Getting time to start looking at when to cash in. Be it 62, 65 or 70? Well I just looked and they have records of taxable SS wages going back on me to 1971. I was 7 years old when I first started giving money to that ponzie scheme! Well at least me or my wife will collect the money if I kick off before 62!

I'm still long off from collecting mine. But I have been helping my mother look into to see when she should start collecting.

Most of her sisters were impatient and collected ASAP which I believe the earliest age is 63 but they made more money than she did. Right now she just turned 64 and at the earliest she will start next year at 65. The reason is she still works and plans on working a few more years so if she collects now they take 20 percent of your Social Security as a penalty until you hit 65 then it goes away. This only applies to those who are still working.

So she is going to wait until at least age 65 which will earn her more on her benefits also no 20 percent penalty.

From what I have skimmed online depending if you really need the money now or have health problems you may want to collect now if you can. Because the moment you pass on the checks stop coming.

If you waited until you were much older say 68-70 and only live a few months to a year or two then die, yeah the checks will be bigger but you could have gotten many more slightly smaller ones over a longer period of time. You never know what the future holds you may have a heart attack or be hit by a drunk driver. So don't let the government keep any left over money they stole from you.

What is called "full retirement age" is different for folks depending on the year of your birth. For me it was 65 for full SS benefit; for others is might be 66 or 67 (and Congress may change that again in the future).

There is an option for "early SS retirement" at age 62 with the benefit reduced pretty significantly. If early retirement (prior to full retirement age) is selected the recipient is limited in the amount of earned income allowed. Generally, what that works out to be is a $1 reduction in monthly benefit for every $2 of earned income in excess of the annual limit (currently about $16K to $17K per year).

We discussed these things with our financial advisers and had the comparisons done based upon our annual SS benefit notices. What I learned was that my "break even point" would be at 17 years. That is to say that if I waited until full retirement age to take SS benefits it would be 17 years before the total amount of payments would equal what I would have had with claiming benefits at age 62.

Every individual's earnings and benefits records will differ to some degree, so this is not a definitive statement for your decision making. Consult a trusted financial advisor for the best information in your case.

My wife took early SS at 62. I was still owner-operator of a good business so I continued until locating a buyer for the business, then claimed SS at 64.

Note that the restrictions on income apply only to earned income (salaries, wages, tips, commissions, etc), not to retirement funds or interest and dividends on investment accounts. Capital gains (such as the sale of my business) are also excluded from earned income.

I hope this helps. I also hope that you have a trusted financial adviser to give better advice than you will find on internet forums!

If you will go to SSA dot gov, (make darn sure you are at the legitimate site) well here ya go anyway SSA.GOV and create your account, you will be able to look at your earnings records as well as look at what you can draw at different age and months. You can also download and print your projected payments. You can play around with the age slider thing and get a pretty darn accurate amount you will be able to draw at age/month.

From that you can do some simple math, or use a spread sheet figure what you lose/gain by drawing early vs 65 vs later years. This will help you decide what to do.

My neighbor is 59, he claims he is going to start drawing his at age 62 and just work part time. He's just flat out burned out from all those years of grinding out a job. He says he has run the numbers, and he will lose $500 a month if he starts at 62, vs his official retirement age of 66 years and 9 months.

Best of wishes to you.
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My plan is to sign up for my SS when I retire from LE in 2024. I'll be 63 if that happens.

I figure with my LE pension and SS, I should be comfortable. My house is paid off and the only real debt my wife and I have is a car loan.

My wife is on SS disability and while I could wait until I'm 67 to get a bigger SS cut, I plan on on doing it at 63.

quote:

now they take 20 percent of your Social Security as a penalty

Actually the penalty is 50% over $18960 in 2021. The penalty actually is much higher because it is after taxes & SS. Consider the real penalty is about 75% of all income over $18960.

quote:

Originally posted by Steve in PA:
My plan is to sign up for my SS when I retire from LE in 2024. I'll be 63 if that happens.

I figure with my LE pension and SS, I should be comfortable.

Be wary of the WEP. It might or might not affect you. It greatly reduces SS benefits in some cases where you also have a LE pension. WEP did hit my wife with her LE pension. It cut her SS benefits by more than half.
 
The Social Security Windfall Elimination and Government Pension Offset Provisions for Public Employees.

far from an expert on which age is better... and it is always a gamble...

for me... I came as close to dyeing as you can at age 61 and 3/4s and so figured I better get what I can back while I was still standing...

but having worked for myself for the previous 35 years and being my own accountant I had not paid a lot into SS and so don't really collect that much every month anyway... so I'm sill working and making sure I don't make enough to damage that income.

WEP would have hit me hard, so I'm going to wait and have my wife carry me as a dependent when she reaches full age.

Judging by the age my friends have been upon their demise, I'd say take it at 62.

My Financial Advisor agreed with me.

quote:

Originally posted by LoboGunLeather:
We discussed these things with our financial advisers and had the comparisons done based upon our annual SS benefit notices. What I learned was that my "break even point" would be at 17 years. That is to say that if I waited until full retirement age to take SS benefits it would be 17 years before the total amount of payments would equal what I would have had with claiming benefits at age 62.

There is a flaw with that thinking. Perhaps two.

The first flaw is that your monthly income is less if you take early SS retirement. You have to do the math. Collecting the same amount over a longer time is no good if it's not enough per month upon which to live comfortably--or even survive.

The second potential flaw is if, while employed, you're building a retirement plan, such as a 401K. Retiring early means that many years of contributions denied the fund.

I waited until full retirement age. As a result: Between SS and a modest monthly withdrawal from our retirement account, plus the fact we were able to pay the house off two years after retirement, we're now in better financial shape than we were when I was employed, we have a much better medical plan, and, despite the withdrawals, our retirement fund continues to gain value.

quote:

Originally posted by henryaz:

quote:

Originally posted by Steve in PA:
My plan is to sign up for my SS when I retire from LE in 2024. I'll be 63 if that happens.

I figure with my LE pension and SS, I should be comfortable.

Be wary of the WEP. It might or might not affect you. It greatly reduces SS benefits in some cases where you also have a LE pension. WEP did hit my wife with her LE pension. It cut her SS benefits by more than half.
 
The Social Security Windfall Elimination and Government Pension Offset Provisions for Public Employees.

it eliminated my SS completely. I was going to claim on my wife's contributions as I had two LE pensions, neither of which were full term (30 years contributions), and after jumping through all the verification hoops over a couple of months I was informed that 'We have determined you qualify for SS, but we're not going to pay you anything as you have too much income.'

quote:

Originally posted by Anush:

quote:

now they take 20 percent of your Social Security as a penalty

Actually the penalty is 50% over $18960 in 2021. The penalty actually is much higher because it is after taxes & SS. Consider the real penalty is about 75% of all income over $18960.

Once you reach full retirement age you are not limited to how much you can make.

quote:

Originally posted by Flash-LB:
Judging by the age my friends have been upon their demise, I'd say take it at 62.

My Financial Advisor agreed with me.

That's what I did.

It depends on your individual situation on when you should take Social Security.

The first consideration is if you think you'll die sooner or later. Are you in good health? Did your parents die naturally at an old age or did they die of things that they could have passed to you like diabetes or bad heart. If you think you'll die sooner, then might as well get social security as soon as you can and enjoy life more.

If you think you'll live a long time, then the question is: do you need the money now to survive?

If you don't need the money to survive, then the next step is to wait until Full Retirement Age. The ROI on waiting until Full Retirement Age is pretty good. You'll need to run the calculations on your own projected cash flows. Mine ended up to be close to 30%.

The next consideration is: will you be having to deal with required minimum distributions from your tax-deferred retirement accounts? If you are, then a good strategy is to optimize taxes by converting a portion of your tax-deferred accounts into Roth IRAs ahead of the RMD up to the top level of your current marginal tax. How social security affects this is that taking social security reduces the amount of tax-deferred money you can convert before hitting the ceiling of your marginal tax rate.

Worked for SSA for 42 years prior to my retirement. The comments so far have been on target. Nothing said so far that I would disagree with. The main thing I would say is that it's obviously an individual choice. I disagree with many financial advisors and others who seem to suggest that the most advantageous choice for almost everyone is to go for the higher benefit and delay collecting as long as possible. That's wrong. Do the math. Compare the benefit amount from the earlier entitlement date to the amount payable later. How long will it take to recover what you lose by not collecting at the earlier date and waiting for the later date.

quote:

Originally posted by Fed161:
Worked for SSA for 42 years prior to my retirement. The comments so far have been on target. Nothing said so far that I would disagree with. The main thing I would say is that it's obviously an individual choice. I disagree with many financial advisors and others who seem to suggest that the most advantageous choice for almost everyone is to go for the higher benefit and delay collecting as long as possible. That's wrong. Do the math. Compare the benefit amount from the earlier entitlement date to the amount payable later. How long will it take to recover what you lose by not collecting at the earlier date and waiting for the later date.

And correct me if I'm wrong , when you go to the SS website and look at your benefits calculator , the difference ( $ ) between age 62 and full retirement age is based on you continuing to work and contributing to the system .

There is an element of complexity for married couples when one spouse makes more than the other. In such circumstances you need to consider how long both will live in deciding when to take SS. Financial planners have really good software tools to run the numbers. I plan to pay a few bucks and get a print out that shows the impact of the various alternative.

SS is taxed upwards of 85%, depending on your total income at retirement.

(Thank you Bill Clinton)

For a single person, if your Pension income, your SS payment and other income exceed $25K AFTER deduction adjustment, your SS will be taxed.

I chose to fully retire at age 63 and yes I do get taxed on my SS yearly amount because my adjusted income is greater than $25K.

Don't forget, your monthly SS amount will be reduced to pay out for Medicare.

[/QUOTE] And correct me if I'm wrong , when you go to the SS website and look at your benefits calculator , the difference ( $ ) between age 62 and full retirement age is based on you continuing to work and contributing to the system .[/QUOTE]

Yes it does. Unless you specify a retirement date that precedes the date when you reach age 62 (the earliest age at which you can receive retirement benefits), the calculator assumes you will have covered earnings up to the year in which you start receiving a benefit. That's true whether you plug in age 62 or full retirement age (FRA).

One other word about delaying benefits to go after a higher benefit. If your die before you collect, you get nothing. Knew a guy at church who asked me about collecting early vs waiting for a higher benefit. He went with waiting to get the higher benefit. He was in great health (or so he thought). Exercised regularly. Dropped dead of a brain aneurysm at age 63. Never collected a dime. His wife of course will be eligible for widows benefits, but she would have been eligible for the same amount whether he collected or not.