5) ‘Bird in the hand...’. Even if you don’t really NEED it yet, if you control it, you will have a much better chance of getting a better return on it. (See also #4)
    6) If you go back to work, you can suspend payments (or Not). Anyway, the way SS is set up, you will receive the same amount of funds no matter when you start taking it, as long as you live to your mortality table date (approx 85). This affects several of the previous points!
    7) Enjoy your $$ while you are still ‘young’. Really, what are you waiting for?

    Me and my wife followed our own advice on this. She retired and started taking SS at 62. I retired and started taking SS at 65.

    AND, some of the same points guided me in deciding to switch to FERS from CSRS back in 1984. I was told that only 400 people nationwide made that switch. Biggest reason? If the government wants you to do it, it probably favors THEM. So am I happy I switched, looking back? YES!! Sure I would have gotten a larger pension had I stayed in CSRS. But then, I wouldn’t have over $1MM in the bank. So, a lot of the same points do, in fact, apply.

    By the way, I am NOT a Financial person. Only a retired Federal Civilian Engineer. Good luck on your decisions! ____
    I’m surprised that this topic has not received a lot of posts. I thought it was pretty controversial. But out of 318 views, only 3 replies??

    Oh well, for what it’s worth.....Additional info on my point #3:
    If you take into account the time value of money, it makes an even stronger case for ‘take it when retired and eligible’. Even if you are only considering the yearly adjustment to SS from COLA. If you consider your own investment, you can do even better. At least 6%, and probably more.
    So let’s hear from those out there who are still going to wait to 70. Why would you do that? (Except if you are following TSP recommendations!)

    By the way, those who have been following me over the years...I recently did what I had predicted that I would do. I moved all but about $100K OUT of TSP and into a separate IRA fund. Also what TSP is recommending AGAINST!
    Last edited by uscfanhawaii; 08-05-2020 at 01:21 AM. Reason: changed to point #3.
    There are 10 types of people in the world. Those who know binary, and those that don't!!
    Retired on December 31, 2018!!

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  11. #6

    Default Re: Retirement Talk - Deciding When to Claim Your Monthly Social Security Benefits

    My plan is to wait for my FRA at 67 and my situation is as follows: Age 60, retired FERS at 57 with 33 years of service, TSP balance is robust and I am not yet drawing a check from it. My FERS annuity including the Supplement is sufficiently funding my retirement budget. My bride of 37 years is 61 and just recently stopped teaching pre-school due to the COVID issue. My SS will be substantially larger than hers due to 15 years away from the workplace raising our 3 boys. Together we have 3 parents still living at 89 years of age, my grandmother made 100+. I plan to replace (+$) the supplement portion of my current monthly income by drawing from the TSP between 62 and 67. In this way, my wife will have a larger SS check in the event I kick-the-bucket early. I should probably also mention that I'm a "intermittent" employee of a major commercial civil engineer firm which allows me to earn up to the SS income limit (~18K) annually working something like 30 hours a month. Life is good and waiting for 67 before claiming SS just seems to make sense given my unique situation.

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    Default Re: Retirement Talk - Deciding When to Claim Your Monthly Social Security Benefits

    Retired at 62 (CSRS) in 2012, 38 years at NASA and 4 years Air Force. Failed retirement and went back to work full time in 2014. Since I was paying into SS/Medicare I figured I would wait to collect SS because of WEP. During NASA employment I also worked some part time jobs that paid into SS/Medicare so I have accrued all my points for SS and Medicare. Anyway I finally sat down and did the math and this past weekend I went online and signed up my wife (67) and myself for SS.
    May the force be with us.

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  15. #8

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    Default Re: Retirement Talk - Deciding When to Claim Your Monthly Social Security Benefits

    Correct me if I'm wrong, please, but if you are retired and currently drawing your FERS pension and are taking the supplement, then you are already taking your Social Security. It has been my understanding that if you plan to delay taking Social Security until you reach full retirement age, then you MUST forego the supplement.
    Scott Harrison
    Senatobia, MS

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  17. #9

    Default Re: Retirement Talk - Deciding When to Claim Your Monthly Social Security Benefits

    Respectfully, I believe you are incorrect, I have made no promise to Uncle Sam as to when I will claim SS. The supplement is no way attached to SS, it is purely a FERS thing. It is automagically included in your FERS annuity if you have 30 years of service and have reached your minimum retirement age, it stops automagically when you reach age 62.

    edit: I should note however that the supplement portion of the annuity is subject to the SS income limits and will be reduced if your earning exceed ~$18K per year.


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  19. #10

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    Default Re: Retirement Talk - Deciding When to Claim Your Monthly Social Security Benefits

    Quote Originally Posted by rangerray View Post
    Correct me if I'm wrong, please, but if you are retired and currently drawing your FERS pension and are taking the supplement, then you are already taking your Social Security. It has been my understanding that if you plan to delay taking Social Security until you reach full retirement age, then you MUST forego the supplement.

    Apparently I've been confused on this. Now, I'm reading that the supplement stops at age 62 (which I've always known) and you can still choose to delay your SS benefit until your full retirement age. For me, that would be a 5-year gap if I chose to delay.
    Scott Harrison
    Senatobia, MS

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  21. #11

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    Default Re: Retirement Talk - Deciding When to Claim Your Monthly Social Security Benefits

    Quote Originally Posted by uscfanhawaii View Post
    So let’s hear from those out there who are still going to wait to 70. Why would you do that?
    Many people in your generation have decided to work longer into their late 60's.

    In 2018, 29% of Boomers ages 65 to 72 were working or looking for work, outpacing the labor market engagement of the Silent Generation (21%) and the Greatest Generation (19%) when they were the same age, according to a new Pew Research Center analysis of official labor force data.
    https://www.pewresearch.org/fact-tan...s-labor-force/

    Much of this is because there is a demand for older, experienced workers with skill sets that take years to learn. Some are working in the private sector and are applying their well-mastered skills for a decent wage. I think this is especially true today when employers can have someone start working today and won't waste years training only to lose that person early due to greener pastures.

    I can tell you first hand, I am much more confident dealing with a project manager in their 60's than 20's.

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  23. #12

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    Default Re: Retirement Talk - Deciding When to Claim Your Monthly Social Security Benefits

    Quote Originally Posted by rangerray View Post
    Apparently I've been confused on this. Now, I'm reading that the supplement stops at age 62 (which I've always known) and you can still choose to delay your SS benefit until your full retirement age. For me, that would be a 5-year gap if I chose to delay.
    Exactly.
    So why not take the SS at 62?
    I believe it will be a bump up from the supplement, because the supplement is loosely based on 80% of expected SS at age 62.
    There are 10 types of people in the world. Those who know binary, and those that don't!!
    Retired on December 31, 2018!!

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