Social Security- take early or later?

[barkley]

I will say that we have several friends that took SS at 62 and now are over 65 and completely regretting it. Two of our friends have had to go back to work at 68 full time to make ends meet. Another friend is having to go back to work to cover the cost of his wife meds and cover the cost of the supplemental.

i am by no means unsympathetic to your friends but this sounds like they would have been in worse financial shape if they had delayed taking ss. if the maximum 30-35% social security benefit reduction has that great an impact on their budget where would they have been absent the 65-70% full benefit they DO receive? for just the sake of numbers i'll use the example from social security's website for someone with a spouse, who have the max reduction applied (numbers are from ss website/not reflecting average person's generally higher benefit)-

full retirement benefit-$1000/spouse $500 so.....................................$1500 per month
age 62 reduction factor-$700/spouse $325 so....................................$1025 per month

o.k.- so the net difference is $475 per month, nothing to sneeze at BUT-could they have gotten by absent that $1025 per month they DO receive? if $475 per month is the make it/break it then the answer seems to be 'no' so i don't see it as the worst decision in their case.

My Dad had to take SS at 62 for medical reasons and he said that it was the worst thing that he had to do, now at 84, him and my mom need that extra money, to cover the cost of medical bills, meds,

with regards to the bolded-

i highly recommend to anyone in these situations (as well as anyone in general with medical/pharmaceutical costs) the following to help reduce or in some cases entirely eliminate those expenses-

-review your (encourage/help older family/friends) medicare plan to see if it's truly the most cost effective. there are such a wide variety with varying costs and what can look like the best choice b/c of coverage ends up costing more in monthly premiums over the course of a year than the maximum out of pocket expenses would be in the worst case scenario,

-look to the medical providers used/likely used in your area and see what financial assistance programs they may provide. many if not most offer these and they generally all use the same financial criteria (u.s. federal poverty guidelines). NOW-no one likes to identify with 'poverty' but if you look at the numbers below i think you will agree that many people qualify despite receiving even FULL unreduced social security , along with savings earnings and even pensions-

(these are the 2022 federal levels for a household of 2)


gross annual income 300% 350% 400%

$18320 $54930 $65085 $73240

at these gross income levels, providers (doctors/specialists/labs/hospitals...) reduce patient bills (including co pays and share of costs) AFTER all insurance payments applied by-

(300%) 100% (so zero cost to patient)
(350%) 75% (25% cost to patient)
(400%) 50% (50% cost to patient).

very simple 1 or 2 page application with few/easy verifications. most providers have this information on their website (put 'financial assistance' in the search field).


-on meds

talk to providers to see if any regular meds can be gotten in a larger scrip that will save you money. for example-my atorvistatin is prescribed in 90 dose scrips which USED to save me 2/3'rds over my 30 day scrips (USED to b/c the lower cost medicare advantage program i'm on no longer charges a copay for MANY preventative meds-another reason to cost compare plans to weigh out the known services you WILL use vs. the 'just in cases' that might be covered under a financial assistance program or by setting aside a portion of the monthly savings from a lower cost plan to have that higher max out of pay at the ready). compare prices at pharmacies-costco is available to anyone for meds/no membership required and they will accept the good rx and other discount programs. amazon rx supposedly offers good discounts for those with prime memberships so it's worthwhile to see what prices run with them.

i don't mean to come across as 'preachy' on these topics, it's just that i'm retired from administering financial and supportive services programs to the public, a decent chunk of which are related to medical services, and it taught me about the many programs that could help SO MANY are not well known.

 

[tvguy]

So I will be eligible to draw SS at the end of the year at 62, I am a stay at home wife. DH is several years younger than me, his job allows me to stay home, we are comfortable, so financially that money is not needed. The financial planner said it would be better in the long run to wait, more money for after he stops working. After looking at it all, doing a 360 several times.. this is the route we decided on.

I will say that we have several friends that took SS at 62 and now are over 65 and completely regretting it. Two of our friends have had to go back to work at 68 full time to make ends meet. Another friend is having to go back to work to cover the cost of his wife meds and cover the cost of the supplemental.

My Dad had to take SS at 62 for medical reasons and he said that it was the worst thing that he had to do, now at 84, him and my mom need that extra money, to cover the cost of medical bills, meds, and with all the inflation the cost of just about everything else. No amount of planning can and will cover whatever life throws at us.

Medicare only pays so much, then you must have a supplemental for the difference which you have to pay for and still there is money out of pocket.

Not questioning your examples, but there are just too many individual situations to say you should, or should not take Social Security early or not to take it early.
My dad went on Social Security Disability at age 54 due to a terminal illness. While my mom worked, that Social Security was a life line. He passed away at age 56, when I was 9. I drew survivors benefits from his Social Security Account from age 9 until age 21 because I stayed in school. The law has been changed and now children can only draw survivors benefits until age 18. And when my mom turned 62 1/2, rather than take her Social Security at a reduced rate, she took Widows benefits from my dads account until she reached her full retirement age of 65, when she switched to her benefits. There is no question between my dad, me and my mom, were drew far far more money from my dad's social security account than he paid in.
As for me, I retired at 64, and we are living off savings until I reach full retirement age of 66 1/2. Our financial advisor has said 62 1/2 was too young. 66 1/2 is the best balance in his opinion. However, he adds, if we live a long time, into our late 80's, waiting until 70 would have financial advantages. Well, we don't know how long we are going to live, so it is all a gamble. But our Social Security checks will be almost exactly what we were earning each month working, without touching savings. And the annuities we purchased years ago will insure we have adequate income in case of inflation. Medicare with a private supplement, being one of the major factors that save us a LOT of money. I was paying $700 a month under COBRA, up from the $400 I paid for group insurance when working. Medicare with a private supplement, prescription, dental, hearing and vision coverage is costing me $325 a month. The big difference is out of pocket. In the first six months of 2022 I was under COBRA private insurance and my out of pocket was $11,000. The next six months, with similar medical treatments, my Medicare out of pocket was $233.

 

[barkley]

but there are just too many individual situations to say you should, or should not take Social Security early or not to take it early.

this is very true and there's at minimum one specific situation i'll describe below that can make taking it earlier life altering for one's adult child.


i know it's a rare situation but my adult son falls into it and i know there are others on this board who have disabled minor children so i would strongly recommend to anyone in that situation= fully research the social security rules regarding DAC (disabled adult children). taking that reduced benefit can mean your disabled child (who meets certain ss disability criteria) can as an adult draw from YOUR work record for the remainder of their lives (at upwards of 75% of YOUR full retirement age benefit rate-PIA- REGARDLESS of when you start drawing your benefit).

if it's affordable for someone-to take even that 35% reduction in exchange for your child becoming eligible for 50% of your unreduced ss/75% upon your death (along with full medicare vs. medicaid or private pay insurance) it can be tremendous peace of mind for the parents (I know that having this in place for our son makes a world of difference in our financial planning for him when we are gone) and life altering vs. the amounts these individuals traditionaly receive under the ssi program.

 

[piccolopat]

I agree with a previous poster that opensocialsecurity.com is a great resource. It will tell you the optimum time for you and your spouse to collect SS but you can also model alternate starting dates.

I disagree with a different poster about choosing Medicare part C (they referred to it as Complete but it is really referred to as Medicare Advantage). Those plans are fine when you're healthy but most have limited doctor networks, require preaurhoruzation for most procedures and higher deductibles. Plan C is private insurance, not actual Medicare. If you want a supplement/medigap later you may not qualify since medical underwriting cones into play.

 

[tvguy]

I agree with a previous poster that opensocialsecurity.com is a great resource. It will tell you the optimum time for you and your spouse to collect SS but you can also model alternate starting dates.

I disagree with a different poster about choosing Medicare part C (they referred to it as Complete but it is really referred to as Medicare Advantage). Those plans are fine when you're healthy but most have limited doctor networks, require preaurhoruzation for most procedures and higher deductibles. Plan C is private insurance, not actual Medicare. If you want a supplement/medigap later you may not qualify since medical underwriting cones into play.

Exactly about Medicare Part C, Medicare Advantage plans. It worked perfectly for my mom who had minimal healthcare needs. I expected to go that route but have a health condition that required monitoring, so a more expensive Part G, Medicare Medigap Supplement, is actually cheaper in the long run, gives me access to almost every Doctor, and requires no pre-authorization.

 

[barkley]

Plan C is private insurance, not actual Medicare

i'll respectfully disagree. from the health and human services website-

What is Medicare Part C?​

A Medicare Advantage Plan (like an HMO or PPO) is another Medicare health plan choice you may have as part of Medicare. Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by private companies approved by Medicare.
If you join a Medicare Advantage Plan, the plan will provide all of your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage. Medicare Advantage Plans may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. Most include Medicare prescription drug coverage (Part D).
Medicare pays a fixed amount for your care every month to the companies offering Medicare Advantage Plans. These companies must follow rules set by Medicare.

 

[barkley]

Exactly about Medicare Part C, Medicare Advantage plans. It worked perfectly for my mom who had minimal healthcare needs. I expected to go that route but have a health condition that required monitoring, so a more expensive Part G, Medicare Medigap Supplement, is actually cheaper in the long run, gives me access to almost every Doctor, and requires no pre-authorization.

it bares repeating-

advantage plans vary region to region, cost and coverage wise. in our case our household medicare covered members each have multiple complex health issues and the plans available in our region are fully capable and efficiently provide us with the cardiologists, neurologists, gastroenterologists, orthopedists and other specialists we require at little to no out of pocket cost ($35 copay).

Medicare with a private supplement, prescription, dental, hearing and vision coverage is costing me $325 a month.

is this the FULL amount per month you pay or what you pay on top/in addition to the standard medicare premium?

 

[tvguy]

is this the FULL amount per month you pay or what you pay on top/in addition to the standard medicare premium?

Full amount.
$164.90 for Medicare Part A and B. That premium should be exactly the same for everyone on Medicare.
$96 for Medicare Supplement part G*.
$46 for Dental/Vision/Hearing Supplement
$18.50 for prescription drug coverage.

*Funny thing about the Medicare Supplement part G coverage, I had options of a variety of companies with the exact same coverage, the premiums ranged from $96 to $150 a month. Broker said those premiums are based on how good a contract they have with the Doctors and Hospitals in your area.

 

[DLgal]

this is very true and there's at minimum one specific situation i'll describe below that can make taking it earlier life altering for one's adult child.


i know it's a rare situation but my adult son falls into it and i know there are others on this board who have disabled minor children so i would strongly recommend to anyone in that situation= fully research the social security rules regarding DAC (disabled adult children). taking that reduced benefit can mean your disabled child (who meets certain ss disability criteria) can as an adult draw from YOUR work record for the remainder of their lives (at upwards of 75% of YOUR full retirement age benefit rate-PIA- REGARDLESS of when you start drawing your benefit).

if it's affordable for someone-to take even that 35% reduction in exchange for your child becoming eligible for 50% of your unreduced ss/75% upon your death (along with full medicare vs. medicaid or private pay insurance) it can be tremendous peace of mind for the parents (I know that having this in place for our son makes a world of difference in our financial planning for him when we are gone) and life altering vs. the amounts these individuals traditionaly receive under the ssi program.

Isn't the DAC program only for disabled adult children who have never worked and paid any SS tax? That was my understanding. Certainly a good program to know about, but many disabled adult children are capable of doing *some* work and will likely be disqualified from this benefit if they ever work, even if they stay under the threshold for SGA.

DAC is also subject to maximum family benefit amounts, so it's not as generous as it sounds, especially with more than one disabled child. Life insurance should still be part of the picture.

 

[runwad]

I think it would be helpful if people said if they were on a Advantage plan and what state they are in and if it's good or not, sInce it varies by region.

 

[MimitoAlex]

i am by no means unsympathetic to your friends but this sounds like they would have been in worse financial shape if they had delayed taking ss. if the maximum 30-35% social security benefit reduction has that great an impact on their budget where would they have been absent the 65-70% full benefit they DO receive? for just the sake of numbers i'll use the example from social security's website for someone with a spouse, who have the max reduction applied (numbers are from ss website/not reflecting average person's generally higher benefit)-

full retirement benefit-$1000/spouse $500 so.....................................$1500 per month
age 62 reduction factor-$700/spouse $325 so....................................$1025 per month

o.k.- so the net difference is $475 per month, nothing to sneeze at BUT-could they have gotten by absent that $1025 per month they DO receive? if $475 per month is the make it/break it then the answer seems to be 'no' so i don't see it as the worst decision in their case.


with regards to the bolded-

i highly recommend to anyone in these situations (as well as anyone in general with medical/pharmaceutical costs) the following to help reduce or in some cases entirely eliminate those expenses-

-review your (encourage/help older family/friends) medicare plan to see if it's truly the most cost effective. there are such a wide variety with varying costs and what can look like the best choice b/c of coverage ends up costing more in monthly premiums over the course of a year than the maximum out of pocket expenses would be in the worst case scenario,

-look to the medical providers used/likely used in your area and see what financial assistance programs they may provide. many if not most offer these and they generally all use the same financial criteria (u.s. federal poverty guidelines). NOW-no one likes to identify with 'poverty' but if you look at the numbers below i think you will agree that many people qualify despite receiving even FULL unreduced social security , along with savings earnings and even pensions-

(these are the 2022 federal levels for a household of 2)


gross annual income 300% 350% 400%

$18320 $54930 $65085 $73240

at these gross income levels, providers (doctors/specialists/labs/hospitals...) reduce patient bills (including co pays and share of costs) AFTER all insurance payments applied by-

(300%) 100% (so zero cost to patient)
(350%) 75% (25% cost to patient)
(400%) 50% (50% cost to patient).

very simple 1 or 2 page application with few/easy verifications. most providers have this information on their website (put 'financial assistance' in the search field).


-on meds

talk to providers to see if any regular meds can be gotten in a larger scrip that will save you money. for example-my atorvistatin is prescribed in 90 dose scrips which USED to save me 2/3'rds over my 30 day scrips (USED to b/c the lower cost medicare advantage program i'm on no longer charges a copay for MANY preventative meds-another reason to cost compare plans to weigh out the known services you WILL use vs. the 'just in cases' that might be covered under a financial assistance program or by setting aside a portion of the monthly savings from a lower cost plan to have that higher max out of pay at the ready). compare prices at pharmacies-costco is available to anyone for meds/no membership required and they will accept the good rx and other discount programs. amazon rx supposedly offers good discounts for those with prime memberships so it's worthwhile to see what prices run with them.

i don't mean to come across as 'preachy' on these topics, it's just that i'm retired from administering financial and supportive services programs to the public, a decent chunk of which are related to medical services, and it taught me about the many programs that could help SO MANY are not well known.

So I spent quite a bit of time with the whole med's thing with my mom, not only does she have a ton of med's she also has very costly eye drops, and specialist visit, she has myastyehia gravis in her eyes and the meds are quite expensive, plus she has laser surgery normal about every 3 or so years due to the canals in her eye being to narrow, along with narrow angle glaucoma, and other normal issue's with aging eye. They get scripts from mail order, CVS, Walgreen, and Publix, we shopped the cost to determine where the cheapest price is. They also have very good prescription med coverage, it just the amount of meds she needs.

As well I agree with PP about how completely different each person retirement needs are. You have to just look at your on personal circumstance, and really look at the big picture and then the bigger picture. Run the number and re run over and over again then.
Talking to a financial planner if you can is really helpful. There are alot of companies that provide some type of financial planner to help with 401K and other retirement benefits. We are very lucky that DH's company offers it. It's worth it to just look at what your work place benefits are. I know where my friend goes to church they offer free seminars on financial planning, which she attends. You can check out what your city offers, especially what they offer for seniors, there most likely some type of estate planning seminar, and free for resident or only a few bucks.

We made a 1 year plan - then a 3 year plan - then 5 year plan - the another 5 year plan and another plan. I think that alot of people get discouraged when starting to plan, because things happen life happens and you have to be flexible.
Goodness knows we hit a bunch of bumps along the road.

 

[Sheree]

Isn't the DAC program only for disabled adult children who have never worked and paid any SS tax? That was my understanding. Certainly a good program to know about, but many disabled adult children are capable of doing *some* work and will likely be disqualified from this benefit if they ever work, even if they stay under the threshold for SGA.

DAC is also subject to maximum family benefit amounts, so it's not as generous as it sounds, especially with more than one disabled child. Life insurance should still be part of the picture.

they mut have had SSI prior to age 19 to e considered a DAC. they can get Medicaid in addition t Medicare because Medicaid excludes the portion of the C claim putting them over the limit. there's also workability for those that work

 

[DLgal]

they mut have had SSI prior to age 19 to e considered a DAC. they can get Medicaid in addition t Medicare because Medicaid excludes the portion of the C claim putting them over the limit. there's also workability for those that work

Prior to age 19? Where is that stated?

 

[barkley]

Isn't the DAC program only for disabled adult children who have never worked and paid any SS tax? That was my understanding. Certainly a good program to know about, but many disabled adult children are capable of doing *some* work and will likely be disqualified from this benefit if they ever work, even if they stay under the threshold for SGA.

DAC is also subject to maximum family benefit amounts, so it's not as generous as it sounds, especially with more than one disabled child. Life insurance should still be part of the picture.

a dac can have a work history, just not currently earning in excess of sga, and they can work while on it and are encouraged to so with some income disregard programs. in fact, in the insanely rare situation where a dac actually acquired enough quarters to qualify for ssd (vs. ssi) under their own work record then an application can be made and social security has to look and see if they will qualify for more under their parent's work record.

dac IS subject to maximum family benefits amounts but in our case dh and i both draw from our own individual records so that means ds draws on the higher of the two and it's considerably more than ssi (and he's not held to the ssi income/assett restrictions but the more generous dac).

i agree-financial planning in this situation is key. we were fortunate to have an estate attorney who was very educated in both elder and disability law so coordinating dac, life insurance, trusts, an able account...was paramount in everyone's mind.

they mut have had SSI prior to age 19 to e considered a DAC. they can get Medicaid in addition t Medicare because Medicaid excludes the portion of the C claim putting them over the limit. there's also workability for those that work

no, prior ssi receipt is not required for consideration what so ever, in fact many young adults in receipt of DAC would not have been eligible for ssi b/c until age 18 their parent's income and assets would have made them financially ineligible. if the parent does not pass away or begin receiving social security until AFTER the child turned 18 then it's possible they may have applied for and received ssi but it is not required. the eligibility for DAC under a parent's record is (copy and pasted from social security website)-

An adult who has a disability that began before age 22 may be eligible for benefits if their parent is deceased or starts receiving retirement or disability benefits. We consider this a "child's" benefit because it is paid on a parent's Social Security earnings record.

The Disabled Adult Child (DAC) — who may be an adopted child, or, in some cases, a stepchild, grandchild, or step grandchild — must be unmarried, age 18 or older, have a qualified disability that started before age 22, and meet the definition of disability for adults.

 

[barkley]

I think it would be helpful if people said if they were on a Advantage plan and what state they are in and if it's good or not, sInce it varies by region.

advantage plan-hmo pos (so i can opt for providers out of network if i desire)

washington state (eastern side)

$35 per month in addition to standard $164.90 medicare a/b cost but i feel it's offset b/c they provide a $280 per year otc visa debit card so in reality the net cost over a/b is $11.67 per month.

$0 deductible
$4800 out of pocket max in network/$10,000 in/out of network combined

i have no problems finding in network providers but here's how costs flesh out-

in network out of network

primary care provider visit- $0 $35
specialist $35 $50
e/r $70 $70
urgent care $50 $50
mental health $35 30% of contracted rate

most other services/treatments it's the difference of 10% vs 20-30% of medicare contracted rates

standard vision has no charge/allowance to pay for glasses yearly

dental is limited as with most plans but this year in addition to routine and preventative we have another visa debit card benefit of $250 for dental services of our choice (when i dumped my retiree plan i retained my lousy dental plan b/c it was only about $25 a month for both dh and i for about $3600 per year in benefits so that helps)


this works for us b/c it is administered by one our state's largest medical systems (to the extent that kaiser which is trying to establish a foothold in washington contracts with them for many if not most of their providers and hospitals in many regions of the state).

 

[tvguy]

$35 per month in addition to standard $164.90 medicare a/b cost but i feel it's offset b/c they provide a $280 per year otc visa debit card so in reality the net cost over a/b is $11.67 per month.

The Medicare plans are more specific than per state, they are by zip code. I'm in Sacramento County, California.
In my case, I would NOT have had to pay the standard $164.90 medicare part A and B premium nor any additional premium, it would have been "free".
HOWEVER, none of my Doctors were In Network, so I went no further in investigating that option.

 

[barkley]

The Medicare plans are more specific than per state, they are by zip code. I'm in Sacramento County, California.
In my case, I would NOT have had to pay the standard $164.90 medicare part A and B premium nor any additional premium, it would have been "free".
HOWEVER, none of my Doctors were In Network, so I went no further in investigating that option.

i had the same issue with traditional health insurance in your neck of the woods when we lived near by. my employer only offered 3 choices-1 only available if you lived in the county they were located in (and AWFUL), 1 hmo that required residence in a geographical proximity to the contracting company's sole provider (tons if you wanted to battle traffic down to the bay area but nada at the time where we lived) and a ppo. thing with the ppo is they had almost no 'preferred providers' anywhere and they flat out told customers that they were under no legal obligation to (employer only offered it b/c they had to have some plan that did not exclude based on residency).

insurance be it traditional, medicare or medicaid can look great on paper but making it actually work for you can be horrific.

 

[Debbie Jean]

The Medicare plans are more specific than per state, they are by zip code. I'm in Sacramento County, California.
In my case, I would NOT have had to pay the standard $164.90 medicare part A and B premium nor any additional premium, it would have been "free".
HOWEVER, none of my Doctors were In Network, so I went no further in investigating that option.

Since no one has pointed this out, I wanted to add that while standard A & B is $164.90, if the income you filed on your taxes is above a certain amount you will pay a surcharge:

For those single filers in the MAGI (modified adjusted gross income) range of over $91,000 to $114,000, that means your Part B premium is $238.10. For those in the over $114,000 to $142,000 bracket, the premium is $340.20.

There is a formula they use. I got hit this year since it is figured on my last tax return when I was working full time. Since it’s reassessed yearly, it should drop off… but it wasn’t something I was aware of before… bad planning on my part!

 

[tvguy]

Since no one has pointed this out, I wanted to add that while standard A & B is $164.90, if the income you filed on your taxes is above a certain amount you will pay a surcharge:

For those single filers in the MAGI (modified adjusted gross income) range of over $91,000 to $114,000, that means your Part B premium is $238.10. For those in the over $114,000 to $142,000 bracket, the premium is $340.20.

There is a formula they use. I got hit this year since it is figured on my last tax return when I was working full time. Since it’s reassessed yearly, it should drop off… but it wasn’t something I was aware of before… bad planning on my part!

Only fair that those that have the income pay their fair share. Even at $340.20, those are very modest premiums compare to what I was paying under COBRA and even when I was working with the employer paying a portion.

 

[Debbie Jean]

Only fair that those that have the income pay their fair share. Even at $340.20, those are very modest premiums compare to what I was paying under COBRA and even when I was working with the employer paying a portion.

Only problem is that it is a “look back” surcharge so not based on current income but previous income. For many there is a substantial difference… if true, it will be self limiting moving forward, since it’s recalculated every year.

I was very lucky that I never had to deal with Cobra but have known many who did and I think the costs are just criminal! The Medicare surcharge is just something I think most are not aware of… and depending on your situation is a another piece of the financial information to consider.