retiring

[RickB]

Yes, BUT: My mother was a postal carrier. My father a custodian for a university system. He was 11 yrs older than my mother. Not exactly sure how their retirement accounts were handled. Mom's was definitely civil service. Dad's, maybe similar??? My older brother helped my mother (executor) with the estate paperwork. When my father died, Mom started collecting his SS benefits. My father had opted (with his plan at the time) to take a lesser SS benefit so that mother was able to take his at the time of his death. Which she did. For about 2 years after his death. Then she got a letter from the SS admin saying that she owed them all those SS payments back as it was illegal for her to collect his. Even though at the time Dad had opted for the lesser amount so that she could. It didn't matter. they told her that the rules were the rules and that even if Dad had been instructed to take a lesser amount back then (probably 15 years worth) it was most likely not proper to have offered that to him at that time. My parents even had that paperwork saved which showed his decision. Didn't matter. She was given a couple of months to pay the funds back (close to $40K) or start paying penalties. They would also not reimburse anything for the so called improper lesser payments that dad had been receiving all those years. Pretty heartbreaking for an elderly widow!! So things can change, and usually not for the better!!
Regards,
david

As a civil service employee your Mom was ineligible for SSI.

 

[Chris616]

My earlier post regarding SS withdrawals at age 62 vs. full retirement age wasn't an easy one to grasp. Let's try again with some actual #s. I'lll even slant the #s to give advantage to waiting to age 66 vs. starting at age 62 and see where it leads with a simpler illustration using my situation, but rounding to nice simple #s for ease of understanding. Also, since its usually mentioned that its better to wait til full retirement age to start SS, that implies you don't need the money prior to age 66. That is my situation as I try to have a ready reserve fund that will last me quite a while in a down market. But I still took it at age 62. Why? This:
Full retirement age: 66 (actually 66.5) but giving it the advantage of being earlier. SS benefit: $2500 mo.
Age 62: Reduced SS benefit is $2000 month (Easy figures to use but again slanted a little bit to give advantage to the age 66 benefits. The difference between the two payments is $500 per month.

<snip>

Here are a couple of things to consider, David.

I'll say again that I don't know anything about SS, but the bit of reading that I've done says that you can expect a 30% decrease in the payment when taking at age 62 vs full retirement age. I notice that in your calculation that it only gets knocked down by 20%.

Of course, everyone's health prospects are different, but if we're just working with average lifespans (and it doesn't make a great deal of difference), but just to be correct 78 isn't the number to use. The OECD says that the life expectancy at birth for someone in the US is 78.6 years, but the life expectancy for a male who has already made it to 65 years old is 83.1.
Health status - Life expectancy at birth - OECD Data
Health status - Life expectancy at 65 - OECD Data

Chris

 

[dmccarty]

...

I doubt Congress would ever actually cut benefits for those already entitled as it is electoral suicide. Remember too that members of congress have older relatives who are the most potent lobbyists of all. My observation after watching this closely for a few decades (my old job) is they usually fool around with cutting future benefits for people not too close to retirement as it's safer. The COLA allowances might get throttled back for beneficiaries as there is a school of thought that they may be too generous. Likely to raise payroll taxes (F.I.C.A.) Lastly for those few of you who still have defined benefit pensions through your employer or labor union : Don't automatically take the survivor option. You say "What, I love my wife." Sometimes the more cost effective plan is to take self only with no survivor benefit. Use the extra money to fund additional life insurance to protect your loved one. That will take one heck of a spreadsheet to compute.

I think what you said has the highest probability of happening. However, why is there always however, :laughing: with the increasing Federal debt there is going to be a time when the whole financial house of cards comes tumbling down. Then things get interesting. There are numerous cities that have already gotten into trouble because of their debt load, often made far worse by pensions, where benefits have been cut.

For sure, the younger generation is going to get a cut in SS benefits and an increase in taxes. Already happened to me and it will happen to them. The question is how much, when and how often.

Your comment about life insurance vs PRSO, pension coverage for a spouse, is correct. The life insurance policy might be the better option. However, did I comment about however , I have a family member whose husband did not take the spouse option and took out life insurance as a replacement. Then he let the policy lapse. And then he died...

One of our retirement plans is to sell everything, buy a boat and go see the world. Health insurance is far cheaper overseas than in the US and one can get quality health care in some places that one would not expect. However, there is that word again :laughing:, one of our issues is what to do if I die and wife is left alone with the boat. I don't mean left alone at sea, though that is a probability though low one, I mean I die in some country on the other side of the world and she is left with the boat. I doubt she will continue sailing but she might. A 77 year old woman just completed a solo sail around the world. Anyway, we will have to keep up a life insurance policy so that if I die, the wife can hire a delivery captain to get the boat to a port where it can be sold, if the wife does not wish to sail the boat herself or keep the boat.

Don't know if the boat plan will happen but we are actively working toward the goal. But life happens.

Later,
Dan

 

[goeduck]

Your Social Security benefits are based on your 35 highest-paid years on the job. But if you don't put in 35 years in the workforce, you'll have a $0 factored into your benefits equation for each year you go without an income. I have 35 years in but part of my intent is to work a little longer to get the early lower income years off of that calculation. Every little bit helps.

 

[goeduck]

Here is another explanation of drawing SS early that I came across. I had not understood the second point before:

If you claim Social Security early, your benefit will be reduced at the rate of 6 2/3% per year (about 0.56% per month), for as long as 36 months before your full retirement age.

Beyond 36 months early, your benefit will be further reduced at the rate of 5% per year (about 0.42% per month), until as early as age 62.

If you claim Social Security late, your benefit will be increased at a rate of 8% per year (about 0.67% per month), until as late as age 70.

 

[RickB]

Your Social Security benefits are based on your 35 highest-paid years on the job. But if you don't put in 35 years in the workforce, you'll have a $0 factored into your benefits equation for each year you go without an income. I have 35 years in but part of my intent is to work a little longer to get the early lower income years off of that calculation. Every little bit helps.

All true.

 

[dnw64]

No one answer will work for everyone regarding SS.

Kinda like R1s vs R4s...

 

[dnw64]

The biggest factor that influenced me was that using the age of 90 as a death date far exceeds the average age of a male today.

But, do you feel average, kid? Do ya?

My goal is to have enough at retirement that I will not be able to (without doing something stupid, like buying 5 "second" homes or a yacht or three) outspend my income from investments. But it's amazing how quickly a very small change in the "numbers" can make it go one way or the other.

 

[bird dogger]

As a civil service employee your Mom was ineligible for SSI.

Rick, that's true. I might have misspoke on some of the details. As I said, I wasn't involved much as my parents lived 2 states away from me at the time and my older brother lived near them. My parents were sticklers for keeping paperwork and had all the details and original forms they had filled out. They were ok'd by there employment superiors at the time and approved by the benefit providers. That's been over 30 years ago now and it's probably been 10 years since my mother died. The point I was making though was that even though both had made choices that they thought were best for them, and at the time was considered fair, square, and perfectly legal, signed and submitted by their employment superiors, only to find out 30 years later that something had changed. And not for mother's benefit even though she had all the original paperwork. She talked to an attorney and he advised her that she might have a chance to prevail but the time, cost, and aggravation would be no where near financially beneficial for her. All the while accruing penalties. She ended up having to pay back those benefits (what ever they were from my father's plan). A short time later she was diagnosed with cancer and passed away hardly a year later. Just pointing out that nothing is absolutely guaranteed.

 

[kenmac]

I think what you said has the highest probability of happening. However, why is there always however, :laughing: with the increasing Federal debt there is going to be a time when the whole financial house of cards comes tumbling down. Then things get interesting. There are numerous cities that have already gotten into trouble because of their debt load, often made far worse by pensions, where benefits have been cut.

For sure, the younger generation is going to get a cut in SS benefits and an increase in taxes. Already happened to me and it will happen to them. The question is how much, when and how often.

Your comment about life insurance vs PRSO, pension coverage for a spouse, is correct. The life insurance policy might be the better option. However, did I comment about however , I have a family member whose husband did not take the spouse option and took out life insurance as a replacement. Then he let the policy lapse. And then he died...

One of our retirement plans is to sell everything, buy a boat and go see the world. Health insurance is far cheaper overseas than in the US and one can get quality health care in some places that one would not expect. However, there is that word again :laughing:, one of our issues is what to do if I die and wife is left alone with the boat. I don't mean left alone at sea, though that is a probability though low one, I mean I die in some country on the other side of the world and she is left with the boat. I doubt she will continue sailing but she might. A 77 year old woman just completed a solo sail around the world. Anyway, we will have to keep up a life insurance policy so that if I die, the wife can hire a delivery captain to get the boat to a port where it can be sold, if the wife does not wish to sail the boat herself or keep the boat.

Don't know if the boat plan will happen but we are actively working toward the goal. But life happens.

Later,
Dan

If /when you die. Like everyone else. Jody will be there to take up any slack. I have no doubt Jody is there waiting for me to kick the bucket where he can step in and take over.
Jody can do it all, From piloting the boat, to running the farm !:laughing: