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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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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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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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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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Originally Posted by savage62
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
Yeah, now they're calling it a 'benefit' instead of drawing our own money, like it's out of THEIR pockets instead of ours.


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Man there is sure some good stuff here. Lots of people can learn from this.


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remember, these are the people that want to run your health care.
my wife is ten years older that me, and at age 62 she took earlier social security under her own benefit, which wasn't much as she had not made much money. When i turned 62, i filed for social security because among other things, it doubled her check. Now i am still producing income, way above the 14k cap. They stopped paying BOTH our checks around april, to reclaim the overpayment because of my income level. Hers was stopped too because now hers is based upon my benefit. We have gotten about six letters in the last month regarding this. Asking me to calculate what i expect to make(how do I know), and so on. Last week she got a letter stating they were going to pay her, which they did, about 2/3rds of what they hadn't paid, due to reclaiming the money based upon my income, and they were going to Lower her benefit in stead for about 24 months. okay. A couple of days later another letter saying, no, next month we are going to pay the full benefit. Okay. I am still waiting for a letter to see if they are going to retro and pay what they haven't been paying me.
Now a lot of this is funky because i turn 66 in december next year, which means unless i get ambitious and make over 37k, they can't poo poo me again.
And another letter, since they weren't paying her benefit, they said they would bill me in advance for three months of the medicare payment rather than taking it out of the check they weren't paying. Life is wonderful.


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I keep remembering my dad who made it about six months into his early retirement at age 62. I would like to get back at least what i paid in.


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Originally Posted by Cariboujack
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.


Basically, you'll permanently loose 8% for each year you are under your "full retirement age" (Google "full retirement age" and determine yours). For each year OVER your "full retirement age", you'll get 8% more for each year (up to age 70). This is done so that each individual will receive the same amount over their lifetime regardless of when they start collecting social security. I started collecting SS at age 70 (still working) and save each month's check.

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Originally Posted by RockyRaab
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.


Correct Rocky, except that you'd get a larger check each month by waiting (I started at age 70 and receive $2220/month). If you don't need the money, you'll get a larger monthly check (and live better) by waiting. It is an individual decision that depends on each set of circumstnaces.

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My main concern is what is best for my wife after I die (assuming I die first,) which I am convinced is going to happen. If she dies first, I have no concerns. If I die first and she lives to 90+ I want her to be able to support herself without the kids having to get involved. My second concern is for my kids and grand kids. I would like to be able to leave a meaningful inheritance for them as well. I fear they are going to have a much more severe financial ride in life than did I. I am convinced that business ownership is the way to go now days. Count on yourself and your own actions and behavior for what you are able to provide for your family.


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Kiplinger's has a section on maximizing SS benefits at: http://www.kiplinger.com/reports/maximizing-social-security-benefits/

You can also "Google" your question and get an (and probably several) answer.

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I'm 64. I checked the difference in the SS check if I retire at 65 or 66. It's $130/mo. It would take 13.8 years at the age 66 rate to get back what I'd lose by waiting the extra year. 65 is looking pretty good right now.


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one of the bigger differences is you're not eligible for Medicare till 65. If you stop working full time you lose health insurance. I know several guys who retired at 62 only to find out that insurance check every month was hard to write. Most of them have gone back to work.

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you are still getting hosed, whenever you take it.
they have been withholding money for years that had certain purchasing power attached to it at that time, then paying you an annuity in essence with unrealistic cola adjustments in deflated dollars.
Kind of like the old savings bond scheme. And medicare premiums are age related among other things, that eat up the cola adjustment on the social security.
A lot of people buy the way on medicare don't know those premiums are means tested.
I have gotten several letters and phone conversations by the way recently regarding medicare and the supplement plans. If you are low income there are programs to pay that stuff, the premiums for you.


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It turns out that those most likely to receive a spousal benefit while using �Claim Now, Claim More Later� are the husbands in two-earner couples. Previous research has found that married women will maximize the couple�s expected lifetime benefits by claiming early. As a result, the way an optimizing couple would use �Claim Now, Claim More Later� is for the wife to claim at 62 and, once her husband reaches age 66, he would claim a spouse�s benefit based on his wife�s earnings. At age 70, he would claim the maximum amount of his own retired worker benefit due to the delayed retirement credits, and stop receiving the spousal benefit. Of course, if the woman is the higher earner, the story works in reverse. Link


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My wife and I both turned 66 this year, and both decided to start taking SS.
My wife was initally planning to wait until 70 to get her max benefit, but when we looked at what that amount was, and what she would get from mine as a survivor benefit if/when I die before her, it was nearly the same amount. The decision to start this year was a no-brainer.

Just as a point of interest- we looked at what we had both paid into SS, plus our employer's contributions, and it will take roughly 10 years for our current benefits to burn thru that amount, but that doesn't take into account the value of the money at the time we paid it in. It's probably more likely that the equivalent value of what we paid in, vs. what we will take out, would take 30-40 years to equalize.


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