saving this one
Anyone thinking SSI is a livable wage is going to be terribly disappointed.
Speaking as one over 65 but waiting, a relatively minor item is the fact that one starts owing Medicare at retirement age. Thus waiting for Social Security (SS) means a negative cash flow in terms of paying out Medicare the standard monthly Part B premium of $134. This is the minimum and does go up if your income tax AGI goes over certain breakpoints depending upon filing status. This increase takes effect 2 years following the filing of that tax return.
As for taking SS at 62 or later, look to your parents & G.Parents for a probable life expectancy. The longer that they lived, the more logic for waiting if it is economically feasible.
FYI: Taxation of SS is based upon a formula that takes 50% of SS Income and almost all other taxable income for that year. If that exceeds $25k for a Single (Filing Status) then the SS starts being taxable and increases with income up to a MAXIMUM rate of 85%.
• First and foremost, because I could. Healthy and able to retire at 62 was a no brainer. A bird in hand is better than two in the bush. The time utility of the money in hand today outweighed the promise and value of more money down the road.
• The government could keep raising the ante for when I could retire. I decided to take the certainty of what I could get now.
• What if I got sick and couldn't enjoy it down the road? What if I waited and I died before I could draw it? The prospect of receiving more money as I got older would become a moot point if I died before I could start drawing it.
• I thought it better to take it now, than to wait for more later. The amount of money I would have to forego while waiting until 65 or 66 or 70 to start drawing a larger SS check, far-outweighed any difference in the smaller amount I could start receiving right away.
• My financial advisor said to wait until I got older. I did the opposite. He's since passed away at age 60 of a heart attack.
It's been 8 years since I started drawing my SS at age 62. I am still healthy and alive, and doing well financially. Either I made the correct decision or I just got lucky or both.
No regrets. Life is good. Enjoy the fruits of your labor while you can.
Happy New Year!
If your wife was born before 1964 she can take SS benefits at 62 and in addition you can get a check for half her benefits until you start taking your SS benefits. Your taking a check on her benefits does not affect your SS benefits.
Learned this from a retirement plan specialist we are working with. Just so happens we can take advantage of it as I am going to wait until 70. She is thrilled. That knowledge alone was worth the price of admission.
If you continue to work after you begin getting SSA benefits, you will probably be taxed on your SSA benefits.
As bad as that is, the law does not have a COL adjustment, so more and more people are being forced to pay taxes because incomes are higher than they were when Reagan signed this POS law, and when Clinton signed the POS bill increasing the taxes.
This taxation should be voided, but failing in that, there should be a COL adjustment each year that would stabilize the taxation, so it doesn’t keep increasing.
I’m sure Congress will get right on this.
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General rule of thumb is you have to make it past 80 to make it worth your while to wait past your full retirement date for SS. Look at your parents and grandparents, your lifestyle, and your known issues to make a best guess at your odds.
Thank you for posting this. I am getting close to retirement age. I appreciated reading this article, and reading other freeper’s opinions.
I was diagnosed with metastatic prostate cancer in 2014 when I was 61. My CPA son and I concluded I would have to live until 79 to break even if I started taking SS at 66.
At the time I was diagnosed, my statistical life expectancy was 3-7 years, so taking SS at 62 was a no-brained.
Fortunately, I am responding extremely well to the treatment I am getting at www.mdanderson.org and I plan on being around for the cure and well into my 70s.
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You also need to consider the inevitable changes in Social Security that will be needed to keep the program solvent. In my mind it is more difficult to take away what you currently get in Social Security benefits than to come up with new restrictions applied to new beneficiaries. Those delaying getting their benefits in hope of bigger payouts might find themselves caught by changes in the current law that could leave them getting less or even nothing. Take what you can get as soon as you can or risk getting nothing.