Skip to comments.5 scenarios where claiming Social Security early is a terrible move
Posted on 08/24/2020 5:15:42 PM PDT by rintintin
As of June, the average retired worker was bringing home $1,514 a month from Social Security. This works out to all ost $18,200 a year. All things considered, this isn't very much -- but for 62% of retired workers receiving a Social Security benefit, their monthly payout will account for at least half of their income.
The critical role Social Security plays during retirement for so many elderly Americans demonstrates just how important your claiming decision can be.
Claiming age plays a big role in determining your Social Security payout
Although there are more than a half-dozen factors that can affect how much you'll receive and get to keep of your Social Security retirement benefit, there can be an up to 76% difference in monthly payout, all things being equal, between claiming your benefit as early as possible (age 62), or waiting until age 70. That's because benefits increase by as much as 8% annually for each year a worker holds off on taking their payout until age 70.
Statistically speaking, a majority of seniors would be better served by waiting until age 70 to begin taking their Social Security retirement benefit. But this doesn't hold true for everyone.
In certain instances, an early claim can make a lot of sense. For example, a person with one or more chronic health conditions may not live to see the average life expectancy in the U.S. of nearly 79 years. Thus, an early claim -- even at a rate reduced by as much as 30% per month -- can still lead to a retired worker maximizing what they receive over their lifetime from Social Security.
But there are also many scenarios in which claiming Social Security benefits early would be a terrible move.
Here are five such cases. .... :
(Excerpt) Read more at google.com ...
Claiming before 65 is kind of a pain. If you make more than 17k in addition to social security income, they reduce the social security benefit.
That said, I plan on taking it at 64. Why 64? The break even age is 80. Even someone in relatively good health, (me), can’t be guaranteed a life span. If it makes things a touch easier to start earlier, do it. The government wishes everyone would wait to 70, because the payout for them would be less overall.
So you have to wait to die before you get a chance to take SS check?
Here’s a good calculator that I’ve found helpful.
My dad died at 44 and mom at 68. Social security hit the jackpot over those two.
Social Security loves smokers too.
I figured out the same thing at age 66 vs 70. I broke even at 81.
This article is BS. It all comes out to being exactly the same using actuarial tables.
Figuring average life expectancy (especially if male) you’ll pull less per month over a longer period of time.
There is really not near the downside of taking your money at 66.5 or even 62 if male because if you die a bit sooner then the actuarial tables predict.....You could screw yourself out of a lot of money. The earlier you die the less money you’ll get.
If you happen to outlive the AT, great, you might end up getting somewhat less in the long run but not significantly as it all comes out in the wash and you avoid dying shortly after taking your SS at say 70.
If I wait till 70 my wife gets a bigger survivors benefit if I predecessor her ( which is likely since women live longer). But I dont know if Ill be able to afford waiting till 70.
Some of us retired early to become caregivers for our spouse.
I originally intended to work until age 72, but retired at 70 instead. At age 69, my 65-year old wife retired, with a meager benefit. A few days after her submitting the paperwork to Social Security we got a call from a SS caseworker who wanted to talk to me. She asked if I knew I could get half the amount my wife was getting and it wouldn’t affect my retirement at all. I explained I was going to work 3 more years, and she said it doesn’t matter. Sounded like free money so I said “Sure!”.
The only bum steer in that whole deal was she signed me up for Medicare Part A (I think), saying that wouldn’t affect anything either. She lied, being on Medicare Part A meant I couldn’t have an HSA through my employer, so I lost out on $2,400 a year for 2 years my employer would have otherwise contributed to my HSA.
But, I did get about $800 a month from my wife’s benefits (hers weren’t reduced) for a little over a year when I retired and got MY full benefit instead. Best part of waiting until age 70 was SSA made a back payment to me of about $13,000 because I could have filed for benefits earlier. All-in-All it didn’t work out too bad.
Social Security loves smokers too.
And nursing home covid
In this crazy world we live in, right on the edge of Civil War 2.0, with murder and mayhem running rampant, and chaos everywhere, it’s probably a good idea to start collecting whatever payout you can get before the good ol’ US of A ceases to exist altogether. The old rules of thumb that your broker tells you to follow are a pipe dream.
The article left out the one reason I took it early. You have enough money and you expect the politicians to take your SS away.
Investment returns are as important as life expectancy
Well...maybe one of three sources. Trump wants to do away with the payroll tax.
Close co-worker friend of mine waited until 70. Most of his family lives well into their 90s. He had pensions from other companies too. He was going to cruise retirement with a ton of money. 3 weeks after his 71st birthday, they found a spot on his lungs. He was dead 10 months later.
My dad died at 69. My one grandfather was dead at 65 the other was killed on the job at 44. My one Great grandfather died at 71, the others I’m not sure.
I don’t think it’d be wise to wait until 70, for me.
“I figured out the same thing at age 66 vs 70. I broke even at 81.”
I’ll be 63 soon. I will retire soon, either by choice or by force. I’m not wealthy, but reasonably secure. I could use my 401k to allow the ss to build, but why? Let it build and die at 75? Besides, living around older folks, I’ve learned that once you hit 80, generally speaking, you spend money on food and medical. A vast majority of 80 year olds aren’t overly energetic. Their needs are pretty modest.
I took mine as soon as I turned 62.
For one, I was no longer full time employed, but doing gigs in the new economy. Sometimes a make a huge killing, and others times not much for several months. It all came out to a middle class income, but the uncertainty was concerning.
I also got a military pension. However, I have to give half of it to my ex for life. A bad deal.
I got a state pension after 20 years teaching at a university. That was good, but I took the job knowing I’d get less but could retire again after twenty.
So, it’s worked out well for me... So far.
There is no situation better than taking Social Securityat the earliest, age 62.
It is not a fund where you or your estate own it. If you die, thats it. There is no residue for your family.
Yes, you get a reduced amount than if you waited, but Over a normal lifespan the total is the same - its just spread out over a longer time. But its yours. Its yours.
Yes, if your still working theres an offset, but you get all that back later too.
Dont listen to these advisers, experts, consultants, politicians, investors. Its your money. Take it and run as soon as you can.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.