Comments on: Determining the Best Age to Start Social Security http://gotoretirement.com/2009/02/best-age-start-social-security/ A Baby Boomer's Journey from Retirement Planning to Retirement Living Mon, 15 Mar 2010 17:01:46 +0000 http://wordpress.org/?v=2.9 hourly 1 By: Roland http://gotoretirement.com/2009/02/best-age-start-social-security/comment-page-1/#comment-1858 Roland Fri, 13 Nov 2009 04:10:52 +0000 http://gotoretirement.com/?p=387#comment-1858 Starting social security benefits at age 62 could be a good strategy for people who are single and who have retired or are not earning more than $14K a year. Let's say your full social security benefits at age 66 is $1000. If you start drawing at age 62, you will only get a reduced amount of $733. So, at age 66, you will get $267 less a month, but you will have already collected 48 months of benefits totaling $35184 (assuming no cost-of-living adjustments for simplicity's sake). So you will be ahead for 11 years ($35184 divided by $267), or until you are 77. The advantages of this strategy are: (1) you'll be ahead if due to illness or accident you don't live to age 77 (2) you have a lump sum to invest for greater returns or simply have fun (3) social security and indeed, civilization, may not be around when you are 77 (just kidding). Even if you do nothing and just stash the money in your mattress, you have the option of buying an immediate "income for life" fixed annuity at age 77 with that $35184. You should more than make up for that $267 a month shortfall. A caveat if you are married: by law, the benefits your widow can collect cannot be greater than your benefits, so will be $267 less than had you waited until age 66 to start your benefits. Starting social security benefits at age 62 could be a good strategy for people who are single and who have retired or are not earning more than $14K a year. Let’s say your full social security benefits at age 66 is $1000. If you start drawing at age 62, you will only get a reduced amount of $733. So, at age 66, you will get $267 less a month, but you will have already collected 48 months of benefits totaling $35184 (assuming no cost-of-living adjustments for simplicity’s sake). So you will be ahead for 11 years ($35184 divided by $267), or until you are 77.

The advantages of this strategy are: (1) you’ll be ahead if due to illness or accident you don’t live to age 77 (2) you have a lump sum to invest for greater returns or simply have fun (3) social security and indeed, civilization, may not be around when you are 77 (just kidding).

Even if you do nothing and just stash the money in your mattress, you have the option of buying an immediate “income for life” fixed annuity at age 77 with that $35184. You should more than make up for that $267 a month shortfall.

A caveat if you are married: by law, the benefits your widow can collect cannot be greater than your benefits, so will be $267 less than had you waited until age 66 to start your benefits.

]]> By: Mr. GoTo http://gotoretirement.com/2009/02/best-age-start-social-security/comment-page-1/#comment-1855 Mr. GoTo Tue, 10 Nov 2009 22:01:20 +0000 http://gotoretirement.com/?p=387#comment-1855 Gordon: Who will receive the largest benefit - you or your spouse - and is the difference significant? Also, I don't believe you can claim and suspend your own benefit then claim a spousal benefit unless the spousal benefit is actually larger than your own suspended benefit. That's unlikely. The SSA says that you have to take the larger benefit to which you are "entitled." Even though you suspend the larger benefit (your own), you are still "entitled" to it. Therefore, the SSA won't send you anything. To learn more about the economics of "claim and suspend" I recommend you read the research paper linked <a href="http://crr.bc.edu/briefs/strange_but_true_claim_and_suspend_social_security.html" rel="nofollow">here</a> Gordon: Who will receive the largest benefit – you or your spouse – and is the difference significant?

Also, I don’t believe you can claim and suspend your own benefit then claim a spousal benefit unless the spousal benefit is actually larger than your own suspended benefit. That’s unlikely. The SSA says that you have to take the larger benefit to which you are “entitled.” Even though you suspend the larger benefit (your own), you are still “entitled” to it. Therefore, the SSA won’t send you anything.

To learn more about the economics of “claim and suspend” I recommend you read the research paper linked here

]]> By: gordon http://gotoretirement.com/2009/02/best-age-start-social-security/comment-page-1/#comment-1854 gordon Tue, 10 Nov 2009 20:04:20 +0000 http://gotoretirement.com/?p=387#comment-1854 Hi there...I am 66 and my wife is 62. We do not NEED social security to make ends meet, yet. We assume long lives for both...excellent health. Which option is better a. waiting until age 70 to begin SS for me or b. starting to draw now at 66, then immediately suspend my draw and claim my 1/2 sxpousal share on my wife's account and doing that until 70 and THEN switching back to my own account? If you cant answer this, can you suggest a source? Thanks so much Gordon Hi there…I am 66 and my wife is 62. We do not NEED social security to make ends meet, yet. We assume long lives for both…excellent health. Which option is better
a. waiting until age 70 to begin SS for me or
b. starting to draw now at 66, then immediately suspend my draw and claim my 1/2 sxpousal share on my wife’s account and doing that until 70 and THEN switching back to my own account?
If you cant answer this, can you suggest a source? Thanks so much
Gordon

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