Can we talk about retirement?

[Janderso]

In a few months I'll be 64. I just looked at my Social Security statement.
They have full retirement at 66 and 6 months.
There is a benefits slide gadget that lets you dial in the anticipated month of retirement.
Example, if I retire at 65 and 6 months, the difference is <$245 a month. If I retire a year early, I will receive $31,500 I would not have received if I wait another year.
You all know where I'm going. It would take 11 years to break even for the amount I received for the one year of early retirement.
Since this is supplemental to our overall retirement plan, it's looking pretty tempting.

Did you go out early? Do you regret it?
Do you wish you went out early?
Are you thinking along my same lines?
Am I an idiot for thinking to go out early

I know many of you are retired, I'd like to talk about it.
Thanks,
Jeff

 

[mickri]

I had to take mine early do to losing a huge share of my savings in the 2009 market crash. No choice but also no regrets. I did the same break even calculations that you did and held out as long as I could. Some of my friends did those calculations and decided to wait till they were 70 before taking SS. Sadly one friend came down with cancer in his early 70's and died shortly thereafter. I have other friends who took it as soon as they could.

My thought is that if you don't need it to live on then wait as long as you can. This has to be tempered against the typical longevity of your parents and grandparents and your current health.

 

[Winegrower]

I don’t think relying solely on SS income yields the lifestyle ”to which we are accustomed”. I suggest in one’s last few years of income producing work, you try to get some additional form of income that is as inflation resistant as possible. For me, it’s income producing real estate. If it takes working longer to be able to make such investments, well, at least your SS payments will be higher when you can pull the trigger. Maybe a side bet in precious metals is also a good idea.

 

[Papa Charlie]

Still working, but I have a rather elaborate spreadsheet that helps me calculate the best options and how long my money will last.
Currently, based on my 401's current state for 2020, I won't retire for another 1.5-2 years. Even At that, I will not take SS until I reach 67-4mo. My spreadsheet helps me calculate the value by month so plenty of games to take into account.

It took some time to gather all the information, including how my retirement income would be affected by state taxes. Every state and county deals with 401's, pensions and SS differently. A real eye opener for running the numbers. I had my CPA do the math on the taxes for me. Not straight forward by any means. The biggest shock was the cost of medical even with Medicare. $144 per person, per month for medicare, then there is the medicare supplements and possible out of pocket expenses.

You can log onto the SS website and once you sign in. There is a table that shows the amount of SS you get as a percentage of the fully vested value, which for me is 66-4 months. Before that it goes down by about 0.55% per month that you take early and it goes up by 0.7% per month the longer I wait. Don't know if these percentages are common or just mine.

Also, add into your numbers your wifes. She will get a percentage of yours. If she waits until she is fully vested then she will get 50% of yours or vice versa if you so choose. But if she takes it before the values will change either up or down. Sadly, if she waits later than when she is fully vested it won't go up any higher than 50% of yours at the time you take it. So the longer you wait the more her contribution will be.

 

[Stonebriar]

I retired at 63. I am VERY happy I left early. MY company covered medical until Medicare took over. Now they just pay the supplemental, so I didn't have to worry about medical coverage. I didn't take social security until age 66, my age target. I used 401K money to supplement the company pension. Now I take the social security and don't take any 401K money. My company pension covers all of my expenses.

You are smart for leaving early as possible. The time FLIES after retirement. You can't buy more time. I think the early years are the best quality years we may have after retirement.

So if it is just a supplement to your plan I say go for it.

 

[Nogoingback]

In a few months I'll be 64. I just looked at my Social Security statement.
They have full retirement at 66 and 6 months.
There is a benefits slide gadget that lets you dial in the anticipated month of retirement.
Example, if I retire at 65 and 6 months, the difference is <$245 a month. If I retire a year early, I will receive $31,500 I would not have received if I wait another year.
You all know where I'm going. It would take 11 years to break even for the amount I received for the one year of early retirement.
Since this is supplemental to our overall retirement plan, it's looking pretty tempting.

Did you go out early? Do you regret it?
Do you wish you went out early?
Are you thinking along my same lines?
Am I an idiot for thinking to go out early

I know many of you are retired, I'd like to talk about it.
Thanks,
Jeff

I retired two years ago when I turned 65. Since I was forced to retire I had no choice in the matter, but one consideration
I hadn't anticipated was the cost of health insurance. I'm on medicare of course, but my wife is 4 years younger than
I am and our son is still in school and needs insurance as well. The best deal initially was COBRA, which lasts 18 months.
Since then we've had to pay for insurance from the market. The cost of both has been simply unbelievable. Fortunately, our finances
are such that we can handle it until my wife gets medicare. Unless your wife works and can provide insurance for the two of you I STRONGLY suggest you take this into consideration.

 

[Papa Charlie]

I retired two years ago when I turned 65. Since I was forced to retire I had no choice in the matter, but one consideration
I hadn't anticipated was the cost of health insurance. I'm on medicare of course, but my wife is 4 years younger than
I am and our son is still in school and needs insurance as well. The best deal initially was COBRA, which lasts 18 months.
Since then we've had to pay for insurance from the market. The cost has been simply unbelievable. Fortunately, our finances
are such that we can handle it until my wife gets medicare. Unless your wife works and can provide insurance for you, I STRONGLY suggest you take this into consideration.

Fully agree, Also, if you are covered under her insurance as part of her benefit package, you can defer Medicare until she reaches retirement. They will require you to provide a form filled out by her company, if she qualifies for this under her company, that you provide to SS to prevent any penalties.

There is a lot to digest in the retirement subject. I would highly recommend picking up a phone and talking to someone at SS about it and get the facts directly. They were very helpful for me. I will be deferring Medicare while I am still employed at Boeing. But will need to get that form and submit before I retire so prevent healthy penalties.

 

[NC Rick]

In a few months I'll be 64. I just looked at my Social Security statement.
They have full retirement at 66 and 6 months.
There is a benefits slide gadget that lets you dial in the anticipated month of retirement.
Example, if I retire at 65 and 6 months, the difference is <$245 a month. If I retire a year early, I will receive $31,500 I would not have received if I wait another year.
You all know where I'm going. It would take 11 years to break even for the amount I received for the one year of early retirement.
Since this is supplemental to our overall retirement plan, it's looking pretty tempting.

Did you go out early? Do you regret it?
Do you wish you went out early?
Are you thinking along my same lines?
Am I an idiot for thinking to go out early

I know many of you are retired, I'd like to talk about it.
Thanks,
Jeff

Jeff,
am about a year ahead of you and am a notorious poor planner. I haven't tried to do calculations because I don't know all the denominators
I work for me and I like my boss and my job. I put off thinking about it but will likely jump in on the prescribed date. With company restructuring I can likely "consult" and keep things going. I feel so fortunate that when I wake up, I look forward to my day. If I were doing my previous job it would be very different. I'm not sure I would be as healthy and happy as I am now. It seems to me, as important as monetary lifestyle management is, it can pale in comparison to other lifestyle choices. We all do the best we can. Making lots of money has never been my strength.

 

[Janderso]

My wife is a retired teacher, she has been receiving her pension for three years and is 65. She now has the medicare supplement. So much better than my insurance!
I won't consider retiring until I'm 65 and receiving medicare with the supplement.
We went to london a couple years ago. Touring that city takes two good legs. I get it about retiring young enough to be physically fit to enjoy a little traveling. We have a travel trailer that never gets used-no time.
My wife is really looking forward to having me home.
It's all coming together. We have been planning on retirement and saving for over 30 years.
I see so many co-workers that don't take it seriously.
I trust my Edward Jones guy. We meet twice a year. I max out my Roth and have been putting 15% of my paycheck into my 401K for a very long time.
Between my wife's pension and our savings, I hope we have planned well.
Our CPA says we will be in good shape, just don't go on any world tours or buy a yacht

 

[RJSakowski]

I did some checking on the various social security options. It turns out that the break even point across the board is age 85. If you expect to live longer than 85, you will be better off waiting for the maximum benefit. If you don't think you will make it to 85, take the benefits earlier.

I took my social security at age 70 and enjoy an 8%/year increase because of that. I retired at 69 and my particular financial situation allowed me to delay social security.

In my case, my wife is fourteen years my junior and will most likely live long past my 85th birthday. Also since she immigrated from the UK some 22 years ago and retired early, her social security benefit will be minimal and she will be better off taking social security as a survivor.

Another overlooked consideration is medical insurance. If you retire before age 65 and Medicare elegibility, the cost is dear. My wife retired at 54 and has to buy independent insurance. Her annual cost for an HSA plan is between $6K and $7K and the insurance won't pay one dime until she reaches an annual deductible of $7K. (They do pay for an annual physical and provide some discounts for medication). At least with the AFA, she is covered for preexisting conditions but that may disappear.