If you look back at the beginnings of SS in the late 1930s, the life expectancy in the US was males around 55-60, females (depending upon number of pregnancies) 50-55. So SS setting in at 65 meant little payment out by the Gov't. Remember, no antibiotics, very few "vaccines" (cowpox for smallpox), no pain remedies except for aspirin and opiates such as morphine. Dave_n
Drawing Social Security early....
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JohnHL
Member
Some folks say, "Tomorrow is never guaranteed, so take SS as early as possible."
Seems like good advice, except for some of us, that plan could go horribly wrong, and we could end up living a lengthy and healthy life well past the age of 90 or even 100!
Oh the horror of having a long and happy retirement.
I shudder to think about it.
John
Been retired since I was 55, am almost 68 now, and waiting until 70 for SS.
Seems like good advice, except for some of us, that plan could go horribly wrong, and we could end up living a lengthy and healthy life well past the age of 90 or even 100!
Oh the horror of having a long and happy retirement.
I shudder to think about it.
John
Been retired since I was 55, am almost 68 now, and waiting until 70 for SS.
Sistema1927
US Veteran
I retired from my paying job at age 55 with a defined benefit pension with no SS deductions, so my contributions history was set. I began drawing SS at age 62, and it has already had several COLA's. Based upon my earnings history, my SS payment at 62 was higher than what is advertised as the average benefit.
All of this has allowed me to devote my time to volunteer service even though some of it has slowed down due to the COVID pandemic.
All of this has allowed me to devote my time to volunteer service even though some of it has slowed down due to the COVID pandemic.
Anybody know how income from a company pension is classified? Is it like earned income (reduces your SSI payment) or is it like interest/dividends/capital gains?
Given that most men in my family have not made it to 70 I will
Anybody know how income from a company pension is classified? Is it like earned income (reduces your SSI payment) or is it like interest/dividends/capital gains?
Given that most men in my family have not made it to 70, God willing I will start drawing mine just as soon as I am eligible at 62 - which will be exactly 4 years from yesterday.
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I'm no expert but as far as I know you don't actually "lose" anything. Any payments withheld due to failing the earnings test are credited back to your account, raising your payment at a later date. Earn what you want.
This could have been me. For health, family and job issues I ended up retiring at 63 1/2. Right before I retired, a new Nurse Practitioner took over my case for my diabetes. Apparently I was a wreck and didn't know it. She told me later on that she didn't think I was going to make it. I retired on December 31, 2015 at 3:30 PM (but who's keeping track), and I'm still here. Retiring early made it possible for me to concentrate on taking care of myself and eliminated a lot of stress and possibility of danger (commuting on the Baltimore Beltway).
It is amazing to go to the program on the Social Security web site and see how long it takes to even out the total benefits received as between taking early retirement and waiting until full retirement age. The difference in my case was 13 or 14 years, and at the rate I was going I might not have gotten close to that. Now I have a chance based on the life spans in my family.
Use this program on the Social Security web site to calculate what your monthly benefit would be at different ages. I did that, and being a Luddite I took pencil and paper to determine how much money each month I would actually put in my pocket. I was not going into my peak earning years so that was the kick in the pants that inspired to do this. With my commuting expenses taken out of what I would actually put in my pocket, I calculated that if I kept working I would put the princely sum of $20 more per month in my pocket as opposed to retiring. I figured I could squeeze $20 a month somewhere and I dropped the hammer to file for Social Security and the rest is history.
Sistema1927
US Veteran
My pension does not reduce my SS benefits. YMMV.
Huskerguy
Member
The age old question of when to take SS.
Everyone has an opinion and of course, different circumstances. As for the earnings piece from the OP, I ran into that and figured why take a reduced amount at 62 if I wanted to keep working. I retired last June along with my wife.
Several mentioned health, that is a big one. If your health is not great, might be good to take it earlier. Here is what I don't think people count on though. At age 65 if you sign up for Medicare Part B you will be charged for it if you ARENT taking SS. Neither my wife and I are taking SS, she is waiting for her FRA which is 66-2. However, with both of us on medicare we send them a check every quarter for our share. So the number you see, lets use $2,000 a month is not really $2,000 a month at 65.
Yes, you will see an 8% increase each year up to age 70. I have seen people say they are going to wait longer but there is absolutely no reason to do that.
There is also a surviving spouse to figure. My wife worked but never made a lot of money and she will get my SS when I pass. She has excellent longevity in her family so I am gambling that she will use my SS long after I am gone.
A quick story. My father's family including his parents all died fairly young, 60's. He had a couple brothers make it to early 70's. He didn't plan on living to where he is now, age 90. He was a very poor planner, never saved a dime all those years. He took SS at age 62 and it is $1,206 a month after all these years. What little increase you get goes right back out to medicare and taxes. Luckily he has a military pension or he would be in trouble.
I don't thing taking SS is an isolated decision. Do you have debt, if so, get out of it, work a little longer, whatever it takes. Don't incur more dept. Learn what it really is going to take to live in your "golden years" and then make your decision. I tend to err on the side of being conservative. I was planning to take SS at 64, then 66 at my FRA but now likely it will be 67.
Why you ask? Well, right now I don't "need" the money although I could use it and I know it is there for my wife.
The other school of thought which is where I am leaning now is to take it at 67 (whatever you decide based on your circumstances) and invest it IF you don't need it to live on. If you make over the 8% you are money ahead.
There are lots of ways to skin the proverbial cat in this case.
Everyone has an opinion and of course, different circumstances. As for the earnings piece from the OP, I ran into that and figured why take a reduced amount at 62 if I wanted to keep working. I retired last June along with my wife.
Several mentioned health, that is a big one. If your health is not great, might be good to take it earlier. Here is what I don't think people count on though. At age 65 if you sign up for Medicare Part B you will be charged for it if you ARENT taking SS. Neither my wife and I are taking SS, she is waiting for her FRA which is 66-2. However, with both of us on medicare we send them a check every quarter for our share. So the number you see, lets use $2,000 a month is not really $2,000 a month at 65.
Yes, you will see an 8% increase each year up to age 70. I have seen people say they are going to wait longer but there is absolutely no reason to do that.
There is also a surviving spouse to figure. My wife worked but never made a lot of money and she will get my SS when I pass. She has excellent longevity in her family so I am gambling that she will use my SS long after I am gone.
A quick story. My father's family including his parents all died fairly young, 60's. He had a couple brothers make it to early 70's. He didn't plan on living to where he is now, age 90. He was a very poor planner, never saved a dime all those years. He took SS at age 62 and it is $1,206 a month after all these years. What little increase you get goes right back out to medicare and taxes. Luckily he has a military pension or he would be in trouble.
I don't thing taking SS is an isolated decision. Do you have debt, if so, get out of it, work a little longer, whatever it takes. Don't incur more dept. Learn what it really is going to take to live in your "golden years" and then make your decision. I tend to err on the side of being conservative. I was planning to take SS at 64, then 66 at my FRA but now likely it will be 67.
Why you ask? Well, right now I don't "need" the money although I could use it and I know it is there for my wife.
The other school of thought which is where I am leaning now is to take it at 67 (whatever you decide based on your circumstances) and invest it IF you don't need it to live on. If you make over the 8% you are money ahead.
There are lots of ways to skin the proverbial cat in this case.
Dividends, capital gains and pensions will affect your Medicare Part B contribution.
NYC/NYS reimburses all retirees for Part B.
NYC/NYS reimburses all retirees for Part B.
i retired at 59 but as a professional pilot one must pass that FAA medical at least every year and depending on what FAR Part you operate under it could be every six months. I started my SS at 62 when I figured out how much I would lose on a monthly basis and how long it would take to recoup at some future higher rate. I'm 72 now and even if i hit that break even point it won't make a bit of difference to me. The point on debt is an excellent one. We owe no one any thing. Period! Cash is king, pay off CC's every month. No exceptions. Early planning and hard work pays off. If you contribute to a retirement system that gives matching funds with a minimum contribution, by all means, make that minimum, even if you have to give something up. If you don't do that you are giving up free money. There are other things but those are the high points. Don't rely on SS. It might not be there when you qualify,
I am no financial wiz but I have been able to live quite well in retirement, and will continue so. We are not rich and inherited nothing.
I am no financial wiz but I have been able to live quite well in retirement, and will continue so. We are not rich and inherited nothing.
xring33
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I retired at 62. Wife has medical problems that keeps me busy with her. Not complaining but, life does throw monkey wrenches in the best plans. I was ready to retire at 62 anyway as my last job was so bad that anything had to be better. House and vehicles are paid for and medical insurance is covered. One thing is to save for retirement yourself. Union or company sponsored programs can go bust. A company I worked for was supposed to pay the expenses on the 401K program and didn’t. The bank that managed it took the expenses out of the employees retirement funds. No warning to the employees. Lost a couple of grand before I could get out of it. Use care.
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I started drawing at 62 - not really by choice. My doctor told me that my Type 1 (?) personality, being hyper and a workaholic, and strung tighter than a piano string, I'd die well before reaching full retirement age. I took his advice, but still had my heart attack - but I lived through it - wouldn't have had I still been working. The slightly less monthly SS check was a good tradeoff in my case.
Hair Trigger
US Veteran
This is why I opted to retire at 65 instead of waiting a year until I turned 66, which was my full benefit retirement date. It may pay to wait until being closer to your full benefit date than going as early as possible, because the percentage you lose is greater with every year earlier than your full benefit date. In my case, the math was pretty simple. What amount per month I lost by retiring a year earlier than my full benefit date, I made up in what I received by taking a lesser amount a year earlier. I lost 3% of my full benefit amount, but it will take 14 years to come out even because I get a full year of benefits I wouldn't have otherwise gotten.
As someone has already said, you lose $1 of your SS benefit for every $2 over your income limit. I think the more important thing by retiring that far back from your full benefit date is the percentage of the full benefit you lose. I don't know the exact percentage per year, or what your full benefit date is, but I lost 3% of my full benefit amount by retiring a year "early". As I said above, it will take me quite a few years for that to even out, but the earlier you retire, the larger the percentage you lose from your full benefit, and that is a permanent thing, so find out how much you're going to lose and do the math to see how that adds up over time. If you have a second retirement income like a pension, that may offset the loss enough that it doesn't matter.
In the case of earning money while you're drawing SS, that reduction applies until your full benefit date. Once you've reached your full benefit date/age, you can make as much as you want with no reduction in your SS benefit.
Nor does mine. It depends on how the pension you have was set up by your employer, or the type of pension it is, I forget which.
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My police pension would have reduced my SocSec by about $400 monthly, but I've paid in 29 years not including those 20, so it will actually cost me about $40 a month now. Not willing to work another year for $40 per month more in SocSec!
GypsmJim
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My Grandpa retired in 1958 at age 58 due to health reasons. At that point he had only paid into SS for 20 years, and earning a meager salary at that. They barely survived on Grandma's pittance as a cleaning lady.
At age 62 he started collecting his SS. They were so frugal that they actually saved some of that income.
Grandpa died 37 years later. I'm sure he got back more than he ever paid in. He was the anomaly...the govmt never counted on him in the calculations.
Sounds like my parents, my Dad was a farmer and farmers weren't a part of SS until 1955, he passed away in 1963 and had collected for 5 years. Then my Mother received the widow's benefit until 2010.(she never worked outside the home) Plus my benefit as a minor dependent for 3 years.
pittpa
Member
From the link in post two :
It is important to note that any benefits withheld while you continue to work are not "lost". Once you reach NRA, your monthly benefit will be increased permanently to account for the months in which benefits were withheld.
Edit to add that I learned this in a class my employer gave prior to retirement. When I called Social Security to verify this, the young lady who answered the phone not only had no clue about it, but rather than admit that, she declared it was not so.
So I had to go onto the website and find it myself which I did. Unfortunately this means that you have to take what you’re told on the phone with Social Security with a grain of salt.
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Normal Retirement Age (NRA) seems to be the new acronym for Full Retirement Age: Normal retirement age (NRA)
