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Mainly...
(1) When to start collecting when you've already retired.

But also...
(2) Whether to reboot after a year, paying back the first year's benefit.

And...
(3) Whether to complexify things by one of us collecting immediately and the other delaying (I note that we are very close in age, 5 months apart, and that my benefit is 70% of his if we start collecting at the same time).

If we both start collecting SS as soon as the paychecks stop, we won't hit our assets hard each month until we're making up for years of insufficient COLAs in SS and the pensions.

OR, we could delay SS a few months till DH reaches 64 & I reach 63 1/2, providing about another hundred bucks/month by my calcs (need to verify amounts with SS), but requiring us to fund almost all income needs out of savings for the first few months of 2013. Which we could do.

OR, we could both delay SS longer, but I'm a bit uncomfotable with that on several levels...the possibility of Congress changing the SS benefit formula for anyone who hasn't staring collecting yet, not just those under 55...depleting savings more rapidly when we don't have LTCI (and doubt we could qualify for it now, with DH's micro-strokes--but that's the subject of another question!), or make ourselves too poor to afford a CCRC should that look sensible down the road.

And reboot a year later (or not), whether we start SS immediately or delay 3 months (or longer).

OR, one of us could start collecting before the other. (Our full retirement age is exactly 66.)

Note that we will get a slight raise in income at age 65 when DH's small private pension kicks in, and a big raise at age 70 when RMDs kick in.

I'm willing to provide the numbers if you need them to help me figure this out.

I'm hoping to hear from you numbers dudes! My number comfort consists mostly of being able to make a simple equation whenever possible: X over Y = A over B. But that doesn't solve everything ;-)

[also posted at RELE, as was my previous query.]
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no more reboot possible.

The gov't closed that loophole last year.


you are stuck once you start taking it.



t.
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As has been said, the Social Security "Do Over" option is gone.

Here are some things to think about:

#1 Have you checked local taxes? Here is GA, we have an income tax, but state taxes on SS depend on where you live.
#2 If either of you have health issues, choices can be different -- but for anybody who thinks you will live longer than the average 65 year person, delaying the start of SS will result in more money, when you need it the most -- later in life. The longer you live past the "expected" or "average" life of a Social Security recipient, the greater this effect. Those who start early will have received less total money when they hit 90 than those who wait. Those who wait until at 70 to start, well have received the most money when they hit 90.
#3 Call the folks at Social Security. They are very helpful and know more about the ins and outs than anybody else. They also are not trying to sell you anything. Be certain to ask about the combined situation for you and your spouse. There are privacy issues, so you will undoubtedly want to start the phone call with both you and your spouse so both can give permission to examine both records.

In today's low interest rate situation the magic age is 78. If you start at full retirement age, start at age 70 or start at age 62 -- the total dollars for each will be equal at at 78. But since you get more per month by starting at an older age, the longer you live past age 78, the bigger your receipts will be.

Gordon
Atlanta
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no more reboot possible.

:-(
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#1 Have you checked local taxes?

SC doesn't tax SS at all, and exempts the first $3,000 in pension income below age 65, and $15,000 at 65+. So we'd only be paying state taxes on asset income--we might fall below the bottom tax rung, at least at first.

#2 If either of you have health issues, choices can be different -- but for anybody who thinks you will live longer than the average 65 year person, delaying the start of SS will result in more money, when you need it the most -- later in life.

My crystal ball is cloudy. My husband and I both have health issues, but not I think ones that will kill us quickly. I doubt either of us will exceed the average age of death for people who are now 63 like us, but of course I could be mistaken.

#3 Call the folks at Social Security. They are very helpful and know more about the ins and outs than anybody else. They also are not trying to sell you anything. Be certain to ask about the combined situation for you and your spouse. There are privacy issues, so you will undoubtedly want to start the phone call with both you and your spouse so both can give permission to examine both records.

I'll make an in-person appointment so print-outs can be shared and I can get a better sense of whether the representative is knowledgeable or a trainee.

In today's low interest rate situation the magic age is 78.

Back when it was in the 80s, the decision seemed easier.

It's too late for us to postpone retirement, it is here. The only way to make it to a later age before collecting SS would be to spend down our savings. I am reluctant to do that for long. And I am afraid that Congress may change SS benefits on anyone who hasn't started collecting yet, not just people under 55. I expect they'll be cutting back on COLAs by changing the formula. This might not hurt most on this board, but SS represents 2/3 of our retirement income (that allows us to withdraw less than 2% of assets). I note that we are close in age and if we start to collect at the same time, my benefit is 70% of DH's (not the typical wifely scenario).

Thank you, TwoCybers.
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As has been said, the Social Security "Do Over" option is gone.

Not gone, but now restricted to 12 months, as opposed to the old law, which allowed it indefinitely.

http://www.socialsecurity.gov/retire2/withdrawal.htm

Phil
Rule Your Retirement Home Fool
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Here is the table of Life expectancies:
http://www.ssa.gov/oact/STATS/table4c6.html

Keep in mind these numbers are the number of years until 50% of the people die. i.e. if your current expectancy is 18 years - 50% of folks your age will live longer.

Keep in mind, a lot of people in our society are obese, smoke, do not exercise, etc. All those things have an effect. You know your family history - if people life longer or shorter lives that matters. Certainly on any given day, some fool can run a red light for the big Lights Out Event.

You seem more informed than many asking these questions, but I trust you understand you cannot collect your SS and a spouses after the spouse dies. You can get either one, but not both.

The withdraw 2% is rather extreme. If you took 2% (with no increase for inflation) money would last 50 years -- 0.02 time 50 years = 100%. Few people getting social security live 50 years. I am not saying take out 4%, but somewhere between 3% and 4% will is very likely going to last longer than your lives if you put the money in something that grows with the stock market -- for example Vanguard's Wellington Mutual fund as an example.

I don't know about your social security office, but I can tell you here in Atlanta, the folks are no where near as helpful as the folks on the phone. I think that is because the local office is covered up with people trying to get disability benefits and other non-retirement items.

This is the crazy season of an election year. Politicians will say anything to get elected. But social security is not going away and neither are COLAs. People think their personal cost increases should be covered by a COLA. Well that is not the idea. We see gasoline going up, but we don't balance that in our minds against price declines in computers and cars. We see medicare premiums going up, but we would not for a minute want to give up the newest cancer drug or or surgical technique. COLAs are designed to increase payments for the same stuff, not new or improved.

Gordon
Atlanta
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Not gone, but now restricted to 12 months

Whew.

=alstro, likes to have an ace in the hole ;-)
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a lot of people in our society are obese, smoke, do not exercise, etc. All those things have an effect. You know your family history - if people life longer or shorter lives that matters.

I was the sickly member of my athletic family, who genrally tend to be long-lived on both sides, with some exceptions. Lots of cancer, even the skinny ones tend to get T2D, high blood pressure, and cholesterol problems. I never smoked, but am overweight and exercise average--I could do better. I used to have near-constant respiratory infections, but that is much better since (a) retiring, (b) taking supplements, (c) getting more medical care, (d) using alternative medicine.

You seem more informed than many asking these questions, but I trust you understand you cannot collect your SS and a spouses after the spouse dies. You can get either one, but not both.

Indeed I do. It's more of a problem for us than most because we'll get a bigger income cut when one of us dies. Unlike the typical wife collecting 50% of her husband's benefit off his record, I will collect 70% of his benefit off my own record. To prevent my also losing hubby's small pension, he;s taking a 15% cut to provide me with 100% survivor benefit. Not doing that with his teeny tiny corporate pension though.

The withdraw 2% is rather extreme.

I set aside 25% of savings as elder e-funds, car fund, travel fund, new roof and suchlike fund. We have no LTCI and presumably can't get it now, so most of it is set aside for elder care, hearing aids. I'm hitting on it for my upcoming cataract surgery, for example.

Vanguard's Wellington Mutual fund as an example.

Funny, I've been thinking of switching much $$ to Wellington, although I'm nervous about owning bonds now. Neither of us is into or good at investing. Is there a dividend ETF or Vanguard or Fidelity fund that people here recommend? Lat time I checked, they semeed to be heavy on financial companies, which put me off.

I don't know about your social security office, but I can tell you here in Atlanta, the folks are no where near as helpful as the folks on the phone. I think that is because the local office is covered up with people trying to get disability benefits and other non-retirement items.

Thank you--good to know. I'll try the phone thing first.

This is the crazy season of an election year. Politicians will say anything to get elected. But social security is not going away and neither are COLAs.

SC leg and Gov. Haley just capped SC state pension COLAs at 1% per year MAX last June. Nobody is grandfathered, including those already collecting pensions. It can happen wherever conservative/libertarian politicians predominate.

People think their personal cost increases should be covered by a COLA. Well that is not the idea. We see gasoline going up, but we don't balance that in our minds against price declines in computers and cars. We see medicare premiums going up, but we would not for a minute want to give up the newest cancer drug or or surgical technique. COLAs are designed to increase payments for the same stuff, not new or improved

I get it, and thanks for spelling it out so well.

One more question (a la Columbo ;-)

How soon do you receive SS after you apply? Some places say 3 months, some say 1 month or even the same month(!). I think 3 months might be relevant to applying at age 62, which isn't the case with us.
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a lot of people in our society are obese, smoke, do not exercise, etc. All those things have an effect. You know your family history - if people life longer or shorter lives that matters.


I am 64 years old. I walk 10,000 steps a day (pedometer). I ride my exercise bike 10 miles a day in my apartment. I could stand to lose ten pounds.
But, ten years ago at the age of 54 we took a long car ride and two weeks later I developed a massive blood clot in my leg.
It went unnoticed by me for a whole two weeks as I thought it was a pulled muscle. Imagine my shock and surprise when I realized that I could have died from the clot.
So, whether you are healthy or not, we cannot control everything in our lives. Some people die young. Some live until nearly 100 years old age. I know a person who did just that.
I took my SS at the age of 62. My husband will take his at age 66.
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In terms getting the first SS check -- it depends on when you apply in the month. The shortest time is 6 or 7 weeks. The longest is over 2 months. I get my deposits on fourth Wednesday of every month. Clearly if I started the process so the earliest possible payment was on the 4th Thursday, I would have almost a month longer to wait than if all the ducks lined up just right. There are some processes at happen within the Social Security Administration. Another thing that gets into the equation is how you get paid. Trust me, have your check deposited in a bank account. I moved from the fee happy big brink and mortar bank to Ally Bank. They give me ATM rebates and I can use any ATM in the country. I may switch to Schwab bank, since Schwab is where my brokerage accounts are. Both Fidelity and Schwab have very nice banking options for folks with brokerage accounts. We do have a checking account in a community bank. That way we have a lock box and a place to get papers notarized as needed.

Regarding Wellington's bonds -- drill down into their non-equity holdings. Yes there is some risk, but much less than traditional US Treasury type bonds. I would not worry about Wellington being in this or that sector. Banks are going to make money. No matter what mutual fund you look at there will be something you think/"know" is a stupid investment or worse. But you might be wrong - I was wrong once back in the mid 90s (VBG). Very few banks are going bust and once interest rates return to normal, they will make money like a printing press. The higher interest rates will cut into profits for say manufacturing, home builders, etc. So having a balance across the economy is a very smart plan. The difference between good and great can be just the stuff you don't see by examining a mutual fund's holdings. Today are they 22% large cap US vs. 20% in 2009 and 18% in 2007. Those small adjustments between sectors can minimize taxable gains, lower trading costs and give the investor in the range of 1% additional return annually. Some years will be better than 1% and some will be worse.

When you were talking COLAs, I thought you were talking Social Security. In my world of pensions COLAs have never existed. Last time I checked anything is better than zero.

There are multiple ways to plan/budget for retirement spending. Some people have a car funds, a travel fund, etc. I take a different approach. I have used Quicken since 1986. While I don't count pocket change and balance with Quicken daily, I have less than 0.5% of our spending that I cannot get into our Quicken categories. One year's data in my view was not enough, but I knew when the pay checks stopped what we spent in an average year. I knew at retirement we would stop that large expense call Retirement Savings. Healthcare insurance costs went up. Now that we are in retirement, I still keep Quicken going and I keep a running total on our spending. I track the trailing 12 months - that factors out things like August that has all our State Farm Insurance bills plus 50% of our Property Taxes. Spending for use in not uniform throughout the year.

Very few people are good at investing and those who are better have the danger of creeping senility. The fact you understand the advantage in having a pro, puts in into at least to 90th Percentile!

If you have not checked out the Bogleheads, they are worth a read. See http://www.bogleheads.org/forum/index.php
Spend some time reading before either believing somebody or acting. Some folks there are good. Some are good and also selling services or books. I am not saying this is a corrupt place, but there is a difference between good and great. There is a difference between people who want to "set it, forget it" and those who want to adjust/rebalance yearly or monthly.

Now I will share with you the best single idea I every had. It is
http://www.amazon.com/Conserving-Client-Portfolios-During-Re...
Not a cheap book. He has a web site.
For us this is important because we have no pensions. We opted for cash payment. Generally cash payment is not an option for government workers, so Bengen's approach may not suit your needs. I will warning you, this book is not easy to read, but I dug into all the math and found only one tiny error.

Gordon
Atlanta
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In terms getting the first SS check -- it depends on when you apply in the month. The shortest time is 6 or 7 weeks. The longest is over 2 months. I get my deposits on fourth Wednesday of every month. Clearly if I started the process so the earliest possible payment was on the 4th Thursday, I would have almost a month longer to wait than if all the ducks lined up just right.

I'm not sure what you're saying here since a couple of different things are colliding. The day of the month your benefit is paid depends on your birthday and nothing else. As for the very first payment, you can apply well in advance of your start date. http://www.ssa.gov/planners/about.htm#a0=0 That link is info about the online application process, but I can't imagine the rules are more restrictive for in-person applications.

Phil
Rule Your Retirement Home Fool
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for anybody who thinks you will live longer than the average 65 year person, delaying the start of SS will result in more money, when you need it the most -- later in life.

We were living entirely on withdrawls from our portfolio when we turned 62 and began taking SS. We did not ratchet up our spending, so the SS allowed us to take less from our portfolio each year. In the four years from when we turned 62 to when we will turn 66, we will have collected a total of $120,000 in SS. That's $120k we won't have had to take out of the portfolio.

So by taking SS early, we will end up saving our accounts $120k by the time we're both 66. And the standard 4% annual withdrawl from $120k is almost $5k per year. So you could look at it as us having an extra $5k per year from the portfolio that we wouldn't have if we waited to 66 to start SS. So the higher amount of SS we would have gotten if we'd waited would have to make up for not only not collecting anything for those four years but also for a $120k depletion of our savings/investments. Even though our ancestors are fairly long-lived, I think it would still be difficult to catch up.

--fleg
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As for the very first payment, you can apply well in advance of your start date.

If you are applying for a start date of January 2013, I agree. When I applied I was beyond the full vesting age and wanted to start receiving payments ASAP. While my birthdate was fixed, the date I asked had an effect on how long I had to wait until the first payment.

Thank you for posting this information, I just assumed my delay variability was normal. But for those planning ahead, life is more predictable.

Gordon
Atlanta
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So by taking SS early, we will end up saving our accounts $120k by the time we're both 66. And the standard 4% annual withdrawl from $120k is almost $5k per year. So you could look at it as us having an extra $5k per year from the portfolio that we wouldn't have if we waited to 66 to start SS. So the higher amount of SS we would have gotten if we'd waited would have to make up for not only not collecting anything for those four years but also for a $120k depletion of our savings/investments.

Thank you for explaining this perspective so clearly, fle9bo. I also see starting SS sooner as an asset-sparing technique to be weighed against the higher SS benefit if you delay. It's not that I can't afford to use my assets alone (for a time, anyway), but that I'm not convinced it's logical to do so.
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Astroe: Go to: http://www.ssa.gov/estimator/

Also, I know this is really stressing you out. I would stop worrying about it until you return from NY, and then start again.

Personally, I don't think you need to worry about your benefits at your age. Even Ryan has stated that there will be no changes in SS or Medicare for those older than 55.

Since you are no longer working, if you wish, you could take your SS benefits now and wait for DH to turn 66 to get his. Remember, if something should happen to him (God forbid), you might have a larger spousal benefit from his SS than from yours.

If there's any way to wait until you are 65 and DH is at least 66, that would be optimal.

Call me.

Donna
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I wish there were a calculator or application (or freindly local mathematician!) that allowed you to mess around with more inputs--like different lifespans (most calculators assume at least average or even age 90 or 100), lower-earner getting 70% of higher-earner's benefit, starting SS at ages other than 62/66/70, what happens when you collect SS early along with a low portfolio WR vs SS later with a high early WR.

Then there's the issue of whether to spend taxable vs IRA stash first! Conventional wisdom used to be taxable first, but now I'm seeing IRA first in some articles.
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I spoke with a relative about his Social Security experience (and to get his Hurricane Sandy story-).

He worked with an actuary, who advised collecting SS asap after retirement. He & his wife did that and have no regrets. They're in their 70s now, receiving SS since age 62, his corporate pension since 55, and investment income since being laid off from his corporate job at 49 (he worked at a few jobs intermittently from 50 to 65 both for the health insurance and to spare ravaging the portfolio).

That's what I like--real-world data, and opinions, both professional and someone I know.
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... lower-earner getting 70% of higher-earner's {SS]benefit ...

Doesn't the lower earner usually receive 50% of the higher earner's SS benefit?

culcha
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Doesn't the lower earner usually receive 50% of the higher earner's SS benefit?

culcha


Sorry, I just now noticed this post (I'm that rare bird who reads threaded and only occasionally goes back to see about additonal posts to older threads).

IF the lower-paid spouse earned less than half the SS benefit of the higher-paid spouse, then, yes the automatic 50% benefit is given to the lower-earnin spouse. This is almost always the case in pre-Boomer generations. A nice freebie for low-earning/non-working spouses! But I worked and earned more than half of DH's benefit. If he starts collecting SS on his 64th bday and I start mine 5 months later on my 64th (my current plan), I will receive 75% of his benefit.
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