1 in 4 Recent Retirees Would Delay Taking Social Security, If They Could

I probably will be claiming next yr at 62. I homecare my mom in sandiego and will be able to invest the money until my husband and I sell the condo and move to the coast of oregon. It's a lower cost of living there so will enable us to buy another home and have enough money to add to the lower SS amount I will be receiving.

Due to husbands health problems I started collecting my SS at 62. I have worked most of my adult life as a LPN. I started working when I was 16 in hospital kitchen part time and have worked ever since, taking a few years off while kids were young. I was slightly disappointed at the amount of SS I receive but I will not claim under husbands until he is 70 so my survivor benefits will be the max I can get. Many people don't have choices about when to collect because of illness, disability, or being forced out of a job and not finding comparable job. I wish that there was a way that SS could keep people above the poverty level because the less a person made the less a persons ability to save. So the gap just keeps widening the older we get.

I just signed up for SS and will be taking it at age 62. I ran the numbers twice and both times they showed that it would take 16 years and 3 months for me to break even with all the money I would not have received if I waited until age 66 (just 4 years) to start collecting SS. By then I would be 82 years old. Being a two-time cancer survivor, longevity is not on my side. In my case, I'll take what I can get (and what I paid into all my life) now. Otherwise, the government wins.

I am several years older than my wife. We have followed our plan as follows. I started taking SS at 66. When my wife turned 66, she took spousal benefits (1/2 the size of my payments). When she turns 70, she will drop spousal benefits and take her own SS will then be at the maximum. That way, if I check out earlier than her - likely - she will have the maximum monthly payment.

I took SS at 63. Because our youngest daughter was 14 at the time we got an almost equal amount for the next 4 years until she turned 18. I did not know of this benefit until I got to the SS office. Used half the money for living expenses and half into her college fund. Had almost 50K in the fund when she left for college. Enabled her to go the private college of her choice.

Planning on age 67 (my wife is a year younger, and we'll retire together when she hits 66+2 months). Men in my family rarely make it to 80, so I don't want to work any longer than that.

I turned 66 this week and plan to wait until 70, or at least as long as possible. I am still employed, and although the money would be helpful to pay off debt and invest, I need to wait. My family on both sides lives into their 90s and 100s. Every year I wait to age 70 means an additional $125 a month added onto my current amount, which is slightly above the average monthly payout. Oddly, this week, I've had 3 health issues pop up that are reminders of what I face for the future. Clearly, I'm going to need that extra money for healthcare in the future.

While I'm not eligible to take SS yet (I'm 57), I've run the numbers too and if I take SS at 62 instead of 67, it will take close to 18 years to break-even if I waited. And I'll only "lose" out $75K by the time I'm 85 -- if I make it that far (both of my parents died in their 70's). I think the conventional "wisdom" to wait is flawed.

My financial advisor told me that anytime someone wants to give you money, you take it... even if it would be a larger amount down the road. Two reasons: 1) Noone knows what the future will bring; and 2) The difference in the two amounts can be made up through earlier investments. This obviously won't apply to everyone.

I just turned 62 this month and am in the fortunate position to not need to claim Social Security benefits even though I have retired. My current plan is to wait as long as possible and the earliest I will consider taking it is at my FRA (66). My wife is still working. I am currently drawing from my IRA for our remaining monthly expenses which is fine since when I turn 70.5 and already taking Social Security, the Minimum Required Distribution from my IRA will be lower which means our overall tax burden will be lower. In essence, I've decided that I will get a better return on my "investment" (i.e. monthly benefit) by delaying my Social Security benefits than I could get from my IRA investments. (If the stock and bond markets were not at all-time highs I would feel differently).

Delaying is also a kind of longevity insurance. My breakeven between taking at age 62 and 66 is age 77. The breakeven between age 66 and 70 is age 82 for me. As I have have had many relatives live into their 90s (and a grandmother to almost 103), the permanent higher amount I would have would be quite welcome if I happen to live longer than age 82. For grins, I went to several insurance company web sites to see what they thought my expected longevity would be at this point and the average came out to be about 88. I'll take my chances and wait. I understand that others do not have that luxury. Every individual's situation is unique.

I always find this topic interesting. And the thoughtful comments so far show that this is a very personal decision. I am single and it makes things way easier than the complications couples face but it can still be challenging. Obviously if you are contemplating when to start you have other means to cover your expenses. If not it becomes an easier decision. I am fortunate enough to have been able to contemplate. As many note a key assumption is how long you will live. For those financially able to compare Social Security versus funding from an IRA it is an interesting exercise. The tax considerations complicate that but most advice I have read suggests that tapping your IRA s probably the better option if you think you will live beyond break even. Of course the pessimists who are concerned about the viability of the system have the easiest decision since they feel it is too risky to wait. Fortunately, for the optmists who are waiting, if your circumstances change before you begin taking Social Security you can start at that point. Our government makes all of this quite complex but at least it does provide choices for folks in different circumstances. Best to all in making this decision.

I attempted to start my benefits at age 70. I contacted SS before my 70th birthday to ensure that they would start at my birthday. The deposit that came a month later was way more than it should have been. I went to the SS office to find out what had happened. They went back 3 months and started my benefits at a much lower rate and not getting the benefit of waiting until I was 70. Yuck. Its been nearly 6 months, three visits to the SS and multiple phone calls and still no correction to my benefits.

Watch out for their tactics and read every word and contact you congressman if you need more help!

Does anyone know If the estimate that you receive on the SSI website accurate or at least close to it?

I retired at 60 and will wait until 66 to draw.My wife can then file for a spousal benefit as she is a year younger and earned much less over her career.I was going to file and suspend,allowing my wife to draw 1/2 of my benefit at FRA,and wait until 70 for my own benefit to grow but Congress took the ability to do that away last November for folks in our age bracket,64 and 65. Though I will take the full benefit at FRA of 66 next year,we have to see how much less of a spousal benefit my wife will get at 65 rather than waiting til she turns 66 in 2 years.
During the past few years I have converted some regular IRA funds into Roth IRAs and paid the taxes as I go so as to reduce the tax impact when I must take IRA and 401k distributions at 70.

I decided to take SS at 62. After crunching the numbers it would take me at least 11 years to catch up to what I will get if I take SS at 66. Plus I decided I would prefer to use the money while I am ambulatory. I feel I will need less money when I can not get around on my own (I also have a GREAT retirement health care program).

I'm 63, and in a slightly different boat. If I get laid off or when I retire (age 65, hopefully), I plan on taking widow's benefits (I called SS, and was told that it would be about $2,100) instead of my own benefits. When I hit 66, I'll qualify for the maximum SS benefit. My plan is to do another break even analysis at that time, and see how I'm doing on a budget with the widow's benefit. If I'm doing ok and health is good, I'll defer my own benefits to take advantage of the 8% annual increase for deferring. Each year until 70, I'll do the same analysis.

Stacey - I used the SS website to calculate my estimated SS benefit and it was spot on. Maybe others can provide you with their experiences.

65th birthday is in a couple of weeks, and have planned it so that I retire in March when I'm 65 1/2. Expect to wait until I'm 67 before starting SS benefits, but that could change.

My financial advisor, like most of them, wants me to work as long as physically able and to delay SS until 70. That's not realistic because I'm emotionally ready for retirement, even though I have an interesting, stable, well-paying job. The long commute is really getting to be a major drag. I'm ready for a new phase of my life. Don't think I can financially wait until 70 for SS, so I compromised. No idea when I'll die, but I'd be satisfied with a life that extended into my mid to late 80's.

Stacey,

I will get my first SS payment in October. It will be exactly the same amount as reflected in my SS statements.

Hi, everyone, I listen and tried to understand all comments that everyone writes. They are very interesting and every day is a new day. My name is Juan and I am from Puerto Rico. Will continue chatting. Thanks everyone, I read your comments every day. Juan

Thanks for the info Gene and Mike. I was counting on it being correct!

Can someone provide a calculator, if one exists, to determine the break-even point between taking at 62 and full retirement age? Or just provide the formula? Thanks!

Never mind - i figured out the math. :) It would take me almost 9.7 years to break even if I waited until FRA instead of taking it at 62, and if I waited until 70 instead of taking at FRA (66 10 months) it would take me 11 years to break even. So would have to live to 76 1/2 or 81 respectively. While I certainly hope to live longer than 81 (and planning accordingly...) not sure that's worth the wait.

Interesting how many retirement planners/financial planners disagree on this. I see a planner yearly and she's staying take the money at 62, a 4-part retirement seminar I took at a local community college said wait as long as you can. I believe I won't "need" it but why not take it and bank the cash?

Lisa see this link for an example of taking SS at age 62, age 66 and age 70: http://www.aol.com/article/2014/05/31/social-security-why-taking-benefits-at-62-is-smart/20903771/

Bozoboomer
You may want to check-- I heard that the spousal benefit is being repealed by the IRS.

Editor's Comment: There were big changes in this whole area last year that went into effect this year. For a good run down of how this might affect you see http://www.topretirements.com/blog/financial/how-the-new-social-security-claiming-rules-affect-you.html/#more-8645

Lisa....many great comments and reason to take SS or wait. However, if you don't need it leave it. By taking it and banking it would not be to your benefit. You can take it anytime you like if need be. By banking you will not even get close to the 8% increase SS is providing.
by Bruce

@Bruce:
Yes, you are correct by waiting to take SS. But, if Lisa takes it early and banks all of it then she can have a nice large amount of money for when she might really need a large lump sum, like an organ transplant or medical emergency, rehab and nursing home stay or anything else she might need lots of quick cash. After all, banks don’t usually lend out to retirees, even for first or second mortgages. And selling a house or other assets might take months.

Lisa, I think your thinking is sound only if you bank all the money for emergencies. Of course, it will be too tempting and too easy to spend it for pleasures and luxuries. Anyway, good luck, Lisa.

Stop, how many people you know that waited to 66 and never saw a nickel caused they died. the government got it figured out as the number usually works out the same whenever you start collecting. Enjoy the $$ why you can while u still got the desire and health to do it. My financial person says the formula does not take into account quality of life nor the fact spending is higher in the beginning of retirement than the later. Even if you reach 90, you will have made more $$ but will you have the mental capacity to even know it???
life is to short and if you hold on to that nickel to long, you just may loose it.

I am 59 1/2 now, and I plan to start taking SS as soon as I reach 62. Like most of you, I calculated my break-even point for waiting until 66 1/2 and until 70, and it comes out between 78-79.

Here's why I'm going to start taking it as soon as I can. I will then cut back on the amount I am withdrawing from my IRA, leaving more of that money to grow and compound - and in my possession! So after I pass the break-even point at 78 or 79, I'll have far more money remaining in my IRA than I would have had if I had withdrawn more money from it in lieu of taking SS. That should more than make up for the smaller SS checks.

Plus, when I die, there will be more money to leave to my beneficiaries. They can inherit money that is still in my IRA. They can't inherit SS money I deferred receiving.

I'd rather start taking the government's money sooner and keep more of my money for longer.

This logic works in the case of people who are already not working at 62 (or any age prior to "Full Retirement Age"). If you want to keep working and are able to, then by all means, do that and don't start taking SS until you quit working.

This logic also works only if you can reduce the amount you take out of your IRA by all or most of the amount of your SS check, and you have the discipline to do so.

My financial advisor, who is real sharp and has done a great job with me for over 12 years, agrees.

Dave Hughes
RetireFabulously.com

I agree with Dave Hughes, Hub and I retired are 62 1/2 and age 63. We are both on SS and take minimal withdrawals from annuities to keep our income below the income level required to receive the Obamacare subsidy for health insurance. However, let us not forget if we end up sick and need nursing home care the cost in CT per runs approximately $12,000 a month. In TN and KY I know of two nursing homes that are running around $6,000 a month. This will wipe out savings in no time. It is heart wrenching to hope to leave your life savings to your children to have it used to pay for nursing home care. I have no children but my Mom ended up in a nursing home and she intended for her money to be left to me, her only child. Mom passed away before Medicare stopped paying for her care. But I was faced with a $12,000 monthly fee. Medicaid requires you to be almost broke before they will start paying. It might be wise to visit an Elder Attorney to see if anything can be done to protect assets. I have a book called: How to Protect Your Family's Assets from Devastating Nursing Home Costs/Medicaid Secrets by: K. Gabriel Heiser, Attorney. I can't vouch for the information in the book but the author mentions many ways to spend your money down, legally.

I am 68, started my SS at 62 and I totally agree with DaveHughes and alexm56. If you have no need for the income, then your options are many. But so many things can occur that make early SS the right move. Look at your health and your living prospects. Come from long-lived stock, you may be interested in a larger draw. Even if the crossover point is 78, the difference in what your receive is minimal for 5 more years. I retired at 55. I had the long anticipated heart attack at 65. (Not to imply happily, but all the men in my family die of heart disease -- I am currently the longest living ever in my line.) At that time the cardiologist said that with the triple bypass, they had extended my life by 5 to 10 years. Gee, maybe I should have waited until 70 to draw SS -- NOT!

Look at your own prospects. Consider the words of DaveHughes and alexm56. In the words of Robert Heinlein: "You want to live forever?!"

Dave Hughes,
Great point regarding how SS can reduce the amount of money withdrawn from your IRA/401k. Our balances have recovered from the 2008 collapse and them some because we filed for benefits at 62. It also helped that we stayed in the stock market after the crash and it eventually recovered.

The below link makes a valid case for taking SS early. The article, "Is 70 too late to claim Social Security?", has excellent examples as to why late is too late and describes the break even points. It even talks about retirees with pensions, collect SS early and invest it. Wow! The differences are huge.

This was an eye opener for me. For years I thought I would hold out and collect when 67 or even 70, but, this CNN article has made me reevaluate my financial retirement plans. Of course, everyone is different. Even if you disagree its still a good read.

http://money.cnn.com/2016/07/24/investing/70-too-late-to-claim-social-security/index.html?iid=hp-stack-dom

From your editor:
We always enjoy the comments that come up when we discuss this issue of when to take Social Security. As our members have probably figured out by now, we are fervent believers that in most cases (but not all), it is better to wait to claim, preferably to age 70. Of course if you are in poor health with a family history of dying early, or you don't have any other source to live on, you have no choice.

The article referenced above by Colorado Living is thoughtful, but consider its assumptions. The entire argument assumes that you take SS early and invest all your benefits and get 6% on them. If you don't invest it, there is no advantage. First, anyone in this market who can earn 6% is a miracle worker. But more importantly, the people who tend to claim early are the least likely to be investing their benefits, they need them to live on. However if you wait from age 66 to age 70 to claim, your benefit will increase 8% per year. Hard, if not impossible, to beat.

Consider this article, "5 Bad Reasons to Claim Social Security Early". To us, the logic in this article is really sound. And for those of you who worry about when the break even occurs between early and late claiming, consider this: According to data compiled by the Social Security Administration: A man reaching age 65 today can expect to live, on average, until age 84.3. Want to know what your life expectancy is (it is a little eerie) - the SSA has a calculator. Food for thought.

In my case my wife raised our boys well by staying home working 24/7 and did part time work when we were empty nesters. So her SS benefit was very small, but mine would be much larger. I waited until 70 to begin my benefits so I gained the 8% per year and if I died her benefits will be raised to my level. I did look at early benefits, but taking at that age would've given lower benefits when I died. So breakeven point was not a priority.

When to take Social Security will forever be debated. What is good for one person will not be good for another. There are so many questions each person must ask themselves. Do you have a job? Do you have credit card debt or other debt? Do you have a mortgage? Do you have savings to supplement SS and pay your bills. Are you healthy? Do you know how much money you actually need monthly to pay bills? Is your house in good repair or in need of repair? Are you willing to move to a smaller home to stretch your SS dollars? How old is your car? Can you afford a new or newer one down the road? Have you checked out the cost of Medicare Part B, D and F? Will you need to go on Obamacare until you reach age 65 and have you checked out those prices? What do you plan to do during retirement? If travel is one thing, do you have the money to travel?

When you retire you will have most of the same bills you had while working. We use less gas. Some of you might save money on clothes and dry cleaning. Gather all your bills and do some math. Don't forget some of those pesky bills that you only see once a year like professional licenses, taxes, Triple A service.

Also, you might consider finding lower cost insurance through AARP or another provider...we saved over $800 just by switching our house, cars and house over. Call your cable company...good luck with that but you might be able to get on a package to lower your cost. Find ways to cut your bills. Every penny counts on a tight budget! We had 3 vehicles and just got rid of one. Hated to do it but that car was used for commuting and was just sitting around.

I took SS at age 62 1/2 and Hub at 63. With our combined SS and one small pension and small withdrawal from an annuity per year we are doing fine.

Good luck to all.

To those that favor waiting to 70 to start SS benefits, how long did you predict you would receive benefits (e.g. live)? I've done some projections and just don't see it as advantageous. I felt receiving benefits for more years outweighed the 8% increase per year to benefit rate when I looked at breakeven year/age.

I am almost 65 and working full time in a new career and I love it. After a long battle with 2 cancers, it gives me a reason to get up in the morning and a chance to give back.I know theoretically that I should probably be taking SS now, as my "break even" age will probably not ever be realized. My concern is the income taxes that I will pay. I can't figure out just how much of it I will be able to keep. I am divorced and an empty nester, with few deductions. How do I go about figuring out if it is worth taking now.. I think that all the money that they are taking out now for SS will just go into the pool because I am single and will have no SS survivor.I do feel that it is slightly unfair that you must be married in order for the money I have paid into SS all these years to go to an heir.

It is hard to decide rather to retire at 62 or wait. I don't want bad health to be the factoring reason. I agree with Louise above, yet I know people are living longer into their 90's. You can change your mind at Social Security within the first year, if it doesn't work out. The medical insurance is my big concern until 65.

Hi Louise:

I have been doing all that you suggested. I am not yet 62 until September. I got rid of cable TV and now use an HD Antenna and get those channels for free. I still use the Internet with Comcast but nothing else. I only have my mortgage, monthly co-op fee and a bit of credit card debt which I am paying off. My car is paid for(2008 VW Jetta--low mileage 9500 miles) and if I sell it, I am in a very walkable area of Washington, DC. I really think I am at an advantage keeping my car for now as it is a 2008 and not computerized as some are now--no one can just turn my car off with a tech gadget. Since I am considering moving...I am not sure how to work this out. My problem is that groceries are very expensive in Washington, DC. I have compared what I spend with other single people and we all come out about the same. As a former nurse, I have turned to alternative healthcare and do not plan on being part of mainstream medicine any time soon. I have stayed healthier by changing my diet. I am a divorced so I will only have myself to rely on. I currently work in Administration at a Church--less stressful than medicine for sure.

Jennifer, Great you are preparing yourself for the future! As far as groceries go, that isn't an easy one if you live in a high priced area. All the stores will be similarly priced. We follow the sales and buy bargains as they become available. We also shop at Costco sometimes. We might buy in bulk and split it up and freeze meats. However, a single person probably wouldn't find that helpful unless you could split the costs and food with friends. Another option is shopping on line with Walmart or Amazon. They have lots of food items. Probably not fresh produce but canned and boxed foods. We have a shopping service called Peapod here and you shop on line and you pick a delivery day and time and they bring it to your house. Maybe you have a similar service in your area. Not sure if it would be a savings though. Another on line place I have shopped is Jet.com. Walmart is in the process of buying it. You might find savings by shopping for some foods online.

Another thing you might consider is joining a Consumer Supported Agriculture (CSA) program. You have to plunk down a certain amount of money depending on if you buy a half a share or a whole share. Maybe between $180-$360. Then each week you get a hodge podge of fresh vegetables. It is seasonal so each month what you get will be different. I have not done this but am considering it next year. Sometimes you might get an oddball veg. but it could be fun to figure out what to do with it and introduce you to new horizons! If you are unfamiliar with CSA just look it up. It helps support local farmers.

Please do not rule out mainstream medicine. My Hub has been healthy his whole life and just recently found out he has an illness which will require surgery. It has been a real punch in the gut. He will turn 65 next year so we will have to pay a lot because Obamacare does not pay all costs. If we had Medicare and a medigap plan most of the costs would be covered. Not sure if we can postpone his surgery to wait till he gets on Medicare or not. We have more doctor appointments ahead.

Hi Louise:

We have all of the above mentioned options right here in DC. Peapod is here and it is merely a delivery service and does not affect the price of groceries in this area. We have CSA here too. I prefer organic vegetables and I am a vegetarian. I do not eat eggs or meat. Once in a while I will have wild salmon, but rarely. I do not eat dairy either. The other things one needs like supplies for laundry, deodorant, paper, etc cost the most.

I hope not to take SS until I am 70 since it is only eight years away. Because I am a former surgical RN, I prefer alternative medicine. Surgery is done too frequently when corrective chiropractors will work. If you go to a surgeon, guess what, you WILL have surgery! I worked with many cancer patients who began over time to pursue alternative medicine. I was an BIG skeptic until I saw the results achieved by reducing prescription drugs and improving nutrition. I know that life is a big gamble and one cannot control the factors that cause illness, but until I have a health issue arise, I will pursue alternatives as they do in Europe with great success.

Below the first link is an article, "It May Not Pay To Wait When Collecting Social Security", by Investor's Business Daily. The hook is the title, but, this is an unbiased view weighing both sides of taking SS early or later. Many people might find this article informative. I think it is well thought out and well written. Its not very detailed, but it does get one thinking. They are not trying to sell you anything.

The second below link is another good article, "Can You Live On Social Security Alone?" by Fox News / Fox Business. This article is a good read and might give some people insight and advice to help prepare for the future. Financial examples are provided and mentions Medicare. Caution: Ignore the last part "Build yourself a better retirement life style", its trying to sell you stuff,

First article, "It May Not Pay To Wait When Collecting Social Security":
http://www.investors.com/etfs-and-funds/personal-finance/when-to-start-taking-social-security-patience-may-not-be-a-virtue/

Second article, "Can You Live On Social Secuirty Alone":
http://www.foxbusiness.com/markets/2016/10/23/can-live-on-social-security-alone.html