Why People Take Social Security at 67
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- เผยแพร่เมื่อ 1 มิ.ย. 2024
- Five reasons why people take Social Security at 67. There are reasons for waiting to claim your benefits and good reasons for taking it early. In this video, we discuss them plus see below to get your ultimate Social Security cheat sheet.
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🔑 Key Topics :
0:00 - Intro
1:36 - 1. Rescue Plan For Lack of Savings
3:21 - 2. Not Full Retirement Age
3:50 - 3. Not Full Retirement Age
4:29 - 4. You Have Longevity in Your Family
5:25 - 5. You Have the Larger Benefit and Your Spouse Is Younger
6:16 - Conclusion
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Will be waiting until at least 65, then plan is to work (Seasonally) 6 months , then retreat to the mountains. Time becomes more precious than money in old age, downsize your lifestyle, stay fit, eat well and enjoy whatever years the Lord blesses you with. As far as plans, remember, (we make plans and God laughs). 🤷🏻♂️
Agreed. Time and the experiences you create are at the top of the list. Thanks for commenting!
People wait because they don’t have any savings, still paying debt and need to work to pay bills. Very sad but a lot of Americans do that. I retired at 55 with 500 k and $1500 a month pension. Moved to Mexico City and only live on $2500 a month very comfortably.. If I stayed in the Bay Area, it wouldn’t be possible. I plan to take it at 62 and enjoy my remaining 20 plus years.
Thank you for commenting!
Will - You might be right, but my brother waited because he was making $8K per month and SS was only going to pay him $2K per month. He had enough to retire, but he enjoyed his job, so he didn't want to leave $6K a month on the table just for the sake of collecting early.
Some people actually enjoy working
Agreed!
Another reason is that if you wait later, til 70, your tax liability for the rest of your life will be very positive for that portion of your income, as ss is taxed very favorably...also...if you graph the amounts at age 62, 67 and 70, and factir in inflation over time....the gap between the 3 numbers gets larger and larger over time
I tend to be a spender. I have to use unfamiliar muscles to save. I have fought with myself many times to overcome the want of spending verses the cognitive intent of saving. The goal for "someday" seems vague and abstract. I have never been a big fan of large government, but my observation has been that our friends in Washington DC have the same struggle dealing with money that is not their own. I believe that Social Security needs to take a priority over other government spending due to so many people needing it when they are disabled or for sure retired and or widowed. This seems to be the only fair approach to the American worker who has paid into the system. SS and Medicare should come right after security, infrastructure in my opinion.
It is impossible to get from money what it cannot give you: peace. In other words, one cannot have a 'big enough pile of money' to serve us to the point of contentment. Resources should serve us, rather than the other way around. Some of these ideas will not be popular and I admit I am a lay person (not an economist); but I think an infusion of common sense is always appropriate in Washington. I am sure not all of these ideas would make people agree. I think public policy should enhance wise behaviors for individuals and all of us collectively. Lawmakers have a number of "levers" they can pull to fix the system.
Lever 1. Limit non Social Security/Medicare government spending to a maximum of 4 percent less than calculated inflation rate per year. This might even help lower the federal deficit.
Lever 2. To keep up with inflation updates were made to current calculation [in 1977 with SS law changes], since then Social Security uses two types of calculations for SS benefits to keep up with the standard of living: a)Use of Wage inflation (average wage index) and b) Price inflation (consumer price index). The inflation calculation used prior to one's eligibility year (year you die, become disabled, or turn 62). Prior to one's eligibility year, inflation is calculated based on wages (AWI) and the beginning in the eligibility year, inflation is calculated on price (CPI). The problem is for the last few decades, wages have been growing faster than prices (until recent inflation). Over the last 50 years, wages have grown at 4.59% per year and prices at 3.59% per year---A small change in the growth rate over a long period of time, can make a big difference. A study by SS Board of Trustees studied this and if we went back to this calculation (using price inflation only), starting in 2029, 80% of the longterm shortfall would be solved. This would only affect future beneficiaries less than age 57 in 2024. By the 75th year (2104), the SS trust fund would be at 172% surplus!
Lever 3. Increase FICA taxation on all earnings up with no max on earnings (current max up to $168,500/yr).
Lever 4. Adjust FRA and change DRC as follows:
Birth year Full benefit FRA Eligibility
1997 68
1998 68 and 2 months
1999 68 and 4 months
2000 68 and 6 months
2001 68 and 8 months
2003-2014 69
2016 69 and 2 months
2017 69 and 4 months
2018 69 and 6 months
2019 69 and 8 months
2020 70
Beginning in 2065, Delayed retirement credits move to ages: 71, 72 and 73 but continue at 8% per year or 2/3 of 1% per month.
Lever 5.
Institute SSA Roth IRAs for Minors from ages 1-26, with annual contributions (non-earned) $1000/yr, as either a tax credit/deduction based on the on the guardian's income. Once the minor is no longer eligible for guardians' health insurance, the minor/beneficiary gains control of indexed investment choices inside the account. Access to these benefits are administered by SSA until eligibility requirements are met just as with other SSA benefits.
Lever 6.
For workers > age 50, who earn
I plan to wait until at least 65, maybe start with Medicare, however if my bridge is still holding up well, I can delay further. It essentially becomes a yearly decision once I get to 65. That is unless the bottom falls out and I need it at 62. It's nice to have options.
Options are a good thing, flexibility is wise. Thanks for commenting!
Thank u 4 this great information.
Glad it was helpful!
Or...if you have a pension at 62 that can bridge that five year gap to FRA. Also giving some time with fingers crossed that they pass the "You earned it, you keep it" ending Fed taxes on SS.
Unless you know when you are going to die, waiting is a sucker's bet. If you have a strong familiy history of living well past 80 you may want to consider waiting. If you don't take the money and run at 62. That's what I did 7 years ago. Zero regrets. Social Security offers that "incentive" to wait because it's better for them, not better for you. When was the last time the government did what was best for you?
It's not really because it's "better" for the government; it's just simple actuarial (statistical) math. In fact, social security pays out the same amount on a statistical basis if you take it at 62 or 70. Now keep in mind for you or me, it might pay more or less because no one really knows when they'll die, but it's not about it being better or worse. It's just simple statistics.
Very informative. Thanks!
Glad it was helpful!
If you lucky live that long