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#7074826 - 11/14/12 Question regarding Social Security
Cariboujack Offline
Campfire Outfitter

Registered: 02/14/04
Posts: 9406
Loc: Alaska/Idaho
I turn 62 next month and have been paying into social security since I was 15. My wife will be 64 next fall and has some physical disabilities. We both still work. My question is when you look at what they send you it says how much you will get at 62 and how much you get when you hit 66. Are you stuck at the same amount regardless of when you start social security regardless of starting at 62, 63, 64 or 65 or is there an incremental increase along the way. thanks for the help.
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#7074858 - 11/14/12 Re: Question regarding Social Security [Re: Cariboujack]
captbutch Offline
Campfire Regular

Registered: 07/24/09
Posts: 445
Loc: Michiana
If you start at 62 with X-amount of dollars that is what you will get forever. There is no increase because of age after that.
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#7074875 - 11/14/12 Re: Question regarding Social Security [Re: captbutch]
Cariboujack Offline
Campfire Outfitter

Registered: 02/14/04
Posts: 9406
Loc: Alaska/Idaho
My question is if I wait until I'm 63 or 64 to start will I still be getting what I would at 62 or are there incremental increases depending on when I start.
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#7074882 - 11/14/12 Re: Question regarding Social Security [Re: Cariboujack]
captbutch Offline
Campfire Regular

Registered: 07/24/09
Posts: 445
Loc: Michiana
The benifit goes up with age, but once you take it, it is set.
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The problems we face today are there because the people who work for a living are outnumbered by those who vote for a living.

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#7074891 - 11/14/12 Re: Question regarding Social Security [Re: Cariboujack]
RoninPhx Offline
Campfire Outfitter

Registered: 10/26/05
Posts: 8369
Loc: arizona
caribou:
You get a reduced benefit at age 62 from that you would get at your normal retirement age, dependent on when you were born. Normal retirement age might be age 66. Each year, after 62, the benefit is higher if you start then, rather than 62, till you reach full benefit at what ever your normal retirement age is. You do get benefit increases for COLA adjustments, but they are generally pretty low as the government uses unrealistic inflation numbers to set this increase, which usually is offset by medicare premium costs when you hit that point. You really need to find out from social security as to what your benefit schedule is. My wife started taking social security at age 62, but she didn't make much money, and she IS ten years older than me. When i hit 62, and started taking it, she was able to go to half my benefit, and she got paid double what she was getting.
The rest of it is a long story, and I don't want to get into it on here, but i am still working, and make more than what social security allows me to make without reducing the benefit. I.E. they haven't paid the benefit since around april. This supposedly stops at age 66 for me, when i can make what i want to without reduction.
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#7074953 - 11/14/12 Re: Question regarding Social Security [Re: RoninPhx]
VernAK Offline
Campfire Guide

Registered: 06/27/01
Posts: 2676
Loc: Delta Junction, Alaska
It's incremental!

You will get more if you start at 63 than you would starting at 62 but less than you would get if starting at 65.

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#7074970 - 11/14/12 Re: Question regarding Social Security [Re: Cariboujack]
milespatton Offline
Campfire 'Bwana

Registered: 08/31/02
Posts: 12484
Loc: Arkansas
Be sure and look at any part time work after you start because there is a yearly limit on how much you can make and there is also a monthly limit. If you go over they will take a third of what you made. Also be aware than when figuring your income, any money made in another year does not qualify even if you got it in the same year you start SS. miles
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#7074971 - 11/14/12 Re: Question regarding Social Security [Re: VernAK]
Cariboujack Offline
Campfire Outfitter

Registered: 02/14/04
Posts: 9406
Loc: Alaska/Idaho
Thanks. Is it fairly even per year? Seems to me that what I get at 62 is about $600 less than what I get at 66. One would assume it would go up $150 per month for every year I wait. Is that accurate? I would like to work at least until I'm 66 or later but not sure I'll be able to find a job when I move next year.
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#7074999 - 11/14/12 Re: Question regarding Social Security [Re: Cariboujack]
MacLorry Offline
Campfire Guide

Registered: 06/25/10
Posts: 3207
Loc: polar orbit
They calculate how much you would get at your full retirement age of 66 by taking your best 35 years (indexed for today's dollars), adding them up and dividing by 420 (number of months in 35 years). Then they apply their bending rules to cheat high wage earners to benefit low wage earners. Anyway, they come up with a number that represents what you would get when you turn 66. If you retire at 62 you get 80% of the 66 amount, at 63 you get 85%, at 64 you get 90%, and at 65 you get 95%. So for every year you retire before 66 it cost you 5%. Here's the thing, if you wait until 63 to get a 5% higher amount it will take you 20 years to make it up.

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#7075031 - 11/14/12 Re: Question regarding Social Security [Re: MacLorry]
17ACKLEYBEE Offline
Campfire Kahuna

Registered: 11/04/07
Posts: 19664
Loc: A wash in the west.
My financial advisor told me I was way ahead of the game money wise to retire early. A little less money but for a longer time. People that retire early tend to live longer also. I don't have access to the info he showed me now or I'd share it with you.
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#7075033 - 11/14/12 Re: Question regarding Social Security [Re: Cariboujack]
victoro Offline
Campfire Regular

Registered: 07/18/09
Posts: 1008
Loc: Texas
Cariboujack,
I waited until age 66 because I was still working (not by choice) and it increased my montly SS payment quite a bit over what I would have gotten at age 62. I'm still working (not by choice) and what bothers me is that they're still taking SS and Medicare out of my check. The first year I worked after age 66 they raised my SS check by $9.00 per month the following year because I had paid into SS. It will take me 48 years to get back what I paid into SS that year at $9.00 per month(and that's not counting what I paid into Medicare). I called SS and told them that I was happy with my original SS check based on my original work history and would rather not contribute any more. They didn't care whether I was happy or not.


Edited by victoro (11/14/12)

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#7075053 - 11/14/12 Re: Question regarding Social Security [Re: victoro]
saddlesore Offline
Campfire 'Bwana

Registered: 06/22/01
Posts: 11572
Loc: Colorado Springs, CO, USA
After you reach full retirement age. Most are 66 now. There is no limit on how much you can make by wages.
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#7075113 - 11/14/12 Re: Question regarding Social Security [Re: saddlesore]
MacLorry Offline
Campfire Guide

Registered: 06/25/10
Posts: 3207
Loc: polar orbit
Originally Posted By: saddlesore
After you reach full retirement age. Most are 66 now. There is no limit on how much you can make by wages.


That's true, but you always have to pay social security and Medicare taxes on wages. It doesn't matter how old you are only that you are breathing and working.

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#7075155 - 11/14/12 Re: Question regarding Social Security [Re: MacLorry]
Tracks Offline
Campfire Outfitter

Registered: 01/11/02
Posts: 9417
Loc: Northern Colorado
I waited until I was old enough to get the full amount. That was April 1st 2007. If I had earned more that some set amount in the rest of that year there would have been penalties.
Starting Jan 1 2008, I could have worked as much as I liked with no problems from then on.
I just don't to work anymore.
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#7075222 - 11/14/12 Re: Question regarding Social Security [Re: Cariboujack]
Dantheman Offline
Campfire Regular

Registered: 05/26/05
Posts: 984
Loc: Orange County, NY
I believe one of you could retire and the other could receive a partial spousal check while still working. The longer the working spouse gets to 70 yrs the more they can earn.

Here's one article but please do your own research or ask a financial planner to see if this scenario would be good for you.

Collecting Spouse's SS while still working

Dan

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#7075225 - 11/14/12 Re: Question regarding Social Security [Re: Tracks]
RockyRaab Offline
Campfire 'Bwana

Registered: 05/23/03
Posts: 14618
Loc: Ogden, Utah
You are money ahead to take it the very first day you can.
Let's assume you'd get $1,000/month at 62 and $1,600/month at 66.

If you start taking the $1000, you'd receive $48,000 from then until you turned 66. Now divide that $48k by 600 and you see that it would take 80 months, or almost seven years, to make up the $48k you wouldn't have gotten if you had waited to start accepting the cash. So you wouldn't actually come out "ahead" until you turned 73.
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#7075359 - 11/14/12 Re: Question regarding Social Security [Re: RockyRaab]
Otter Offline
Campfire Guide

Registered: 10/14/06
Posts: 3253
Loc: NW Arkansas
I have a bit more than a year before I reach 62, so I will be investigating this more thoroughly in 2013. Just got an estimated SS statement in August.

Using those numbers - If I start drawing at 62 I will bring in more money than if I wait to start drawing at age 66 UNLESS I live beyond age 77. The monthly amount depends on how much you have made and contributed over your work-lifetime - I think . . .

Kinda depends how long you think you'll live. And THAT is a guess . . .
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#7075387 - 11/14/12 Re: Question regarding Social Security [Re: Otter]
Cariboujack Offline
Campfire Outfitter

Registered: 02/14/04
Posts: 9406
Loc: Alaska/Idaho
That does concern me. I've got 4 friends that have died in the last two years, none made it to 66. The guy whose celebration of life I went to last night was 64. Makes a guy think.
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GOD BLESS OUR TROOPS
ESPECIALLY THE SNIPERS!
"Suppose you were an idiot And suppose you were a member of Congress... But I repeat myself."
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#7075404 - 11/14/12 Re: Question regarding Social Security [Re: Cariboujack]
2legit2quit Offline
Campfire 'Bwana

Registered: 04/19/10
Posts: 14320
Loc: cold & forbidden
ooh ooh take the money and run!


I've got 8 more years before I turn 62, I fully expect it to be "means determined" by then.

I also hope to have the means that they say I don't get any SS if it is indeed means tested.

but I plan to get as much back ASAP whenever I'm eligible. Great thread for us geezers and geezer wannabes.

good luck Marlin
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#7075460 - 11/14/12 Re: Question regarding Social Security [Re: Cariboujack]
17ACKLEYBEE Offline
Campfire Kahuna

Registered: 11/04/07
Posts: 19664
Loc: A wash in the west.
Originally Posted By: Cariboujack
That does concern me. I've got 4 friends that have died in the last two years, none made it to 66. The guy whose celebration of life I went to last night was 64. Makes a guy think.


That's why the money you pay into SS should go into your own private account and what you don't draw should go to your estate. That's the real reason Tards don't like ROTH IRA's. SS is nothing short of a ponzi scam.


Edited by 17ACKLEYBEE (11/14/12)
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#7075843 - 11/14/12 Re: Question regarding Social Security [Re: 17ACKLEYBEE]
Cariboujack Offline
Campfire Outfitter

Registered: 02/14/04
Posts: 9406
Loc: Alaska/Idaho
I agree, gov't is full of ponzy schemes. I think Bush was on the right track encouraging private investments for retirement.
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GOD BLESS OUR TROOPS
ESPECIALLY THE SNIPERS!
"Suppose you were an idiot And suppose you were a member of Congress... But I repeat myself."
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#7076172 - 11/15/12 Re: Question regarding Social Security [Re: Cariboujack]
Texas99 Offline
Campfire Regular

Registered: 12/10/07
Posts: 910
Loc: Texas Coast
I started drawing SS as soon as I was eligible. Of course, I was already retired, but if I had passed on that $1,600/month for another four years, it would have taken me a long time to get it back at the higher rate. A good friend who was well enough off that he didn't need it in the first place waited until he was 66, then died of cancer at 67.
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#7076326 - 11/15/12 Re: Question regarding Social Security [Re: 17ACKLEYBEE]
savage62 Offline
Campfire Tracker

Registered: 06/15/09
Posts: 6630
Loc: Mi
Not only that S.S. is no more it became a goverment annewity about a year ago . Now how many of use new about this

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#7076576 - 11/15/12 Re: Question regarding Social Security [Re: savage62]
OrangeOkie Offline
Campfire Outfitter

Registered: 01/04/09
Posts: 7547
Loc: Oklahoma
I turn 60 this Saturday. I read this article from Forbes and learned quite a bit.


The Big Decision: When To Take Social Security

When should you apply for Social Security? It’s a simple question with no simple answer. In fact, coming up with the perfect answer requires you to be part actuary, part financial planner and part fortune teller. Still, you can make a better decision if you take the time to understand some of the twists in how benefits are calculated.

Before we venture down that winding road a warning for the oldest baby boomers, who turn 65 this year: Regardless of when you take Social Security and when you stop working, you need to enroll in Medicare when you first become eligible at 65, or you could face financial penalties in the form of higher premiums. (You can start the sign-up process here, up to three months before the month of your 65th birthday.)

By contrast, you can start collecting Social Security anytime from age 62 to 70 and the later you start, the bigger your benefit. Just how much bigger depends on when you were born. Americans born from 1943 to 1954 have a “normal” or “full” retirement age of 66. They get 25% less than their normal benefit if they cash in at 62 and 32% more than their normal benefit if they wait until 70. (Those born in later years have a slightly higher “normal” retirement age which means they take a somewhat bigger hit for claiming their benefits early and get somewhat less of a bonus for waiting until 70.)

Say you are turning 62 this June and earn $50,000 a year. You could collect about $988 a month at 62 years, or $1,391 a month (in today’s dollars) at your full retirement age of 66 in 2015, or $1,934 a month (again in today dollars) starting in 70 in 2019. If you’re earning $150,000, the comparable monthly amounts would be $1,760 at 62, $2,388 at 66, and $3,209 at 70. (You can estimate your benefits here.)

While those benefit amounts sound dramatically different, in theory the system is actuarially neutral—meaning if you live to an average age, you’ll end up with roughly the same total benefit no matter when you claim. But that’s not really the case. The most obvious example of this: women live longer, but benefits aren’t adjusted by sex. So women are more likely to live past the “break-even age”—that is, the age at which waiting to collect a bigger check pays off.

Here are some points to consider when making your decision:

If you’re still working, don’t claim benefits before your full retirement age.

After studying at length when folks should claim their benefits, David P. Richardson, a principal research fellow at the TIAA-CREF Institute, concludes “it’s a very idiosyncratic, very difficult decision” and that there is only one generally applicable rule of thumb. Says he: “Never claim early while working unless you really need the money to survive.” That’s because of the earnings penalty. Until you reach the full retirement age, for each $2 you earn above $14,160, you lose $1 of your annual Social Security benefits. (Update: In 2012, you’ll start losing benefits above $14,640.) After 66, benefits don’t get cut no matter how much you earn. If you reach 66 in 2011 you can earn $37,680 in the months before you reach 66, without affecting your benefits. (Update: If you reach 66 in 2012, you can earn $38,880 in the months before you reach 66, without losing benefits.) For each $3 you earn above those ceilings, you will lose $1 in benefits. Note that if you take early benefits and then earn too much, your check will be increased some at your full retirement age to take account of what you lost. But when all the different adjustments and taxes are considered, Richardson says, it just doesn’t pay to take benefits while you’re still earning a decent salary.

Don’t take Social Security until you’re sure you want it.

In December, the Social Security Administration effectively killed a “do-over” strategy that had allowed seniors to file for benefits and then later repay them, without interest, and get a bigger check. In effect, you got eight years—from 62 to 70– to change your mind about taking early benefits. You could even use a do-over as a way to get an interest free loan from the government. But since the December change, you have only 12 months to change your mind after initially filing for benefits. (More on this development, as well as how it affects those who are already retired, is here.)

Consider your family genes and general health.

If you don’t need an early check to make ends meet, and particularly if you’re single, this could be a significant factor in your decision. A calculator on the Social Security site will give you average life expectancy, without regard to your health or family history. It shows a woman turning 62 next month will live to an average of 85.1 and a man to 82.6. But when TIAA-CREF sells annuities —and people who buy annuities tend to live longer—it assumes a 62 year old woman will live to 89.4 and a man to 86.6. Play around: Numerous sites on the web will calculate your life expectancy taking into account your health, family history, exercise, eating, drinking and driving habits and even social relationships. If you’re in poor health, and you want to get some of your tax dollars back, it can make sense to claim Social Security as early as possible.

Don’t get hung up on the break-even date.

You’ll hear a lot of talk about the “break-even” age—the age you have to live to so that waiting to collect a bigger check pays off. But be aware that this age depends on the discount rate you apply when valuing future benefits. (The higher the discount rate, the longer it takes for you to break even by deferring benefits. For example, Richardson calculates, using a 2% real discount rate, waiting until 66, instead of taking benefits at 62, pays off if you live until around 80; using a 4% rate you must live until 84.)

Moreover, just looking at the break-even age understates the price you pay for claiming benefits early, particularly if you’ve got hardy genes, experts say. Anthony Webb, of the Center For Retirement Research at Boston College, argues that by waiting to claim a bigger check you’re buying “longevity insurance”—that is insurance against outliving your money. Put another way, by waiting, you’re buying a larger inflation adjusted lifetime annuity for a lot less than you could buy a commercial annuity, even from a low cost, no-commission provider. “This is the first port of call for buying an annuity,’’ says Webb.

Understand the couples game.

Here’s where claiming strategies can get really complicated—and where understanding the Social Security rules is even more important. Remember that supposed actuarial equivalence of early and delayed benefits? It doesn’t take into account the favorable way Social Security treats married couples. If one partner dies, the survivor can claim the deceased spouse’s check instead of his or her own, assuming the dead spouse’s check is bigger. This is crucial because of something known in the actuarial and insurance businesses as joint mortality: With two individuals, there’s a greater chance that at least one of them will live to a ripe old age and collect that bigger check. The upshot: At least one partner (usually the higher earning one) should delay benefits well past 66, to buy that higher lifetime “second-to-die” annuity for both of them.

Then there’s the issue of how spousal benefits are calculated when both partners are still alive. When you claim benefits, you’re eligible for what you yourself have earned, or up to half of your living spouse’s full retirement benefit, whichever is higher. A low earning spouse who is relying on spousal benefits takes an even bigger early claiming hit than a primary wage earner–if she claims benefits at 62, she gets just 35% of the primary earner’s full retirement age check, instead of 50%. On the other hand, she gets no extra benefits for waiting past full retirement age to claim her check. So, for example, if a husband is four years older, a one-income couple would receive the maximum benefit if the husband claimed at 70 and the wife put in for her spousal benefits at 66.

But there’s yet another angle. Suppose a couple wants at least some cash coming in from Social Security before the hubby reaches 70? Once he reaches his full retirement age of 66, he can claim his benefits and then ask that his claim and his benefits be immediately suspended. He then can continue to wait for a bigger benefit, while his wife is now eligible to claim spousal benefits. (For more on this strategy, read the Center For Retirement Research paper here. )

And there’s this: Once you reach full retirement age, you can choose to take benefits as a spouse, while deferring your own earned benefit until later. So in a two-income marriage where the partners are the same age, one might claim benefits at 66. The other could then claim 50% of those benefits as a spouse, while allowing his or her earned benefit to build until 70, buying longevity insurance for both of them.

“There’s a view that Social Security is a simple system. But it’s actually very complex,’” says Richardson. And, he notes, the cost of making the wrong decision can be large.
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