I could probably live off that if I were a hermit in the woods.
FORBES, so the post is limited. See full article at link..................
Many strategies are possible.
Suppose you don’t need the money at age 65 but take it anyway, and save it instead of spending it. At age 70, you might have $100k in additional capital to invest. The stream of income from the invested capital would offset your lower SS payments, and might be taxed at a loser rate.
Many strategies are possible.
Suppose you don’t need the money at age 65 but take it anyway, and save it instead of spending it. At age 70, you might have $100k in additional capital to invest. The stream of income from the invested capital would offset your lower SS payments, and might be taxed at a loser rate.
Depends upon how much you contributed.
I did some math for my California pension (13 years) and it turns out that if I took it now (with survivor option) compared to waiting I get like $5K more over 20 years,
So I took it.
Since SS has always been zero in my planning (and I am shy of 60) I figured I will wait until 70 or if my health fades or something like that. Better to enjoy the money while alive then to enjoy it when dead. It really is a fall-back in case 1929 comes back around ( could probably weather 2008) or for fun money, depending on when I pull the trigger.
If you are 50 or under, just make it zero. You will have to work to 75 to see a penny.
IMHO.
I also add, if you are VERY young and in your first decade of work — SAVE NOW FOR RETIREMENT (and assume zero SS). If I would have done that I would be long retired instead of having to put in 3 or 4 more years.
Crumbs.
Whatever we think of social security, it was never ever intended as a “liveable tetirement sum”. Only as a supplement to your regular savings and investing and any pensions you might earn and any annuities you might choose to acquire. Even FDR broadcast repeated speeches or statements to this effect. To convert it into a liveable sum, we would have to raise the contributions a lot - and terminate the sucking off of contributions for ( very thinly ) disguised welfare type payments It could probably be done but I sure wouldn’t recommend it as good public policy for America.
I have several long-time friends who worked for cash and rarely filed taxes, or only worked for a few years when young and then were stay-at-home moms. They barely paid in enough to qualify for SS benefits.
Each of them gets about $550 a month.
Think of that, they barely paid in anything, and they get 20% of what the max person gets. But the max person paid in much more than 5 times what those guys paid in. Much, much more. It’s just not a retirement program, it’s a redistribution program too.
I have several long-time friends who worked for cash and rarely filed taxes, or only worked for a few years when young and then were stay-at-home moms. They barely paid in enough to qualify for SS benefits.
Each of them gets about $550 a month.
Think of that, they barely paid in anything, and they get 20% of what the max person gets. But the max person paid in much more than 5 times what those guys paid in. Much, much more. It’s just not a retirement program, it’s a redistribution program too.
https://www.ssa.gov/OACT/COLA/piaformula.html
- your expected years remaining (family history and current health),
- the size of your various income streams,
- expected changes in the law,
- what you would do with other retirement income or with social security payments if you took those payments early/late,
- expected income in those early years and later years,
- how you visualize your lifestyle/spending in early retirement and in late retirement,
- and many other factors.
I've made my decision, but it's based on too many factors for others to simply follow my lead.
The other bad news is that if you wait until 70 to take your SS, the chances are pretty good you’ll be too doddering to have anything worthwhile to spend the money on, or you’ll be dead.
If you have decent private savings and/or a private pension and/or have low living expenses and/or debt free, do not wait until 70 to start taking SS ... in other words. if you don’t really NEED to take your SS, you should take it ...
oh, and cutting through all the gobbledygook about the more you wait, the more you get, everyone accumulates monthly payment increases of about .5%/month more for each month you wait to take SS (not counting additional payments made to SS if you are still working) ...
I get $1004.00@month for SSDI + Surviver. Starting 06/01/18 I got Medicare A,B & D coverage and they took &134.00 @ month.
It’s no picinic to pay the rent, bills, Dr Copay and Rx. Basically nothing left.
So much for paying in all those years.
I was Diagnosed with Leukemia at age 52. Probably got it when I was50.
I took my SS at Age 62 which was my expected Sell By Date at the time of my Diagnosis. Just turned 65 a week ago.
Two of my closest Childhood Friends both died at Age 61 from Heart Attacks. They worked their whole lives and they each “contributed” about $250,000 into the SS System.
They never got a dime.
From Politifacts: "According to the institute's data, a two-earner couple receiving an average wage — $44,600 per spouse in 2012 dollars — and turning 65 in 2010 would have paid $722,000 into Social Security and Medicare and can be expected to take out $966,000 in benefits.
That means that, if you live long enough, you will take back something like 34% more than you paid in. Further, if a couple both work and pay into social security, when one unfortunately dies, the remaining spouse only gets to receive the social security benefits of one of them - even though they BOTH paid into it. Thus, the benefits received will likely be significantly less than the total paid in by that couple.
If you invested that same amount of money wisely, you would likely have well over $1.5 to 2 million (maybe more) accumulated from your investment - considering we're talking about at least 25-30 years (likely more) of paying into social security.
In short, FDR and the New Deal screwed over great swath's of the American public, while getting credit for 'helping the people'. Social Security has just turned out to be another revenue source which the pathetic 'know nothings' in DC can squander and exploit.
That said, everyone who has paid into social security should get their benefits, and I'm not in favor of doing anything to the program that would hurt those who have paid in for years and are counting on getting something out. They absolutely deserve their benefits, and much, much more.
Going forward, however, there are only two options that are credible, in my opinion. One would be to REQUIRE the government to take all social security payments from each year and keep them in a separate 'untouchable' investment portfolio run by professional portfolio managers - aiming to get the largest percent return in every calendar year. All this income would go straight back into the social security system, and the amount of each person's contribution would be amplified by the annual rate of return, every year. The second option is to allow people to opt out and invest on their own. If the government were able to perform the first option correctly, the government's investment portfolio and return rate would be similar to or better than the rate of return of individual investors - thus most people would be happy to have the professional social security fund managers do their investing for them, rather than choosing the second option.
Finally, you would get a monthly, or bi-annual report of how much your contributions have increased, and this would be just like having your own personal investment account - with no ability of the government to confiscate or alter your investment return. AND, if you and your spouse pay in, the surviving spouse gets the amount BOTH have put in and earned over the years.
Anything short of that is theft, and immoral.
Interesting article. Thanks for posting.
I weighed the benefits of taking it now vice waiting till 66 and 2 months which would have been my max. Simple calculations said it would take 15 years to make up the difference in what I get now (85) and what I would have taken in at 66 and 2 months so I took it now. I could be dead in 15 years besides that I doubt SS will be around in 15 years.
SS is a scam. What financial product takes 14% of your annual pay then pays such a minimum return. Let me invest that into my 401k.
Also, working until age 70 allowed me to replace a few zero's and a few low wage college summer job years in my 35 year average. It was a double win that way.
Furthermore, as someone who has been saving for retirement his whole life the age 70 1/2 minimum IRA and 401k distributions will kick in at about the same time.
That is another source of age 70+ income. If you can wait to age 70 to collect social security (and many folks can't afford to) then you get some substantial benefits. Plus if (or should I say when) you die, your wife gets the larger of her or your social security. If you are a typical breadwinner with a larger salary and your wife took a few years out of the work force to raise your children, then maximizing your social security by working until 70 will give her a larger income when you die, if she out lives you.
The only down side is that the more income you have the higher the taxes on social security and the higher the medicare payments, but even though your “taxes” are higher, so is your income after taxes.
And yes, I lucked out and was able to do the file and suspend thing with my wife. She continued to work and was able to draw my 1/2 full retirement age social security on top of her salary.
You need to study the options, figure out what you can afford to do and then maximize your social security benefits.
I am wobbling along with $1155 a month. Had 4 years out of 8 with Obama with ZERO COL raises. One ‘raise’ was $3 a month.