Rethinking the ‘When to Start Collecting Social Security’ Question

An interesting question, to be sure. However, and with all due respect to financial wizards who are rethinking their advice and strategies, doesn't it seem reasonable to presume that if SS benefits are cut in 2034, they will be cut proportionately across the board?

My thinking: Let's suppose that at age 66 my FRA was $1000 per month. If cut to 77% in 2034, those benefits would dwindle to $770 per month, yes?

Now let's suppose that I opted to wait until age 70 before collecting. My benefits would be $1320 per month. At 77% in 2034, those benefits would be whittled down to $1016 per month.

Instead of a bump of $320 per month by delaying benefits, I'd be seeing $246. Still a 32% gain over the reduced $770, correct?

JCarol, that was exactly my first thought. I would rather take a reduction on a higher rate. I will be 66 in a few months and long ago decided to wait until I am 70 before collecting benefits. I did an analysis and if I remember correctly, breakeven is at age 81 or so which would be just before 2034. I'm sticking with age 70 unless someone can show me a compelling reason why this reasoning is flawed. It will be interesting to see what subsequent commenters have to say.

I don't understand why people don't seem to understand that if you live long enough and start collecting at age 62 you will reach the break even point around age 82 years old. Not too many people live to 100 these days. At the break even point you will have collected as much as if you waited till age 70 to start.

From age 62-66 at $1,640 I would collect $78,720

From age 62-70 at $1,640 I would collect $157,440.

The person collecting more money, lets say $2,300 a month by waiting till age 70 would take 5.7 years to catch up but in the mean time I have collected another $112,076. I am now 76, so are they. I have collected a total of $269,880 at this point and the person who waited till age 70 to start would have still only collected $157,320. This of course doesn't take into consideration cost of living raises, etc. Also realize that if they live longer they WILL collect much more in the long run. But life expectancy is age 81 if you live in Hawaii. http://www.worldlifeexpectancy.com/usa/life-expectancy

I am in the take it as soon as you can club and hope for the best.

I do understand if you have no savings your best bet is to keep working and take the bigger check to survive.

Currently age 65 1/2 and not yet collecting SS, I’ve done the same math as Louise (several times) and come to the same conclusion (every time). Why would I forego good money earlier, particularly when tomorrow is promised to no one, and wait until age 70? Sure, I may live to 100, but if so I will have had significantly more money at a younger and presumably more active, healthier age and thus better able to enjoy it while planning for a less active existence 15-16 years hence. I’m open to being persuaded otherwise but all the financial gurus I’ve read on the subject haven’t made much headway with me. They simply can’t deny the math. The thought that, should I live to 81 or so (my actuarial death age) my benefits will be cut 33%, should that be Congress’s “fix”, doesn’t bother me.

I wholeheartedly agree with Louise. I took my SS at age 62. Why? I did the math. It would take me until age 82 to break even with the amount of money I would NOT have received if I waited just 4 years to age 66. I think all of those "financial experts" who urge you to wait until age 66 (or later) must work for the government. They are hoping your will die before they have to pay out. And that is exactly what will happen if you die first. You paid into the SS system all your working years, why not get something back? Also, get it back while you are still young enough to enjoy it, instead of spending it all for medical costs. Just do the math. You will be surprised.

I think many people advocating for early as possible taking SS are missing the big arguments for delaying. Particularly since half of retirees don't have enough money to retire on, if you can possibly get by without it, why risk living in poverty in your old age to get a few more dollars in early retirement. If breakeven is 81 or 82, you are going to lose out if you live to the average life expectancy (82.7 for men, 85.3 for women). That is only the average. About half of folks will live longer than that - many of them MUCH longer. And if they don't their surviving spouse probably will. Lets say you or your spouse live to 90, you will have missed on a lot of money.

JCarol and Mark...you aren't including (in the example JCarol gives) the $48,000 you have forgone by waiting. This is similar to the point Louise is making. You may end up better eventually but your breakeven point will be at a much older age with the reduction. In other words it will take longer to make up that $48,000. An example, similar to what you have done, but considering that will show you this impact.

I won't comment on taking earlier versus later or whether there will be a "Gray Revolution" if the government tries to cut back :) but so many people need the money it is a small percentage who even have the luxury of deciding. If you are someone who has large IRAs or 401ks and has to pay taxes on those withdrawals (mandatory at 70 1/2 for now) and then on some of your SS you may look differently at the situation. And if those amounts start kicking you into higher Medicare Premiums you have another layer of complexity. So everybody needs to do what they think is best for them.

I've read all of the comments so far and I am still in favor of delaying. However, some excellent points have been made that I didn't mention. First, I do have substantial 401k and IRA assets; not as much as I might like but certainly more than average. I have those assets because I have lived a modest lifestyle that I am quite comfortable with and am quite content to continue. I plan to retire early this summer about the time I turn 66. I have plenty to sustain me until I'm 70 with plenty left over. By drawing down retirement funds "early", I am reducing my tax liability once I start taking SS. Break even is in late 2032 or early 2033, before the potential reductions. Many of my ancestors, including my mother, lived well into their 90s, so I figure I have a better than even chance of doing the same. By the time I run out of savings I'll probably be plenty old enough for the increased SS to be sufficient... and if the 2034 scenario comes to pass, as mentioned before, the reduction will be on a higher rate. If I were to pass before break even, I really don't think I will be worrying about whether I got my fair share or not.

Mejask, I understand the point that you, Louise, and several others are making, but that's a decision that people have been making using those arguments irrespective of 2034 possibilities.

Agreed Louise that the $48K would be deferred until after age 70, but that $48K would be distributed in higher benefits over 12.5 years from ages 70 - 82. As Ken pointed out, chances are good that at least one spouse will live past age 82. (In DH and my case the chances are excellent since all of our parents lived past 90 and two are still alive and quite healthy at 92 and 95.) In the meantime people who defer do indeed have to self fund their retirement or continue working.

In any event, the thrust of this article has to do with "experts" possibly revisiting the widely advocated strategy of waiting until age 70 because SS benefits may be cut in 2034. I use quotations because I've found most financial advisers dispense wisdom that quite handily lines their own pockets. Whether that advice is sound for their clients often seems to be of secondary consideration.

There are other filing SS strategies that aren't discussed in this blog post or comment string, but are mentioned here: https://www.topretirements.com/blog/financial/the-can-that-keeps-getting-kicked-down-the-road-social-security-trustees-annual-report-has-more-bad-news.html/

If you haven't read that post or comments, I highly recommend doing so.

Also this one: https://www.topretirements.com/blog/financial/social-security-2017-update-part-2.html/#comment-306820

I hear stories that there are ways for individuals to collect social security benefits after having paid little or nothing into the system. Are these stories fact or fiction? If true, what would be the impact on the system if there was some sort of minimal requirement to obtain benefits at full rates or reduced rates. All with the intent of saving the system from bankruptcy.

Another thing to look at too is let's use my previous numbers. If I start at age 62 and draw $1640 per month for 8 years. I am now 70 years old and have drawn $157,440.

If I decided not to start taking SS till age 70, and I retired at age 62, I would have to draw out of IRA's for those 8 years and that money is gone forever. ($19,680 per year times 8 years = $157,440)

If I take SS at age 62 this will delay touching the IRA money thus letting it grow. Also, if you have children and wish to give them an inheritance, you will have used SS money and preserved your nest egg for them. You can't get money from SS if you are dead and your children can't get back payments. The survivor spouse is the one who will benefit from the larger check if you wait to collect SS and then die. But then you have to hope the survivor spouse lives long enough to collect and get to the break even point of around age 82. It is all a gamble.

Louise - totally agree with you. I would rather keep current savings to continue investing it and take the SS money before age 70.

https://www.pbs.org/newshour/economy/making-sense/watchdog-reports-reveal-problems-at-the-strained-underfunded-social-security-administration

I just retired at 65. My first check for February will arrive next week. I decided to collect widow's benefits, which are a few hundred dollars less than my own benefit (I'll get close to the max that is payable for full retirement age at 66). My plan is to reevaluate my health and finances once or twice a year, and switch to my higher benefit when the math looks right. I think it's unlikely that I'll defer all the way to 70, even with the 8% return for delaying. One of the problems with delaying collecting Social Security is that you're spending your own money while waiting. Assume that John Doe would collect $2,000 per month from Social Security, but decides to defer to Age 70. John Doe will use $24,000 of his own money each year while waiting. That is money that he won't have in his own account for an emergency, and can't leave to his wife or kids someday. I think I'd rather keep more of my own money rather than deplete my assets in the hope that I'll collect more money from Social Security in the future.

As an extra warning, read everything that Social Security sends you! I applied for benefits in my local office, instead of on-line. I also hand-delivered the SSA-44 form, to avoid paying the premium for Medicare Part B higher-wage individuals after retirement.

In the last two months, I've received 4-5 letters from Social Security giving me completely amounts for my benefit. None of the amounts matched the amount that I was told I'd receive when I was in my local office. I've spent four hours on the phone lately with representatives. Not only was the widow's benefit calculated incorrectly, but Social Security then deducted some Medicare payments for months when I was 64. Social Security has just deposited a "correction" check into my bank account this month, although my first check won't arrive until next week. I assume that eventually this will all settle down, but be prepared for some confusion when getting started!

Louise, just a few things to keep in mind. You must take your mandatory payouts from you IRA at age 70.5 and depending on that situation could put you in a different tax bracket. The other is it would be hard to get an 8% return year in and year out in the market by not using IRA funds. 8% is hard to find these days in any investment, but that is what delaying SS would give you.

Hi Kate: I am now 63.5 and decided to now collect Social Security and supplement with a part time job that pays under the limit allowed for early retirees. My job was eliminated at a Church where I was the Administrative Assistant. It was hard to find a full time job at my age. I get my first SS check on March 28. If I find a full time job that pays well enough, I can let SS know and they will suspend my benefits and recalculate my benefits since I would be paying back into the system again. I did not want to do this...I fully hoped to collect at 70 BUT life intervened. I also did not want to deplete my savings so I took the SS benefits. I also have to pay for my own insurance now until I reach 65, a year and a half from now. I chose Christian Healthcare ministries a sharing type of plan--and will use them as my secondary insurance when I do go on Medicare. While the government want us all to work to 70, many cannot for various reasons and they do precious little to help us retain or obtain new jobs when you are my age. I got severance for only two months and had to sign an agreement that I would not sue them for age discrimination.

Bruce, you are right about successfully making 8% a year in IRA investments and you are also right on the taxation of the IRA funds when you are forced to take required minimum distributions (RMD) at 70.5 years old. I already have an inherited IRA I must take RMD's on and get taxed 5% State and 15% Federal tax. Right now I am on Obamacare and have to keep income low to receive the subsidy and not fall off the income cliff. Our income is low enough where we got all our money back from State and Fed. Hub will have to start collecting RMD's in 4 1/2 years and I will have to in 5 1/2 years.

People could also consider moving to a tax friendly state like Georgia.

Many considerations to think about collecting SS. It would be a perfect world if we knew how long our lives would be then we could plan better! LOL!

Interesting article, JoannL. I'm not surprised. Twice at local SS offices I have been told I can not delay taking my retirement benefit if I take survivor benefits. Also, I will be curious what the actual $ benefit will be for the survivor benefit, because I've been told 3 different numbers which differ greatly. When to file? Everyone's situation is different. I plan to put off collecting my retirement benefit and file for survivor benefit when I retire later this year. Hopefully I won't have to dip into 401k, as I also have a state pension.

Well thank God I started collecting my SS this past August at the age of 62.....I had been caregiver of my mother who passed away 3 weeks ago from Dementia and if I hadn't had that extra money in savings I would not have been able to continue paying on her condo....and lost it in foreclosure. I have no 401k savings and I need to probate the property so I can live a retirement without having to rely on government benefits.....I couldnt continue to work and take care of her...yes I'm earning less than 800 per month but being able to keep her at home and out of a nursing home and also not losing the family home was the best decision that I could have made....

My condolences on the loss of your dear mother, Mary. My mother also had dementia so I know what a difficult slog that can be.

Based on your comments at TR, you cared for her for quite some time. I hope that things work out well for you. Are you still planning a move to OR?

Mary11:
Will you still go to the Oregon coast? I may end up there myself to be near my brother and his wife. He had a stroke in Feb 2017 and luckily had recovered most of hos short term memory ..which was the only problem. Physically he is fine. The really would like it if I came out there and I just spoke to a Realtor last night. Affordability is the key.
I am sorry for your lost. You had to take SS early...no doubt about it....in your situation, many would have made the same hard choices.

There will be a funding crisis for Social Security in 16 years. Count on politicians to do two things. First, Social Security recipients who are receiving large payouts should expect to be means-tested. If you are drawing a large monthly SS payment (say, $3K or more), expect to have your Social Security check cut in half. Second, if you are drawing a small monthly SS payment (say, $1K or less), expect the politicians to boost your monthly Social Security check to $1K. Those with a monthly Social Security check between $3K and $1K will lose from 50% to 0% on a sliding scale. These changes will be done in the name of "equity". Anyone who maxes out their check by waiting until age 70 to collect and who doesn't think this paints a great big target on their back is seriously deluding themselves.

I just retired at 59 (yes I know, early) partly for health reasons but also kind of forced out.
Now have a part-time job and a small pension and decent (not great) 401k (rolled-over to IRA) and a separate small IRA.
Live in a high-tax, high cost of living state (NY) but plan on moving to Florida shortly.
I want to begin collecting SS at 62 in spite of the lowered benefits.
Any suggestions or ideas anyone?
Thanks.

Thank you JCarol and Jennifer......yes it looks like we will be moving to the coast of Oregon once we sell our condo. We are very interested in Brookings. It has the lowest crime rate in the state and you can purchase a cabin style Mfg home that overlooks the Pacific Ocean for less than $100,000. Square footage is about 800 but I will be downsizing so that's ok. It's only 10 mi from the CA border too. One thing though trying to find a hospital with more than 25 beds on the coast can't be found. Oh well I've lived in all 4 corners of the US and still haven't found the perfect place so ....good luck in your search Jennifer too!! I was thinking of going inland for a while but they have a much higher crime rate. You can always take a weekend to the largervtowns if you want to dfo your major shopping. I order almost everything online so I won't be missing my mall. If any have questions on Oregon I'm here for you. I LIVED IN Portland for several years but it's too expensive now and we want to start fresh somewhere new too....

Hi Mary11, I am looking in a gated community now on the beach which I can afford, but I do not want to feel isolated and that is the rub. I would have to use a car on the Oregon coast, the weather from Nov-June is rain and mist from what I have been told by someone who lives in Eugene. Here in DC I can walk to everything, even a part-time job I just started. Social Security should help me. My benefits are OK, but I need extra income to pay for the health insurance and other things. The maximum payout per the SS representative here in DC and again in Kansas City,, MO is $2600 or so this year, 2018, NO ONE is getting $3,000 a month for an individual benefit. My own earned benefit is more than half of my ex husbands and he made a six figure income, so I was advised not to consider that option. We were married for fifteen years. I am looking for security in a possible home in Oregon. I am a former nurse and into alternative medicine. I am not sure about health care at the Beach...checking it out.

To clarify Jennifer's comment about the maximum retirement, it is possible to get well over $3000/month. Although very few people made enough in their careers to get it, it is there. This is from the Motley Fool:
- At full retirement age (66 for people at least that age now) is $2,788 per month, or $33,456 per year (in 2018)
- By waiting until age 70 to claim the maximum possible monthly Social Security retirement benefit is $3,680, or $44,162 per year.
See https://www.fool.com/retirement/2017/12/01/this-is-the-maximum-social-security-retirement-ben.aspx

I retired at 64 and I am turning 69 soon I have not started my SS yet and I will wait until I am 70. The SS office showed me where I will get over $40,000 a year. My wife is younger and we can live on what she makes. Plus I also have a part time job that pays about $30,000. I think I getting the 8% bump each year is a great deal

The Social Security Office in Washington DC gave me the information I posted. Not sure the Motley Fool is correct. I also spoke with Social Security in Kansas City and this year 2018 they are NOT paying out $3,000 in benefits to anyone. Admin may be looking at possible future benefits, I am talking about current levels.

Comment from Admin: Sorry Jennifer, whoever is giving you that information from SS is just plain wrong. Maybe they are referring to your situation. We just used the SS Retirement Income Calculator and here is what they say the benefit is for someone turning 70 THIS YEAR, and making $100,000 a year (yes, that is a lot, only a small percentage of people earned enough to get a benefit over $3000/month).

Your Retirement Benefit Estimate
The age that you start your benefits determines how much you receive each month.

We created estimates for you using your earnings information. You can also add your own custom estimates by changing your stop work age and future earnings.

If you start your benefits:
And you earn an average of:
Your benefit will be about:
At age 70
$100,000 a year
(from now until age 70)
$3,673 a month

See https://secure.ssa.gov/apps8z/ARPI/main.jsp?locale=en

Jim I am happy for you. I too thought I would be waiting until 70 to collect SS. It also helps to have a spouse bringing in extra income. If I find a job that pays well full time, then I will suspend my benefits and work again. SS said they will then recalculate my benefits. I am also working a part time job until July 1. Then I can see what transpires, I have been looking for a job that is full time. My part time job is adding to my skill set so I am hopeful.

Good article but doesn't consider yet another point of concern about our gov't's control of these funds. Under the previous administration they were aggressively pursuing ways to implement a means test for SS benefits. Meaning if you worked hard and saved diligently our lovely gov't's intent was to say you didn't deserve SS and since we're running out of money we're cutting your benefit to give it to someone who failed to save like you did. Remember this is YOUR money they took from you supposedly to "save" it for your retirement - ha! While this effort seems to have lost some steam, I don't trust politicians AT ALL, neither side. As a result we are taking our benefits at 62. We are planning to save every penny of the SS money we receive and invest it conservatively. I modeled this strategy and using very modest returns it would take us until our mid-90's for the catch up to occur if we waited until 70 to take the money. I know many people can't afford to save it all, but even if you save a portion you'll still be much farther ahead. Don't trust the gov't! If you think this can't happen just remember the lies about our healthcare, that we could keep our Dr's, that we were going to save $2,500 a year. Instead my healthcare costs have increased 800%, my deductible 150%, and I lost my Dr and have crap care. They have already bankrupted SS, how can anyone of reasonable mind think they won't screw up the handling of the 2034 mess any better than they have our completely screwed up healthcare system.

The Motley Fool numbers are the same as the numbers in my latest statement from Social Security. I wondered if the age 70 forecast included the possiblity of inflation adjustments.

Everyone needs to make their SS decision based on what works for them. I retired a few months after I turned 62 and started my SS then. Because I had a relatively low lifetime earnings, I did not lose much, $$ wise by starting early. My husband started his at 65 when we moved and bought a new house which increased our monthly expenses. We have substantial money in our investments and IRAs but wanted them to continue to grow instead of drawing them down as you never know what the market will do. We also felt like we needed more money when we are younger for travel and everything that goes along with a new home purchase. When we are older we will travel much less and stick closer to home. My husband will start his RMD this year and I will start mine in 2020. We have been pleased with our decisions so far. Again, everyone must make their decision based on what is best for them. There is no “one size fits all” when it comes to SS.

I'm in the camp to take it early. We prefer to let our investment grow and draw down on it less. Our CPA advises the opposite. The only time we haven't followed her advice. That said, everyone has their own particulars for their situation. We know we will reach an age where travel is no longer enjoyable and want to do that type of activity in the early retirement phase.

Earl, would you be willing to cite some sources for the SS scenario you painted?

Kathy, I totally agree with you and others who say that decisions about when to take SS should be reached on a case by case basis.

My guess is that the SS debacle will be like most looming problems - the ultimate scenario will probably be better than most pessimists predict and worse than the optimists believe. I'll further speculate that nobody has yet figured out what Congress might do to patch this up. Not even Congress.

All we mere mortals can do is hope for the best, try to plan for the worst, and work on keeping our sanity as this spins out.

I believe the comment about means-testing is right, they won't cut across the board, higher SS payments will get trimmed more. I also believe the means-test will extend to other income (401k, IRA, etc.), so if you were diligent and maxed out your retirement savings, the government will say you don't need SS as much as people who didn't save, and cut your benefit (or raise your taxes) even more...

Dave, my husband and I think the same.

Well, another thing we could do would be to vote out all the current members of Congress who refuse to deal with this issue and continue to vote them all out until we get some people in there who actually represent their constituents instead of special interests. What a concept.

Acknowledge deciding when to draw SS is a ver personal and situation dependent decision. I only scanned the comments but did no see any mention of family heirs. I am in the take at 62 crowd so I can do a few more things in retirement and take less from my savings, and if God willing, leave some money for the grandchildren. Whether you draw early or late SS is set up to pay out the same amount. The fact that I will draw over 85K before full retirement age and an opportunity to help grandchildren was important to us. Best wishes to all heading into retirement!

I also agree that the decision on when to take SS depends on your individual circumstances and how you think the 5 - 10 year future will pan out. One caveat I will state is that you cannot foresee what will occur with your health. Also, do you have long term care plans (we do).

We are both 70, retired at 55 and made an early decision to take SS at 62. We planned carefully and the markets have cooperated, so we did indeed approximate the 8% on investments that we would have gained in SS had we waited.

For us, the decision to start at 62 varied. I am now the oldest ever in my direct line (by at least 8 years) -- so longevity has been a question. My wife by 62 noted our market returns and the economy in 2010, then decided to also go ahead. Then during our 60's life (and health) changed. She has several issues and has been diagnosed with a potentially life-threatening allergy. While I felt "very" healthy at 55-60, since then I have had a heart attack/triple bypass, I'm about to replace my second knee, I have chronic Achilles bursitis in both heels (at times near crippling), and have become allergic to bee sting along with several other concerns. We are both reasonably ok at 70, but IMO the decision to take SS early was excellent. My family history was a key for me, others may have the good luck not be impacted by health issues for the first 10 or more years, and we all have different investments, pensions, inheritance, etc. that should be considered.

Just as was true at the time we retired (but did not pan out), the prognosis for the markets over the next 10 years is flat. Carefully consider not only your expected lifespan, but also your possible future health (family history), add in all the uncertainties identified in this article and consider ALL of these various comments. In the end, it's something a crap shoot. Good luck to all.

It would be naive to think that Congress will do anything except to cut benefits on people with higher asset bases or higher Social Security earnings. They are not going to tax future generations to help aging Baby Boomers so those who have sacrificed and saved for retirement will be hit in the head and the pocket. I planned to wait until 70 but now will take my Social Security at 66, other things irrelevant. Congress, whether controlled by Democrats or Republicans, can't agree on much except not to help seniors. What have they done or will do to Medicare is the next issue and it won't be good. Don't be naive about this.

RichPB, I agree with what you said.

No one knows what the future holds as far health goes. You could get hit with a truck, get the flu and die, be unlucky and get dementia. So many things can happen.

Hub took his at 63 and me at 62 1/2.

Since then Hub has had surgery and radiation treatments after never being sick except for colds his whole life.

If you can afford to take it early do it! If not, keep working for the bigger check. The bottom line is if you live long enough you will either break even or collect more if you waited.

Chances are like RickPB said, you can enjoy your retirement years in the earlier years without serious illness. As the clock ticks, age catches up and different ailments pop up.

Rich, I agree with you 100%. I didn’t plan on retiring at all, but got sick and ended up taking it at 65, too for me to enjoy the extra money to travel or have fun and life will probably not be anywhere close to break even age. I was in excellent health, active, and in good shape, until I wasn’t one day. Life goes by fast, take the money and if you don’t need it, invest it.

I have a question about one of the posts above. So, is there a maximum that one can collect on SS? The link posted did not work. I collect partly on my own, but partly on my ex. Husband’s amount. He is a very high earner. I don’t think that what SS is giving me is correct , but no way of checking what he makes now. At time of divorce more than a decade ago, he was earning about 500k/yr. i am sure it is more now, as he owns a company.

I didn't plan on retiring either but got laid off at age 58 when there were no jobs to be had. Collected Unemployment for 73 weeks. Then my Mom got very sick and was taking her to all over for medical stuff. Eight months later she passed in 2013. So at that point I am 60 years old and still looking for a job but not finding anything. Received an inheritance from my Mom so used that to help pay bills. Hub retired and took SS at age 63 in 2015 and I took SS in 2016 at age 62 1/2. For us it works perfectly. The SS money is a huge portion of our income and we withdraw from IRA to supplement.

Everybody has different life issues to deal with. That is why there is no one answer on 'when' to take SS. What is good for me isn't good for you. Some people are going to wait till age 70 to collect SS and may collect till age 100. Some other person may wait till age 70 and collect one check and pass away the next month. No one knows what the future holds.

This is a burning question I am wrangling with. I am 63 now and 40 years at same job and oh so wanting to call it a career but hard to pull the trigger. Not many males in my family lived pass 50 and I have lived life like I probably would suffer the same fate. Trying to hang on until full retirement but so many other things I want to do.

What I have seen during my 67 years is that way too many males don't even make it to 62.

My 61 year old brother had a stroke last year, Feb 2017, which took his short-term memory for a time. Luckily no physical deficits. He had therapy for the memory loss and was placed on statins, blood pressure meds, and an anti-seizure medication. He feels awful on these meds and I have asked his doctor to re-evaluate the statin as he is experiencing bone pain from it. He turned his business over to others and sold some of the equipment. He feels his mortality and he was vital, and fit with no medications in his system prior to the stroke. He is taking his Social Security in June when he turns 62 as well as two pensions he earned before he started his business. He feels his mortality now and says he is going to enjoy life while he can. I hope he can do so, but he just does not feel as well now. Without your health money really does not mean as much. He enjoys his beach home and goes there with his wife and dog most weekends. I read the average Social Security beneficiary collects for 15 months--not years....so many people are not able to collect and the money is left in the system.

Jennifer, I don't mean to doubt your statement: I read the average Social Security beneficiary collects for 15 months–not years….

But I have never heard that. I certainly hope it is not true!

Jennifer: If he hasn't already done so, your brother and his wife should check with an elder lawyer before taking SS at 62. He might be eligible for disability SS benefits and Medicare, which would let him defer taking his Social Security so early. (My spouse was on disabilty payments, which converted automatically to his SS at full retirement age.)

Maimi - Yes, SS is capped at $2,786 in 2018. Your benefit could be one half of your ex's benefit. See https://www.ssa.gov/planners/retire/divspouse.html

Michael Alwardt, Wow to you working 40 years at the same job! You must be beyond burned out!

You need to do an analysis of your money needs. What is your SS going to be now if you collect early. What will it be if you wait 3 years? You will probably take a 18-20% reduction if you take it now at your age of 63.

At around age 82 you break even. If you had waited to collect at age 66 this is the point where you start making more money if you had waited.

If you have credit card debt you might want to pay that off before you retire. Once you have your debt paid off, if you have any, then determine if you can can afford to take SS and take withdrawals from IRA's to make ends meet. If not, then perhaps if you have a large home you can sell it for something small. Or you can do a reverse mortgage on your current home and use that money to supplement your SS.

It is very hard to leave a job with a steady paycheck. If you are healthy and can deal with 3 more years stick with it if you can deal with it. Are there any options at your job to work from home 3 days a week. Or reduce your hours to maybe 32 hours but still have benefits? Also, if you have a spouse how does that person fit into the financial plan? Will they collect SS too? Do they work?

Before we collected, I had a notebook filled with Plan A, Plan B, Plan C, Plan D. If we do this, if we do that, If we wait, if we take it now...you get the picture! Get a note book and write out your facts and figures! Good luck to you!

Hi Kate:

My brother has already hired an attorney and applied for disability SS, but as a rule they say that usually one is not approved the first go round. They are a law firm in Portland, Oregon with a proven track record and he may be one of the lucky ones...time will tell.

I make more on my own than half of my ex-husbands SS benefit and he made a six figure income. Mine was not quite up to that level as a nurse. We were married for fifteen years and divorced in the nineties. SS checked into it and definitely gave me the capped figures for 2017. I see that has inched up for 2018. Yes if I could wait until I was 70 I would get more money, but I have not yet been able to find a full time job. I elected to preserve my savings and take the SS early and a part-time job. If I find a full-time job, I can contact SS and have my benefits suspended. They will recalculate my benefits if I am paying into SS again.

Louise, I hope it is not true too. I do not want to think of only collecting SS for fifteen months. I do see a lot of my friends and acquaintances having lots of physical problems as they reach their early sixties....I do not think, act, or look old and I was shocked to see these people who were so vital be stricken. It scares me. I changed to a plant based diet and am eliminating simple carbohydrates, and dairy products (cheese has been the hardest for me). I took a part-time job at a historic property here in DC and I walk all day with a pedometer as I prepare groups for tours---and also give the tours if there are not enough volunteer docents. I love it so far, it is a seasonal job that will end on July 1. I hope by that time to find something else that is as much fun and rewarding. I know that some day something will get me--we all will, but I hope to extend my life with physical activity, I do have longevity on both sides, but I realize I could be stricken at any time. I would never guess that my younger brother would have a stroke. I am now 63.5 and will be 64 in September. When it is your time...it is your time. I would like to have some good years ahead.

Jennifer - I really admire your efforts to stay healthy. Certainly, health is a major factor in deciding when to take SS. I retired at 65. While I probably should have tried to keep going to 66, the stresses of my job would have taken years off my life. I've just spent my first two months of retirement happily reading, real estate shopping online, and watching tv with my feet up. While it was great not to get up at 4 am and have so much stress at work, I've realized that snacking & sitting around is not actually not a good path to a long and healthy retirement. (Hmmm. Good idea for a blog, Administrator!).

Michael Alwardt and others desperately hanging on to get full SS benefits despite wanting to retire: Especially if your family history suggests a shorter life span, consider that 1) you might die tomorrow and 2) many (including me) have noted significant health problems can surprise in your 60s. How do you want to spend your remaining time and what do you want to do after retirement?

Yes health is definitely a major factor in the decision. Wife has 3 hip surgeries, 2 new knees since turning 60 and myself a pulmonary embolism at 60. Health insurance is a stumbling block trying to retire now. Also cost of living for us is one of the highest in US. Unfortunately wife doesn't want to live elsewhere. I have a decent 401K mainly because of 40 yrs putting into it. Ha I never figured on living this long or would have been able to retire a lot earlier.

Louise--I re read what I had found and I was wrong---the average amount of checks issued prior to death is not fifteen--it is THIRTEEN!! That is thirteen months of checks. No wonder they want everyone to wait until they are 70. Keeps more money in the pool. More money per month is a good thing and I always planned to work to 70 or at least wait to claim SS until I was 70. I am trying to do my best to preserve my savings and still survive in a high cost of living area. I have travelled a lot in my youth and lived in Egypt for six years. I am happy to live simply and create memories. Many retirees want to keep up their lifestyles living large in retirement. That is fine for them. I can live well by being more of a minimalist. Scaling back is no problem for me. Until I decide if I am staying here, DC has much to offer. Lots of free or reduced activities....I even get discounts on AMTRAK. I will take advantage of anything that interests me if it is offered at reduced rates.

Jennifer - please provide your source for the claim of thirteen months of collecting Social Security. Thank you.

Jennifer, the statement that thirteen is the average number of SS checks issued prior to death seems very suspicious, given that US life expectancy is roughly 78-80 years. If indeed the average number of checks issued per person were only thirteen, SS would not be in trouble. I'd guess that your source meant thirteen years, not 13 checks.

My husband and I retired at 60 years of age and I am so happy we made that decision. I had a heart attack at 61 and a cancer diagnosis at 65. In those five years we traveled extensively and shared many great memories. Since the Cancer diagnosis I have not been able to travel. I should point out that we have Railroad pensions and I also have a private pension. We were debt free at retirement and never lived beyond our means. If, I had waited till 65 I would have missed many experiences. Just a reminder that health can change very quickly.

We have a 24 year old disabled son who lives with us. I turn 62 in May and submitted my application for SS. I received a call and will be going in next month for an interview since my earnings will not bump up our son's montly SSI payment. He was born with a rare diseases and is multiply disabled. I do not know how much extra he will receive but even if it is another $10 per month this will kick in when I start to receive my payment. In my case, waiting longer might not have been the right choice since there is a benefit to our son.

We moved a group of comments that had to do with medical/dental insurance to a more relevant Blog post. https://www.topretirements.com/blog/health-issues/medicare-continued-what-you-need-to-know-about-medigap-insurance.html/#comments

Comments moved here for a better fit:
From Kate
Louise – Yes, deferring to 70 could be a good option for me. I’ll be reassessing periodically. I will get close to the maximum benefit when I am 66 so deferring could work out well. On the other hand, there’s a lot to be said for getting the larger benefit in the earlier years of retirement when you spend more for travel and entertainment. (The difference for me at 66 will be about $4K a year between spousal benefits and my own benefit.) I am clearly insane, since I’m moving to the snow belt from the Carolinas to be near family now that I’ve retired. I am probably going to need as much money as possible to pay my heating bills after I crank my thermostat up to 74 during Ohio winters LOL.
---
Yes, Kate, each of us need to evaluate our needs of SS. I took mine at age 62 1/2 and hub took his at 63. The two checks cover quite a large amount of our income allowing us to let our money stay in the investments to grow. We do take withdrawals each year but not all that much. Mostly due to the fact that we were/are on Obamacare and had to stay below the 400% poverty level to get the subsidy. Hub went off to Medicare last year and This August I go on it too. So this will now allow us to withdraw more from investments without losing the subsidy because there isn’t any with Medicare! Good luck moving to the snow belt. Where might that be? I live in CT and it is snowing a little this morning and yesterday too. No accumulation though. Spring is around the corner…hopefully!

from JCarol (a portion of a post elsewhere that applies to SS)
I started drawing SS recently at 65. When DH turns 66 in a few months he’ll file for spousal benefits against my earnings (he’ll get 50% of my benefit, so between us we’ll get 150% of my benefit). At age 70 he’ll file for SS against his own earnings which will have grown considerably in the intervening years.

Between our consulting earnings, my SS, and a 2% annual draw from our savings, we are able to live comfortably. When he starts spousal SS we will be in better shape and when he turns 70 our finances will be better still. If the consulting opportunities evaporate we will still be fine. That money is welcome but we can manage without it, if necessary.

from Maimi
Carol, I thought that you could not do that with SS anymore. I am divorced and started SS at 65, though ex. Is waiting until he is 70. I was told that I could not collect on his and then let mine grow until age 70. So confusing

If one was born after January 6, 1954 then one can no longer file for and then suspend spousal benefits and expect to them to grow while you live on yours ( or the reverse). That has been eliminated unless you were born prior to 1954.

As for my previous comments on Social Security many people get the benefits as children of a deceased parent, disability and many other reasons. Older recipients such as retirees have a much lower average when it comes to the amount of months they receive benefits.

Hi folks. Since the discussion came up we want to clarify some of the comments about delaying and in particular File and Suspend. There is a difference between File and Suspend and Restricted Benefit. If you are not already taking advantage of File and Suspend, it is not available to you anymore. If you were born before Jan 2, 1954, you might still be eligible for Restricted Benefit. That allows you to get spousal benefits (if your spouse has already claimed and taking benefits) while your own benefit record continues to grow. Whenever you claim in the future you will get benefits based on your record. It is a little complicated, but this 2 part article explains it in some detail. https://www.topretirements.com/blog/financial/social-security-2017-update-part-2.html/

Just an additional note - surviver's benefits are different from file and suspend. (A widow or widower can get spousal benefits and suspend collecting on their own benefit.)

I think that the considerations for a single, divorced, or widowed person in when to take SS are different. In my opinion, it is just foolish to assume I will live until the break even age of 82 and my SS will just stay in the pot when I die(not fair), so why in the world would a single person let money sit there when they could be enjoying it or investing it now? I don’t know what the average lifespan is in the USA, but not many people in my family have lived to 82 or beyond. I say take the SS when you stop working or at FRA if you are going to continue to work.

Maimi,
I think you are correct. If you have to stop working at 62 or before FRA and are not contributing to SS, by all means take your benefits if you need to. No one has a crystal ball as to how long they will live and there are many factors besides genetics to consider. Some people get cancer when they have no family history of the disease, some have accidents that can be life changing, and things just happen. We all have to do what works for us, there is no one answer.

An excellent article justifying not to collect SS at age 70. The government will need to change the SS system soon because of the unsustainable trajectory. The current political environment is ripe for changing this.

https://www.foxbusiness.com/markets/3-disadvantages-of-claiming-social-security-at-70?intcmp=ob_article_footer_text&intcmp=obnetwork

To me taking Social Security between 62 and 66 is a smart thing to do. People keep forgetting that the SS benefits are set up so you receive a lower check by collecting early but whether you collect early or late you catch up IF you live long enough.

Collecting a smaller check longer or a bigger check for a shorter amount of time gives almost the same benefit. If you should live to 100 years old, and if you waited till age 70 to collect, then you will make out better. No one can predict day of check out.

If at age 62 you start collecting your SS check and let us say it is $1,400 a month times 12 months is $16,800.
$16,800 times 8 years collecting is $134,000. Now you are age 70.

If at age 70 you start collecting SS you will get 76% more than at age 62. You would get $2464 per month compared to the retiree who was collecting $1400 per month.
It would take about 4.5 years to achieve $134,000.

But in the meantime the person who collected at age 62 has collected another $75,600 in those 4.5 years. Around age 78-80 is approx. the break even point.

This also doesn't take into account COLA's along the way.

Another point is that you can use SS instead of dipping into your savings. You can will your money to your heirs, you cannot will your SS. This will let your nest egg grow while using SS money.

Then we have to take into account that some predict that SS money will be depleted by 2034 and SS checks will be reduced 21% if Congress sits on their hands and makes no changes to it to fix SS.

This is how I look at it whether I am right or wrong.

Louise, I agree with you. Life happens when you are busy making plans. Taking SS when you are eligible makes the most sense to me. I have lost too many friends in their 60’s to cancer the past few years to think it is wise to plan to live to the “break even” age. I am divorced, so when I die, the money will not go to a surviving spouse, so I took it as soon as I turned 62.

Louise - what you describe is what was recently recommended to me by a financial planner. Maimi - I'm in agreement with you regarding a health crisis. So I've decided to start taking SS at age 62.

https://www.fool.com/retirement/2017/11/19/why-smart-people-take-social-security-at-62.aspx

Hi Louise and Maimi:

Life happens is a common comment and it certainly does. I wanted to work until I was 70, but when my job was eliminated and I could not find another fulltime job with benefits, I was forced to take SS benefits at 63.5 years of age. I, like Louise, did not wish to deplete my savings. Since then I have found that by working three days a week, I am able to supplement SS and pay for my health insurance and live simply. I never was a big spender, but I do love to travel. Meanwhile, my brother of 62 had a stroke last year which changed his life. We are lucky it was only short term memory loss which now has been almost totally restored with daily therapy sessions last year. It has made him feel his mortality and he, too elected to take his SS last June. I see lots of people around me having problems in their sixties and these are people who take care of themselves physically and eat well. Cancer, heart issues, cataracts, muscle and back pains are what I see happening to my friends. I pray that I can stay healthy. I know that my sixties are still years when I hope to enjoy my life and I am also hoping for that in my seventies. Tomorrow is not guaranteed. I am divorced and I have no heirs so I am trying to navigate life the best way I can. I hope by working even part time that I can add to my SS benefits--the COLAs will certainly help and continue to save a bit.

Question:
I believe I need to go to a SS office to sign up for benefits, not online . Do I need to file from my current state of residency ?
Thank you in advance.

Caps, you can file online. My Hub and I did and it was easy. Just take your time going thru it. I think you can even stop and go back to it another time if you can't finish. If you don't feel comfortable, you can make an appointment or I think even do it over the phone.

Not sure what you mean by current state of residency. I don't think it matters where you live as long as you have a checking account and a mailing address. Your check is automatically deposited into your checking account.

Social security and Medicare are very well organized. I have never had any issues with them. They send out a once a year update on your SS benefit and Medicare deductions.

Caps, you can file for your benefits online from the comfort of your home, just take it slowly. The people at SS are not concerned where you are when you file. I found it easy and had it done within 30 minutes tops. You may be concerned about showing certain documents, if so, a representative from Social Security will let you know. They will call you, in any event, within a few days of filing. I filed on a Thursday at the end of January and got a call from them the following Tuesday to confirm details. My first benefit check arrived in March.

Thing is : I don't think I will have internet access when it's time for me to file, as we will be traveling.

Editor's Comment: You can go to a library and use a computer there for free. Or you can call them up and wait your turn.

I will be taking my retirement at 62 for several of reasons. First is that I don't trust our government to live up to it's promises. It has wasted our money and has failed to invest it wisely in any sense. Second, the previous administration was attempting to get lawmakers to consider redefining payments from Social Security to be determined on a needs based approach. In other words, yet another attempt to punish hard working Americans who saved all their lives to give money to people who didn't save. If I happens to have lots of savings, they wanted to take away my Social Security - keep in mind, this is my money, entrusted to the government to save for me for my retirement. However, lately government thinks all money is their money to be redistributed as they see fit. While the current administration may not be doing this I have little faith that the current generation, that wants socialism to be the norm, will honor their commitments to those who paid into the system. Finally, from a strictly financial standpoint. if I take Social Security at 62 and save and invest it until I'm 70, I'll have well over $200,000 additional money saved. At that point I could take over $1700/month out of that savings until I'm at least 90 to add to my current Social Security payments, giving me a bit over $500 more per month in total than had I waited until 70 to start taking Social Security. That is with an extremely conservative investment return estimate. Since I typically earn 2x-3x that rate on my investments I could have much much more to use than that at age 70. I would never trust the government to honor their commitments, as soon as I can get my hands on my money I'm taking it.

Dave, I agree on what you say. Needs based SS is wrong. Most of us have paid into it our working lives and should not be denied due to us being able to save more than someone else. Even Warren Buffet is entitled to his SS check. We should be able to do what we want with it. Use it to pay our monthly bills, gamble it away, give it to charity, hoard it in the bank, give grandkids money gifts, throw hundred dollar bills in the street. It is our money. Maybe there are some people who would consider opting out. But, if I didn't need it I would donate it to a worthy cause. I took mine at 62 1/2 and never looked back.

Dave - great comments! I especially agree with your last statement. I'll be contacting SS after the holidays to enroll.

Just a quick note about widow's/widower's benefits - once you sign up for them (which can't be done on-line, by the way), you will no longer be able to access your own benefit estimates online. You can get your own benefit calculation on the phone, or at a SS office. My local office printed out an estimate of my benefits at each age for me. I started taking widow's benefits when I retired. My own benefit (I'm approaching 66) will be about $500 more than my widow's benefit. I've decided to defer switching to my own benefit for a little longer but I doubt I'll wait to 70 for the reasons cited by other posters. Even though at 70 I'll qualify for something close to the maximum benefit, I am concerned about possible future taxes on SS, cuts to benefits, health emergencies, or other contingencies. A bird in the hand etc etc etc

It seems that Dave has his Social Security situation all figured out. And that’s fine -for him. However, I think the smart thing to do is consult with a financial advisor or other appropriate professional about your own personal Social Security situation. On our own, we may easily rely on assumptions about the future that may be entirely inaccurate or unlikely.

Yes," admin."....
Libraries are available (I don't know if a non-resident can qualify for a library card, however). I am a former widow, therefore I believe it would be in my best interest to visit the office in the city of my former residence while traveling. The question I am proposing is this: Can I enroll from a state that is not not my current permanent address? Has anyone else ever had to do this?

@Caps: Social Security doesn't care where you are when you enroll. It makes absolutely no difference. Not sure why you are fixated on the idea that you should be in the city of your former residence. And libraries allow people who do not have library cards to use their computers. You can also enroll by phone.

RE. "needs based SS", it already is needs based in a way, since the maximum benefit of $3,700/mo. at full retirement age can substantially short the person who has had 35 years of well above average earnings. So unfair! At any rate, I'm 66 and waiting a few years. I like the idea of a risk-free 8% per year return. That will give me $3200/mo. at current payout. And when I'm dead, I'm dead. Won't care then! I'll probably convert some IRA money to Roth in the meantime.

Peder, I take it you do not have a surviving spouse? Yes, when you are dead you are dead, but why not leave money to you heirs if you can? If you die without taking your SS and you are single, it is your hard earned money, that could have been left for your children,down the drain! If you are single, it is a fool’s bet to wait to take SS. Take it and put it in the bank or invest it so that if you die before age 70 , at least some of your hard earned money can go to your heirs, rather than fund someone else.

Unfortunately, ( or fortunately), as Clyde indicates, there is no "one size fits all" answer to how or when one decides to initiate social security.
I have elected to wait until 70 to both maximize payments to myself, and....ultimately, my wife. I'm betting on longevity, and if I don't achieve it, my wife might. Once gone...I won't care.
A guaranteed 8 percent rise year by year is compelling and when, or if there are cuts coming....seems like cutting a higher payment makes more sense than a lower one.
As far as not trusting in the government to keep their promises...paranoia is not part of my strategy.

When a layoff at the age of 62 forced me to claim SS while I looked for work, it was crucial income. Then after getting a well-paying job with good benefits, thanks to the SS monthly income (which increased every year) I was able to max out 401K contributions for years while I built my retirement funds. Now in retirement, income is solid from the combination of SS and 401K withdrawals. The option was great for me.

JoeG:

Did you suspend your SS Benefits once you found a well paying job with benefits? I was forced to take my SS Benefits in Marchof this year when I was 63.5 years of age. My part-time job pays well, but I still need to pay for my own insurance and have no benefits at all. I am a former nurse, but have worked in Admin and software training in my past. I am glad I have a diverse skillset. I would still love to find a fulltime job that pays well, and with benefits, but as of yet I have not found that job. I am grateful for my SS benefits and if I find a full time job, I plan to suspend my benefits especially in 2020 as it is my FRA and my income will finally be uncapped...my SS can grow until I am 70...of course it depends on finding that full-time job.

I don’t have the stats, but I am willing to bet that the government gains with the wait until you are 70 approach. Otherwise, they wouldn’t promote it. I would say that if I had a spouse and did not need the money, I might be tempted to leave it, but on the other hand, I think if you take it when eligible, and invest it wisely, you are better off. What really bothers me is that SS is taxable income. This is double taxation and is so unfair.

Maimi,

All good points. It’s funny. Several friends of mine are top economists. I mean the top ones In the country. We argue about this all the time. In their glass towers,with their high incomes, they preach the gospel of waiting til 70. They do not think of the person’s total circumstances.
My tax accountant, who is very expensive, very smart, sums it up this way.
Take social security when you stop working.
I side with her. Go figure. I say, just do the quick and easy math. First, figure out your break even point, meaning at what age you would’ve lost by collecting, which of course doesn’t include many unpredictables and it’s pretty easy to think out what you want.

I came to the conclusion a few years ago to start taking it at 66 and did. Welcome aboard the reality train. When the SHTF the solons in DC will go after the "rich" first. You will be surprised how little assets you need to be considered rich. Take it while you can get it.

#1 The way to fix SS is for congress to pay back the money they have robbed already from the SS Superfund enacted by Reagan. #2. Quite stealing the money each year from the fund. I will never support an additional SS tax. That's is like giving the thieves the combination to the vault.

I plan on drawing at the earliest possible age. I understand it takes 10 years, from age 70 to 80, to make back the money that you would have made by starting SS at age 62. Who knows how long you may live, or how long SS will be around if congress continues to act against our best interests.

Group - What I felt was a pertinent to topic from today's WSJ article.

https://blogs.wsj.com/experts/2018/12/19/for-older-americans-working-a-little-longer-is-less-costly-than-it-used-to-be/

Collecting Social Security at any age is a crap shoot because no when knows when check out time will occur.

If you are healthy and like your job, keep working don't collect SS till later.
If you lost your job and can't find another one start collecting SS.
If you have health issues that make it difficult to work, quit the job or work part time and collect SS.

Everyone has different life issues and we are lucky we have choices to collect early or late.

If you are unsure about your decision, talk to a SS representative, family and friends.

My Hub despised his job for many reasons and would have liked to have left his job years earlier. I liked my job but was laid off and couldn't find another. I wish things could have flip flopped for us so I could have worked longer and he could have retired sooner. Things just don't always work out like we hope for. I am thankful that SS has many options to offer.

My friend's job was eliminated. It was an office type job. Now, the job she was placed in requires she be on her feet all day. She is finding it is becoming too much due to health issues. She will turn 66 in July and plans to retire at that point. Maybe she will work part time. I think if she had not lost the office job she would have worked longer but life has its twists and turns.

I am 63 and am waiting to 65 to collect SS. I was appalled to learn that SS is taxable income. Any chance that will be changed in the near future?

Thinking that there is an optimal age for everyone to take Social Security is foolhardy. The decision as to when to take Social Security is a personal one based on your personal situation. In my situation, I am waiting to take it at 70, but that is because of other things that have happened and that is part of a larger strategy. I took a lump sum distribution from a defined pension plan a couple of years ago. The reason I did so was because my wife would be better off if I died early. That is protecting against not living very long. To balance that out, I am waiting to take SS until 70. That protects against living "too long." If I knew exactly how long I would live, it would be a simple mathematical calculation. Since I don't, my strategy is to balance out the risks of dying early and dying late. Note that my decision-making process does not apply to anyone else. If our circumstances change, then my strategy for when to begin SS may change as well.

FWIW, if you really think there is going to be means testing and benefits reductions based on that in the future, then you are probably better off spending down some of your retirement funds prior to age 70 and then taking Social Security at 70. That way, you have fewer "means" to be tested and a higher base SS payment before any wealth-related adjustment is made. That has never been a consideration in my overall strategy. Social Security is the 3rd rail of politics and I am convinced Congress will find some way to kick the can down the road prior to 2033.

Martin, Social Security income is only taxable if your total income exceeds certain limits. And then not all of it is taxable. Some states also tax Social Security income, many do not. Here is the federal situation as described on the SS website:
• If you file a federal tax return as an “individual,”
and your combined income* is between $25,000
and $34,000, you may have to pay taxes on up to
50 percent of your Social Security benefits. If your
combined income* is more than $34,000, up to 85
percent of your Social Security benefits is subject to
income tax.
• If you file a joint return, you may have to pay taxes
on 50 percent of your benefits if you and your spouse
have a combined income* between $32,000 and
$44,000. If your combined income* is more than
$44,000, up to 85 percent of your Social Security
benefits is subject to income tax.

Martin - Just FYI - if you are 63, as am I, our Full Retirement Age is 66-1/4. If you take Soc. Sec. at 65, you will get less than your FRA. My husband's disability insurance only covers him until age 65 - they never changed the age, in their contract, when the government changed theirs. So, we will have about 1-1/2 years to make up the difference until he can take his FRA. Of course, it IS a personal decision - good luck!

Jennifer, in response to your 12/18 question (sorry--I was traveling since then) as I noted in my post, I continued to receive benefits after getting another good job, since it allowed me to contribute the legal maximum to my 401K--which has made a retirement with decent income possible.

Jeff, in your post above you sure hit the nail on the head with these words, "To balance that out [the strategy you detailed that benefits your wife better should you die early], I am waiting to take SS until 70. That protects against living “too long.” If I knew exactly how long I would live, it would be a simple mathematical calculation. Since I don’t, my strategy is to balance out the risks of dying early and dying late."

My husband and I have employed strategies somewhat different from yours, but with the same goal of hoping to ensure enough money should one die early or both live a very long time. If we both die early there will be sufficient monies/assets to give our beloved children's bank accounts a significant boost.

Rich Grace: Just an FYI. Only subscribers to the Wall Street Journal are able to read the lion's share of its articles. The one you linked requires a subscription.

An 8% + COLA risk-free return is quite compelling when one has their health and the ability to work until FRA (or even 70). Working half time at @$15/hr earns someone $15k/yr while SS builds up, thus improving cash flow a few years later when working is not practical. As far as taking it early and investing it, if that person has decades of investment experience making 8% + COLA returns, they should have a big nest egg and an appreciation of risk-free future income growth in their portfolio. If they don’t have lots of investment experience, they shouldn’t expect 8% + COLA sustainable returns to magically happen (witness today’s market).

However, serious health issues or physical inability to work changes things, making it prudent to take SS early. Also, someone may have a “paranoia discount” that gives them peace of mind to forego 8% + COLA returns and take it early (though I suspect their paranoia will not go away, it would just find another subject for their nightmares).

As for me, being 59 and recently retired I’m planning on taking it at 66/10. I’m fortunate to have a decent pension, OK pension for my (still working) wife, and healthy investment and 401k balances to give me options that not everyone has. I’m working a low-pay very p/t coaching job and about to start a 20-30 hrs/wk volunteer position. In between I spend time with my aging Dad (reason for retiring early), pursue hobbies and do minor house upgrades to keep me busy. I have my health and, if needed, I can jump on a Walmart greeter-type job for bridging cash until FRA. And I’m learning to like home-brewed coffee, replacing my 2-a-day Starbucks mocha frappalottimus with almond milk ;-)

But as they say...your mileage may vary...;-)

All great observations. Bottom line. Louise said it all.

I found this link somewhere a couple days ago, whether it was here or from one of the articles linked I'm not sure. I found it very helpful in deciding I'm taking SS now at 66 rather than waiting. It's a little more complicated than just the arithmetic between payouts at 62 and 70. Hope it helps someone.
http://danielamerman.com/va/BenefitAge.html

I can't seem to find the answer to this question. My spouse is at full retirement age (FRA) with his Social Security (SS). I am 65 and will be 66 this year and be at FRA. I am collecting on my own SS and he on his.

My question is, if I wanted to when I reach FRA would I be eligible suspend my SS to take half of his SS and let my SS grow till age 70?

Even if this is possible, I don't know if I would do it.

This is just a thought that popped into my head but the examples I see don't apply to what I am asking.

Louise, from what I've read if you are already receiving SS checks you can suspend at 66 or anytime after before 70....but you can only suspend to reclaim anytime before 70 to receive an increase for the time you didn't receive any checks. I dont believe you can claim 50% of your spousals amount if you have already started receiving checks under your own.

Bill Hisle

From the Motley Fool article
https://www.fool.com/retirement/2018/05/20/did-congress-really-steal-from-social-security.aspx

No, the federal government didn't raid Social Security
As for Social Security's most pervasive and borderline irritating myth, that goes to the belief that the federal government raided Social Security's coffers and never put the money back. As a financial journalist of nearly eight years, I can confirm that the comment section on most Social Security articles over the years has been riddled with allegations that Congress stole money from Social Security and never put it back -- and that this is the primary reason why the program's asset reserves will be depleted within the next 16 years.
n reality, none of this is true.

The folks who perpetuate this myth strongly believe that Social Security's current asset reserves of nearly $2.9 trillion is a sham. In other words, they don't believe the money is there. They believe lawmakers on Capitol Hill absconded with this money, and that seniors and future retirees will suffer as a result.

The truth is that the Social Security Administration takes this extra cash, which would be earning nothing if it were sitting around in a trust, and invests it in various special-issue bonds, and to a lesser extent certificates of indebtedness, with staggered maturity dates ranging from a year to perhaps longer than a decade from now. By placing this excess cash -- which has been built up since 1983 as a result of Social Security being a cash-flow positive program -- into special-issue bonds and certificates of indebtedness, it earns interest. In 2016, $88.4 billion of the $957.5 billion in revenue that was generated came from interest income earned on its bonds and certificates of indebtedness.
in reality, none of this is true.

I just found this and it says no, cannot collect on spouse's SS when you suspend your SS at FRA.

https://maximizemysocialsecurity.com/can-i-suspend-my-benefits-fra-and-draw-spousal-benefits

Louise, When you reach FRA, you can apply to receive a "bump up" to the (I am assuming) larger amount of your spousal benefit ( again, assuming he is already taking his) against your husband's Soc. Sec. You will still be receiving your own with the additional amount added to that. Be advised, if you are already taking your Soc. Sec. then you will not get the FULL 1/2 - you will get a pro-rated amount because you chose to file early.

I have seen nothing about suspending - I'm sure you cannot do that any more. They keep changing the rules!

HEF, thanks for the information, however my SS and the spouse's SS are close in amount. His is higher but mine is way more than half of his. Yes, the rules change often. Even if it was possible, which now I see it isn't, not sure I would have suspended it for his half and to suspend and get nothing for 4 years doesn't sit well with me! I will just continue taking my check!

A reminder that this is a complex subject and top of the head opinions are often incorrect if not dangerous. This article on the new claiming strategies has the basics and links to more. https://www.topretirements.com/blog/financial/how-the-new-social-security-claiming-rules-affect-you.html/ You can also go to ssa.gov and find good info, or call them (sometimes not always perfectly reliable.)

I just saw this article in AARP and thought it was relevant. Plans on when to retire and take SS are great, but along with issues with a bad economy (as it was for 8 years), divorce, death, many people over 50 unexpectedly lose their jobs. Life happens. https://www.aarp.org/work/working-at-50-plus/info-2018/forced-retirement.html?cmp=EMC-DSO-NLC-RSS-WORKJOBS--CTRL-010419-P2-3479300&ET_CID=3479300&ET_RID=5472401&mi_u=5472401&mi_ecmp=20190104_DailyBulletin_Control_247401_320001&encparam=Rrj1rBSErB%2bxCRdiHNsXx9%2bJmfrtS6iDhNFzhCOGV84%3d

Maimi - the article you posted is very accurate IMO. The exact circumstances happened to me after 22 yrs with same employer - sudden down-size after the company had just hired younger personnel. I've had to now completely reconsider taking SS at age 62 - not what I had planned. The odds of finding employment at my age are against me although I have 40 yrs experience in my discipline.

Companies do what they want and usually figure out how to cover their butts. My last job (2011) I was laid off in my late 50's along with 2 others that were also in their 50's and one that was in his 60's.
So, due to ageism, I could not find another decent job and collected SS at age 62 1/2.

Reading al of these posts makes me realize how lucky I have been. I retired at 64 and found a great part time job 3 days a week that paid well and provided a 401K. I am waiting until I turn 70 this year to begin SS. There are some very good part time jobs and with employers who will value your knowledge, but you need to value there knowledge also. It is a two way street for sure. Good luck to everyone as they begin retirement.

Jim, I too have a wonderful part-time job through networking. Unfortunately, it does not provide many benefits. I am paid for Holidays but I pay for my own health insurance. It allows me to dabble in medicine as I was trained as a registered nurse. I am 64 as well.

Knowledge is one thing, yes, but a willingness to learn new things is also an asset. Mind over matter can be the key. If you think you can learn a new skill--you probably can. I found this when I was a software trainer for six years. Older people can most likely do anything the younger workers can do--if they have a positive attitude and are willing to focus and learn.

Maybe someone can point me to tax information regarding social security? I'm 62 and now unemployed and husband is 60 / employed. We file joint income tax and our tax bracket will change lower now. However, we still have an employer based income with healthcare coverage - so will this income situation adversely affect my monthly SS benefit? A brief conversation with a financial adviser told me not to wait to FRA but to take it now.

Joann,

Your benefit depends on your individual income--not joint income. And since you're now unemployed, there should be no effect on your benefit if you decide to start receiving SS.

If you begin receiving SS before FRA, and become employed again, income you earn will have an effect on your monthly benefit until you reach FRA. That's a fairly complicated discussion.

JoeG - Thank you - I was confused by a previous post by Admin stating:

If you file a joint return, you may have to pay taxes
on 50 percent of your benefits if you and your spouse
have a combined income* between $32,000 and
$44,000. If your combined income* is more than
$44,000, up to 85 percent of your Social Security
benefits is subject to income tax.

JoannL

Go to the SSA.gov website. Social Security can address your issues. Common questions are answered on the website. You can also call Social Security and speak with a representative.

Joann, the post you referenced has to do with income taxes on benefits, not the benefit amount itself. There are a lot of factors affecting the net amount you end up with, as you are discovering.

Editor Note: We moved this Comment here from the "How Much Do I Need for Retirement" article because it seems to fit better
--
I have a question that is related to this article and comments, and it concerns when to best take Social Security benefits. I’m 67 and my wife is 59, and we’re fully retired. The conventional wisdom is to wait until 70 if possible, and I’ve always adhered to that. However, when I recently ran an accumulated value comparison of Social Security benefits at the 67, 68, 69 and 70 age levels I’m no longer convinced that’s correct. In order to meet current expenses, the amount we’ll deplete from our savings for the next 3 years is approximately equal to the accumulated increase in Social Security benefits if waiting until 70…but only after about 20 years! So if I begin to start taking Social Security benefits immediately, we keep about $30,000 in our savings account each year, but trade that for a smaller monthly amount for a lifetime. Am I missing something here, or is our situation unique? I would be interested in any opinions or suggestions others might have.
Thanks. Don

These are some other comments moved here:
Don, you’re not missing anything — it is a trade-off. Each person should evaluate their own situation. Before retiring 16 years ago, I put the info into a spreadsheet and found that the time at which I would go positive by taking SocSec later, was a few years after a reasonable life expectancy for me (family history). No regrets. Retired early and took SocSec at 62.

I’ve seen similar calculations for others with comparable results. But each person should do their own assessment — it’s personal based on situation and individual ability to live with your choices.

Don – I found these articles to be helpful:
http://danielamerman.com/va/BenefitAge.html
https://www.marketwatch.com/story/when-less-social-security-is-more-2017-12-05
https://www.marketwatch.com/story/why-it-might-be-better-to-take-social-security-at-age-66-instead-of-70-2018-02-02
Originally, I had planned on waiting until 70 (read: greed) since I retired at 62 and had no issues with debt or expenses and my family history generally goes well into 80/90’s. But I also thought about RMDs at 70 and more SS taxed and higher Medicare premiums caused by a higher income. So I finally decided to take it at FRA (66). You break even by 82-83 anyway if you live and if you don’t, well, too bad. I’d probably suggest using Other People’s Money instead of your own. You can always find something better to do with your own, whether enjoyment, inheritances, or donations.

Another reason to take SS early is if you had children late in life. If you are 62 and have for instance a 10 year old child, you can collect SS and so can the child collect without lowering your SS amount. Your 10 year old kid could collect for 8 years and save for college.

In regard to waiting until 70 to take Social Security: Remember that when one spouse dies, the other spouse is entitled to only the higher of the two Social Security payments; the other one goes away. That may be a good reason for one spouse, if possible, to wait until 70 in order to have a possibly much higher benefit going to the surviving spouse. Every year you wait from age 62 to 70, your benefit goes up 8%. Impossible to get a guaranteed 8% return for eight straight years otherwise unless you get very lucky. Nevertheless, only about 3% of SS beneficiaries wait until 70 to claim.

Louise, I don’t understand what you are saying? How could a child collect SS? Do you have a provision to cite about this?

Louise is correct regarding children collecting...they just don't advertise that very well. I know for a fact because my parents qualified but no one ever notified them. Also, from 62 to your full retirement age you only increase your amount by 5%, but after your full retirement age it goes up to 8%.

Maimi, Here is a link. Read thru and you will see and example of a guy named Rodger with two children and what he will collect and what they will collect if he retires at age 62.
https://socialsecurityintelligence.com/social-security-benefits-for-children/

Our kids were fortunate enough to receive benefits. Spouse was disabled with a terminal, degenerative disease in his 50s. I was still in my 40s at the time, and our youngest was still in elementary school. He was unable to work due to the illness and had to go on SS disability (converted to his regular SS when he hit 66). Our kids each received a benefit until age 18. I was working a high-stress, full-time job to support the family, trying to keep the family home for them and being a caregiver (his own benefits covered the cost of an in-home caregiver and Easter Seals day-care until he had deteriorated to the point that they couldn't help him anymore). The benefit for each of the kids was paid to me, and I provided an annual accounting of how the money was spent for them. Their benefit was about half of their Dad's with a family cap on all benefits that were payable. This may not be the same as the benefits paid to the kids of early retirees, but the dependent benefit was certainly a blessing as I tried to keep my head above water during those years.

Louise, wow that is an eye opener and pretty startling. No wonder SS is going broke. I don’t think paying children was part of the original intent of SS. I was a divorced Mom and raised a family with no assistance from the government and there are so many women raising children alone, it makes no sense that taxpayers are paying to assist children in two parent households, even when one is disabled. That is just one example of the inequity of taxpayer funded government benefits. Wow.

Maimi, well I'm sure the govt felt this benefit is for the tax payers who just happened to have children later in life and either lost their job or had to claim SS earlier because of medical issues. I dont have any children but I for one am glad that is provided to families in need. It's not a crime to accept help from the govt when it's offered to you and you don't want your family to suffer needlessly.

I obviously agree with Mary11. The benefit helps as child support that a parent would pay if alive or not too disabled to work. It's a percetage of the dead or disabled parent's benefit, and isn't enough to make life easy for anyone.

If snarking on that benefit for chidren who are suffering from the death or very serious disabilty of a parent, it should be noted that its also possible for people to criticize the fact that some people make the choice to stay at home and not contribute to SS at all -- but will then feel entitled to get a benefit based on the taxes paid by a spouse (double-dipping into the system on that one working person's taxes). And everyone could criticize the unfairness of SS taking money from single working people throughout their lives but not having to pay anything if that person dies before collecting their benefit (Even married people don't always get back what they've paid in, whether through their own, spousal or dependent payments). The system isn't perfect, but there are arguments pro & con the safety net that it gives us.

Maimi,

Once again you are correct. The original intent of social security was to provide retirement assistance to workers only (and at a time when the average lifespan was 62 and benefits started at only at 65. No “early” benefits). To quote from Social Security's own website at ssa.gov: "It is impossible under any social insurance system to provide ideal security for every individual. The practical objective is to pay benefits that provide a minimum degree of social security—as a basis upon which the worker, through his own efforts, will have a better chance to provide adequately for his individual security." -- From the Report of the Social Security Board recommending the changes which were embodied in the 1939 Amendments.

“The original Act provided only retirement benefits, and only to the worker. The 1939 Amendments made a fundamental change in the Social Security program. The Amendments added two new categories of benefits: payments to the spouse and minor children of a retired worker (so-called dependents benefits) and survivors benefits paid to the family in the event of the premature death of a covered worker. This change transformed Social Security from a retirement program for workers into a family-based economic security program.”

Partagas - Very interesting background info, Thank you!

So Kate, a spouse that moved 14 times in 32 years, worked when that could get raised 3 children while her husband spent a career in the military is what...double dipping?

Steve W
US Army retired.

I did NOT say that I felt that it was wrong or unfair (especially since people have made important life decisions based on the existing system!). I was pointing to the fact that there are many situations in which unfeeling people could snipe about benefits received by others. And yeah, technically it is double dipping when more than one person gets benefits from a single person's taxes...or triple+ dippling if someone marries every 10 years....or when minor children collect benefits at the same time as a disabled or retired parent....but that's also how the system was set up to be a social safety net in 1939 per Partagas' great historical background information.

Talk about double dipping - my sister in law a retired teacher that paid no social security but receives a teachers pension & she can't collect social security for what she never paid into, I feel is fair. But my brother who paid social security for years & starting receiving it a couple years ago when he recently retired & he just passed away. She can't collect on his social security which I think is unfair. He paid into the system for years & a good amount as he was a professional which means the Government makes money off people that pass away after just collecting. She should be entitled even to get part of what he got & not just that meager $255. death benefit.

VTRetiree, I dont have an opinion of whether a person who never paid into SS but does get a good public pension should be able to collect survivor benefits, but just want to comment on your concern that "He paid into the system for years & a good amount as he was a professional which means the Government makes money off people that pass away after just collecting.". The govt doesn't make money on people who die shortly after starting to collect SS. That is how insurance and annuities (ss can be looked at in their family) work, the expectation is that enough people will collect for a shorter time so there is money to pay those who live longer. It's not like SS funds are invested and held in specific accounts for each individual. And it is why many people think SS should be phased out for younger people and replaced with a self managed account (similar to a 401K) that people and their employers are required to contribute to but which will pass to the persons estate on death.

We think by now we have heard all sides (many times) on the question of whether SS should pay benefits to survivors. Let's move back to the conversation of the purpose of this post, When to Start Taking Social Security.

Has anyone taken SS at age 62 then suspended at FRA, for me that would be age 66. Then start collecting again at age 70? I wonder how much it would boost the bring home amount? Would you still earn 8% a year for 4 years?

Editor's note: That might be a great idea, but it is not possible at this time. From the ssa.gov site:

If you change your mind about receiving Social Security benefits, you may withdraw your Social Security claim only if it has been less than 12 months since you were first entitled to benefits. Your date of entitlement is the month you start your benefits and may not be the same as the date you actually received your first check. If you withdraw your claim, you may re-apply at a future date. To withdraw your claim, you must make a request to withdraw in writing and repay the benefits that you received. For more information, visit our If You Change Your Mind page.

Louise, I too have my FRA at 66 in Sept 2020. I contacted SS about this very item. I was told that it would be better to invest what SS I get than to suspend until 70. This was by a Supervisor at a Social Security office in Texas. You may get a different answer than I did.

Admin, I think there are two scenarios.

1. You can suspend during your first year of collecting, ages 62-66, and pay back amount you received.

2. You can suspend AFTER you reach full retirement benefits (age 66 for me). and then you can collect at any age, up to age 70.

https://www.ssa.gov/planners/retire/suspend.html

Admin note: Option 1 is correct.
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As far as Option 2, the SSA explanation is written in a very confusing way, but it does appear you can suspend your benefits if you are at your Full Retirement Age and delay getting benefits up till age 70. It is not clear how the payments already made to you are treated. Best to get expert opinion on this before doing it. If it is permissible, one reason to use it would be if you are working and improving your earnings record used as the basis for payments.

To be sure, talk with Social Security.

I also think that suspending SS at age 66 and waiting to collect till age 70 would jack up your SS per month amount by 8% a year for 4 year or 32%.

A person collecting $1,500 a month now, if they could earn 8% a year for 4 years, would increase their $1,500 to $1,980. However, not sure how many years it would take to break even for the years of not collecting SS.

I probably personally would not do this but for some people this might be a great way to increase the SS monthly payments if they felt they took SS too early or they suddenly came into some money and could suspend SS.

As far as payments already made to you prior to suspending at FRA, I don't think there is a pay back issue. It looks like you keep what you earned and just suspend and collect later. This seems to be different from suspending during the before FRA the one year timeframe. Of course, it would be best to talk to a SS person on that.

Just an interesting way to collect more if you can do with out SS for 4 years.

Louise:

Option #1 after collecting for up to one year is a clear issue and it is clearly outlined on the SSA.gov website.

My concern was that if one collected SS Benefits prior to FRA and then decided to suspend at FRA would the returns still be 8% until age 70 as if one had waited. I was not sure that the 8% was still available to those who collected prior to FRA. If there are contributors here who went back to full time work after FRA and suspended their SS, it would be good to hear how it turned out for them.

I have been reading different things about suspend and restart. Looks like you might have the choice of requesting a lump sum of the months you didn't collect. However, that would have to be added to your income and cause higher taxes. It would also deny you the delayed retirement credits you would have earned by waiting thus no 8% increase per year.

This I have found thru various sites but not an official SS website. Best of course is to check with your SS office.

OK, it looks like one can suspend benefits at 66, but if the benefits were taken prior to FRA, then the returns are based on the reduced figures, not what you would have gotten if you could have waited to FRA. This is no judgement on those who needed the money and had to take SS early, it is just that the 8% is based on the now reduced figures.

This Motley Fool article explains suspending benefits.

https://www.fool.com/retirement/2018/02/07/is-it-ever-smart-to-suspend-your-social-security-b.aspx