Social Security- take early or later?

[rangerxenos]

The problem is the industry is so rife with fraudsters and con artists I've found it better to educate myself. Plus the compensation structure for most advisors is either way too expensive or in conflict with the goals of the clients. I mean charging someone 1% yearly fee to mange their money? That is outrageously high for someone who has several hundreds of thousands of dollars invested.

More power to you if you're able to do that, and keep up with all the rules and regulations. I prefer to deal with an advisor who I trust, and it took a few years and switches to do that. As with anything, you should be aware of the fees you are paying.

 

[snappy]

Just wanted to comment on a fine point about this. If the spouse who would be collecting the spousal benefit was born before January 1, 1954, this option is still available.

Also wanted to comment on another poster's information that if you earn more than a certain amount of money, the social security benefits that you'd be collecting would be reduced. This is true only if you start collecting before your full retirement age, and even then this sort of reduction would apply only to the years between then and your full retirement age (FRA). If you start collecting at or after your FRA, your earnings do not affect your social security benefit amount.

Not only that, but--now stay with me here, since it's kinda complicated--if you were to start collecting your social security at or after your FRA and the income that you were currently earning surpassed your earnings for any one of your 35 best-earning years (which form the basis of your social security benefit), then the amount of your social security payment would continue to rise, as you would be "replacing" lower-earning years even though you were collecting your benefits already.

This is all described on the government social security site. You don't have to take my word for it! I just know this stuff because I did a lot of studying over the last year or so. It is complex and everyone's situation and needs and desires are different.

Just a small warning about consulting a financial advisor: a lot of financial advisors make their living selling all kinds of financial instruments. Be careful and make informed decisions.

I got in just under the wire (born in 1953) and applied for the restricted application when I reached my full retirement age. I will receive half of what my husband’s retirement at full retirement age was and let my benefit based in my earnings continue to grow until I am 70. No one at social security tells you about this. You have to do your research.

 

[tvguy]

I got in just under the wire (born in 1953) and applied for the restricted application when I reached my full retirement age. I will receive half of what my husband’s retirement at full retirement age was and let my benefit based in my earnings continue to grow until I am 70. No one at social security tells you about this. You have to do your research.

They told my mom. But in her case she took widows benefits at 62 and her full benefits at 65. She felt that made more sense. In hindsight, since she lived to be 90, she might have been money ahead to wait until 70 for her benefits.

 

[snappy]

Hind sight is always easier. Luckily my dad had the foresight to get the spousal benefit on his pension, as he knew he wasn’t in the best of health when he retired at age 62 but she was in great health. They started collecting on the pension circa 1988, he died in 1998, she’s still collecting the pension benefit and his social security benefit with no end in sight in 2020.

 

[Dznypal]

There’s a lot of great info on here. One thing I don’t understand is I collected at 62 which was a few years ago. My birthday is the end of July yet I had to wait until the end of sept to get my first check. How can they do this. Cause you never collect thst first check since you you die so does your SS it’s not like a job when the co holds the first check but you collect it after you leave the company. Not in the case of SS so where does thst first check goes to. Also there’s a commercial for some insurance co that SS you get a 255$ death penalty it it’s only for the first person in the couple that dies gets it. If everyone thst works pays into SS the money should be there when you die. Whether it goes to the survive spouse or next of kin. Does anyone have any info.

 

[MillauFr]

Education is a good thing. But to be honest, since 1% is the industry standard, I would be more worried about someone who charges less.

So people are ok with paying someone $10k per year to do 10 hours worth of work?

 

[tvguy]

So people are ok with paying someone $10k per year to do 10 hours worth of work?

Good point. Same feeling I had about paying a 6% commission to a Realtor to sell my mom's house. From listing date to close of escrow, 30 days cost me $33,000+ just in commission. She brought in a photographer, printed flyers, wrote the listing, got it on MLS, put a sign out front and went over the offers with me. Even if she did nothing but work full time on selling the house for 30 days, pretty steep, but, again, the industry standard. Great work if you can get it.

 

[seasheller]

I took mine at 62 since we were having a home built. Regretted it immediately. Now I tell people to wait as long as possible - at least until 70 if you are fairly healthy. Life expectancy is increasing all the time. But these days Social Security is also always being looked at by the government as a source of funds for other things rather than the retirees.

 

[Miffy]

I took mine at 62 since we were having a home built. Regretted it immediately. Now I tell people to wait as long as possible - at least until 70 if you are fairly healthy. Life expectancy is increasing all the time. But these days Social Security is also always being looked at by the government as a source of funds for other things rather than the retirees.

Just FYI for future regretters: If you take social security early and regret it, you've got 12 months to change your mind. Of course, you must pay back everything you collected, but, still, this is good to know. https://www.ssa.gov/planners/retire/withdrawal.html

 

[peabody58]

If we knew our DOD, we could all maximize our SS payout. Unfortunately ,all we can do is 'optimize' our SS payout to best benefit our cash flow/life style. DW and I retired at 57 with plans to both take SS at 62. DW started hers last Sept, and I get my first check in 2 weeks. DW also gets a nice Spousal Benefit increase of almost $300. It's all her 'mad money', and she is certainly enjoying it. We won't need to touch our IRA accounts now like forever! Taking SS at 62 was the best option for us, and I could care less about break even points, or how much more I could have gotten. We're healthy and active now, and want to be able to enjoy traveling and life while we can.

 

[2TxAgs]

There’s a lot of great info on here. One thing I don’t understand is I collected at 62 which was a few years ago. My birthday is the end of July yet I had to wait until the end of sept to get my first check. How can they do this. Cause you never collect thst first check since you you die so does your SS it’s not like a job when the co holds the first check but you collect it after you leave the company. Not in the case of SS so where does thst first check goes to. Also there’s a commercial for some insurance co that SS you get a 255$ death penalty it it’s only for the first person in the couple that dies gets it. If everyone thst works pays into SS the money should be there when you die. Whether it goes to the survive spouse or next of kin. Does anyone have any info.

@Dznypal - you might find it helpful to search the aarp website, or do a google search on receiving your first check. From the aarp website, it says that SS benefits are paid 'behind' rather than 'ahead'. So you get paid for April in May, and get May's benefits in June, etc. So the first full month after your July bday is August, and you get your payment for August in September.
As for your second question, your SS payment continues until you die - whether that's 3 months after starting, or 30 years after starting. So there is no 'set amount' that would remain to go to a surviving spouse after someone dies. Check out this website for more info: https://www.nasi.org/learn/socialsecurity/widowed-spouses

 

[MillauFr]

But these days Social Security is also always being looked at by the government as a source of funds for other things rather than the retirees.

That is one of the bigger risks of waiting to start taking Social Security. Sooner or later the government is going to have to cut benefits in order to keep the program solvent. Might as well get as much out of it before your benefits are cut.

 

[ruadisneyfan2]

It's a very individual choice so like others said hard for us to advise you.

One thing to keep in mind, they are saying by 2035 the social security trust fund will run out of money and benefits will probably be cut by 23%. How that cut will happen, who knows? Will it only be for future retirees or will it affect current retirees too?

If you took it now and in 15 years your benefits maybe were cut would you still be ok with the amount you would get?

There have been several predictions that it will run out which are now in the past and it still hasn't. I wouldn't use this info as a basis to make a decision.

 

[Miffy]

There have been several predictions that it will run out which are now in the past and it still hasn't. I wouldn't use this info as a basis to make a decision.

In case anyone is interested--article in the Guardian today: https://www.theguardian.com/commentisfree/2020/feb/02/social-security-benefits-future-2020

Edit: This article explains why Social Security is actually not in danger of running out of funds. Also, the problem with funding Social Security could be fixed very easily by eliminating the income cap on contributing.

 

[Dznypal]

Way back in the day SS was for when you retired. Now there’s so many different programs that can collect on it no wonder there’s talk of running out. My friends husband is 13 years older then her husband and she got some SS for having an older husband and their son got it till he turned 17 for having an older dad this money at least didn’t go to the kid but to his parents to help raise him. Not sure if this program is still running just one example

 

[_19disnA]

There have been several predictions that it will run out which are now in the past and it still hasn't. I wouldn't use this info as a basis to make a decision.

I agree, when you want to start SS should have NOTHING to do with fears about the fund running out. Politicians on both sides will make all sorts of misinformed statements particularly when trying to get votes in the next election. No one knows how SS will be modified in the future. Typically, benefit changes that have been made impact FUTURE benefits and don't usually impact those currently taking SS. There are all sorts of ways to fund the benefits being given and it doesn't have to only be a $1 in = $1 out scenario.

 

[scard192]

Way back in the day SS was for when you retired.

and is was only intended to be a "supplement" in retirement, not anyone's only source of income.

 

[Mikey15]

and is was only intended to be a "supplement" in retirement, not anyone's only source of income.

If you're paying 6.2% of your income into it for decades (more if self-employed) then it better work out to more than a supplement. Investing 6.2% of your income in an index fund in an IRA/401(k) would give you a pretty big annuity by retirement if you were free to invest the money yourself.

 

[kymom99]

If you're paying 6.2% of your income into it for decades (more if self-employed) then it better work out to more than a supplement. Investing 6.2% of your income in an index fund in an IRA/401(k) would give you a pretty big annuity by retirement if you were free to invest the money yourself.

Exactly, and it depends on how much money each person needs in order to live in retirement. If you want a big nest egg, then yes, you have to save additional money. If you have lived modestly prior to retirement your SS should go a long way towards meeting your needs.

 

[scard192]

sadly from time to time I see things in the media about someone who is struggling to get by on their SS check.....