Skip to main content
No. of Recommendations: 8
Retired IRS Research Analyst says it doesn't make sense to delay your SS benefit.

http://ssmisconceptions.solutions/

intercst
Print the post Back To Top
No. of Recommendations: 1
. . . it doesn't make sense to delay your SS benefit....

I thought everybody knew that already.
Print the post Back To Top
No. of Recommendations: 0
". . . it doesn't make sense to delay your SS benefit...."

I thought everybody knew that already.


Only people who know how to do simple math.

And people who know that a dollar today is not the same as a dollar 8 years from today.
Print the post Back To Top
No. of Recommendations: 7
One thing these "buy the numbers" calculations don't take into account, elderly functionality.

An active, healthy 62 year old can enjoy the money now much more than waiting till 70 and not being able to do things anymore.

Just food for thought.

JLC
Print the post Back To Top
No. of Recommendations: 1
If a 62 year old needs the money for luxuries like food and shelter they might come to a different conclusion.
And of course the real difference in total money received will depend on when one passes. Not many know that with any certainty.
Print the post Back To Top
No. of Recommendations: 5
And of course the real difference in total money received will depend on when one passes.

About 10 years ago I went through theses calculations when my mother could start drawing. She didn't exactly need the money, teacher's pension covered everything plus a little. Given family history of longevity and her current good health, etc., etc., etc., opted to wait. Calculated, IIRC, in ten years she would be on the plus side of the equation.

Well, ten years later, and while she is in relatively good health, can't really travel by herself anymore and is having problems getting around. Probably could've traveled more (or at least with better accommodations) ten years ago.

Take your educated guess and hope you are right. No one has a crystal ball.

JLC
Print the post Back To Top
No. of Recommendations: 43
And people who know that a dollar today is not the same as a dollar 8 years from today.

It's simplistic to compare simply the number of dollars today and in the unknown future. But your implication is that inflation is the only relevant factor. In fact, there are a few things that can make dollars in the future much more valuable than dollars today.

Deflation is the obvious counter-possibility to inflation, but I don't think that's the important one. The real possibility is that the money is just much more useful to the individual in the future. At 62, if it's the case that you have a $150K/year income and taking SS would add $30K/year then how useful is it really? But if, by some unfortunate chance, your income and savings disappear (fraud, mismanagement by dementia, identity theft, family disasters, etc.), then getting $40K/year because you put off taking SS until later will be a substantial improvement over $30K.

This is my situation. I've retired early with plenty of money to cover my needs (and wants). I won't need any SS payments when I turn 62. So I'll just wait until I do need it and take the higher amount then. I look at it as insurance in the case of disaster, and absent disaster it just won't make much difference to me. If the insurance ever is needed, having it be more money with be a very good thing.

Only people who know how to do simple math.

When it comes to money the math is never simple. To get it right you always have to apply some personally defined utility function. It changes with time and fortune.

-IGU-
Print the post Back To Top
No. of Recommendations: 6
ItsGoingUp writes,


This is my situation. I've retired early with plenty of money to cover my needs (and wants). I won't need any SS payments when I turn 62. So I'll just wait until I do need it and take the higher amount then. I look at it as insurance in the case of disaster, and absent disaster it just won't make much difference to me. If the insurance ever is needed, having it be more money with be a very good thing.

</snip>


That's my approach to SS.

My current plan is to limit dividend income through age 65 to maximize my Obamacare tax credit. Do Roth conversions age 65-70. Then start SS at age 70.

intercst
Print the post Back To Top
No. of Recommendations: 4
intercst:"My current plan is to limit dividend income through age 65 to maximize my Obamacare tax credit. Do Roth conversions age 65-70. Then start SS at age 70."

Since most males in my dad's family didn't make it past 77, and grandpa on the other side made it to 82........ Uncle Bill made it to 94, the runt of my dad's family. Probably being not too tall helps.....living longer.....

I didn't feel like I had to plan like I'll live to 90 .....

so I took it earlier...didn't touch the IRA.....let it grow and grow...

next year I'll have to tap the IRA......

Took SS at 62......had a few health issues...over most of them.....

Did lots of traveling when I first retired...now slowing down as I edge on toward 70. The enthusiasm for travel just isn't there like it was when i first retired 17 years ago!.... got a lot of travel out of the system.


t.
Print the post Back To Top
No. of Recommendations: 1
There are some factors that many fail to consider. For example, there are apparently strong correlations between wealth, education and longevity.

http://money.usnews.com/money/personal-finance/articles/2012...

Form your own conclusions. If you are reasonably well educated and well off, and have healthy habits and long living ancestors, you may want to factor in the 'risk' of living a very long life and the 'risk' of nursing home and healthcare bills that rise far faster than inflation as measured by CPI.
Print the post Back To Top
No. of Recommendations: 17
IGU: . . .I look at it as insurance in the case of disaster, and absent disaster it just won't make much difference to me. If the insurance ever is needed, having it be more money with be a very good thing.

And insurance is exactly what it was intended to be. I think treating SS as insurance and trying to make sure you use it in a way that optimizes your insurance in case of financial disaster makes sense.

Only people who know how to do simple math.

IGU: When it comes to money the math is never simple. To get it right you always have to apply some personally defined utility function. It changes with time and fortune.

Yes. Sometimes dollars might represent food and shelter insurance units. Other times they might represent fun units. If you feel very confident you will never need additional food and shelter units, you can try to optimize your SS fun units. But even the same fun unit might have very different values to the 62 year old than to the 70 year old. It's a guess and a gamble no matter what your situation.

Also, there are some problems I see with this analysis. Fundamentally, it assumes the SS benefit and tax code formula of today does not change. That seems unlikely to me. One of our two major political parties is obsessed with taxes and tax structure. Also, this analysis is for a very specific income level and specific tax situation. I know the example doesn't fit my situation in either way. When I've done analysis for my specific case, the resulting differences in the analysis are not so great. In fact, I consider them insignificant. Also, I do some things by choice that have significant impact on my tax situation. I can choose how much of those things to do or whether to continue to do them. I do have significant control of my tax situation. Finally, I think the examples miss some important points. When a comparison is made for a 62, 64 and 68 year old all taking the same income, that misses the point that you are all of the above, but not at the same time. It took you 6 years to get from 62 to 68. You had to be making other financial decisions during that time. Your situation will have changed in many ways.

In the end, no matter what decisions you specify, there are events that can make those decisions look either good or bad. And those events are mostly out of your control and unpredictable.
Print the post Back To Top
No. of Recommendations: 0
Can someone bottom line this for me? Is he saying to go ahead and take SS payments at 62?
Print the post Back To Top
No. of Recommendations: 5
There isn't a bottom line because every individual is different.

If you wait and take SS later, you get more money and if you far outlive your life expectancy you will be well ahead financially.

But if you wait, it can take years to make up the funds you would have collected between age 62 and the later year you picked. This is the breakeven point.

People with health issues that might limit life expectancy are probably better off taking SS sooner. But there are many other considerations including your need for funds, situation of your spouse, other assets, etc, etc.
Print the post Back To Top
No. of Recommendations: 25
Can someone bottom line this for me?

If you need Social Security to keep from eating cat food, take it at age 62.

If you don't need Social Security at all, take it at age 62.

If you keep working from 62 to 67 and make more than $45k a year, you may as well wait until you stop working. You'll have to give it back anyway.

If you are terminally ill, take it as soon as you can.

If you don't fit one of those, you'll have to do some thinking and analysis.

--Peter
Print the post Back To Top
No. of Recommendations: 2
To summarize, these two items have been brought up:
-You don't know when you're going to die, so it's hard to maximize the total amount you will get,
-The value of a dollar now is worth more than a dollar later.

What hasn't been covered:
-The rules might change. (We saw a change to File & Suspend this year.)
-If I have enough to retire today and decide to spend all my own money now and delay drawing SS to maximize the monthly benefit, what happens if the rules change to make the future payout less, or make the taxes on SS "Means-Tested" when my plan didn't account for that?

If you're going to need $X,000 this year, and you're doing a trade-off between spending some of your own and some SS, or spending all your own to delay filing for SS, you might spend all your own money for a hoped-for higher amount that may not be more, or may not be more if the increases don't match inflation. (And by that, I mean YOUR inflation, not the government number...a retiree probably is influenced more by the price increases of health care and drugs than by furniture, oil, etc.) Filing early for SS lets you keep more of your stash untouched. Now, if you're just going to spend less overall, that's NEVER going to be bad for your budget, but if you put off that European vacation for five years you may not be healthy enough to go then.
Print the post Back To Top
No. of Recommendations: 3
The one item that was brought up that was of interest to me is that I may go nuts someday and blow all my assets. The higher SS payment by delaying may help pay for the nursing home.

PSU
Print the post Back To Top
No. of Recommendations: 6
-The rules might change. (We saw a change to File & Suspend this year.)

And the Medicare increase for 2016. Nobody saw that coming. Nobody. I've been doing serious reading about SS for 8-10 years and never once heard anything about the "hold harmless" rule.

Which is: People who are getting their Medicare premium deducted from their SS check will never have their net benefit cut, even if Medicare goes up more than the SS benefit. No COLA increase in 2016, but 15% Medicare increase.

People who are 65+ years old (and therefore on Medicare) who have deferred SS get hit with the increase. The rest of us don't.

It actually worse than that. The entire Medicare increase has to be paid by the aggregate Medicare population. But 75% are in the hold harmless group, so the remaining 25% have to pay 100% of the overall increase. Lucky for them, Congress just changed the law and limited their increase to 16% instead of 45% (3 * 15%).
Print the post Back To Top
No. of Recommendations: 3
As far as I can see, no one in this thread has considered taking SS now and not spending it but investing it. Would you do better or worse than waiting until later to collect the SS checks? What's the CAGR for waiting?

Denny Schlesinger
Print the post Back To Top
No. of Recommendations: 0
People who are getting their Medicare premium deducted from their SS check will never have their net benefit cut, even if Medicare goes up more than the SS benefit. No COLA increase in 2016, but 15% Medicare increase.

People who are 65+ years old (and therefore on Medicare) who have deferred SS get hit with the increase. The rest of us don't.


I hadn't heard that. Thanks for letting us know.
Print the post Back To Top
No. of Recommendations: 1
...What's the CAGR for waiting?

Hi Denny!

About 8%

Cheers!
Murph
Home Fool
(who is happy with that CAGR, and who will delay taking SS until 70, since the money is not needed now)
Print the post Back To Top
No. of Recommendations: 5
As far as I can see, no one in this thread has considered taking SS now and not spending it but investing it. Would you do better or worse than waiting until later to collect the SS checks? What's the CAGR for waiting?

What will you do for living costs? It seems you either spend the SS on living costs and leave your investments alone or you cash out on some of your investments for living costs and invest the SS. Seems like a zero sum result.

PSU
Print the post Back To Top
No. of Recommendations: 3
What will you do for living costs? It seems you either spend the SS on living costs and leave your investments alone or you cash out on some of your investments for living costs and invest the SS. Seems like a zero sum result.

PSU


I think you miss my point. If you need the money you take SS early. But if you don't need it, which is better, getting the 8% that Murph says you get from leaving it alone or investing it yourself in the hope of a CAGR higher than the 8% SS gives you. Murph is OK with the 8%.

I'm not saying which is better, only that until now the issue had not been raised. But it is not a zero sum game at all. You can invest better or worse than 8%.

Denny Schlesinger
Print the post Back To Top
No. of Recommendations: 2
As far as I can see, no one in this thread has considered taking SS now and not spending it but investing it. Would you do better or worse than waiting until later to collect the SS checks?

1) I have an entire spreadsheet about this.
https://www.dropbox.com/s/gebanzrbr3g33qf/My%20SS%20breakeve...

2) Money is fungible, so it is immaterial if you spend your SS or invest it.
Print the post Back To Top
No. of Recommendations: 5
...What's the CAGR for waiting?

About 8%


The easy answer. But wrong.

An 8% bump in eventual benefit for each of 4 years is not the same thing as 8% return. That would be the same type of mistake as thinking that you make 18% return by paying off your credit card each month.
Print the post Back To Top
No. of Recommendations: 0
Hi Rayvt!

I said about 8% for a reason; because the 8% is not compounded, thus not a true CAGR....but close enough for me in this case.

Cheers!
Murph
Home Fool
Print the post Back To Top
No. of Recommendations: 0
Rayvt, cool spreadsheet...but how are you using COLA?
Print the post Back To Top
No. of Recommendations: 1
Peter,

If you don't need Social Security at all, take it at age 62.

If you keep working from 62 to 67 and make more than $45k a year, you may as well wait until you stop working. You'll have to give it back anyway.


My only "nit" to a great bottom-line is that the definition of "you" should take a spouse into consideration. I'm 69, retired, and my wife is working at a great job that she loves. If I take SS I get taxed at about the highest level. So, I've waited until 70.

My biggest regret about the new "File and Suspend" remains the loss of being able to F&S at 66 and then develop a medical condition at say 69 and being able to get the lump sum back payment but then start the 66 payments. A friend in GREAT shape, runs, eats right just had a major heart attack and stent. It might change HIS thinking about SS and his longevity.

Repurposed
Print the post Back To Top
No. of Recommendations: 1
My only "nit" to a great bottom-line is that the definition of "you" should take a spouse into consideration. I'm 69, retired, and my wife is working at a great job that she loves. If I take SS I get taxed at about the highest level. So, I've waited until 70.

There is a good chance I'll be in the same situation.

PSU
Print the post Back To Top
No. of Recommendations: 1
Never mind, Rayvt, I figured out the COLA thing. So to bottom line basic ideas:

At a 6% interest rate and 2.5% COLA to SS, it's best to take:

at age 62 if you plan to die by age 83
at age 70 if you plan to live past 88
at age 66 if you plan to die between 83 and 88

Those are pushed out quite a bit if you assume a higher interest rate instead of 6%, or something smaller than 2.5% for the COLA.

I couldn't match Rayvt's numbers exactly, but even if they aren't exact, the story holds true. At any rate, I'd say that this statement is false: "If you don't need Social Security at all, take it at age 62."

It's not simple math at all. It depends very much on how long you'll live and what interest rate you'll achieve.
Print the post Back To Top
No. of Recommendations: 1
...What's the CAGR for waiting?

Hi Denny!

About 8%


I plugged in my numbers and got the following: at 62 $1885, 67 $2663, and at 70 $3316.

https://www.ssa.gov/OACT/quickcalc/index.html

If I wait from 62 to 70, CAGR of 7.32%
If I wait from 67 to 70, CAGR of 7.58%

So could you take that money and invest it and beat 7-8%, maybe. That is the historical average (roughly of the S&P500).

There are so many permutations of if I don't need the money, take from investments but is/is not taxed, etc., etc., etc., as to be laughable. Everyone just needs to study/reason as best they can and make their decisions.

JLC
Print the post Back To Top
No. of Recommendations: 0
Well, it is a combination of math, psychology, health, employment, accumulated wealth, and many other factors. Each person has to decide what is best for them and theirs. Personally, I like getting a money deposited each month into my checking account, and it is my full retirement age amount. I also really like Medicare, because I was paying full freight for an individual policy due to being self-employed. Given how much Medicare has already paid on my behalf, I way ahead of the game for life, plus enough left over to cover my wife's contributions during her working years. Personally, I truly appreciate all the hard-working folks who are making this possible. As for taking SS, to each their own, as I mentioned above. Good luck to us all.
Print the post Back To Top
No. of Recommendations: 8
At a 6% interest rate and 2.5% COLA to SS, it's best to take:

at age 62 if you plan to die by age 83
at age 70 if you plan to live past 88


On this point, what if you are wrong?

Which situation would you rather experience:

If you take it at 62 because you plan to die at age 83, but instead live to 93.

If you plan to live past 88 but die at 70*

*Living spousal benefit exluded.

It seems to me, and since the idea behind SS was to keep people out of poverty when they are really old, that a person would be far worse off if they are TOO SHORT on their assumptions around life expectancy.

#1 fear in retirement - outliving your money. The person that plans to take their SS at 70 is less likely to outlive their money, all else being equal. Even if my personal and family medical history were to suggest I will only live to 83, I still am going to plan (insure myself) against the posibility of such being wrong by planning to take SS later.
Print the post Back To Top
No. of Recommendations: 3
One more "nuance" point about SS decisions, especially if you're retired and your spouse is not. And, I'm waiting for SS and any withdrawals from my retirement accounts to age 70.

We all have different kids, and I have one who is trying to make ALL his mistakes before 30. Since he couldn't qualify for an apartment, I went down to qualify for the apartment for him, and didn't want to bother my working wife, so used only MY information. I was DENIED!

Now I've got a TOP credit score, showed a LOT of money in my own retirement accounts, and have never, ever been denied credit since I was maybe 16. But it was simple for them ... with no need to take RMD's and no social security, I show NO income and do NOT qualify for an efficiency apartment.

It's ALWAYS good for me to be humble(d), but it was a lesson too.

Repurposed
Print the post Back To Top
No. of Recommendations: 1
. Murph is OK with the 8%.

I'm not saying which is better, only that until now the issue had not been raised. But it is not a zero sum game at all. You can invest better or worse than 8%.


Well, Murph is wrong about the 8%.

But anyway...
Putting together the data from a few spreadsheets:
1) The age ~60-65 life expectancy is about 20 years. (Age 80-85)
2) The median 20-year return for the S&P500 is about 10.5%
3) Average SS COLA: about 2.5%

Derate assumed return to 8.5%, assume 2.5% COLA, the age 62 vs. 70 break-even age is 98 years old.
Print the post Back To Top
No. of Recommendations: 1
There are so many permutations of if I don't need the money, take from investments but is/is not taxed, etc., etc., etc., as to be laughable. Everyone just needs to study/reason as best they can and make their decisions.

JLC


Thanks for the feedback! My point is this, if you can invest that money at 8% or better (granted, a big IF), then you have the best of both worlds: the money is available at any time and there is no penalty for early withdrawal. This is Warren Buffett 101: if management (SS) can't invest the money better than you can, they should give it back to you. You know what SS can do (7.32% to 7.58%). If you can do better, do it. Just remember there is added risk, the "insurance" value of SS would be gone.

Denny Schlesinger
Print the post Back To Top
No. of Recommendations: 0
Now I've got a TOP credit score, showed a LOT of money in my own retirement accounts, and have never, ever been denied credit since I was maybe 16. But it was simple for them ... with no need to take RMD's and no social security, I show NO income and do NOT qualify for an efficiency apartment.

Of course. Look at it from their point of view. Who rents apartments? People who cannot afford to buy a house. So people who basically have little extra income and little or no assets. What's the best way to filter out the people in this category who will or will not pay the rent on time?
INCOME.

The number of people who want to rent an efficiency apartment and who have 6 or 7 digit retirement accounts is approximately zero, so they've never seen anybody like you ever.
The don't need to look at credit scores, etc. Income tells them virtually all they need to know.

FWIW: when we retired we moved down south and rented a short-term apartment while waiting for our new house to finish construction. The office manager told us the minimum income to rent from her was something like $500 a week, and was our income above that?
Wife and I looked at each other, rolled our eyes, burst out laughing, and said, yeah about 5 times that -- and would she give us a discount if we paid all 6 months rent in advance?
Print the post Back To Top
No. of Recommendations: 0
with no need to take RMD's and no social security, I show NO income

Then how do you live? You must take income from something - even if it is divs or tax free interest.

This is not an uncommon situation for people that apply for a mortgage or a line of credit and usually such individuals are simply asked to demonstrate the source of their monthly income (like statements from the brokerage account and statements on the checking account showing the deposits).
Print the post Back To Top
No. of Recommendations: 2
The median 20-year return for the S&P500 is about 10.5%

Median doesn't mean much. Run a Monte Carlo analysis on that return that includes withdrawals and it will not likely look so pretty, or show a break even of age 98.

8% simple interest risk free is worth quite a bit compared to the past performance of the S&P - and not many retirees are going to be invested 100% in stock while they take income - especially not with a standard deviation of over 10% (which is why median doesn't mean much).
Print the post Back To Top
No. of Recommendations: 4
....Well, Murph is wrong about the 8%.


To repeat, I said "about 8%", recognizing the difference between a true CAGR and 8% on the same base.....and that's good enough for an approximation of MY situation.

And Denny's point is not about the precise CAGR, rather, that I, for my specific needs, am OK with "about 8%". ( or 7.3% 7.53% or anything in that arena).

Cheers!
Murph
Home Fool
(not anal about precision at age 69)
Print the post Back To Top
No. of Recommendations: 1
Which situation would you rather experience:

If you take it at 62 because you plan to die at age 83, but instead live to 93.

If you plan to live past 88 but die at 70*

------
Great question. I think the point is, in an ideal situation, you're trying to maximize SS, not just to make ends meet. So if you don't take any payments until 70 and then you die at 70, that's worst case scenario. If you start taking payments at 62 and live until 93, you've been getting payments for 31 years. I'll take that scenario!

Now if you're struggling to have enough to live on, even WITH social security, maybe the situation is different, but even if you started taking payments at 62, you're still getting SOMETHING at 93...perhaps you just have to adjust your standard of living because you've lived so long. Alternatively, if you're in that situation, how are you going to make it until 70 without taking any SS payments?
Print the post Back To Top
No. of Recommendations: 5
I said about 8% for a reason; because the 8% is not compounded, thus not a true CAGR....but close enough for me in this case.

It's not a CAGR in any sense of the word. It's not a return, it's a payout increase. Just like an immediate annuity. Just like paying points to get a lower mortgage interest rate.

In order to get an 8% increase in benefit for the rest of your life you have to give up 100% of one year of benefits now.
It takes 100/8 = 12.5 years for the total additional benefit to surpass what you gave up to get it.

=====
BTW, the 8%/yr applies to deferring past Full Retirement Age.
Before FRA the reduction is -6.67%/yr for 3 years and -5%/yr thereafter.

Of course, it's not actually 8%/yr.
It's 24/36% per month. Same math, though. Foregoing 1 month's benefit gets you an extra 0.666667%/mo for the rest of your life.
100% / (24/36)% = 150 (months)
150 / 12 = 12.5 (years)
Print the post Back To Top
No. of Recommendations: 2
Come on Rayvt!

The CAGR reference was made by Denny in order to compare it with investing...and I was referencing the time period between taking SS early and when one has to take it (70)....not until I die.

Your math skills are truly amazing, but please don't construct a straw man argument(that I was implying an "about 8%" CAGR until one dies) so they can be used to knock it down.

And the REAL point seems to have gotten lost...that there is no one "right answer" to the early/late SS question: there is only the right answer for each individual...with their specific financial circumstances, goals and risk tolerances.

Cheers!
Murph
Home Fool
Print the post Back To Top
No. of Recommendations: 2
then you die at 70, that's worst case scenario.

Why? Assuming all else is equal, I still enjoyed my life up through 70. I did not live in poverty. I took what I needed/wanted from my non-SS savings. If a person cannot do that, then they certainly can't afford to postpone SS.

It would be far worse if I spent down everything I had because I took SS at 62 and the performance on my investments did not keep up with inflation and I spent the last 10 years of my life living "paycheck to paycheck" off of SS - all because I lived 10 years longer than I ever expected.

I work with folks like that. "I never imagined I would live this long." is a very common phrase.

Alternatively, if you're in that situation, how are you going to make it until 70 without taking any SS payments?

Great question, and that is where a more indepth analysis is often warranted. I personally recommend people run a monte carlo analysis of their assets earning about 5.5% a year with a standard deviation of about 8% (50/50 stock to bond mix). When a person factors in withdrawals on those assets vs no withdrawals and waiting until 70 for SS, such individuals usually see a higher rate of success on their monte carlo analysis. The loss of File and Suspend hurts this a bit but it still holds true for those that I have rerun recently.

Not all situations are the same but in nearly every case where I have worked with someone that had assets they could spend now and postpone SS, the success of their plan, (as defined by not outliving their money), increased by delaying SS various years. I assume people are going to live to at least 90 in most cases.

Per SS, males age 65 are now expected to make it on average to 84+. 25% will make it to age 90 or older. If you are married, those numbers increase.

Note, my assumptions assume that SS COLA will increase at 1% per year and spending increases at a constant rate of 2.25% while in retirement where as some people will spend more or less as they get older - and no analysis can account for every variable.
Print the post Back To Top
No. of Recommendations: 0
Median doesn't mean much.

Indeed. That's why it's also valuable to look at lowest 20 year return (0 percentile) and 5'th or 10'th percentile.

For S&P500, 1950 to present, including reinvested dividends, lowest annual return was 6.3%. 5'th percentile (which means 95% of the time it was more than this) was 7.0%. 10'th percentile was 7.4%

For an asset allcation of 60% S&P and 40% 10-yr Tbills, median 20 yr annual return was 9.1%. Minimum was 6.3%, 5'th percentile was 6.8%, 10'th percentile was 7.1%

All from my other spreadsheet, https://www.dropbox.com/s/cbzvg74iyeyfwt6/SPX-monthly-1950-2...
looking at the "rolling N yr" tab, adjusting the AA in the "Main" tab.

Using average return of 6.3% and average COLA of 2.5%, the 62-70 breakeven age is 87.
Which says that in the worst ever 20 year period of the S&P500, the break even point is within a year of the life expectancy.

For the median return (9.1%) and 2.5% COLA the break even is over 100 years old.

One thing that all these computations show is that the decision to take SS early or late is *not* a no-brainer.
Print the post Back To Top
No. of Recommendations: 1
Based on what we've learned so far, I'd say the original post needs a big asterisk:

it doesn't make sense to delay your SS benefit*

* if you can get a certain rate of return (8% + SS COLA, adjusted for the difference in your personal tax rate at present vs later, plus maybe other variables I'm not thinking of)
Print the post Back To Top
No. of Recommendations: 0
If I take SS I get taxed at about the highest level.

So?

I don't see how the taxes on the benefits - whatever those taxes are - enter into the determination of when to take your benefits.

--Peter
Print the post Back To Top
No. of Recommendations: 5
And the REAL point seems to have gotten lost...that there is no one "right answer" to the early/late SS question: there is only the right answer for each individual...with their specific financial circumstances, goals and risk tolerances.

Alas, there is no "right answer" available to mortal men.

The only time you know what the right answer was is when you die. And then it's too late. ;-)

When we were approaching 62 and I was doing all this reading and figuring, about when to take SS, when to take my pension, what withdrawal rate to use, I said to my wife, "Y'know, all this would be a lot simpler if I knew when we were gonna die."

My last word on this is this:
All this "when to take SS" stuff is only applicable to a very small number of people.
For those that don't have much money they have to take SS as soon as they retire. They need it to live on.
"The most popular age to sign up for Social Security is 62, with 32 percent of men and 38 percent of women born in 1946 claiming benefits at that age."

For those who have a lot of money, SS is a small percentage of their income so it doesn't matter. There's not a substantive difference in getting an extra 8% of 10% of your income. Maybe you fly coach to Europe instead of 1st class.

Only to those in between these two categories does it make any difference if they take early or defer. And that's not very many people. Thing is, those are the people who hang around internet message boards and talk about money & investing, so we're kinda in that echo chamber.
Print the post Back To Top
No. of Recommendations: 0
I can't access dropbox from work. Does your spreadsheet account for withdrawals at all during those 20 years? What is the standard deviation on those returns? Again, even something like the min being 6.3% is not relevant if the standard deviation creates so much variability with withdrawals that the plan fails. To use the S&P again, the standard deviation is over 10%. If a 60/40 mix has a standard deviation of say, 8%, then 34% of the time the investment will be as much as -8% than average. 14% of the time the investment will be as much as -16% less than average. Sure, if you don't touch it at all over those 20 years you will be fine but That isn't really what this is about. The question appears to be more about spending SS now (with perhaps some investment spending to make up the difference) or spending investments now and spending SS later.

If you have to make up the shortfall of taking SS at 62 vs some later age, does your analysis account for those withdrawals? If for example, I wanted to pull $3000 in monthly income and I could take $1500 of SS now at 62 with $1500 from my investments, or take $3000 from my investments now and wait and take $3000 from SS at 70.

Have you considered a monte carlo analysis of your research?
Print the post Back To Top
No. of Recommendations: 5
Hawkwin writes,

#1 fear in retirement - outliving your money. The person that plans to take their SS at 70 is less likely to outlive their money, all else being equal. Even if my personal and family medical history were to suggest I will only live to 83, I still am going to plan (insure myself) against the posibility of such being wrong by planning to take SS later.

</snip>


Excellent point!

The other point that hasn't been mentioned is that delaying SS to age 70 essentially allows you to buy a life annuity for about 1/2 of what a for-profit insurer would charge for the same monthly benefit.

If you are interested in buying "longevity insurance", delaying SS benefits to age 70 is the cheapest way to to it.

Uncle Sam will 'sell' you a single-premium immediate annuity (SPIA) for 50% off the insurance company price?
http://retireearlyhomepage.com/bad_annuity_2.html

</snip>


intercst
Print the post Back To Top
No. of Recommendations: 2
Repurposed writes,

We all have different kids, and I have one who is trying to make ALL his mistakes before 30. Since he couldn't qualify for an apartment, I went down to qualify for the apartment for him, and didn't want to bother my working wife, so used only MY information. I was DENIED!

Now I've got a TOP credit score, showed a LOT of money in my own retirement accounts, and have never, ever been denied credit since I was maybe 16. But it was simple for them ... with no need to take RMD's and no social security, I show NO income and do NOT qualify for an efficiency apartment.

</snip>


I haven't shown any wage & salary income since 1994 and have never had a problem renting an apartment. If you show any landlord with more than two functioning brain cells an investment account with $50,000 in it, you'll quickly move to the head of the line.

intercst
Print the post Back To Top
No. of Recommendations: 0
So?

I don't see how the taxes on the benefits - whatever those taxes are - enter into the determination of when to take your benefits.

--Peter


If I'd started at 66 there would have been 6 years of highest taxation. Waiting I not only increased the SS payment by 8% per year (of the original SS age 66 payment) but I only have to pay that high tax two more years until she retires), and then my models show a much lower tax rate. I think Intercst's original article emphasized the impact of taxes.

For Intercst -- That apartment manager probably didn't have two brain cells. But I also assume you show income from your investments that you then spend. I'm really plowing all proceeds from both our accounts back into the retirement basis. The next time I'll write it up better if I do an application just for myself, although my son does have a place now off my wife's earnings. I just couldn't believe I was denied at a pretty low-income location and didn't push it. I assume you're right.

Repurposed
Print the post Back To Top
No. of Recommendations: 2
intercst writes:

I haven't shown any wage & salary income since 1994 and have never had a problem renting an apartment. If you show any landlord with more than two functioning brain cells an investment account with $50,000 in it, you'll quickly move to the head of the line.

In the beach areas of So Cal where I rent properties, $50k is about 14 months rent. I've turned down people with $250k in the bank. Money is very easy to move out of my reach. That the candidate refused to fill out an application or permit a credit check didn't help.
Print the post Back To Top
No. of Recommendations: 5
Does your spreadsheet account for withdrawals at all during those 20 years?

The spreadsheet models a "make whole" strategy:
* Take SS at early (62 or before FRA).
* Put all that money into a side account.
* At the later age (66/FRA or 70), file for SS.
* Figure out what the SS benefit would be if you had *not* filed early.
* Figure out the shortfall.
* Each month, withdraw from the side account the difference between what you get (the smaller "early" benefit) and what you would get if you'd not filed early.

* That is, at 70 you receive the full age-70 benefit either way, either:
1) Receive the entire amount from SS, or
2) Receive a smaller amount from SS which is supplimented by a withdrawal from the side account.

* Notice that the remainder of the side account still continues to grow, it's just being depleted by the monthly withdrawals.

* When the side account is fully depleted, that's the break-even age.

so:
Does your spreadsheet account for withdrawals at all during those 20 years?
Yes. Monthly withdrawals are made to total up to the full amount you'd have gotten if you had not filed early.

What is the standard deviation on those returns? Again, even something like the min being 6.3% is not relevant if the standard deviation creates so much variability with withdrawals that the plan fails.
a) None. Both COLA and returns are treated as constants.
b) The minimum & median returns I quoted are the actual historical returns for all rolling 20-year periods. Could some future 20 year period be worse than the worst so far? Yes.
c) Don't forget that SS is not guaranteed to never change. We've already seen a number of times since 1986 where SS benefits were changed either directly or indirectly. There's no way to model this.

If you have to make up the shortfall of taking SS at 62 vs some later age, does your analysis account for those withdrawals? If for example, I wanted to pull $3000 in monthly income and I could take $1500 of SS now at 62 with $1500 from my investments, or take $3000 from my investments now and wait and take $3000 from SS at 70.
Ah, I should have read ahead. That's exactly what the spreadsheet models. ;-)

* One thing about the side account is that if you die early, the money in the side account is still there for your heirs. But if you die before you file for SS, there's no pile of money for them. Either way, your spouse gets the survivor benefit, of course.

Have you considered a monte carlo analysis of your research?
No. Because I don't care. I just wanted to model the "make whole" treatment of a side account. The first version was very simplistic. On subsequent enhancements it was given the ability to account for different COLA and and average return rates.

Also, there's no way to do any sort of monte carlo analysis on the SS side. Congress can change the SS rules at will. Means testing, additional income tax, interaction with Medicare premium, Trust Fund running empty, etc.

To me, the spreadsheet is more of a "see lightning, hear thunder" analysis -- and for that, using simple averages for COLA & return is good enough.
Print the post Back To Top
No. of Recommendations: 0
The spreadsheet models a "make whole" strategy:
* Take SS at early (62 or before FRA).
* Put all that money into a side account.
* At the later age (66/FRA or 70), file for SS.
* Figure out what the SS benefit would be if you had *not* filed early.
* Figure out the shortfall.
* Each month, withdraw from the side account the difference between what you get (the smaller "early" benefit) and what you would get if you'd not filed early.


I might be entirely slow on this point but I don't get the above.

How can you put the money in a side account if you need income at 62? If there is a shortfall (which there obviously will be since there is no income from SS), then you not only have to spend all of what you get at 62, you also have to spend a portion of your investment assets.

To use my hypothetical previous example, if you take it at 62 and get $1500, you must spend all of that - there is no side account - and an additional $1500 from your investments to receive the same benefit as you would receive at 70 ($3000).

How do you create a side account when you have a net negative cash flow?
Print the post Back To Top
No. of Recommendations: 10
Just a personal note, which may (or may not) be of use to others here.

I retired and drew my last paycheck in June 2015, at age 66. I did not file for SS. I've got a decent-sized TIAA-CREF account, which I have not tapped, and Schwab accounts (Roths for myself and my wife, a regular IRA, and two taxable accounts), which we also have not tapped.

So we've been living, comfortably but not extravagantly, off our savings account for the past year and a half.

Although our net worth has actually increased somewhat over these past 18 months, I've learned that there's nothing like a relentlessly dwindling bank account to focus my attention. I've been a saver all of my life, and transitioning into becoming a spender is not coming to me easily.

That, plus the recent changes in SS law that rattled me somewhat, plus the realization that I am not immortal, led me to file the other day for SS benefits beginning March 2016, when I turn 67. My wife will continue to delay her SS benefits until she reaches FRA in January 2018.

So beginning in April, I'll be seeing nearly $2700/month flowing into our bank account; and that will be net of monthly Medicare Part B premiums, which I've been paying our of pocket.

BOTTOM LINE: If you believe that I've totally screwed up, please feel free to say so. I've got plenty of time to undo things. But I admit that I woke up today looking forward to seeing that "free" money coming in beginning next spring. It won't cover our monthly expenses fully, but it will take a good bite out of them.
Print the post Back To Top
No. of Recommendations: 0
I've been a saver all of my life, and transitioning into becoming a spender is not coming to me easily.

I sure can identify with that sentiment. It just feels so wrong.

-IGU-
Print the post Back To Top
No. of Recommendations: 1
I sure can identify with that sentiment. It just feels so wrong.


I'm on the verge of leaving my job with nothing else lined up: Last day Jan 21. We have plenty of savings, and I'm not worried about finding something else in my field, but I'm curious to see how long it will take for me to feel pressure to do so. I figure our burn rate gives us two years of comfortable living with zero income before we start to run out of non-retirement savings, but I don't expect to have zero income for nearly that long... I just don't know how much it will be, or from where.
Print the post Back To Top
No. of Recommendations: 0
How can you put the money in a side account if you need income at 62? If there is a shortfall (which there obviously will be since there is no income from SS), then you not only have to spend all of what you get at 62, you also have to spend a portion of your investment assets.

The question whether or not to take SS at 62 or wait until 70. If you need the income then question is answered, you take it at 62.

Ray will correct me if I'm wrong but the side account is really just an accounting fiction for purposes of illustration. I don't think the recommendation is to actually create a side account.
Print the post Back To Top
No. of Recommendations: 0
I've been a saver all of my life, and transitioning into becoming a spender is not coming to me easily.

I sure can identify with that sentiment. It just feels so wrong.

I partially retired 2 years ago, DW may retire in a couple of years. We're looking at optimizing how to live off savings for the few years from her retirement until the units are paid off and the free cash flow covers 75% of our expenses. Unless the world economy melts down much worse than 2008 we're in fine shape.

I'm still nervous.
Print the post Back To Top
No. of Recommendations: 1
That, plus the recent changes in SS law that rattled me somewhat, plus the realization that I am not immortal, led me to file the other day for SS benefits beginning March 2016, when I turn 67. My wife will continue to delay her SS benefits until she reaches FRA in January 2018.

No idea if you screwed up but assuming you and your wife are at or near the same age, it is possible that the two of you (especially her) might be better off taking her SS early and delaying yours if you are the older spouse and you have more SS earnings.

One of you are likely to have the unfortunate choice of picking the higher SS benefit when the other passes.

Since your SS benefit grows at 8% simple interest and hers only grows at 6.25% simple interest, I would take hers, all else being equal.
Print the post Back To Top
No. of Recommendations: 1
If you need the income then question is answered, you take it at 62.

No, I don't think so. The question was if you had options, SS early(ier) or spend down investment assets (or a combination of the two), which is the best choice.

If the question is to take it or wait based on the assumption that you don't need the net income inflow it would create at any age, then yes, that is a pretty easy choice - take it ASAP. That isn't really a question of current vs future income. That is more about NPV vs FV on an asset that is not guaranteed - and as such, is really a no-brainer and not worthly of 60 posts on the subject.

If you take it and spend it, or spend down any assets, the questions is a lot more complicated.
Print the post Back To Top
No. of Recommendations: 8
If the question is to take it or wait based on the assumption that you don't need the net income inflow it would create at any age, then yes, that is a pretty easy choice - take it ASAP. That isn't really a question of current vs future income. That is more about NPV vs FV on an asset that is not guaranteed - and as such, is really a no-brainer and not worthly of 60 posts on the subject.

Is it? Not from a which will give me the biggest pot of money basis. I would point back to intecst's post about viewing it as longevity insurance.
http://boards.fool.com/hawkwin-writes-1-fear-in-retirement-o...

I don't know how many of you have had a member of the family have Alzheimer's. Before you recognize the problem and get power of attorney over their assets, they can do all kinds of stupid stuff with money. I recall my grandfather buying a casket from a door-to-door salesman. So someday I may lose my mind, spend some money of hookers and booze and then waste the rest. The larger SS checks may help pay for the loony bin.

Yes, if my only concern was how can I accumulate the most assets, I'd take it at 62.

PSU
Print the post Back To Top
No. of Recommendations: 4
"How can you put the money in a side account if you need income at 62? If there is a shortfall (which there obviously will be since there is no income from SS), then you not only have to spend all of what you get at 62, you also have to spend a portion of your investment assets."

The question whether or not to take SS at 62 or wait until 70. If you need the income then question is answered, you take it at 62.


Correct.


Ray will correct me if I'm wrong but the side account is really just an accounting fiction for purposes of illustration. I don't think the recommendation is to actually create a side account.
Also correct.

The scenario is this (considering 62 vs. 66, but works for any early vs. late date):
* My SSA statement says I can get $2000/mo at 66 (FRA) or $1500/mo at 62.
* I want to receive $2000/mo at 66, sourced from SS.
* I do not want or need any spendable money from SS between ages 62 and 66.

Here are 2 alternative ways to effectuate this:
a) Wait until 66 to file for SS.

b1) File at 62, but squirrel away the $1500/mo (this is the "side account").
b2) At 66 start spending $2000/mo. You get $1500 each month directly from SS, and $500/mo taken out of the money you got from SS and squirreled away.
b3) Each $1500/mo you put away at 62 (to 66) covers 3 months of shortfall at 66 and above.
b4) The earnings (if any) in the side account extend the time until the side account becomes depleted.

N.B., At 0% earning, the side account will be $72,000 ($1500 * 12 * 4) at age 66. It will last for 144 months ($72,000 / $500) or 12 years.

N.B., COLA is a wash, it impacts both alternatives identically.
Print the post Back To Top
No. of Recommendations: 2
Is it? Not from a which will give me the biggest pot of money basis. I would point back to intecst's post about viewing it as longevity insurance.

Yes, because:

Yes, if my only concern was how can I accumulate the most assets, I'd take it at 62.

The above is what I stated in that paragraph.

To quote myself:

based on the assumption that you don't need the net income inflow it would create at any age

For a person or family that will never need the income, there is no reason to delay at all.

don't know how many of you have had a member of the family have Alzheimer's. Before you recognize the problem and get power of attorney over their assets, they can do all kinds of stupid stuff with money. I recall my grandfather buying a casket from a door-to-door salesman. So someday I may lose my mind, spend some money of hookers and booze and then waste the rest. The larger SS checks may help pay for the loony bin.

There is no insurance against really bad decisions. If you have enough money that you don't need SS, then it is fair to assume that you had plenty of opportunities to create a financial plan that keeps you from making really bad decisions due to mental defect.

With the cost of "loony bins" these days, a larger SS check won't help you if you piss away the rest of your assets on impulse purchases. You are going on Medicaid whether you like it or not and that larger SS check is going to be lost regardless.
Print the post Back To Top
No. of Recommendations: 2
So someday I may lose my mind, spend some money of hookers and booze and then waste the rest.

The really sad part, you won't remember any of it either.

JLC
Print the post Back To Top
No. of Recommendations: 1
The really sad part, you won't remember any of it either.

It is the same way with kids when they go to Disney World at age 3.

PSU
Print the post Back To Top
No. of Recommendations: 1
It is the same way with kids when they go to Disney World at age 3.

LoL! That analogy to your earlier comment is just so.... wrong! :D

Draggon
Print the post Back To Top
No. of Recommendations: 47
1 fear in retirement - outliving your money. The person that plans to take their SS at 70 is less likely to outlive their money, all else being equal. Even if my personal and family medical history were to suggest I will only live to 83, I still am going to plan (insure myself) against the posibility of such being wrong by planning to take SS later.

What is it you think you're going to be doing when you're 89? Jetting to Rio? Building a cabin on Lake Champlain?

My father just died at age 94. He was in a retirement home which promised to care for him "as long as he lived", even if his assets ran out. (He had to have some assets on the way in to be depleted first, of course.) Dad had a portfolio of almost $2m, so no worries.

Mrs. Goofy's father is still alive at age 92, and has recently over into a retirement home which has the same policy. He had less than $300,000 in assets, but they still took him. At $10,000/mo (nursing care) it will be gone in a few more months, but he will stay there until he dies, and the home will take his Social Security check as payment for however long that time left to him is. As he took it early, the check is less, but it ensures a retirement in this lovely home, with daily entertainments, decent food, movies, and companionship.

Meanwhile people are denuding themselves in their 60's in the hopes of living to age 94, when they need be wheeled around by an aide, drooling at the mouth, so they can have a bigger Social Security check - which will be taken by the home regardless.

Bah. You can still have a full and active life in your 60's and 70's (and this is where somebody chimes in and says "But my Aunt Gertrude travelled to France when she was 87!" as though that's typical.) Take the money while you can do something with it, not when all you get to do is sign it over to someone else.
Print the post Back To Top
No. of Recommendations: 3
What is it you think you're going to be doing when you're 89? Jetting to Rio? Building a cabin on Lake Champlain?

Hard to say. A relative of mine was still splitting a cord of firewood by hand at 99. A friend's grandmother took a trip to the Antarctic at 92. My mother is still very active, traveling between two homes at 84. She may go to Alaska next summer with me.

PSU
Print the post Back To Top
No. of Recommendations: 7
1 fear in retirement - outliving your money. The person that plans to take their SS at 70 is less likely to outlive their money, all else being equal.

I am in this camp. I view SS as longevity insurance so that I can ensure that I won't run out of money before I run out of life, even with all my various plans in place.

Meanwhile people are denuding themselves in their 60's in the hopes of living to age 94, when they need be wheeled around by an aide, drooling at the mouth, so they can have a bigger Social Security check - which will be taken by the home regardless.

Maybe, or maybe not. I come from a family where people routinely live well into their 90's in good health. My dad is 95, is very healthy, and still able to drive himself around. His mother lived to 92 and his father lived to be 98. He has a 91-year-old sister who is also still in very good health.

That said, I won't need the money earlier, and can afford to wait to have that longevity insurance. Collecting at 62 or even FRA will certainly give me more money, but for what purpose? I'm not likely to need to spend it at that point, so for me, it works better to just wait.

I think there is no one right decision on when to take SS. I think everyone has their own particular situation, and as long so you look at all the info for your particular case and make the decision, I think that is good.

But the same decision doesn't work for everyone. That doesn't make someone else's decision wrong. It just makes it different.
Print the post Back To Top
No. of Recommendations: 1
Goofy:"My father just died at age 94. He was in a retirement home which promised to care for him "as long as he lived", even if his assets ran out. (He had to have some assets on the way in to be depleted first, of course.) Dad had a portfolio of almost $2m, so no worries."


My Uncle Bill lived at least a decade more than his other siblings (Aunt Anne made it to her early 80s).....and two decades more than most.

He lived with his wife till age 88, she passed, then two years later moved out of the 100 year old house he had been in for 60 plus years...into a 'retirement home' where he had a living assistant apartment - they cleaned, he had laundry service - two meals a day - type deal. THe place also had an attached nursing home. He spend 4 years there and the last 3 months was over in the nursing home.

He 'bought in' for a couple hundred K at age 90.

Most folks don't even last 18 months in a nursing home. Some last 10 years but not many.

He had SS and a good telco pension retirement......plus a couple hundred K in other assets....



---------

Goofy:"Mrs. Goofy's father is still alive at age 92, and has recently over into a retirement home which has the same policy. He had less than $300,000 in assets, but they still took him. At $10,000/mo (nursing care) it will be gone in a few more months, but he will stay there until he dies, and the home will take his Social Security check as payment for however long that time left to him is. As he took it early, the check is less, but it ensures a retirement in this lovely home, with daily entertainments, decent food, movies, and companionship."

Well, I'm sure they're taking his SS, any pension money, and a draw on his assets......

and likely he'll spend only a short time in the nursing home since he gets 'assistance' in the apartment with meals a couple times a day, cleaning service, maintenance service provided, transportation to doctors and shopping provided, in house entertainment, etc.

- - -

some folks choose to stay at home with 24/7 care.....I'm not sure that is what I'd want...... you don't have much of a social life if you are stuck at home in a hospital type bed.....or can't get out on your own.

- - --

Goofy:"Meanwhile people are denuding themselves in their 60's in the hopes of living to age 94, when they need be wheeled around by an aide, drooling at the mouth, so they can have a bigger Social Security check - which will be taken by the home regardless."

When I first retired, I was traveling 1/3rd the time. Had a lot of fun.

Now 15 years later approaching 70, I've slowed down a whole lot. Travel is a hassle. Not a whole lot of things that get me excited enough to want to travel to see them. After 300 churches and castles in Europe, you've seen enough. After 40 years of seeing scenery and 25000 foot mountains, and thousands of miles of 'seashore', and everything in between, there aren't a lot of things that are calling me to come see them.

My parents took 2-3 trips a year in their 70s......usually a cruise or two and a guided vacation tour........spending their SS money. well, part of it.

Dad made it to 75, mom to 82.

t.
Print the post Back To Top
No. of Recommendations: 4
...Meanwhile people are denuding themselves in their 60's ...

Wow! I must have missed my denuding; well, at 69 maybe I still have time. ;-)

Cheers!
Murph
Home fool
(just havin' fun)
Print the post Back To Top
No. of Recommendations: 5
I view SS as longevity insurance so that I can ensure that I won't run out of money before I run out of life, even with all my various plans in place.

To quote goofyhoofy, "Bah." The "longevity insurance" is mostly insignificant hot air. Sounds good, but when you peek under the covers and look at the details, it's a lot of nothing. Look at the exact number of dollars and don't just handwave about longevity insurance.

The current maximum SS benefit at 66 FRA is $2,663/mo. If you delay until 70 you get an extra $852/mo. The cost you paid for this $852/mo is $127,824 ($2663 * 48). (Note: for 2016 the maximum FRA benefit drops to $2,639.)

So say you live to 95.

Just how much difference will it make to your life-style to get $3515 for those last 20 years instead of $2663? Remember, you paid $127,824 for that $852 annuity, so you are just getting your own money back for the first 150 months (12.5 years).

So we're really talking about longevity insurance that kicks in at 82.

At 82, just what does an extra $852 do for you? You already get pension, investment income, $2663 from SS, etc.
You get maybe $2500 pension, $4000 retirement account withdrawal, $2663 SS, total about $9100/mo. What can you buy with $9950 that you can't buy with $9100? And what *could* you have bought with $127,000 between 66 and 70? A round-the-world cruise or two?

The $852/mo is the *most* that the SS "annuity" can be. The average benefit for all retirees is $1,341. The people who can afford to delay SS are upper income people, so they'd get above average SS benefit. Say maybe $2,000 FRA benefit.

For a $2000/mo FRA (66) benefit the delay to 70 will get and extra $640/mo.

True, the SS "annuity" is cheaper than a commercial annuity, but you cannot tailor it according to your own preference as to age and amount. If you defer 4 years, 66 to 70, the SS annuity is 32% of your FRA benefit. Period.

So not only is the net amount of the longevity insurance fairly small, the nursing home will take it all anyway. Whether you receive $2663 or $3515, they'll take the whole thing.
Print the post Back To Top
No. of Recommendations: 20
The "longevity insurance" is mostly insignificant hot air.... So we're really talking about longevity insurance that kicks in at 82.... You already get pension, investment income, $2663 from SS, etc.... For a $2000/mo FRA (66) benefit the delay to 70 will get and extra $640/mo.

I think you are misunderstanding. If indeed you are getting pension, investment income, etc. then SS won't make much difference regardless of age. But what if you aren't? Me, I much prefer the notion of living on $2640/month over $2000/month. Big difference if it ever comes to that. The "if it ever comes to that" part is why we're calling it insurance.

There are many paths to go from perfectly comfortable 60s to rather uncomfortable 70s and 80s. Financial ruin can happen and for me I'd rather have a little more insurance than a little less.

-IGU-
Print the post Back To Top
No. of Recommendations: 2
Well MIL retired at 62 and is 90 now. VERY active, still driving, won a State art contest last year, and ALL her extra money (the home sale, the investments, etc) is gone, basically for the last 10 or so years. She's basically the definition of living paycheck to paycheck, in this case about $2,000 in SS. The $1,500+ really DOES make a difference. The financial logic is a slippery slope.

I'm not sure that having Medicaid as your backup financial plan is a great option although she seems to have made the greatest use of her daughter, my wife.

I do NOT intend for my daughter or Medicaid to serve as my "Longevity Insurance."

Repurposed
Print the post Back To Top
No. of Recommendations: 2
Take the money while you can do something with it, not when all you get to do is sign it over to someone else.

There are a few things wrong with this for a person who has a choice about it:

:: Example: At 63, even though I've cut back my work hours, I still earn enough that I wouldn't collect most of even the reduced amount of SocSec that I could draw.

:: Since I am not only still working, but also collecting other retirement benefits (where the reduction from starting before 65 or 66 is less than with SocSec), most of the little I could receive from SocSec would be taxed.

:: I really hope not to be incapacitated before 66 (when my current employment contract ends) or 70, so the idea of having somewhat more income at 66 or 70 isn't exactly repellent.

:: On the other hand, planning not only in case of being incapacitated, but also in order to profit from it is repellent.

I suppose that taking Social Security the moment you can get any is more attractive if you have so much money stashed away that you will never need the Social Security income anyway, but you just want to grab as much as possible. That's a situation that I know nothing about.
Print the post Back To Top
No. of Recommendations: 13
Hi All!

I never cease to be amazed by those who maintain that "one size fits all"....be it shoes, gloves, socks....or investing/financial planning strategies. ;-)

Cheers!
Murph
Home Fool
Print the post Back To Top
No. of Recommendations: 1
I haven't seen this opinion posted:

Suppose you have a very ample retirement portfolio, around seven figures.

If you take SS later, but that means that you are dipping into the portfolio, should you instead take SS at 62 and figure that each dollar of SS is a dollar less that you are taking out of the investments.

If you have a good degree of confidence in the portfolio, it seems that you would want to leave it alone for longer.

On the other hand, SS is a known quantity, so you might sell some of the investments with a view of getting a larger SS check later.
Print the post Back To Top
No. of Recommendations: 2
"I haven't seen this opinion posted:

Suppose you have a very ample retirement portfolio, around seven figures.

If you take SS later, but that means that you are dipping into the portfolio, should you instead take SS at 62 and figure that each dollar of SS is a dollar less that you are taking out of the investments.

If you have a good degree of confidence in the portfolio, it seems that you would want to leave it alone for longer.

On the other hand, SS is a known quantity, so you might sell some of the investments with a view of getting a larger SS check later. "

---

Depends on how long you plan to live. If you have parents who lived into their 90s, you probably will. In that case, you might want to wait on SS as you'll come out ahead.

On the other hand, if all your parents , siblings, relatives died before age 73, you might want to take your SS at 62.

Your choice

------

Now, at the moment, deferring SS gets you 8% per year......for life.

-----

The stock market, according to many , is going to struggle to give you 4-5% after inflation for the next 20-30 years. Maybe less.

Who knows?


It's your choice.

---

You can't get a better annuity anywhere else by waiting


----

It all depends if you NEED the SS money at 62.

Oh..and the choice isn't 62 or 70. You can wait till full retirement age or any date after that.

---

There is talk that the gov't might stop increasing SS after full retirement age, forcing you to take it then.....

Who knows?

----

The crystal ball is murky.

- - - --

The other factor is once you hit age 70 1/2, you have to take money from your IRA/401K.......it raises your regular income bracket. It gets piled up on top of the SS. And any pension income.

Before that, if you are living off dividends, and any pension, you likely have a much lower tax rate on SS..... as you don't get much 'regular income'.

Another consideration.



t


----------
Print the post Back To Top
No. of Recommendations: 10
I think you are misunderstanding. If indeed you are getting pension, investment income, etc. then SS won't make much difference regardless of age. But what if you aren't? Me, I much prefer the notion of living on $2640/month over $2000/month.

But where did you get the money to live on between 66 and 70?

That's the point that always threw me. That's the thing that tripped me up when I sat down to think this over carefully, after we retired.

It struck me that if you need it you can't afford it, and if you can afford it you don't need it.

If you need the extra SS money, you can't afford to forego to early year's benefit. If you can afford to skip to 70, you've got enough so that the extra is not significant.
Print the post Back To Top
No. of Recommendations: 3
If you need the extra SS money, you can't afford to forego to early year's benefit. If you can afford to skip to 70, you've got enough so that the extra is not significant.

No, that extra may be very significant, especially is SS is your only source of income when you turn it on.

For example, I have a client that had $100k (roughly) in an IRA and she planned to take SS at 62. She absolutely needed income as she was no longer working and had no other source of income.

When we did the math, it made far more sense for her to spend down her IRA and postpone SS as long as possible. She will turn on SS next year at 66 and with only about $20,000 left in her IRA. She will have a larger (guaranteed) lifetime income than if she had taken SS at 62 and then supplemented the difference of what she gained by waiting with withdrawals from her IRA.

Note, there is no way she would have averaged the same rate of return on her IRA that she would have needed to match the corresponding increase in annual income she received by waiting from 62 to 66, especially with the need to take withdrawals at 62 to make up the difference.
Print the post Back To Top
No. of Recommendations: 3
For example, I have a client that had $100k (roughly) in an IRA and she planned to take SS at 62. She absolutely needed income as she was no longer working and had no other source of income.

When we did the math, it made far more sense for her to spend down her IRA and postpone SS as long as possible. She will turn on SS next year at 66 and with only about $20,000 left in her IRA. She will have a larger (guaranteed) lifetime income than if she had taken SS at 62 and then supplemented the difference of what she gained by waiting with withdrawals from her IRA.


Well, math is math. Deferring SS from 62 to 66 for the extra post-66 benefit takes 12 years to come out ahead.

66 + 12 = 78. Being a women, her life expectancy is 19 years, or age 85. So this is a bet with the odds in her favor.

OTOH.... her living expenses have been $20,000/yr. That's $1666/mo. Obviously a very frugal lifestyle.



Ahhhh, hmmmm, she's not filed for SS yet, but she's 65 and therefore on Medicare (or will soon be). Since her Medicare premium isn't being deducted from her SS benefit, she is not protected by the hold-harmless clause. So her Medicare in 2016 will go up from $104.90 to $121.80. All of the rest of us will stay at $104.90. If you are living on $1666/mo income, an extra $15 is a big deal.

This is an example of a problem that nobody ever considered in deciding to delay filing for SS in order to get a larger benefit.
You make a decision at 62 based on what you know at 62 and what you expect the situation to be at 66. But when you arrive at 66, the deal has changed. https://www.youtube.com/watch?v=jsW9MlYu31g

What _other_ unanticipated changes will take place in the next 4 or 8 years? It's not like everybody is saying that there is no need to consider any changes to SS.
Print the post Back To Top
No. of Recommendations: 0
Print the post Back To Top
No. of Recommendations: 4
When we did the math, it made far more sense for her to spend down her $100,000 IRA and postpone SS as long as possible. She will turn on SS next year at 66 and with only about $20,000 left in her IRA. She will have a larger (guaranteed) lifetime income than if she had taken SS at 62 and then supplemented the difference of what she gained by waiting with withdrawals from her IRA.

... her living expenses have been $20,000/yr. That's $1666/mo. ...


Good thing I'm not a Financial Advisor, I'd never keep any clients. I'd be asking a single/widowed old lady how she'd feel like a flying trapese artist letting go of the swinging bar, flying through the air, and depending on grabbing ahold of the other guy on the other trapeze just in time to avoid smashing into the ground.

I'd have done the figuring like this:
$1666/mo of SS at 66 would be $1250/mo at 62.

Leave the $100,000 IRA invested in a balanced stock/bond allocation.
4% SWR of $100,000 = $4000 or $333/mo. That should last indefinetely.
Add to that $1,250/mo from SS (at 62) = $1583/mo.

So she could get $1583/mo starting at 62 or wait for 4 more years and get $1666 -- only an extra $83/mo. Hardly seems worth it to me -- but then I'm a numbers oriented type of guy.

So instead, she spent down $80,000 and gave up $60,000 ($1250 * 48) of SS -- total $140,000 -- to buy an extra $416/mo after 66.
$140,000 / $416 = 336 months to break even. 28 years.
Print the post Back To Top
No. of Recommendations: 1
concur Rayvt.

Wouldn't even take much of a risk to get a 5% dividend, take 4% and reinvest the 1% to get a little "cola" going on the $100K.
Print the post Back To Top
No. of Recommendations: 2
I'm a numbers oriented type of guy.

Yes, you are a numbers oriented type of guy with large blinder on for issues that may go beyond math. Hopefully, your math skills will stay sharp all the way to your death bed and your best laid plans with your assets are not screwed up by some well meaning person that may become in charge of your assets if you don't remain sharp.

PSU
Print the post Back To Top
No. of Recommendations: 2

Yes, you are a numbers oriented type of guy with large blinder on for issues that may go beyond math.

Perhaps. But I pay closer attention to non-math considerations than most of the "beyond math" articles and writers pay to the math.
Particularly the math of SS benefits, when the SSA itself explicitly says that the early reduction & deferred bonus tables were designed to be actuarially neutral. Given that, you'd think that people would feel obliged to make a strong argument that they know better than the SSA.

Well, you know what they say, Figures don't lie but Liars figure.


Hopefully, your math skills will stay sharp all the way to your death bed and your best laid plans with your assets are not screwed up by some well meaning person that may become in charge of your assets if you don't remain sharp.

Yup, that's a problem we all face, the loss of our mental faculties. You just make the best contingency plans you can and hope that your designees will perform honestly and adequately.

By coincidence, my long-time contingency plan turns out to be almost the same as Warren Buffet's. He said 90% S&P500/10% T-bills, I said 60% S&P500/40% bonds, withdraw no more than 4% each year.
Print the post Back To Top
No. of Recommendations: 3
Rayvt writes,

Particularly the math of SS benefits, when the SSA itself explicitly says that the early reduction & deferred bonus tables were designed to be actuarially neutral.

</snip>


"Actuarially neutral" means that the SSA hasn't included the adjustment for "adverse selection" that a for-profit insurer would use to tilt the odds in the house's favor. That's the reason delaying your SS benefit to age 70 effectively allows you to "buy" an annuity benefit for 1/2 the price an insurance company would charge.

A "return" of 8% plus inflation is a fantastic deal for a guaranteed benefit if you have any reason to believe you'll live to the break even point.

intercst
Print the post Back To Top
No. of Recommendations: 2
If you need the extra SS money, you can't afford to forego to early year's benefit. If you can afford to skip to 70, you've got enough so that the extra is not significant.

I think this is mostly true, but it is a little bit more complicated. Almost everyone is somewhat in control of "what you need". Whether we are talking food, shelter, entertainment or travel, there are things we can all do to modulate our "needs". So you can choose to "need" a little bit less or more. Also, how do you know if you "need" longevity insurance 20 or 30 years in front of that need?

But despite these complexities, it is clearly easier for a very wealthy retiree to decide to wait than it is for someone who is struggling to meet their needs and would truly suffer undesirable lifestyle decline in the absence of SS benefits.
Print the post Back To Top
No. of Recommendations: 16
Scott Burns wrote an interesting book called 'spend to the end'.

In it, he and his associate analyzed the spending habits of people over the various decades of their life.

Retirees spending peaked in their 60s. It dropped in their 70s by significant amount, and more as they got to their 80s.

The way the money was spent also changed over the decades, with medical costs rising as a larger percentage of their income/budget.


--

“Spend ‘Til the End” by Laurence Kotlikoff and Scott Burns
Laurence Kotlikoff and Scott Burns challenge conventional financial planning in their new book “Spend Till the End”. They say that conventional financial planning is guaranteed to make you financially sick.

Their approach is built on three principles: (1) maximize spending power, (2) consumption smoothing (i.e. smoothing the per person living standard over one’s life time), and (3) price your love (know what it costs to do what you love).

They start off with a series of “mind-benders” that are then discusses in the rest of the book; mindbenders like: “poor and middle class should hold relatively more stock than the rich”, “over-saving and over-insuring are risky”, “setting retirement spending targets is asking for trouble”, “diversifying your portfolio is generally a bad idea”. They certainly make you stop and think about what they are saying, and thinking is good after all!

http://retirementaction.com/2012/03/05/spend-til-the-end-by-...

and

https://assetbuilder.com/knowledge-center/articles/spend-til...

- - - --

Changed the way I think of things, and, yes, as I approach 70 years of age, my desire to spend more is dropping quickly. Drive a bit less....sort of traveled out...no major trips planned.

Last year did Hawaii and Alaska again - same year......plus trips to OH, MD, CO, all over OK, IL, ........

This year, WI, CO, MD, TX, NM, but no major trips on planes.....and 8K less driving miles.......

His consumption smoothing model appears to be working in my case.....not because I read the book, but I'm less motivated to do things as I get older. Like long travel trips.......I've seen enough 'scenery' to last the rest of my life. worse, I've seen enough crowds of tourists wherever I've been to last the rest of my life. I don't enjoy being part of the 'zoo' of tourists trekking the world looking for 'something different' or checking off things on the 'to do' list.

You've seen 100 fountains, you've seen enough. You've seen 100 churches in Europe, you've seen enough. You've seen 100 castles, you've seen enough. You've seen 20 or 30 vineyards, you've seen enough. You've seen 300 hotel rooms, you've seen enough.

Now, when I go somewhere, it is usually to an 'event', like convention or conference, or get together of some sort - or family get together for a holiday. Occasionally to visit some friends far away.

Not to 'get away' from things! other, maybe than cold weather in the winter!......no need to escape 'from the rat race' and 'take a break' from 'work'......

I took my SS at 62. Figured if I really wanted to , could start over again by paying it back. Well, the feds closed that loophole....so that option went out the window. that would have 'reset' it to the highest value at age 70. Yep, the government can blindside you at any time.

NOw they are talking about capping it at full retirement age with no increase of 8% after that to get you to take it, and save money long term!

Soon, I'll bet they start demanding you start IRA withdrawals at full retirement age.....they want their money sooner!

You never know what they'll do to your retirement plan.



t.
Print the post Back To Top
No. of Recommendations: 1
Great post Telegraph!

For all the changes in SS laws I'll bet you found a way to minimize the impact on you. As long as the tax system isn't something simple there always will be ways to minimize any impact IMO.

I never liked that Kotlikoff article (I think Burns has weaseled on it a bit in his other writings). First, like Lake Wobegon residents I don't consider myself to be average. Second, I'm unclear if they are spending less because they HAVE less.

Third [with a story], my MIL God bless her, despite never saving much, had one terrifically interesting life. She was either THE, or one of THE first nurses to be the companion to a disabled person riding in commercial airplane. President Roosevelt and many others publicized the trip to show the accessability of air travel. The young woman was the daughter of an east coast newspaper publisher.

Now Grandma at 90 will go most anyplace we will fly her. On our trips to Florida there ALWAYS are 5-10 wheelchair passengers and I've been pleasantly surprised that airlines really do a good job in servicing them.

I guess my point is that at almost 70 I feel young. I guess I might slow down at 80, but the example of my MIL makes me think it might be more because of savings/investment than desire. OTOH I also understand I may be one heart attack or fall away from slowing WAY down.

So I don't like the Kotlikoff article because I want to spend it now AND spend it then. If that meant for me that I had to work a little longer at a job that I really did enjoy, then so be it. H*ll I may never be able to get my wife to retire she's enjoying what she's doing so much. I realize that's us and everyone is different. But I really hate to plan on spending less in later life.

Repurposed
Print the post Back To Top
No. of Recommendations: 3
Good thing I'm not a Financial Advisor

Agreed.

I'd never keep any clients

Possibly.

I ran a Monte Carlo analysis of your numbers. For those unfamiliar with a Monte Carlo analysis and why it is necessary to run such. Please see:

http://www.investopedia.com/articles/financial-theory/08/mon...

$100,000 in an IRA with 50/50 stock (large cap core) /bonds (Bond index). Projected rate of return 5.5% with a standard deviation of 8%.

FRA 66 with a SS Benefit of $1666 a month. Current age 62. Life expectancy 93.

Assumptions: SS increases COLA at 2.25% a year. Inflation is also 2.25% a year.

Solve for MC Analysis with 90% success rate and a goal of $1666 a month of income (pre-tax):

Social Security at age 62 probability of success (defined as not running out of money before the end of your life expectancy): 26% @ $19,555 a year.
Perhaps more significant, if we push the success rate up to 90%, we can afford to only spend $17743 a year ~ 11% less income every year.
Perhaps we don't need 90% certainty. Perhaps 60% is enough. We could then only afford to spend $18,680 a year ~ a decrease of 7%.

Social Security at age 66 probability of success: 90% with $19,492 a year of income ~ a decrease of 3%.

If lifetime income is what is most important to me, the choice is easy. Delay (preferably until 66).

If you are a numbers oriented guy, be sure you are using the right numbers. It takes at least 1000 simulations to run a good Monte Carlo analysis and I not aware of your spreadsheets being sufficient at such.

Note, a change in the variables (life expectancy, inflation, COLA) as well as multiple MC trials will produce slightly different results but not significant enough to change the recommendation.

If you want to run your own analysis of the data, you may try:

http://www.palisade.com/risk/ (works with spreadsheets in excel per their site)
Print the post Back To Top
No. of Recommendations: 2
older. Like long travel trips.......I've seen enough 'scenery' to last the rest of my life. worse, I've seen enough crowds of tourists wherever I've been to last the rest of my life.

We've been taking some long cruises on small ships. Small ships get into a lot of places that the large ships cannot get into and that cannot handle the 3000+ passengers. {Worst we ever saw was Cozumel one day. I counted 4 ships tied up at the piers, and another 4 at anchor. 20,000+ tourists in the port that day. Ugh!}
Plenty of the ports, we were the only ship in port, and with only ~400-600 passngers no crowds.
Longer cruises -- no kids and very few young adults. Almost all retirees, since few people with a regular job can take off 50 or 80 or 115 days.


You've seen 100 fountains, you've seen enough. You've seen 100 churches in Europe, you've seen enough. You've seen 100 castles, you've seen enough. You've seen 20 or 30 vineyards, you've seen enough.
I think you're off by a factor of 10. ;-)
We met a Brit once who had the perfect catchphrase: ABC -- "Another Bloody Cathedral"

On the longer cruises, we've run into a lot of people who don't even get off the ship, they just use the ship as a floating hotel which has different scenery every day.
Print the post Back To Top
No. of Recommendations: 0
"We met a Brit once who had the perfect catchphrase: ABC -- "Another Bloody Cathedral""


The ABCs tour of Europe.....

Another bloody Church


another bloody castle.


Yep..... 10 might be enough......but every city in Europe has it's 'famous cathedral' and castle.....

and there are lots of other castles around to see. After a while, you just go into 'repeat mode'......there are only so many kinds of castles. From sand castles in Saudi built by the Portuguese to Castles in the New World, to forts built by Romans, Normans, Vikings, Germans, French, the pioneers moving west...... etc.......

Oh....and you usually get to the 'the train station' as it is the main feature downtown in most European cities and 'the best hotels in town' are usually near it.

London and Paris have a lot to see.....and a bunch of day trips gets you to most of the things you want to see.....

Most German cities? A lot of them were destroyed in WW2...so it's the rebuilt churches and the castles..... and drinking beer in the Ratskeller....and watching the 'town clock' do it's thing..... a few good museums......3 or 4 unique castles you gotta see...but other than that? not much different than the USA....

t.
Print the post Back To Top
No. of Recommendations: 1
Changed the way I think of things, and, yes, as I approach 70 years of age, my desire to spend more is dropping quickly. Drive a bit less....sort of traveled out...no major trips planned.

That seems likely for many but to use my inlaws as a guide (the only living relatives I have currently in their 70s), they spend as much if not more now than they used to. They cruise at least 4 times a year, plus 2-3 more vacations by travel trailer, and at least one more vacation to Myrtle Beach with the extended family. They easily spend their $80k a year pension, SS, and RMD income.

There is a lot of the world to see and I personally plan to die trying to see all of it.
Print the post Back To Top
No. of Recommendations: 0
re: The ABCs tour of Europe.....


We're on the opposite of that experience and look forward to going the distance to achieve that level of disinterest. :) Kids are all just now into adulthood and the nest while not quite empty is freeing up for travel opportunities.

Spent 2 weeks in Slovenia last spring. Not on the main tourist track, still a bit of a "waking up" from Yugoslavia days feel. Went native in Ljubljana, stayed in a local home, met multiple times for dinner with their circle of friends, coworkers and church friends. Enjoyed getting some sense of the rhythms of local life. Day tripped from there to sites of note, walked the city, local river trails and woods. Hiked on an Easter weekend with crowds of locals to the old fort and church atop Smyrnagorda (sp?). Enjoyed visiting the open city market almost daily and seeing the difference in vendors and market themes from day to day.

I'll have difficulty getting dear wife to elsewhere on the next trip.
Print the post Back To Top
No. of Recommendations: 1
"Spent 2 weeks in Slovenia last spring. Not on the main tourist track, still a bit of a "waking up" from Yugoslavia days feel. Went native in Ljubljana, stayed in a local home, met multiple times for dinner with their circle of friends, coworkers and church friends. Enjoyed getting some sense of the rhythms of local life. Day tripped from there to sites of note, walked the city, local river trails and woods. Hiked on an Easter weekend with crowds of locals to the old fort and church atop Smyrnagorda (sp?). Enjoyed visiting the open city market almost daily and seeing the difference in vendors and market themes from day to day.

I'll have difficulty getting dear wife to elsewhere on the next trip. "


YOu could go to West Virginia and get the same 'experience' different from 'mainstream' AMerica. Go to the local cafe, sit down and talk about life with the locals, share a beer or two at the local bar, go out walking on the Appalachian trail with enthusiasts or climb mountains in the state. Go hunting with the locals. Learn how they survive on low incomes.

Or head to WY and stay at a 'dude ranch' and learn how to ride a horse, and what life as a cowboy is like in western USA. Find out how they exist 130 miles from the nearest town.

You sure don't have to to go to Europe to experience a lot of 'different cultures'. Or head on down to the southern border in TX or NM. Eat at local establishments of the natives. Get the Tex Mex culture and feel. Attend local get togethers and hear Tejano bands and join a local family at a B&B.

Or go to AK or HI.......get off the beaten path......

YOu've seen 10 markets in Europe, you've seen them all. Now with the Eurozone , the food gets shipped all over Europe and is getting 'homogenized' Yeah, they have goulash in Hungary and dumplings in other places, but you could probably find the same in a good ethnic restaurant here in major cities if you got to have genuine Hungarian goulash.

t.
Print the post Back To Top
No. of Recommendations: 1
re: West Virginia et al

Sure, but that and visiting places like Europe don't have to be an either/or proposition.

I'm as interested in the history of nations and seeing the lay of the land in person, imagining the movements of trade, nations and armies as I am in seeing the monuments and such.

That isn't limited to provincial interests. It's a much fun iscovering a Revolutionary War marker about some skirmish between locals and a Brit foraging party at random while on a walk thru the woods near the Maritime Museum outside Newport News is a kick as it is spotting a neglected mossy 6' obelisk along a mountain hiking trail in Slovenia. Then going back to research it a bit and discover it had been there since the 15th century to mark the limit of the Turk advance toward the hilltop castle.
Print the post Back To Top
No. of Recommendations: 0
<acch thumbtyping and no edit capability in this dinosaur forum software>
Print the post Back To Top
No. of Recommendations: 0
... Revolutionary War marker about some skirmish between locals and a Brit foraging party at random while on a walk thru the woods near the Maritime Museum ...


Would this be on the Noland Trail around the lake? I'll have to keep my eyes open.


Jim
Print the post Back To Top
No. of Recommendations: 0
With all this talk of sight-seeing in Europe, just want to mention touring China. We spent just shy of a month there in 1999 when we adopted our daughter--fascinating trip!!! As a couple who were raised through the Cold War, it was totally different from what we were expecting--no Mao suits, very little military presence. And such an old culture. And the food was not like any Chinese place I've ever eaten in the states (try to have it ordered by your guide--otherwise they'll tend to Americanize things a bit thinking that's what you want).

We had always intended to go back when our kids were in high school, but our daughter was not ready. But it's definitely not just another round of cathedrals and castles.

Kathleen
(not yet decided whether to take SS early, standard, or late--but have a few years yet)
Print the post Back To Top
No. of Recommendations: 0
HK2,
I don't recall. That was 30 years ago when I was stationed at NAS Norfolk and we newlyweds were living at 105A Friendly Drive in Hampton. Many happy memories of runs and walks exploring the area.


Kathleen,
Right on. My work has takeb me to China and Taiwan many times over the past 20 years. I've got a lot of pent up bucket lists things to see there.
Taiwan's mountains and west coast are the top of my list.

The tempo of work travel and hurry to return home to a growing family always took precedence. We're finally at a point where I hope to be able to schedule some time at the end of a business trip, meet up with my wife and linger a bit. I get way more vacation days than I ever use. Carrying ~ 350hours into the Xmas holiday break at the moment.
Print the post Back To Top
No. of Recommendations: 0
"Taiwan's mountains and west coast are the top of my list."


Are Taiwan's mountains any different than the mountains in HI, AK, Colorado, Montana, Utah, Vermont, New England, West Virgina, New Mexico, Washington state, Oregon or California?

Really?

I'd guess you've already seen most of the USA to want to see 'mountains' in foreign countries.

t.
Print the post Back To Top
No. of Recommendations: 18
edit: Taiwan's "East" coast


"Are Taiwan's mountains any different than the mountains in HI, AK, Colorado, Montana, Utah, Vermont, New England, West Virgina, New Mexico, Washington state, Oregon or California? "

Yep, they have dragons and soy sauce.

Really?

I'd guess you've already seen most of the USA to want to see 'mountains' in foreign countries.


Yep, even been in 4 countries in 2 days: US, Canada, Mexico and Texas.

Joined the Navy to see the world. 70% of it is water.


But seriously Telegraph, to borrow from the timeless wisdom of Sgt Hulka, "Lighten up Francis."
Print the post Back To Top
No. of Recommendations: 12
Are Taiwan's mountains any different than the mountains in HI, AK, Colorado, Montana, Utah, Vermont, New England, West Virgina, New Mexico, Washington state, Oregon or California?

Are the Swiss Alps any different than the Rockies? Yes they are.

Is a restaurant in Spain any different than a Spanish restaurant in Chicago? Yes it is.

Is a rail trip through Europe at different than one through the United States? Yes it is.

Is seeing the pyramids any different than seeing the Empire State Building? Yes it is.

Is the French countryside any different than the Pennsylvania countryside? Yes it is.

I'd guess you've already seen most of the USA to want to see

Mountains are different. People are different. The experience is different. You ought to get out more; there's a whole *world* out there.
Print the post Back To Top
No. of Recommendations: 0
Related and from experience; spouse can only start collecting if you start also (if she hasn't enough quarters worked). What SS won't tell you is once spouse starts getting check, you can stop and keep working. Makes a big difference. I started at 65 so she could start at 62 and did not find I could stop until too hard - would have to pay back 3 years = $65000)!!
Print the post Back To Top
No. of Recommendations: 0
"Are the Swiss Alps any different than the Rockies? Yes they are."

Go to the Rockies in the winter and they look the same. Go to the Rockies in the summer and they look the same as most of the "Alps". I've seen both. There are 1000 miles of 'Rocky Mountains' to see from NM all the way up to MT.

And they aren't much different. I'd bet the mountains of Taiwan aren't any different......

---------

"Is a restaurant in Spain any different than a Spanish restaurant in Chicago? Yes it is."

Other than you better not show up for dinner before 8pm, even better at 9pm or later.....no....not a lot different. I don't drink wine so I don't need 'that experience'.

and I'm not a 'gourmet' so that doesn't make much difference.

And if you go to Germany, you'll likely pay double or triple what you will at the Bavarian Grill here in my home town, that has 100 German beers in stock at any given time.


-----------

"Is a rail trip through Europe at different than one through the United States? Yes it is."

Yes, only because we have rotten rail service. So you go to Europe to ride a train? Wow. Actually, the Acela service on the east coast from DC to NYC is pretty nifty.

Is a 'rail trip' that exciting? Not really. The rails in Germany usually go right through the industrial part of towns........

and of course, you likely have been on the famous train ride in the north US/South Canada will all the scenery? no? oh dear.....or on the train in Alaska? Or on the Silverton/Durango narrow gauge railroad that likely beats anything in Europe?

Yeah, yeah...I had a Brit rail pass for 2 weeks...zipped out of London on a dozen day trips and down to Land's End. After 3 trips, riding the train was ho-hum. Just a way to get from A to B.

But you have ridden the metro systems in Boston? NYC? washington DC? San Francisco? Been on the cable cars? No????Dang.....

---------



"Is seeing the pyramids any different than seeing the Empire State Building? Yes it is."

You can see all the pyramids you want in Central America and Mexico....in fact, some great pyramids in Mexico not far from the beaches and a $400 vacation to Cozumel, Playa Riveria, or Cancun. You
don't have to go to Egypt and be wiped out by potential terrorists. Actually, there are a gazillion TV shows on pyramids that do a lot better job of showing them that all the hassles of going to Egypt just
to see the pyramid and be ripped off as a tourist. You can't go in them.

- - ----

"Is the French countryside any different than the Pennsylvania countryside? Yes it is."

Really? They got magic unicorns? Magic dirt? You want to see palaces? Go visit the Vanderbuilt mansion or the Heart Castle in
the St Lawrence river or similar.....

---------


"Mountains are different. People are different. The experience is different. You ought to get out more; there's a whole *world* out there. "

I've seen the Alps in Europe and been over most of England. Been all over Germany and been to Italy and Austria, Costa Rica, Cocos Island, Mexico, Thailand, every county in the USA, Alaska, HI, Newfoundland, over most of Canada....seen Eskimos and half a dozen Native American tribes, been to most US National Parks. Been to France and Switzerland, Saudi Arabia, Sweden, Jersey, and a bunch of other places.

I don't go places to 'have meals' in that country. Yep, eating 'native' in Thailand was an adventure. Same in Vietnam. Food OK but not on my regular diet and I wouldn't bother to visit a Vietnam restaurant here - there is one or two in my town. Nor does Indian food excite me.

I got out. There's really nothing in the rest of Europe that 'calls' me to go see it. Same for Egypt and Africa. Or Asia.......

I've been traveling for over 60 years.......and the 'lure' of traveling is faded. For many others, the 20 countries in 20 days might still be on their 'to do' list, but I've been up the Eiffel Tower, taken a river cruise on the Seine, seen the London Tower and done the sights there, ......and had a lot of fun along the way.

I don't need to 'get away' from anything (like W O R K ).....for a 'break'......

Travel is often over rated.

Most people haven't seen 1/10th of the US but brag about their adventures spending the bucks and 'wondering' about the 'wonderful' scenery when they haven't seen it here.

It's there money so I guess they can blow it how ever they like it.

Give me a nice week in Colorado...say around Silverton, and a day or two of 4 wheeling it up to 11,000 - 12,000 feet on the dirt/gravel roads in the back woods.....where few 'tourists' go.....fantastic scenery...mining history thousands of pages long....better than any trip to the 'alps' or other 'mountains'.....up to Engineer pass or the other summer only, 4wheel drive only back roads...... and 'dining' if you will on cuisine from just about anywhere in Durango.....world class chefs..... and if you get tired of 'being' in the mountains, head on to Denver and eat at the Buckhorn Exchange. Have some antelope or buffalo or rattle snake for dinner in a 130 year old eating establishment.....


t.
Print the post Back To Top
No. of Recommendations: 11
Travel is often over rated.

To you.

PSU
Print the post Back To Top
No. of Recommendations: 1
Are Taiwan's mountains any different than the mountains in HI, AK, Colorado, Montana, Utah, Vermont, New England, West Virgina, New Mexico, Washington state, Oregon or California?


Actually, yes, they are. Over the course of my life, I have been to the mountains in AK, CO, UT, MA, WV, VA, NM, AZ, WA, CA and OR, as well as the West and East coast of Taiwan, I can comfortably say that ALL of those mountains look different. Hualien, Tairoko Gorge, the valley down the central part of Taiwan and even parts of the West coast of Taiwan look a lot different from mountains in other places. Even different from the mountains in Japan or Malaysia.

Taiwan was formerly known as Formosa for a reason. AND, the people there are the only people in Asia who genuinely like Americans.

Bob

PS. Never really thought about how many mountains I've been to in my life. I may have a problem.
Print the post Back To Top
No. of Recommendations: 1
Since Social Security is a fundamentally flawed program that:

- unfairly takes money away from the next generation of workers to pay retirees.

- delivers lousy returns on the money put in, much worse than market returns

- creates dependence in many individuals that count on SS instead of saving and spending wisely

I would recommend taking a small portion of your returns (all if you can afford it), call in the local news media and BURN the money in front of the cameras to protest a system that is fundamentally anti-American, anti-market, unfair to younger workers, and immoral.

sw
Print the post Back To Top
No. of Recommendations: 25
"I would recommend taking a small portion of your returns (all if you can afford it), call in the local news media and BURN the money in front of the cameras to protest a system that is fundamentally anti-American, anti-market, unfair to younger workers, and immoral."

You go first.
Print the post Back To Top
No. of Recommendations: 0
May just do it when the time comes...

sw
Print the post Back To Top
No. of Recommendations: 1
May just do it when the time comes...

With your first SS check?
Print the post Back To Top
No. of Recommendations: 0
With your first SS check?

Direct deposit is required for new claimants

https://www.socialsecurity.gov/deposit/
Print the post Back To Top
No. of Recommendations: 0
Direct deposit is required for new claimants

I'll volunteer to burn my first direct deposit confirmation. Heck, I might burn the second one, too.

But that's still at least 10 (and probably more like 15) years away.

--Peter
Print the post Back To Top
No. of Recommendations: 1
I'll volunteer to burn my first direct deposit confirmation. Heck, I might burn the second one, too.

But that's still at least 10 (and probably more like 15) years away.


Are you going to print your confirmation so to burn it or you going to toss your computer into the fire?

PSU
Print the post Back To Top
No. of Recommendations: 2
reallyalldone writes,

<<With your first SS check?>>

Direct deposit is required for new claimants.

</snip>


Perhaps stillwater999 can set the bank ablaze?

intercst
Print the post Back To Top
No. of Recommendations: 32
stillwater9999:

"Since Social Security is a fundamentally flawed program that:

- unfairly takes money away from the next generation of workers to pay retirees."


unfairly is a subjective term.

"- delivers lousy returns on the money put in, much worse than market returns"

Not an apt comparison because until 1983, SS was pay as you go, so there was no investment component, and since then the surplus I invested in in interest-bearing Treasury bonds and other Treasury securities and returns whatever such bonds or securities are returning on the market.

"- creates dependence in many individuals that count on SS instead of saving and spending wisely"

Does SS create the dependence or so people who do not understand how SS works create their own dependence by not saving and investing?

If you were older, you might remember the triad, or three legged stool, explanation that discussed SS, pensions, and personal savings, and perhaps note that most of the corporate word has cut-off the pension leg.

Regards, JAFO
Print the post Back To Top
No. of Recommendations: 59
Does SS create the dependence or so people who do not understand how SS works create their own dependence by not saving and investing

The evidence says no. Before Social Security roughly half of elder Americans lived in poverty. After several generations of Social Security, the number who save enough for retirement is almost exactly the same. If the Social Security checks stopped coming, almost precisely the same number of elders would fall into poverty. An examination of actual behavior demonstrates that some people save (about half) and some do not (the other half.) That has not changed since the early 1900's.

That will not stop ideologues from claiming it 'creates dependence' but then those people are not swayed by actual evidence, they glory in their own 'revealed truth.'

Unfairly takes money away from the next generation

I am where I am today because of the government investments made by prior generations. The Interstate Highway System, atomic energy, the Hoover Dam, SEC regulation, safe drugs, the military victories in World War II, public education, and so much more. Those were investments from which I am still receiving benefits. Thanks to the work and contributions by my parents and their parents, my life is enriched. I do not begrudge the fact that my investments will pay off for others, only a selfish twit would do that.

Likewise the government has created a system of "enforced saving" which then enhances society by keeping half the population out of poverty at the end of life. It does so in nearly every advanced civilization on the planet in one form or another. There is no private system which has done so for so long and so successfully, although several have tried and failed. (Yes, we all know it isn't actually "saving." It is a distinction which is important to some, I prefer to revel in the success of the outcome.)

delivers lousy returns

And yet most people get back more than they put in, otherwise the program wouldn''t be "going broke" (not true, but heck, go with the meme.)

It's all polemic. There's nothing to be learned from rants such as stillwaters. Never has been, actually.
Print the post Back To Top
No. of Recommendations: 7
Jumping in out of the Best Of. :) I live in Dumaguete, Philippines at the moment, and have noticed an influx off blue collar workers that come to see if they can live on their social security here. They can, so many of them stay. They have an extreme adjustment to make to the culture here. It is not much different from Latin America.

I encourage them to look at other places in the Philippines, especially Davao City in Mindanoa. :) Acquainting them with the politics down there is an eye opener for them. Yes, the ex mayor, running for Pres has participated in Death Squad killings. Yes, he is a tough law and order fellow who allows the police to kill unwanted criminals. No, he gets along fine with the communist insurgents, and has even take care of Muslim complaints in Davao.

You should make arrangements for health care because you cannot go bankrupt here. Here, it is a simple matter of if you can't afford the medical bill, they let you die. Yes, even your wife will say no to the operation, especially if you have kids. Her choice will be to give permission for the operation if you are not lucid, incurring the expense, or to let you die. If you have kids, her choice is to work overseas to pay your bills and let the grandparents, etc., raise her kids, or to stay, work, and raise the kids herself. If you don't make arrangements, this can happen to you while you lay on the table in the ER.

Most opt to have cheap Phil Health, which helps a little with the bills. They also ride around on motorcycles without helmets. I am happy foreigners are not allowed guns, or concealed carry. Most Americans make no attempt to learn the local dialect and customs, remaining cloistered with few Filipino friends.
Print the post Back To Top
No. of Recommendations: 1
I live in Dumaguete, Philippines at the moment, and have noticed an influx off blue collar workers that come to see if they can live on their social security here...
I encourage them to look at other places in the Philippines, especially Davao City in Mindanoa. :)


I expect that as more and more DINK US couples retire (double-income, no kids), they may find that getting personal help in the US will become extremely difficult. Places like the Philippines may be attractive not only for the general cost of living, but also for the ability to actually find workers willing to provide home care (cleaning, cooking, caregiving and companionship) at an hourly rate that a reasonably well-off retired DINK couple can afford.

The hundreds of thousands of Boomers who retire over the next decade or so are going to find themselves increasingly in need of assistance from young, strong and willing caregivers - at precisely the time when the supply of such workers in the US is shrinking due to the baby bust caused by all those DINKs in the last 3 decades.

Based upon the Wikipedia article, Davao City looks like a nice place, regardless of the politics. Tropical climate, lots of fresh fruits, veggies and fish, an interesting topography, a varied economy, good public safety, plus schools, colleges and churches where an English-speaking Christian should be able to find a welcoming community.

https://en.wikipedia.org/wiki/Davao_City
http://www.numbeo.com/cost-of-living/city_result.jsp?country...
http://newsinfo.inquirer.net/690252/davao-city-ranks-as-9th-...
http://davaochamber.com/
http://www.davaocitydirectory.com/tag/davao-churches
http://www.finduniversity.ph/universities/r=davao-region/c=d...
http://itsmorefuninthephilippines.com/davao-city/

My wife and I are retired DINKs - and we find ourselves having to pay $15.00 per hour to get teenagers to help us do odd jobs around the house, $360 per month to get the house cleaned by a maid, $250 per month to get the lawn cut and an increasingly hefty bill for painting, caulking and such other exterior maintenance jobs.

My health and mobility limitations prevent me from lifting or even changing light bulbs. I am continuously looking for helpers willing to do things like changing the HVAC filters and moving boxes or reorganizing/cleaning closets. Just when we find a good helper, he or she goes off to college or gets a job or a girlfriend/boyfriend which takes precedence over our needs.

If my state of health didn't require regular trips to medical specialists and advanced medical centers, DW and I might consider Davao City an excellent prospect for an expat retirement.
Print the post Back To Top
No. of Recommendations: 1
notehound writes,

I expect that as more and more DINK US couples retire (double-income, no kids), they may find that getting personal help in the US will become extremely difficult. Places like the Philippines may be attractive not only for the general cost of living, but also for the ability to actually find workers willing to provide home care (cleaning, cooking, caregiving and companionship) at an hourly rate that a reasonably well-off retired DINK couple can afford.

</snip>


The same could be said about Cuba, and it's a lot closer than the Philippines.

intercst
Print the post Back To Top