Retirement

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sstterry

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Assuming ss benefit of $1800 month at 70 and born in 1962 collect 56.5%
1800 m at 70 x 56.5% = 1017 month at 62

1800 m x 12 = 21,600 yr age 70
1017 m x 12 = 12,204 yr age 62
62 + 18 = 80
12,204 x 18 yrs = 219,672
starting at 62 at 12,204 yr = 219,672 collected by age 80
starting at 70 at 21,600 yr = 216,000 collected by age 80
12,204 x 19 yrs = 231,876 at 81
21,600 x 11 yrs = 237,600 at 81

breakeven = approximately age 80 yrs 8 months
check your ss statement to do your own calculations
And don't forget if you start collecting before your FRA, there is a limit on your total income and if you exceed that amount they deduct it from your benefit until you reach FRA. You eventually get it back, but it is overtime.
 

greybeard

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And don't forget if you start collecting before your FRA, there is a limit on your total income and if you exceed that amount they deduct it from your benefit until you reach FRA. You eventually get it back, but it is overtime.
Doubletime on holidays?
 

1982vett

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And don't forget if you start collecting before your FRA, there is a limit on your total income and if you exceed that amount they deduct it from your benefit until you reach FRA. You eventually get it back, but it is overtime.
What no one is taking into consideration is investment gains. Taking SS early let’s my my investment portfolio grow. At the moment it’s growing faster than it would by delaying. Taking SS early keeps me from dipping into our Roth accounts. Those funds continue to grow tax free. If I take money out of our Traditional IRA’s I’m paying ordinary income tax on it. For me, some of SS is taxable, but all funds pulled from a Traditional IRA is taxable. Another tool available to me this year since I’m not “forced” to use IRA funds to meet living expenses is to convert some of it to a Roth thus avoiding future (as of now) taxes. Until last year our taxable investment funds were depleted. It now holds our “emergency” funds from an asset sold so taxable gains/loss is back in play.

So, there isn’t a “one fits all” reason to take or not to take early. It varies with each recipient and their financial and health situation weigh heavy on the decision.
 

Son of Butch

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What no one is taking into consideration is investment gains. Taking SS early let’s my investment portfolio grow. Taking SS early keeps me from dipping into our Roth accounts.
So, there isn’t a “one fits all” reason to take or not to take early.
Avoiding withdrawal from a Roth IRA is a big deal.
Delaying, increases ss benefits 0.39 - 0.5% per month = 4.7-6% per year
less in the early years and 6% in the later years.
If filing early allows you to grow Roth IRA more than that you're ahead.

SS rules change and usually not to your advantage.
In the good ole days, my sister was able to file at 62 while her husband worked to 70 and then file on his benefits for full retirement when he retired.
But ss rule change has eliminated that option.
 
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Stocker Steve

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Has anyone done the math to see if you waited until 70 how many years it would take to catch up to the same dollar total as if you started at 62? I'm guessing you'd need to be close to 80. If you put that money into a decent mutual fund for those 8 years I doubt if you'd ever catch up.
Ya, but what if you started SS at 62 and put the money into green tractors that appreciated 18% per year!!!
 

Son of Butch

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Must not be counting insurance as medical expense….
I don't know if it does or not.
What do you estimate the average medical insurance premium to be on Medicare?

If Kaiser's estimate doesn't include Medicare insurance premiums:
My estimate is $2,000 year (167 month)
65 +15 = 80 2,000 x 15 = $30,000 that would leave $120,000 in out of pocket expenses per person = 8,000 yr
I currently pay $1776 year with out of pocket expenses capped at $5,800 per year
1776 + 5800 = 7576 so I bet their estimate does include insurance.
 
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1982vett

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I don't know
What do you estimate the average medical insurance premium to be on Medicare?

If Kaiser's estimate doesn't include Medicare insurance premiums:
My estimate is $2,000 year (167 month)
65 +15 = 80 2,000 x 15 = $30,000 that would leave $120,000 in out of pocket expenses per person = 8,000 yr
I currently pay $1776 year with out of pocket expenses capped at $5,800 per year
1776 + 5800 = 7576 so I bet their estimate does include insurance.
Will find out next year as I’m not on Medicare yet. Our out of pocket healthcare for 2 (subsidized insurance included) ran $16 to $20 thousand a year lately. Unsubsidized insurance alone would run $24 thousand.

But I see now the study was 64 and older. Hoping for lower costs on Medicare but not holding my breath. Affordable Care Act healthcare has been the most expensive and in efficient healthcare I’ve ever experienced.
 
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J+ Cattle

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If you put that money into a decent mutual fund for those 8 years I doubt if you'd ever catch up.
The downside to mutual funds (if it is in a taxable account) is they allocate the capital gains annually. In other words you have to pay capital gains based on a 1099 form that you receive at the end of the years even when you haven't sold any shares. This is why I would recommend an ETF (exchange traded fund) instead of a mutual fund.
 

D2Cat

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Will find out next year as I’m not on Medicare yet. Our out of pocket healthcare for 2 (subsidized insurance included) ran $16 to $20 thousand a year lately. Unsubsidized insurance alone would run $24 thousand.

But I see now the study was 64 and older. Hoping for lower costs on Medicare but not holding my breath. Affordable Care Act healthcare has been the most expensive and in efficient healthcare I’ve ever experienced.

Based on the numbers you're paying now you'll have as go as or better ins. and better prescription drug coverage and still have enough left over for a cruise each year!
 

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