I sold my business at age 62. No more income stream unless I worked. The decision was easy for me: Take SS ASAP.

I do believe that it is in the government's interest to influence us to keep our hands off the money and paying the tax as long as possible. Keep working to 68 and some WILL die without taking a dime. As to the "It's my money" myth: I was paid ALL of my 44 years of contributions in less than 4 years. Now I depend on you to keep working and paying tax.

My advice to the OP: Work as long as you can. We retirees need it!

quote:

Originally posted by cne32507:
As to the "It's my money" myth: I was paid ALL of my 44 years of contributions in less than 4 years. Now I depend on you to keep working and paying tax.

Wow, that's incredible. I had no idea the math worked out like that.

Here's my perspective from a 43 year SSA employee. Some of what I'll say is obvious. There is no "one size fits all" answer to the question of when it's best to start collecting benefits. Your health, your guess regarding your own longevity, your finances outside of Social Security are all factors regarding your decision. Here are a few thoughts and anecdotes from my career.

Contrary to popular opinion, most retirees don't wait until full retirement age to collect. The majority start collecting before FULL RETIREMENT AGE (FRA). Don't have any recent stats, but when I retired that was the case.

I remember talking to one guy applying for benefits at 62. He had been laid off. Given his line of work, finding a new job was unlikely. He needed the money now. He felt bad about "losing" SSA money. At that time FRA was age 65. When I did a simple long division problem for him, he felt much better. Multiply the reduced age 62 amount by 36 (the number of months he collects before he reached FRA - would be more depending on the FRA for the applicant.) This figure is the amount he would have already collected even before he reached FRA. Take the unreduced FRA benefit amount. Subtract the reduced age 62 amount. Take this result and do the division problem with the total benefits payable prior to FRA. This gives you the break even point where you find out when you would have been ahead by waiting until FRA. It always takes at least 12 years (mimimum) before you are "ahead" by waiting to collect. So for him he would be 74 years old before he would be "behind" in the total number of dollars collected. He felt better after I showed him the figures.

One issue I need to address that has come up in the thread. Best way to explain is with a scenario. Guy gets laid off at age 62. He needs the money and starts collecting. The benefit is of course permanently reduced for life, but only if you collect it. So this same guy at age 63 gets a new job. His wages are high enough to suspend his benefits. So he works until FRA, then retires permanently again. The benefit is NOT reduced permanently for life by the age 62 reduction factor. When he collects again the benefit is NOT reduced by all those months he did not collect. It would be reduced permanently ONLY by the 12 months he did collect.

SS tells you how much you will get at each age. I made a spreadhseet with starting ages 62, 66, and 70, and plugged in the numbers.

My SS isn't much because I worked for the Feds/have a civil service pension. SS is only from part-time work.

Starting at 62, I would accumulate $124k if I make it to age 85. Delaying till age 66 and also living to age 85 I would accumulate $135k. Delaying till age 70 I would accumulate $142k by age 85. Not big penalties imo. If I make it to 90, the penalty for taking it at age 62 vs. 70 is $36k after 28 years, again not a big deal to me. I have a separate civil service pension.

So, if I live past 78, I should have waited. If I don't make it past 78, I came out ahead.

I'll take a bird in the had over 2 in the bush.

I turned 67 November 1st. My plan was to wait until 70 to collect. In the space of 10 months this year, I lost my Stepfather, my Mother and my Uncle. My job went overboard as well.

So much for plans. The above events really refocused me on how little time I have left vs thinking I'll live forever.

A couple of weeks ago, I filed for SS. In my case, it will be 108% of FRA. I'll probably get my first SS check in January. I should have filed months ago.

I remain unemployed but on unemployment which ends Christmas week so SS will help out while I keep looking for work. At 67, looking for work, to even come close to what I was making, is a whole different ball game.

I'm on my wife's health/dental plan at work so that's covered and I don't have to pay for Medical B/C/D for several years (she's younger). Most importantly, I have my health and four fantastic daughters.

Quick read thru and I didn't see this one come up.

I am a widower, and thus entitled to the wife's survivor benefits. Like a few others here I got "retired" at 62 with a poor prospect in my field so I chose to work p/t now while it is easier on me. I chose a fun-for-me job at local GS , and collect her SS (hers was substantially less). This allows my benefit to continue to grow about $26 each additional month. When I hit full retirement I can switch to my acct and give myself a nice raise (you only get 1 at a time of course).

quote:

Originally posted by mikeyspizza:

...My SS isn't much because I worked for the Feds/have a civil service pension. SS is only from part-time work...

Watch out for Windfall Elimination Provision (WEP)! This can also hit other non federal gov retirees (public safety, teachers, etc.) who did not pay into SS and later collect enough quarters for an SS benefit.

The Windfall Elimination Provision can affect how we calculate your retirement or disability benefit. If you work for an employer who doesn’t withhold Social Security taxes from your salary, such as a government agency or an employer in another country, any retirement or disability pension you get from that work can reduce your Social Security benefits.

Details:

https://www.ssa.gov/pubs/EN-05-10045.pdf

This message has been edited. Last edited by: Sigmund,

^^^^^^^^^^^^
Hopefully Fred161 will address this issue. Social security seems simple but is VERY complicated.

Good info from everybody here. Just turned 61 myself. Would love to retire, as I’m tired of working. But, just got a new position earlier this year, and the raise was substantial to me. More pressure, but am dealing woth it so far. Can’t retire at full benefits until 67& 10 months, darn it. Hubby still working, younger than me. I prob could retire, but hate to give up that nice paycheck just yet. But, who knows what can happen in the years to come? My parents lived to 90, nearly 92. But....dementia, and stroke good possibility, as that’s what did mine in. And they took care of themselves. His died young comparatively. Will have to see what the situation is next year when I turn 62 and decide from there. Have some savings, and I have 403b, but no pensions for either of us. Just the way life dealt the hand. Still not doing badly at the moment. Need to finish up some fixing of the property before one of us decides if retirement is possible anyway. As long as they don’t push it back yet again, I remember the age being 65 too, then they changed it for me to be 67 10 months. Too soon to make that decision for us anyway. Got another year before I can decide if I’m done with the workload yet.

quote:

Originally posted by mikeyspizza:
SS tells you how much you will get at each age. I made a spreadhseet with starting ages 62, 66, and 70, and plugged in the numbers.

My SS isn't much because I worked for the Feds/have a civil service pension. SS is only from part-time work.

Starting at 62, I would accumulate $124k if I make it to age 85. Delaying till age 66 and also living to age 85 I would accumulate $135k. Delaying till age 70 I would accumulate $142k by age 85. Not big penalties imo. If I make it to 90, the penalty for taking it at age 62 vs. 70 is $36k after 28 years, again not a big deal to me. I have a separate civil service pension.

So, if I live past 78, I should have waited. If I don't make it past 78, I came out ahead.

I'll take a bird in the had over 2 in the bush.

I did a similar spread sheet when I was considering when to start taking SS payments. That was 12 years ago and I came up with the same 78 years old as the break even point, early vs FRA (66). That lines up with the life expectancy of a US male (78.5). Funny how that works. So, if you think you're going to live past 78, waiting might be better if you don't need the cash. Then there's the uncertainty of the government will do with this failing program and also inflation and cost of living, as the COLAs the SS gives is not near enough to cover actual living expenses increases. As you say, a bird in the hand vs trusting the government.

We waited until full retirement age, and at this point I'm happy with that decision.

The post above by Fed161 is something everyone who might be in a similar situation should read, and particularly this:

quote:

Originally posted by Fed161:
Guy gets laid off at age 62. He needs the money and starts collecting. The benefit is of course permanently reduced for life, but only if you collect it. So this same guy at age 63 gets a new job. His wages are high enough to suspend his benefits. So he works until FRA, then retires permanently again. When he collects again the benefit is NOT reduced by all those months he did not collect. It would be reduced permanently ONLY by the 12 months he did collect.

The part about being able to suspend collecting benefits is something I had never even seen mentioned in my research about Social Security, much less explained. With 20/20 hindsight perhaps it should have been obvious that it was possible, but it wasn’t something I even thought to consider.
It wouldn’t have made any difference to me at my decision time, but it could for many people.

Wife and I are both 63 plus, we are waiting until 65 to retire if possible. She is in a retail setting and worries about COVID since the factories around the store have had huge outbreaks. My job is pretty secluded with just my team. Hoping to make it, don't care about the money difference just the insurance part. Our Cobra is over 800 a piece right now. Good luck.

quote:

Originally posted by bgouker:
... don't care about the money difference just the insurance part.

Oh yeah: The insurance part. Forgot entirely about that.

I had decent, not great, but adequate health insurance via my employer. So waiting until my wife and I were both 65 figured into that one big-time. By the time she hit 65 it was only another few months before I'd hit full retirement age.

I ended-up working another six months beyond that only so as not to leave my employer in a lurch.

I received a medical disability pension at age 60 and was also immediately granted SSI disability. I had planned on retiring at 62, and collecting my pension and social security at that age anyway. My ancestors do not have a history of long longevity.

Love this thread! I’m about 8 years from full retirement from a local government job with a pension. My employer has always withheld SS taxes so I do not believe the pension will affect my SS benefits.

Here’s a question: If I start collecting SS at 62 (my intention), therefore getting both SS and my pension, how much can I make working part-time before it starts reducing my SS check? I apologize if this was answered previously in this thread but I didn’t see it.

quote:

Originally posted by G-Man:
Love this thread! I’m about 8 years from full retirement from a local government job with a pension. My employer has always withheld SS taxes so I do not believe the pension will affect my SS benefits.

Here’s a question: If I start collecting SS at 62 (my intention), therefore getting both SS and my pension, how much can I make working part-time before it starts reducing my SS check? I apologize if this was answered previously in this thread but I didn’t see it.

1. You are correct. As long as your employer deducted SS taxes for the entire time you were employed there, your local government pension will not affect your social security benefit in any way. You will get your benefit WITHOUT any WEP (windfall elimination provision) reduction.

2. Your retirement is 8 years in the future. The amount you can earn without affecting your SS benefit changes every year (it goes up every year). Ask the question again a little closer to your retirement. This is the current amount fron the SSA website:

You can get Social Security retirement benefits and work at the same time. However, if you are younger than full retirement age and make more than the yearly earnings limit, we will reduce your benefit. Starting with the month you reach full retirement age, we will not reduce your benefits no matter how much you earn.

We use the following earnings limits to reduce your benefits: If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit.
For 2020 that limit is $18,240.

quote:

Originally posted by preten2b:
Quick read thru and I didn't see this one come up.

I am a widower, and thus entitled to the wife's survivor benefits. Like a few others here I got "retired" at 62 with a poor prospect in my field so I chose to work p/t now while it is easier on me. I chose a fun-for-me job at local GS , and collect her SS (hers was substantially less). This allows my benefit to continue to grow about $26 each additional month. When I hit full retirement I can switch to my acct and give myself a nice raise (you only get 1 at a time of course).

Excellent strategy. The subject is too technical for any lengthy dissertation from me. But you are correct that if you do not collect your benefit, but instead collect a benefit on your deceased spouses account, your benefit amount will increase until you decide to switch over to the higher benefit on your own account.

Fed161, thank you! I really appreciate your response.

As long as we are on the subject generally of SS, and there are many federal, state and local employees who are members, you should be aware of the following issues - Government Pension Offset and Windfall Elimination. Read the links carefully to see if they apply to you. Many of you won't be affected by either because you DID work under Social Security and you did pay SS taxes while you worked in your government job.

https://www.ssa.gov/benefits/r...ent/planner/wep.html

https://www.ssa.gov/benefits/r...planner/gpo-wep.html

https://www.ssa.gov/pubs/EN-05-10007.pdf

quote:

Originally posted by Fed161:
As long as we are on the subject generally of SS, and there are many federal, state and local employees who are members, you should be aware of the following issues - Government Pension Offset and Windfall Elimination. Read the links carefully to see if they apply to you. Many of you won't be affected by either because you DID work under Social Security and you did pay SS taxes while you worked in your government job.

https://www.ssa.gov/benefits/r...ent/planner/wep.html

https://www.ssa.gov/benefits/r...planner/gpo-wep.html

https://www.ssa.gov/pubs/EN-05-10007.pdf

Oh yes, been affected!

Also, working as a private contractor, my employer did not take out taxes or SS. That's another ball of wax at tax time!