Social Security.... 62 or 65???

[Junkman]

I was having a discussion with a friend today that is now 62 and he has said that it is better to wait till you are 65 to collect Social Security. I say that you will have to live to at least 70 before you will be ahead if you don't start at 62. My "guess" is that the difference between what you receive at 62 vs. 65, isn't worth the wait. What are your thoughts???? Thanks

 

[Egon]

Not sure of the details but it may depend on the gross income available to you. I've heard the same thing.

Egon

 

[BB_TX]

If you have a family history of close relatives living into their 80's and 90's and your health seems to follow theirs, it would probably be better to wait until 65. If no one seems to make it past mid 70's, then early is probably better. But probably not a lot of difference unless the person died very early or very late.
I think it was on the SS web site when I put in my numbers that gave the break point for 62 vs 65.

 

[BillG_in_TX]

"Assume for a moment that I'm age 62 ... Also assume that the SSA has told me that I may retire now and receive $1,180 per month, or retire at age 65 and four months and receive a benefit of $1,542 per month expressed in today's dollars. Ignoring inflationary increases to the Social Security benefit, it would take exactly 14 years after receiving my first reduced-benefit check for my lifetime receipts to be less than those I would get by waiting until age 65 and four months to receive that benefit."

From an old article I googled up at fool.com.

 

[riptides]

My thoughts are get anything while the getting is good.
If it is the time money battle. I'll take the money. Only god knows how much time you have, and if you will have the facilities to enjoy that time.

Did that make sense?

-Mike Z. /forums/images/graemlins/grin.gif

 

[fivestring]

Everyone in my family started drawing the reduced benefit @ 62.
Like others have said, it takes years to catch up, otherwise.
Plus, none of us are guaranteed tomorrow, so why not start drawing today? /forums/images/graemlins/wink.gif

 

[Gatorboy]

Well, the age for full retirement for me is 67 with a 30% monthly reduction at age 62. My break-even age will be 78.

I'm not worrying about it now -- there may not be any money left by then anyway. /forums/images/graemlins/crazy.gif

 

[Bird]

My wife will be 62 and can start drawing hers (and will do so) in about a year and a half.

 

[OkeeDon]

I took mine at 62, my wife is waiting until 65. Here's why.

After I closed my store at age 62, I had no effective income (other than what I might bring in by EBay sales, etc.) My wife, a home health physical therapist, is still seeing patients and is still earning a "normal" income. Her income is sufficient that I don't need to bring anything in to pay the bills.

Let's start with her's. If she had taken it at age 62, and still earned a significant amount, the penalty taxes ($1 for every $2 in income) would have eaten up her SS. There was no point in her taking it. After age 65, she can earn as much as she wants, and there will be no penalty taxes on her SS.

Now, mine. That 14 year period mentioned above seemed to work out for me, too. If I had waited until 65, I would have to collect until age 79 in order to merely break even. I probably won't live that long, but, even if I do, we have another plan.

Since I don't need the income now, what I did was take the early amount, then shift it to an investment account. I've made some decent investments with this money, and it has grown and is producing income. So, at age 65, I have my SS plus the income I earn on the investments made in the previous 3 years; and I still have the principle from those 3 years, plus whatever growth there may be in the investment value. The combination puts me way over the top on waiting until I was 65. I can't remember the exact number I calculated at the time, but based on conservative estimates of the investment income, and barring a complete collapse of the market, I would have to live until into my 90's to break even, and even longer to get ahead.

There's a risk associated with my investments, but an even greater risk that I wouldn't live long enough to break even. This way, the money's in the bank, so to speak.

To make it easier to keep track and make sure the investments do what I want, I started a separate Scottrade online account for the SS money. I track it in Quicken, and can get an instant report on my ROI.

I should be pretty much done with building our house, etc., once I get past 65, and if I choose, I can go back to earning as much money as I can, without incurring the penalty taxes on the SS income.

 

[Deerlope]

Just before I retired 2 years ago I attented a couple of seminars and we were told to take it at 62 because if we waited until 65 it woukd take us 18 years to make up the difference. I'll be getting my first in Aug.