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Author: petrus36 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: Social Security Date: 1/10/2011 8:31 AM
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Just another question. Wonder if you recommed taking SS as soon as possible, age wise? We are the 2 women, one 51 the other 55, and I know we still have a ways to go, but with all this talk about the system going broke, etc, I wonder if we are better off to plan to take our ss as soon as possible, versus waiting for payments to get larger?
Your thoughts are appreciated.
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Author: Goofyhoofy Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68188 of 74759
Subject: Re: Social Security Date: 1/10/2011 8:58 AM
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ust another question. Wonder if you recommed taking SS as soon as possible, age wise? We are the 2 women, one 51 the other 55,

The first of you is not even remotely eligible for 7 years, so you have plenty of time to think this over. That said, unless things change and you are someday eligible for survivorship, you are each individuals for Social Security purposes. Therefore it will be up to you to balance your financial needs at the time against your best guess of your respective longevities - and chances of staying together.

For instance, if the first eligible of you begins taking at 62, will that provide enough income for both of you (I'm assuming the other continues working) for a while? Does one of your families have a propensity to die earlier because of heart, weight, or other issues? In that case you may want to begin taking benefits earlier, and if not, not.

I would discount sharply the talk of Social Security "going broke." Even in the worst case scenarios, "going broke" means they will pay out about 80% of the promised benefits, not that they will pay out nothing. The "going broke" is convenient shorthand for people with a particular agenda who want to scare people by comparing it to companies which "go broke", but it is completely different. When a company "goes broke" it goes out of business, kaput, done. If Social Security "goes broke" there will still be tens of millions of people paying in, but the input won't quite match the output.

Rest easy, take the seven years and figure out how your individual situations meshes with your financial needs as you get closer to your actual retirement. And remember that if one of you takes the lower figure earlier, allowing the other to take the higher figure by waiting - and then you break up - you are each stuck with whatever decision you made back at the time.
 


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Author: BruceCM Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68193 of 74759
Subject: Re: Social Security Date: 1/10/2011 11:53 AM
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I agree with the foregoing comments.

Another factor you'll have to consider is if either of you plan on continuting to work. If you begin benefits before your full retirement age of 66, the SS Administration limits the amount you may earn before they start reducing your SS benefits. For 2011, this amount is $14,160/yr ($1,180/month). Note: this is EARNED income or income you get for working for an employer or yourself, and does not include other forms of income such as from investments, pensions, interest, rents, etc. And if you do earn over this amount, your SS benefit will be reduced by $1 for every $2 of excess earnings. Thus, if you plan on continuing to work other than part time, you'll probably want to wait before beginning your SS benefits. But once you reach your full retirement age of 66, there is no earnings penalty and from that point on, you can earn as much as you'd like, without SS penalty.

BruceM

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Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68194 of 74759
Subject: Re: Social Security Date: 1/10/2011 12:06 PM
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..... Just another question. Wonder if you recommed taking SS as soon as possible, age wise? We are the 2 women, one 51 the other 55, ......

In researching this you may read that when you start social security is statistically neutral and that the higher benefits for delaying starting is match what you lose by not starting it earlier.

In your situation this is bull-pucky. At the age of 62 a women has a significantly longer life expectancy than a man, but the social security benefit calculations don't take gender into account so a women will get much more of a benefit by delaying the start of social security since she will likely get receive it for many more years than a man would.

Unless there are significant health issues or you absolutely need the money, then most woman who do not have a husbands social security to take into account should wait as long as possible to start social security. This may also allow you to spend down your taxable money and before you start social security which could reduce your taxes on social security.

Greg

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Author: JCMcCarter Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68195 of 74759
Subject: Re: Social Security Date: 1/10/2011 2:23 PM
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But once you reach your full retirement age of 66, there is no earnings penalty and from that point on, you can earn as much as you'd like, without SS penalty.

While that is a true statement (as it relates to SS Penalty), you should be aware that income above a certain amount will cause up to 85% of your Social Security Benefit to be taxed as ordinary income. (Withdrawals from tax defered accounts also count as income.)

So for planning purposes under current law, I'd figure that 85% of your SS Benefit will be taxed as ordinary income.

James

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Author: LRMCCARTER Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68228 of 74759
Subject: Re: Social Security Date: 1/13/2011 10:17 AM
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James, Also, please inform posters that when they begin receiving full SS befefit retirement, and althought they do not work, do not receive any additional income at all BUT their spouse is still gainfully employed with fairly lucrative salary, they will pay apx 1/3 of their SS in taxes. It stinks, but I've been doing that for 4 years now. It seems to be a well kept secret, until you retire.

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