Claiming Social Security Early is Wrong: The bad reasons to justify claiming before age 70.
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- čas přidán 4. 06. 2024
- Many of the reasons people claim Social Security before their full retirement age are flawed. In this show we scrutinize the most common reasons why people are claiming early. From "breakeven" analysis, to getting better returns elsewhere, to Social Security going bankrupt, the justifications are questionable.
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What a lot of people fail to factor in when taking SSN early, taxes and the Medicare deduction. Also, you receive less of an annual COLA amount. I waited until 70, for a higher monthly amount, and higher annual COLAs.
Indeed, not all Social Security is taxable. At least 15% is not taxed and this increases the overall value of those payments.
SSN means SS Number
If my full retirement age is 66.8 years old. My break even point is 81 years old. This estimate does not take cola increase in consideration. If the cola increases are a conservative 2.5 percent, my break even point will go down? Perhaps 80 years old? Thanks
For a couple, the key metric is the longevity of two people, delay and backload for the survivor. It is an advanced form of the marshmallow test.
For a couple the key question seems to be, do you want the highest lifetime inflation-protected income floor and survivor benefit or not? If so, the key is the high earner delaying. The lower earner's claiming age makes a much smaller difference. It's contradictory to fear outliving your money and claim early.
Great point about being contradictory. The fear of running out of money can usually be solved...but people typically don't do it. czcams.com/video/SAWqVu6Qfsc/video.html
My wife is 7 years older and was already collecting. I started collecting this year at age 62, so that she can collect spousal benefits. This increased her monthly benefit by $950 a month. I know my benefits are greatly reduced rather than waiting, but I have a pension that more than makes up the difference, that she will continue to receive, if I pass away first. Being diabetic, the chances of making it past the break even point are slim. And if I do make it, I'd rather enjoy the money now, than at 80. I don't care to buy designer "Depends".
Claiming early to open up a spousal benefit is definitely an important factor to this decision.
I agree with your logic. Even though I'm on disability currently, I plan to withdraw my retirement benefits When I turn 67 years old and switch to my survivors benefits until I turn 70. And like you said if I get a 3 or 5% Cola increase on the amount I get at age 70, that's three or five percent on 132% of my primary insurance amount! You can't argue that that's a lot better than 5% on 65% that you would get taken at age 62. I think a lot of people want to take it at age 62 because they aren't good at delayed gratification. They've waited their whole life and they feel like it's time to get the money but I don't think it's always a good idea.
I'm 55 working since age 18 with a fused spine. Every day is painful. I don't get a "disability " I'm told ill not live past my 70s. I'm taking SS at 62 because I'm not working until I'm dead. BTW, I've paid in $400k so far so you're welcome.
It doesn't work like you are planning. You can suspend your benefits at FRA and get a higher amount up to age 70, but you can't switch to Survivor Benefits while suspended. From SSA: "If you voluntarily suspend your retirement benefit, any benefits you receive on someone else’s record will also be suspended." www.ssa.gov/benefits/retirement/planner/suspend.html
You can also suspend at FRA for up to 3 years and increase your benefits if you took early.
The most important point that most people miss on delaying, is that you can change your mind every month all the way to 69 and 11months!
Not many people suspend after reaching their full retirement age. However, this is an option, even for people who claimed early. Good point.
Agree BUT. You leave out gains of 8 yrs on money left in and not removed since using SS money. So, 96mo x 1600 = 144k still in your acct not including its gains. 😮
I retired in 2020 started social security at 62 about 20k per year so that's about 80k I didn't take from my investments s&p500 was up double digits every year but 2022 I spend 5% of my investments but have 110k more than when I retired don't be afraid of the market it goes up 75% of the time
One concept I’ve noticed , I’m 61, how much is more money worth to you at 80?
I retired at 48 after looking at my saving comparing them to my expenses and got this empty feeling. I’m maxed on ss so it’s a decent check. Most people pray they can work as long as they can and delay as long as they can so they can just work part time til they die😡
Take it at 62, suspending it at FRA, get 24% increase at 70 (plus all those years of COLA’s). Not a perfect plan, but those 5 years of pmts could give you some tremendous adventures while your still in good shape.
I am taking my SS early to use this benefit for income instead of using my portfolio income as I can continue to go it and use later plus my heirs will inherit my portfolio and will not inherit my SS. Wife will be fine.
Good video. You don’t need to get 8% to beat SS. In fact at 5% which was recently available on a 20 year bond you will come out ahead into your 90s. If you invest in tax free municipal bonds at 4% you still come out ahead into your 90’s and cash value life insurance also tax free at 5%+ you never come out ahead by deferring. So what am I going to do? Despite these facts I am delaying until 70? Reasons
1. Survivor benefit for my spouse as I was the main bread winner.
2. By deferring I can withdraw from my large IRAs over the next 8 years which will reduce future RMds and IRMAA.
3. At least 15% of SS is not federally taxable and none is taxed in my state. That results in 10% less tax (20% vs 30%) on SS income compared to my other ordinary income. So I want to maximize that income and associated CoLAs.
Let’s say I’m retiring at 63. I can either draw down my 403B or take social security. I have some rental property. Does drawing social security make sense or draw down the 403B? Single.
The answer requires careful calculating and comprehensive financial planning. We cover important considerations on your question here: czcams.com/video/9P21Rue_ybY/video.htmlsi=E0dYsKBbbcQV8IYe
谢谢。喜欢你的节目。
If you think you will live past 80, if SS is part of what you need to survive in old age, then delaying makes a lot of sense.
@@randolphh8005 point taken.
Here's the problem if I work and make more now I can't get snap or medicare b paid for that's an extra $500 A MONTH LOST
I'm gonna die before 67. Thoughts?
Claiming ASAP is usually the optimal strategy for those with a short life span. However, if you are married, you may want to factor in your spouse's lifespan in your decision.
Who wants to work to 70
Retiring doesn't mean you have to claim Social Security. Many people stop working and still delay Society Security.
@@Dolphinfinancialgroupfl 62 is sensible to take social security because your spending declines as you get older. If you take it and your late 60s its probably not for discretionary income.lol
谢谢。喜欢你的节目