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THE BENEFITS OF HOLDING OFF ON SOCIAL SECURITY
ncpa.org ^ | July 14, 2008

Posted on 07/14/2008 9:19:24 AM PDT by InvisibleChurch

For decades, a fairly consistent share of workers -- about 60 percent of women and about 52 percent of men -- have claimed a Social Security check at 62, the earliest age at which most people qualify for benefits. However, collecting Social Security before "full retirement age," which is climbing gradually to age 67, results in a permanent reduction in a person's monthly payout, says the Wall Street Journal.

In a study published in June by the Center for Retirement Research at Boston College, researchers found:

Some 48 percent of women and 43 percent of men who turned 62 in 2006 claimed Social Security benefits as soon as they became available. That's down from 60 percent of women and 51 percent of men who turned 62 in 2000. This decline is consistent with data that show labor-force participation rates among older adults increasing, say researchers. About 23 percent of people age 65 to 74 were in the labor force in 2006, up from 19.6 percent in 2000, according to the Census Bureau.

Financial advisers increasingly are urging people to push back their "start date" for Social Security, says the Journal. Delaying Social Security is a way of increasing your overall income in retirement and standard of living.

A number of factors argue for postponing, and trying to maximize, that first check -- including the demise of traditional pensions, increased life expectancy, retirement accounts that fall victim to bear markets, and Social Security's own rules (which tend to favor survivors whose spouses claim benefits at a later date).

Source: Glenn Ruffenach, "The Benefits of Holding Off On Social Security," Wall Street Journal, July 6, 2008.

For text:

http://online.wsj.com/article/SB121529931995230377.html?mod=2_1581_middlebox

For study text:

http://crr.bc.edu/images/stories/ib_8-7.pdf

For more on Economic Issues:

http://www.ncpa.org/sub/dpd/index.php?Article_Category=17


TOPICS: News/Current Events
KEYWORDS: ponzi; ponzischeme; socialsecurity; ss
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1 posted on 07/14/2008 9:19:24 AM PDT by InvisibleChurch
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To: InvisibleChurch

Sorry. I’m taking mine at 62. I may not live to 67 and 10 months. I will be dang if I let the .gov pay me nothing. Although I may not make it to 62 either. Sorry you know whats.


2 posted on 07/14/2008 9:26:58 AM PDT by therut
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To: InvisibleChurch
Perhaps my math is wrong but I've always thought that if you didn't need to keep working after age 62, it would be more beneficial to go ahead and start drawing SS then.

Example:

$700 a month at age 62; $1000 a month at age 67

You would draw $42K for the years 62-66- If you wait until age 67 to begin drawing, just to get that additional $300 per month, it would take almost 12 years to make up the difference. Is that right or is my math off?

3 posted on 07/14/2008 9:28:29 AM PDT by WhyisaTexasgirlinPA (It's the Vast Wright Wing Conspiracy - labeling all whites as racist.)
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To: InvisibleChurch

I held off until age 65, thinking the same thing—bigger benefits.

The SS worker who processed my application ran a payout comparison and told me I’d have to live and receive benefits for an additional 13 years before I began to get ahead because the additional benefits aren’t that great.

Check it out at 62 first before you decide.


4 posted on 07/14/2008 9:29:05 AM PDT by wildbill ( FR---changing history by erasing it from memory.)
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To: InvisibleChurch

Funny, I always heard the opposite—that taking it at 62 was best. Of couse, if you’re still working, that’s another story.


5 posted on 07/14/2008 9:29:53 AM PDT by rbg81 (DRAIN THE SWAMP!!)
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To: wildbill

62 it is.

Factoring in Inflation . . .


6 posted on 07/14/2008 9:31:37 AM PDT by Sundog (Hussein . . . B. Hussein or S. Hussein?)
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To: wildbill

We will probably have my wife take her SS starting at 62, because her part of MY SS is more than her SS. I’ll take mine at 67. If I took mine at 62, we’d get nothing for her lifetime of earnings. But I can take hers at 62, and she will lose nothing in the long run because when I start taking mine, it will stop her from getting hers anymore, and she will instead take half of mine.


7 posted on 07/14/2008 9:32:26 AM PDT by CharlesWayneCT
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To: InvisibleChurch

I started basically on time at 65. SS tried to get me to start early, with the stock answer it will take you ten years to recover. SS I think is for the surviving spouse, so I choose to begin on time rather than early at 62. It is an individual choice.


8 posted on 07/14/2008 9:34:23 AM PDT by wita (truthspeaks@freerepublic.com)
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To: WhyisaTexasgirlinPA

The way I had it figured was, if you start drawing @ 62, you would reach the age of 75 before those drawing from 65 would catch up to you. But my math is subject to being wrong also.


9 posted on 07/14/2008 9:35:09 AM PDT by my right
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Comment #10 Removed by Moderator

To: WhyisaTexasgirlinPA
You would draw $42K for the years 62-66- If you wait until age 67 to begin drawing, just to get that additional $300 per month, it would take almost 12 years to make up the difference. Is that right or is my math off?

Not to mention any investment income you may generate. The only argument to not begin taking SS at 62 MIGHT be so you don't limit your earning potential. Maybe you have a real cushy job you like and make 6 figures.

11 posted on 07/14/2008 9:39:19 AM PDT by IamConservative (Character: What you do when no one is looking.)
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To: therut

In today’s climate taking it at 62 might be a good idea if it means your 401(k), IRA etc can be left alone to recover from the recent beatings unimpeded by withdrawals.


12 posted on 07/14/2008 9:40:44 AM PDT by 1066AD
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To: violettesareblue

I agree with you, I’ll start at 62.


13 posted on 07/14/2008 9:40:56 AM PDT by ops33 (Senior Master Sergeant, USAF (Retired))
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To: IamConservative; my right

Well I hope my husband still has a good job at age 62! lol But yes, that was how I was figuring it too - if you don’t have to worry about the limits on earnings, then go ahead and draw the reduced amount early.


14 posted on 07/14/2008 9:41:36 AM PDT by WhyisaTexasgirlinPA (It's the Vast Wright Wing Conspiracy - labeling all whites as racist.)
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To: violettesareblue

I think Uncle bets that you will live until you are about 82 or 83. I don’t know what the standard deviation is though. Sign up at 62. What is left out of the calculation is the future value of the dollar. it is put simply this way: Would you like to have $100 now or $105 a year from now?


15 posted on 07/14/2008 9:42:42 AM PDT by Citizen Tom Paine (Swift as the wind; Calmly majestic as a forest; Steady as the mountains.)
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To: violettesareblue

A lot depends on whether or not you are working “on the books” after starting SS @ 62 but before full retirement age. If you’re still earning a decent (taxable) income, you get penalized pretty heavily.

If you’re not working (on the books that is), one other scenario they never mention is starting to collect at 62 but not spending the money - invest it instead. Plug that scenario into your spread sheets and you may come out with a different answer.


16 posted on 07/14/2008 9:44:09 AM PDT by nascarnation
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To: InvisibleChurch
My plan, arrived at after much crunching of numbers, is to take it at sixty-two and invest every dime since I won't need it to pay the bills.

I would have to live to eighty-three to break even (assuming zero increase in inflation). I'll probably make it that far but if I do and I need the extra few bucks then I'm screwed anyway.

17 posted on 07/14/2008 9:44:16 AM PDT by wtc911 ("How you gonna get back down that hill?")
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To: therut

If you had a normal 30 to 40 year employment history, they won’t be “paying” you. They’re simply RETURNING the dough they confiscated from you over your working life. They want you to hold off collecting in hopes you’ll DIE before they have to start cutting checks.

The exception to that is, of course, the illegals and over breeding welfare bums who don’t have to hit a lick to “qualify” for benefits. This is why the system is in big trouble: The political hacks we ludicrously call “leaders” are pissing these now non-existent “reserves” to buy reelection.


18 posted on 07/14/2008 9:48:04 AM PDT by Dick Bachert
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To: WhyisaTexasgirlinPA
it would take almost 12 years to make up the difference

This is what financial adviser Suse Orman is telling many of the callers to her tv show. It surprised me a bit, but you're right, it would take years to make up the difference. For someone who really wants/needs to retire, there doesn't seem to be a reason to wait until full retirement age.

Just yesterday I was on the SSA site trying to figure out my widow's benefit if I don't remarry before 62, though I probably make too much money for it to be worthwhile.

19 posted on 07/14/2008 9:48:28 AM PDT by radiohead (See my page to donate to the African-American Museum of Iowa. It lost 1000 books in the flood.)
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To: radiohead

A lot of folks won’t or can’t retire till 66, which you have to be to get Medi-Care?


20 posted on 07/14/2008 9:54:04 AM PDT by umgud
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