Here is a comparison of my Social Security lifetime payouts!

This is the place to talk about pension related issues.

Here is a comparison of my Social Security lifetime payouts!

Postby JohnSwanson » Wed Jan 16, 2019 6:54 pm

I've read conflicting advice on the various retirement websites about when is the best time to take Social Security.
So I wrote a Linux shell script that I can execute in a Cygwin terminal. I open 3 Cygwin terminals side-by-side so
that I can compare all 3 of my Social Security choices. My program displays a running total of the annual payout of
each SS scenario and it accepts these inputs:
1) My initial SS payment.
2) The starting year.
3) The starting month as a number.
4) The annual COLA increase percentage. Since we get about a 2% increase each year, I enter 2%.
5) The year that the SS trust fund goes bankrupt (currently 2034).
6) The percentage of my initial payment that I'll receive after the trust fund goes bankrupt (currently 79%).
7) The year to stop the calculation. I run it until the end of 2048, which is just before I'll hit 91.

The results may surprise you! It will take until I'm 81 for my full retirement age (FRA) payout to exceed my age 62
payout! Despite this, I'm planning on waiting until my FRA, or at least until I'm age 65 because, if I take SS before
age 65, I'll make too much to receive an ACA insurance subsidy. In addition, after the trust fund goes bankrupt,
my FRA payment is larger than my initial age 62 payment.

I see a lot of comments on some of the retirement forums recommending that I wait until age 70 to take SS and
here's why this is terrible advice! It takes until I'm 88 for my age 70 payout to exceed my FRA payout! For my
retirement planning, I've been hoping that I'll hit 90, but this is a long-shot because my father passed-away at
71. However, he was a heavy-duty cigarette smoker for several decades and I haven't emulated his lifestyle!

Note that, if you are able to work until either your FRA or, age 70, your results will be different that what mine
are. However, if you are retired and are waiting to apply for SS, I suspect that your payout threshold dates will
be the same as mine!

FYI,
John
JohnSwanson
 
Posts: 114
Joined: Sat Apr 26, 2014 1:44 pm

Re: Here is a comparison of my Social Security lifetime payo

Postby buzzcat » Wed Jan 16, 2019 7:29 pm

Choosing when to take Social Security is a complex decision based on everyone's individual circumstances, which is why there isn't a simple answer. The common advice to wait until 70 treats SS as a form of "longevity insurance". By waiting, your monthly benefit is higher, (and it's inflation adjusted!) so if you do happen to live well into your 90's or beyond, you will receive that higher monthly payout for life, reducing the risk of running out of savings too early, and giving you a higher base if you do run out of savings. Of course, if family history indicates you likely won't live that long, then taking it at FRA or even earlier might be the wise choice. It would be a much easier decision if we knew our expiration date!

Married couples have more decisions to make, in order to ensure the surviving spouse gets the highest possible benefit. This doesn't currently apply to me so I don't know all the rules and gotchas, but I think it's often recommended for the spouse with the lower benefit to take it as early as possible and the spouse with the higher benefit to wait until 70. Again, individual circumstances might vary.

The wild card is what happens when the trust fund supposedly runs dry. My expectation is that Congress will eventually fix it with tax increases and hopefully not reducing benefits, but that's not happening anytime soon with the gridlock in Congress that seems to get worse every year.
buzzcat
 
Posts: 20
Joined: Tue Dec 30, 2014 9:42 pm

Re: Here is a comparison of my Social Security lifetime payo

Postby rpuckett23 » Wed Jan 16, 2019 9:30 pm

thank gang for the post.....I went with early .....I decide to be mad at myself at 82 or 2039 if my mind still can remember too


the 4 year of payments is 100k+ that will take till 2039 to get even ....

between cancer, heart, dementia, etc if I am still here in 2039 I am going to be mad at me......


btw my broker guy told me assume taxes will have too rise soon......so you IRA MRD, pension and social security is going to be taxed higher

assuming that true I decided to hoard every penny ASAP

also began a move into roth IRA.....no cap at 70.......its a great thing.
rpuckett23
 
Posts: 62
Joined: Tue Jan 31, 2017 3:47 pm

Re: Here is a comparison of my Social Security lifetime payo

Postby maryannhorton » Thu Jan 17, 2019 12:35 am

The sites calling it a no brainer to wait until 70 are based on very simple calculations. Oversimplified, if you ask me. Each person's situation will be different. In my case, FRA is about 66. I won't start before FRA because of all the penalties. But if I wait the extra 4 years until 70, that's 4 years when that income has to be made up from somewhere else. That somewhere else (100k+) is money that could have been growing in my 401k. It much better for me to let the 401k grow and take the 4 years of social security. Indeed, survivor benefits for your spouse are an important part of the calculation, but for me I found it better to buy my spouse an annuity on my death that would pay the difference.
maryannhorton
 
Posts: 23
Joined: Mon May 29, 2017 7:18 pm

Re: Here is a comparison of my Social Security lifetime payo

Postby dlbritton » Thu Jan 17, 2019 9:13 am

My wife and I are some of the remaining few that can double dip using a Restricted Spouse benefit. She turned 66 last May and I turned 64 in August, so I commenced mine early and she filed for a Restricted Spouse benefit allowing her own benefit to grow until age 70. We ran the calculators and the crossover for waiting until age 70 is around 89 for her and 87 for me. I would rather have the money now than wait until my 90's to see the extra benefit from waiting.

As an aside, I sure wish PBGC had taken over last January. I retired from my post Avaya job in January 2018 and could have done COBRA for health coverage.
She is an AT&T retiree so I am covered under her, but COBRA for the 2 of us combined with the Health Care Tax Credit would have been cheaper than my premium and her MediB/Supplement and the coverage would have been better.
She got screwed by the AT&T cash balance pension switch so we are lucky I was able to get out with my Avaya pension.
dlbritton
 
Posts: 9
Joined: Mon Feb 22, 2016 10:14 pm
Location: Piedmont NC

Re: Here's a comparison of my Age 65 benefit!

Postby JohnSwanson » Tue Nov 26, 2019 5:38 pm

When I started this thread, I wasn't trying to be confrontational! So those of you who tend to read words that I didn't write,
please stop reading now! However, those of you with open minds may find some of this helpful.

I found a page on the SS website that shows what percentage of an individual's FRA payment they will receive based on the
age that the individual applies for Social Security: https://www.ssa.gov/planners/retire/ageincrease.html

I bookmarked the payout page that applies to me in my Social Security folder for future reference. Since I retired from Avaya
at 55, I'm deferring my SS benefit for an entire decade if I wait until age 65, which seems long enough to me! Here's a summary
of how my age 65 payout compares with my FRA payout:

My age 65 SS payment is 88.9% of my FRA payment and I used my SS calculator to compare my age 65 payout vs my FRA payout.
Although it may seem like I'm taking a big hit, in the long run I'm not! At the end of 2048, my total age 65 payout is only 3.7%
less than my FRA payout! In addition, my FRA payout won't exceed my age 65 payout until I'm 82. In exchange for slight less
money by age 90, I have more income for 20 months when I'm young enough to enjoy it!

I still have 3 years to decide if I want to take my SS at age 65 and I have hard data to help me make this decision!

John
JohnSwanson
 
Posts: 114
Joined: Sat Apr 26, 2014 1:44 pm


Return to Pension

Who is online

Users browsing this forum: No registered users and 1 guest

cron