Thanks to all of those who have commented. Please see my video on The Average Retirement Savings at Age 60 here -> ua-cam.com/video/8lPdFPaXa1k/v-deo.html
Thanks for these videos...great information. You touched on this a little bit in this video...could you do a break even analysis for when to take benefits if you have a 401K/IRA, producing an average return, to tied you over to full retirement age? Social security is taxable at 85% for federal and exempt from state taxes (at least in CA). This makes the SS benefit more valuable than drawing from a retirement account. As you age, the standard deduction increases and/or medical expense increase to offset retirement distributions which are taxed in full.
excellent point. My parents are living a long life (their 90's), but around 86 they stopped traveling and don't spend much money. I'm glad they enjoyed their adventures while they were agile and could fully explore every place they traveled.
I'm 63 but have good friends in their 90s. Both have fair to poor health and wanted to go home to revisit England 2 years ago. I went along because they could never have made it on their own. Moral of the story: All the money in the world is useless if you cant spend it and enjoy it while healthy. Good health is everything. Great Video!
@@sammencia7945 Nothing mentioned by OP about the couple being short of money. My parents are in their mid to late 80's and have plenty of money (retired healthcare worker and Dentist). Doesn't really matter because both are too frail to enjoy long trips anymore. Could they afford to have someone take them? Utilize a travel company like Tauck tours? Sure and they have in the past but it's more about being able to actually enjoy the travel and endure the physical activity it requires...which they both do not want anymore. So the choice of when to take SS is a very personal choice for everyone. It must be weighed with your individual life situation that includes your financial status, health status and your personal wishes in retirement.
My break even point is at 78. My wife and I plan on taking SS out at 62. I want to do things before my health starts to fail me. We will not be hurting financially.
Age 61 and I think its time to take survivor benefits. My ex spouse and I worked long and hard for the money that was taken out of our checks. No one in my family except 1 has lived beyond 73. I want more TIME with my grandkids. Money is NOT everything.
In the last three months I have had two friends tell me I’m wrong for taking Social Security when I plan to. Mind you, these people have no idea what my financial situation is, what my investments are, or the balance of my 401(k) is. They got advice from a broker or another friend and figured if the advice is good for them, it’s gotta be good for me. Everybody’s situation is different but these friends seem to have forgotten that.
Thanks for the videos - I have watched quite a few of yours over the last few weeks. I'm in my early 50's and working hard on retirement savings. I am seriously considering early retirement due to family genetics on my dads side. Very few people on that side made it much past 80. I would like to enjoy a few years of good health / do some traveling before the possible shortening of my years hits....
I turn 68 in May 2022 and still working a full schedule. This is enjoyable for a bachelor's life. Also, when SSA income starts it may move my base tax bracket up. Since I work for WDW my hourly income is not that much. So should I take it this year at 68? I did notice on the SSA website the sliding scale shows if I wait till 68.8 there is a big increase monthy. Have a Magical Day.
I intend to take it early as I'm older than my wife. We are savers so in 7 years I will be able to retire and she will follow suit 4 years later. Plan to ahve everything we own paid off by then so hopefully can live and enjoy our later years without stress. Good video.
I am glad that still somebody are willing to help other people to experience the wealthy life! thank you Sir Larry Benedict, may our GOD continue bless you.
Your simple break-even chart should be modified to include expected income on investments. If you have assets, by taking social security benefits early those investments can remain invested instead of being withdrawn for expenses. If you earn 4%, then the break-even age pushes out to about age 91 (in my case), which most of us will not reach. Net effect in reality is more complicated, due to tax implications, whether you have IRAs that have to be withdrawn, effect on Medicare premiums if you show more income, etc.
Here's how I see it. From age 64 (when I took it) to age 72 I will spend money and time on 20 day cruises, African Safaris, seeing the world, driving a nicer car that I could not have afforded earlier in life. From 72 to 80 years old I will probably spend money and time on long weekend getaways, bus day-trips with a bunch of old folks, moving into a retirement community (downsizing), and re-writing my will. From 78 to 85, I will probably spend most of my time looking for my glasses, my teeth and my event planner to see when my next doctors appointment is. ! Take the money when you can use it best.
This analysis is generally for people who rely on social security for subsistence. This analysis are not for investors in the stock markets - who are rich and invest their social security in the stock market. If you invest all of your benefits (after tax) received from 62 - 67 in the stock market, you always come ahead, assuming a mere 5% return, after tax.
Another factor is the Affordable Care Act (Covered California). I elected to NOT take SS at 62 because it then has to be claimed as income. That additional income becomes a factor for reducing the amount that is paid towards the health care costs. Most likely a fairly large portion of my small SS check would go right back to pay for health insurance. When I'm eligible for Medicare (66.5 for FRA) I might consider taking my SS. I'm going to have to weight things at that time. BTW, Affordable (???) Care Act. Same people, same policy, year 1, $168, year 2, $256, year 3, $415. What is affordable about that?
@@user-wm2tw This is an old comment but do not confuse Medicare with your traditional health care plan. It generally pales in comparison in what is covered and it's out of pocket expenses. At least that's what I've heard amongst my retired friends.
My SS benefit is $40K per year. I have additional Fixed income of $10K. (Taxed as ordinary income) I am mid-sixties, live in a state without Income Tax, Single individual doing Roth Conversions and can chose whatever AGI I want under $111K. (Level 2 IRMAA maximum) What would be the Conversion sweet spot from a Social Security tax perspective within a annual range between 20K to 60K which I'll be doing over 10 to 15 years? PS love the Videos, keep up the great work.
I tell you what...as I keep watching these.....and knowing that my next door neighbor died at age 58, my Uncle (and his best friend) only made it to age 68. and several of my work colleagues died before age 63......age 62 or 64 is looking like the time to file..more and more.. I noticed that IF you did take the money at 62....and ONLY made it to 76.5, it was only a loss of 10 grand. Seems worth it to me.
Money in the pocket is the best money. Trying to wait and end up with nothing is never a good idea. No one knows if they will open their eyes tomorrow, so don't bank of an extra 3-5 years. Makes no sense.
@@minhhoangnguyen536 I disagree. All men die. The constant indignation and guilt that I would feel leaving money on the table by not drawing at 70 would make every day one of onerous shame.🤑
I'm with you, the earlier the better for me. I don't care if there are $$ to earn later in life, for what? Tell me what is so darned important that you can't give up a couple of bucks to have a better life now rather site and stare at your bank account and be able to do nothing with it. That's a crying shame to me. Besides, you can't take it with you.
@@jaycelliott2 Yup...that's for damn sure - you CANNOT take it with you. I'm now even thinking of maybe retiring earlier than 62. I know this though - I'll DEFINITELY be taking those benefits at 62 at the MINIMUM. A few things have happened since my original post: 1. An old work colleague of mine now has pancreatic cancer. He's only 61 or 62 or so. 2. A PRESENT work colleague of mine just died. He died of cancer - he was only 38. 3. Another old colleague of mine's son just died at the age of 30 or so. Enough said.....I"ve seen TOO many young folks pass way too soon.
Thank you for all these videos, BIG thank you. I want to make a suggestion, for you. Say 'click the like button' a bit sooner to remind us. I replay a few seconds, just so I can click it, there's not enough time after the reminder. :)
Hello! I have a question and I want to ask you. It doesn't matter if it's inconvenient. I watched UA-cam. For retirement questions, add up all your income and divide it by 35 years, then divide it by 12 months. Then look at the table and calculate it. But if the resulting number is higher than 886, then the resulting pension will be even smaller. Isn’t this strange? 7For example, 885x90%=$769.5, but 886x32%=$273.92? Is it correct to add both?
It’s better to use social security as a longevity payment. Your accumulated wealth can easily cover the the 5 to 8 years to a full or maximum benefit. It will also lower your potential future RMD.
Can I ask you I am 74 and retired for years don't think I will make it past 85 to 88 having challenges now.. My wife is a corporate director makes 6 figures and will be 66 & 3 month full retirement age in March 2022 not far away 5 months but wants to work until at least 2 more years. She also has a very healthy 401K. She thinks she will be like her Mom which is 94 right now and may live a couple more years. Not worried about the 401k more on the SS for her to start collecting or because of her income thinking she should wait to collect SS only after she really QUITES the day job. Thank You
This video ignores the case where an individual has existing retirement savings, and could invest the social security income. If that is the case, and one assumes a 4% return, in my case the age at which my total returns (assuming 22% tax bracket) from social security taken at normal retirement exceeds the amount if taken early is 83, and 88 if I waited to file until I was 70. It changes to 80 & 85 if I assume a 2% yield, and 90 & 97 if I assume a 6% yield. Note these assume I have sufficient funds to live off of without social security income, and the money builds value in my estate. Another Time value of Money exercise.
Plus you are living on something? Other investments? So pull out other investments to file early and invest SS benefits? Better make more than 8 percent as well as be able to cover taxes on the investment income you are living on too.
@@connordenson7826 I gave that assumption in my response. And that's moot, since taxes on that investment income is present in any case. Note if living off of a Roth IRA, there would be no taxes on investment income. My calculations/assumptions on yield are net of taxes.
If a person only has 25 years of work credits at 62, what are the points to wait for the full retirement age to take SSB? The average of the income credit for the 5 waiting years are 0. His/hers SSB maybe reduced comparing with the SSB estimate statement due to 0 credit from these 5 years. Am I wrong?
Well I'm currently collecting ssi disability so I'm not sure I'll even have a choice about when I start to collect my regular social security income. If I do obviously I'd prefer to wait until 65 unless there's no difference between filing at 65 versus filing at 62. To me I think waiting until I'm 70 isn't even an option as I'm fairly sure that since I'm collecting ssi disability social security will require me to file no later than full retirement age.
Any chance of a never married person's POV on retirement? Spousal info muddies my absorbing experience. (from what I can tell, most of us out there will retire as single people)
78 is too young to use as age of death for this calculation. It should use at least 82 because that is the life expectancy for men who are past age 62, and it goes up to 84 for women.
i'm sorry, sir. but that breakeven chart is totally misleading. you completely ignore the annual cpi increases. let's say the average increase is 2.4%. 2.4% of $2,320 is a lot more than 2.4% of $1,180. every year, the variance between those three totals becomes larger and larger. another factor that should be considered is taxes. if you have a decent sized retirement savings, when you reach the time for required minimum distributions, you are much more likely to have the majority of your social security taxed if you're only getting $1,180/mo than if you are getting $2,320. there is more that i could talk about but i just don't have the time to write an essay here.
People who are good with money (AKA everyday millionaires) do NOT base monetary decisions on fear, pessimism, or any emotion whatsoever for that matter. They do not dwell on what-if-ism. They simply apply known factors to reasonable assumptions, then make a decision solely on those factors. The biggest problem I see is these people may make the mistake of only looking at the bottom line. This is wrong because income sources are NOT treated equally in a medicaid spend down situation. This is especially true for a community spouse situation. In this situation, having more SS money is better than having more income coming from savings. This is because the community spouse keeps his/her SS, at least they do in my state. The savings are far more difficult to keep regardless of who actually owns the asset.
Hi, Mr. Schmidt. Question: I plan to retire at 60 with a significant retirement nest egg, a military retirement, and a federal civil service retirement that kicks in when I hit 62. My plan was to start drawing social security immediately, but invest that check in a mutual fund rather than spend it. By my calculations, even at a modest rate of growth, I'd end up with a whole lot more when I get to my last few years than I would if I'd waited until FRA. Is there a hole in my logic?
Hi, take this as general advice - you would need to verify this with a good financial planner for your personal situation. Mutual Fund values can go up and down but Social Security (and the published increases if you wait) is US Government guaranteed - which is very nice. This is offset by the fact that you get fewer payments if you wait and when you go, there is not an asset that is waiting to be passed down (ignoring spousal survivor benefits). Also check the income tax on the SS with your financial planner. It is sometimes higher if you take SS early rather than full retirement age if you are receiving other income.
I think taking it at 62 and investing is the way to go if you don’t need it to live on. Just throw it in Dow or SP500 index fund and let it build as estate for your children. That’s what I plan on doing. It can go up or down doesn’t matter because I won’t need it and in long run it will be a nice sum for next gen.
@@HolySchmidt like if I’m getting a pension it will make me go over $18,240.... then I’ll get penalized by having to pay back monies? Then my monthly payment will be lower?
@@paperchaser9565 I believe the form you are referring to is SSA 521. Remember though that you have to pay back everything you received AND you can only do it during the first 12 months after you start receiving Social Security. Also you can only do this one time. Here is the link: www.pdffiller.com/jsfiller-desk18/?requestHash=3a8476fd3a3b42d62f0b5dd83bbbcbe06a42a17759863ca1fe7b5125b927931b&et=l2f&projectId=577935500#f1ef89918ca2012127e4e478795d54ba
@@paperchaser9565 Yes they will lower your payment by $1 for every $2 you earn above that amount up to $48,600 (in 2020) of earnings then it goes to $1 for every $3. You theoretically get it back after you hit Full Retirement Age
I don't think it's correct to look into this without looking at inflation. A $2,000/month benefit today isn't going to be worth $2,000 in 7 years in todays dollars. Baring deflation, the today's dollars are worth more than future dollars. Also worth investigating is Cost of Living Adjustment's. Obviously a bigger payment is going to grow more over time through COLA than a smaller payment.
Terricfic analysis with some caveats. Many variables exist and this is contingent on predicting the future. With so many variables one is less likely to get all the correct answers. A person's health can change with a visit to the doctor. I would say that as one gets older their quality of life will surely diminish regardless of how old they live. The life expectancy is higher today then it use to be due to medicine. I had a relative with memory issues who was alive but her mental facilities were severely impaired.
Thank you for your video, it was well done. My question is, I retired at 67 and claimed my benefits. My wife who is 64 and not working will receive less then half of my benefits when she applies for her own retirement. At what age should she apply for spousal benefits?
It looks like she can get 1/2 of your full benefit if she waits until her full retirement age. The SSA has a calculator that may help you with this question.
she should grab her ss as soon as possible. Then when you claim she will be able to start collecting the high of hers or yours. This can't be done until you start to collect.
Mr. Schmidt If my EX-spouse is younger than me, AND she HASN’T yet reached her SS benefit claim age, AND her benefit will be higher than mine, do I understand you correctly to say I should file ASAP because I will get a “bump” when she does in fact claim? Thanks!
I never understood taking SS @ 62 UNLESS you absolutely need the money. Then it’s completely understandable. I will hold out as long as I can unless circumstances change. I have a running argument with my friends who insist they’re right by taking it at 62. I try to explain that everyone’s finances are different and I’m greeted with “What if you die before you max out how much you get?” To which I respond, “I won’t care because I’ll be dead!” There is no right answer to this.
The best age to begin collecting Federal welfare is 70. If you don't believe me look at your SS statement. This is not difficult, let's not make it difficult.
I would think "No" especially if you don't yet have 35 years of covered work paying Social Security Tax. Or if some of those years had much lower income than you are making now. I guess you can file SS and still work but that gets complicated and while you are working your benefit will be less still.
The government is not stupid they hope is that most people would not make it yet they will dangle a bigger paycheck hoping you go after it and would not make it.
You do not mention that if you have never married and have no eligible children, and you die before you start receiving benefits, NO ONE gets those benefits.
I’m 55 and wife is 58 she wants to retire @ 59.5 😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂 I told her I’m not retiring until 70.5👍 I’m guessing we will not be married much longer 😎🥃 winning
My friend is a CPA and teaches accounting at a prestigious business school has filed at 62... That's enough reason for me to file early !! All the gobbledygook about filing makes it more confusing than it needs to be. I just watch what successful people that are much smarter than I do and try to emulate those choices. But, to each their own...
Robert, I sure hope you're in the same financial situation as your CPA friend. Emulating successful people can be good, but only if everything matches up. A better way of looking at it is, how much money will you need coming in every month, once you are retired? Where will that money come from?
I'm sorry but one of the very dumbest reasons to do something is just because someone else did it. as jody said, your situation may not match his. knowledge is power. it would be wise for you (and everyone) to try and understand as much "gobbledygook" as you can before deciding
You’ve really got to think for yourself and not do something because “smart” people do it. You’re setting yourself up for failure. Better to hunt down good advice based on your own individual circumstances, because it’s actually always more complicated than it seems and taking the easy way is actually taking the dumb way
I am so glad I sought council in this matter. At 58 I gave my boss four years notice. I was going to jump ship at 62 and start collecting SS, a reduced benefit of $1748.00. Did you know if you start drawing more than 36 months before your FRA you gain an extra (permanent) penalty? I kept working, much to my boss's delight until my wife and I got the commie virus furlough last March. We sold our home at a good price and relocated to a low property tax state. NJ to TN, there is $1000. a month in your pocket. I will wait not for FRA in a few months ($2450.00) but live off assets until 70 ($3200.00). My financial councilor's words ring in my ears- "Don't worry about breaking even, worry about being old and broke". As I have a reasonable expectation to live past 100 waiting will add hundreds of thousands to my portfolio. My wife's parents both made it past 95, so we will wait for her to collect as well.
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The life expectancy's in both of your claiming age videos seems low by at least 4 years. I believe your stated average life span of 78 years is for someone born. This is biased low because it includes those dying young from childhood illness, accidents, etc. The Social Security actuarial life expectancy of a 62, 67, and 70 years old should be used to evaluate each claiming age. For example Social Security has the life expectancy of a 62 year old as 82 for males and 84 1/2 for females. This is important because women could benefit from waiting and claiming their benefit at 70.
Thanks to all of those who have commented. Please see my video on The Average Retirement Savings at Age 60 here -> ua-cam.com/video/8lPdFPaXa1k/v-deo.html
Thanks for these videos...great information. You touched on this a little bit in this video...could you do a break even analysis for when to take benefits if you have a 401K/IRA, producing an average return, to tied you over to full retirement age? Social security is taxable at 85% for federal and exempt from state taxes (at least in CA). This makes the SS benefit more valuable than drawing from a retirement account. As you age, the standard deduction increases and/or medical expense increase to offset retirement distributions which are taxed in full.
One thing you have to remember regarding retirement age. Time becomes priceless as you get older.......
Great observation.
excellent point. My parents are living a long life (their 90's), but around 86 they stopped traveling and don't spend much money. I'm glad they enjoyed their adventures while they were agile and could fully explore every place they traveled.
Well said.
@W. good for you !
and time will seem to drag if you dont have enough money to live comfortably.....wait for 70
I'm 63 but have good friends in their 90s. Both have fair to poor health and wanted to go home to revisit England 2 years ago. I went along because they could never have made it on their own. Moral of the story: All the money in the world is useless if you cant spend it and enjoy it while healthy. Good health is everything. Great Video!
Good health is vital but having a great friend like you enabled them to revisit England.
So they needed the higher SSA checks to pay for a companion to travel with them.
Therefore take it at age 70.
@@sammencia7945 Nothing mentioned by OP about the couple being short of money. My parents are in their mid to late 80's and have plenty of money (retired healthcare worker and Dentist). Doesn't really matter because both are too frail to enjoy long trips anymore. Could they afford to have someone take them? Utilize a travel company like Tauck tours? Sure and they have in the past but it's more about being able to actually enjoy the travel and endure the physical activity it requires...which they both do not want anymore.
So the choice of when to take SS is a very personal choice for everyone. It must be weighed with your individual life situation that includes your financial status, health status and your personal wishes in retirement.
@@sammencia7945 he never said that the couple paid his way. He may have paid for his own travel.
I absolutely love straight forward information with a easy to listen to delivery. Thank you
Tesla wouldn't have said that
My break even point is at 78. My wife and I plan on taking SS out at 62. I want to do things before my health starts to fail me. We will not be hurting financially.
Age 61 and I think its time to take survivor benefits. My ex spouse and I worked long and hard for the money that was taken out of our checks. No one in my family except 1 has lived beyond 73. I want more TIME with my grandkids. Money is NOT everything.
But it sure does help!
So?
That was in the past.
Lifespans have INCREASED a lot since 1980.
Woman age 61 will live to 86.
In the last three months I have had two friends tell me I’m wrong for taking Social Security when I plan to. Mind you, these people have no idea what my financial situation is, what my investments are, or the balance of my 401(k) is. They got advice from a broker or another friend and figured if the advice is good for them, it’s gotta be good for me. Everybody’s situation is different but these friends seem to have forgotten that.
Thanks for the videos - I have watched quite a few of yours over the last few weeks.
I'm in my early 50's and working hard on retirement savings. I am seriously considering early retirement due to family genetics on my dads side. Very few people on that side made it much past 80. I would like to enjoy a few years of good health / do some traveling before the possible shortening of my years hits....
I turn 68 in May 2022 and still working a full schedule. This is enjoyable for a bachelor's life. Also, when SSA income starts it may move my base tax bracket up. Since I work for WDW my hourly income is not that much. So should I take it this year at 68? I did notice on the SSA website the sliding scale shows if I wait till 68.8 there is a big increase monthy. Have a Magical Day.
If you enjoy working continue.
Men die when they retire.
Women not so much.
I intend to take it early as I'm older than my wife. We are savers so in 7 years I will be able to retire and she will follow suit 4 years later. Plan to ahve everything we own paid off by then so hopefully can live and enjoy our later years without stress. Good video.
I am glad that still somebody are willing to help other people to experience the wealthy life! thank you Sir Larry Benedict, may our GOD continue bless you.
Your simple break-even chart should be modified to include expected income on investments. If you have assets, by taking social security benefits early those investments can remain invested instead of being withdrawn for expenses. If you earn 4%, then the break-even age pushes out to about age 91 (in my case), which most of us will not reach. Net effect in reality is more complicated, due to tax implications, whether you have IRAs that have to be withdrawn, effect on Medicare premiums if you show more income, etc.
Here's how I see it. From age 64 (when I took it) to age 72 I will spend money and time on 20 day cruises, African Safaris, seeing the world, driving a nicer car that I could not have afforded earlier in life. From 72 to 80 years old I will probably spend money and time on long weekend getaways, bus day-trips with a bunch of old folks, moving into a retirement community (downsizing), and re-writing my will. From 78 to 85, I will probably spend most of my time looking for my glasses, my teeth and my event planner to see when my next doctors appointment is. ! Take the money when you can use it best.
Thanks for the comment
This analysis is generally for people who rely on social security for subsistence. This analysis are not for investors in the stock markets - who are rich and invest their social security in the stock market. If you invest all of your benefits (after tax) received from 62 - 67 in the stock market, you always come ahead, assuming a mere 5% return, after tax.
Thanks for the comment
Another factor is the Affordable Care Act (Covered California). I elected to NOT take SS at 62 because it then has to be claimed as income. That additional income becomes a factor for reducing the amount that is paid towards the health care costs. Most likely a fairly large portion of my small SS check would go right back to pay for health insurance. When I'm eligible for Medicare (66.5 for FRA) I might consider taking my SS. I'm going to have to weight things at that time. BTW, Affordable (???) Care Act. Same people, same policy, year 1, $168, year 2, $256, year 3, $415. What is affordable about that?
Some good points made.
Medicare age is 65.
How about Medicare ?
@@user-wm2tw This is an old comment but do not confuse Medicare with your traditional health care plan. It generally pales in comparison in what is covered and it's out of pocket expenses. At least that's what I've heard amongst my retired friends.
$415 is not affordable?
$168 is not?
Do you want everything to be free?
My SS benefit is $40K per year. I have additional Fixed income of $10K. (Taxed as ordinary income) I am mid-sixties, live in a state without Income Tax, Single individual doing Roth Conversions and can chose whatever AGI I want under $111K. (Level 2 IRMAA maximum) What would be the Conversion sweet spot from a Social Security tax perspective within a annual range between 20K to 60K which I'll be doing over 10 to 15 years? PS love the Videos, keep up the great work.
This was great! Thank you.
Another factor to consider is increases in benefits due to inflation, but that would make the math that much more complicated...
I tell you what...as I keep watching these.....and knowing that my next door neighbor died at age 58, my Uncle (and his best friend) only made it to age 68. and several of my work colleagues died before age 63......age 62 or 64 is looking like the time to file..more and more.. I noticed that IF you did take the money at 62....and ONLY made it to 76.5, it was only a loss of 10 grand. Seems worth it to me.
That's the problem with our Republic, no discipline!
Money in the pocket is the best money. Trying to wait and end up with nothing is never a good idea. No one knows if they will open their eyes tomorrow, so don't bank of an extra 3-5 years. Makes no sense.
@@minhhoangnguyen536 I disagree. All men die. The constant indignation and guilt that I would feel leaving money on the table by not drawing at 70 would make every day one of onerous shame.🤑
I'm with you, the earlier the better for me. I don't care if there are $$ to earn later in life, for what? Tell me what is so darned important that you can't give up a couple of bucks to have a better life now rather site and stare at your bank account and be able to do nothing with it. That's a crying shame to me. Besides, you can't take it with you.
@@jaycelliott2 Yup...that's for damn sure - you CANNOT take it with you. I'm now even thinking of maybe retiring earlier than 62. I know this though - I'll DEFINITELY be taking those benefits at 62 at the MINIMUM. A few things have happened since my original post:
1. An old work colleague of mine now has pancreatic cancer. He's only 61 or 62 or so.
2. A PRESENT work colleague of mine just died. He died of cancer - he was only 38.
3. Another old colleague of mine's son just died at the age of 30 or so.
Enough said.....I"ve seen TOO many young folks pass way too soon.
Thank you for all these videos, BIG thank you. I want to make a suggestion, for you. Say 'click the like button' a bit sooner to remind us. I replay a few seconds, just so I can click it, there's not enough time after the reminder. :)
Hello! I have a question and I want to ask you. It doesn't matter if it's inconvenient. I watched UA-cam. For retirement questions, add up all your income and divide it by 35 years, then divide it by 12 months. Then look at the table and calculate it. But if the resulting number is higher than 886, then the resulting pension will be even smaller. Isn’t this strange? 7For example, 885x90%=$769.5, but 886x32%=$273.92? Is it correct to add both?
Good, straight forward video.
It’s better to use social security as a longevity payment. Your accumulated wealth can easily cover the the 5 to 8 years to a full or maximum benefit. It will also lower your potential future RMD.
exactly....and the cola you get will be larger every time it happens...thats worth waiting..
Just subscribed, great information
Can I ask you I am 74 and retired for years don't think I will make it past 85 to 88 having challenges now.. My wife is a corporate director makes 6 figures and will be 66 & 3 month full retirement age in March 2022 not far away 5 months but wants to work until at least 2 more years. She also has a very healthy 401K. She thinks she will be like her Mom which is 94 right now and may live a couple more years. Not worried about the 401k more on the SS for her to start collecting or because of her income thinking she should wait to collect SS only after she really QUITES the day job. Thank You
This video ignores the case where an individual has existing retirement savings, and could invest the social security income. If that is the case, and one assumes a 4% return, in my case the age at which my total returns (assuming 22% tax bracket) from social security taken at normal retirement exceeds the amount if taken early is 83, and 88 if I waited to file until I was 70. It changes to 80 & 85 if I assume a 2% yield, and 90 & 97 if I assume a 6% yield. Note these assume I have sufficient funds to live off of without social security income, and the money builds value in my estate. Another Time value of Money exercise.
Don't forget to add in investment risk :).
Plus you are living on something? Other investments? So pull out other investments to file early and invest SS benefits? Better make more than 8 percent as well as be able to cover taxes on the investment income you are living on too.
@@connordenson7826 I gave that assumption in my response. And that's moot, since taxes on that investment income is present in any case. Note if living off of a Roth IRA, there would be no taxes on investment income. My calculations/assumptions on yield are net of taxes.
If a person only has 25 years of work credits at 62, what are the points to wait for the full retirement age to take SSB? The average of the income credit for the 5 waiting years are 0. His/hers SSB maybe reduced comparing with the SSB estimate statement due to 0 credit from these 5 years. Am I wrong?
What about taking it early to invest and create more passive income?
Well I'm currently collecting ssi disability so I'm not sure I'll even have a choice about when I start to collect my regular social security income. If I do obviously I'd prefer to wait until 65 unless there's no difference between filing at 65 versus filing at 62. To me I think waiting until I'm 70 isn't even an option as I'm fairly sure that since I'm collecting ssi disability social security will require me to file no later than full retirement age.
This sounds like a call to the SSA is needed.
Any chance of a never married person's POV on retirement? Spousal info muddies my absorbing experience. (from what I can tell, most of us out there will retire as single people)
Thank you this video help me a lot!!! very easy to undestand !!!
You missed mentioning health issues as one of most common reasons to take SS at 62.
Great information. Thanks
My pleasure
No man in my family has ever made it to 76. I'm not waiting a day past 62 to file. Even if I make it past 76, I'll likely be slowing down.
Waiting will net you about a 7% return on your money each year.
Will the value of my social security diminish over time, say the next 10 to 20 years due to inflation? Do you have any historical data?
You Social Security payment is adjust up with inflation annually using a cost of living adjustment (aka COLA).
I’m 63, l have no expenses, should I start collecting ss now and invest?
78 is too young to use as age of death for this calculation. It should use at least 82 because that is the life expectancy for men who are past age 62, and it goes up to 84 for women.
I never know if these charts assume you quit working at 62 or keep working until 70. I guess it assumes you quit working at 62 but dont file until 70.
i'm sorry, sir. but that breakeven chart is totally misleading. you completely ignore the annual cpi increases. let's say the average increase is 2.4%. 2.4% of $2,320 is a lot more than 2.4% of $1,180. every year, the variance between those three totals becomes larger and larger. another factor that should be considered is taxes. if you have a decent sized retirement savings, when you reach the time for required minimum distributions, you are much more likely to have the majority of your social security taxed if you're only getting $1,180/mo than if you are getting $2,320. there is more that i could talk about but i just don't have the time to write an essay here.
People who are good with money (AKA everyday millionaires) do NOT base monetary decisions on fear, pessimism, or any emotion whatsoever for that matter. They do not dwell on what-if-ism. They simply apply known factors to reasonable assumptions, then make a decision solely on those factors. The biggest problem I see is these people may make the mistake of only looking at the bottom line. This is wrong because income sources are NOT treated equally in a medicaid spend down situation. This is especially true for a community spouse situation. In this situation, having more SS money is better than having more income coming from savings. This is because the community spouse keeps his/her SS, at least they do in my state. The savings are far more difficult to keep regardless of who actually owns the asset.
Hi, Mr. Schmidt. Question: I plan to retire at 60 with a significant retirement nest egg, a military retirement, and a federal civil service retirement that kicks in when I hit 62. My plan was to start drawing social security immediately, but invest that check in a mutual fund rather than spend it. By my calculations, even at a modest rate of growth, I'd end up with a whole lot more when I get to my last few years than I would if I'd waited until FRA. Is there a hole in my logic?
Hi, take this as general advice - you would need to verify this with a good financial planner for your personal situation. Mutual Fund values can go up and down but Social Security (and the published increases if you wait) is US Government guaranteed - which is very nice. This is offset by the fact that you get fewer payments if you wait and when you go, there is not an asset that is waiting to be passed down (ignoring spousal survivor benefits). Also check the income tax on the SS with your financial planner. It is sometimes higher if you take SS early rather than full retirement age if you are receiving other income.
I think taking it at 62 and investing is the way to go if you don’t need it to live on. Just throw it in Dow or SP500 index fund and let it build as estate for your children. That’s what I plan on doing. It can go up or down doesn’t matter because I won’t need it and in long run it will be a nice sum for next gen.
Are pensions included in figuring out your SS monthly allotment?
It depends a bit on the type, but generally if it’s taxable then it probably does
@@HolySchmidt like if I’m getting a pension it will make me go over $18,240.... then I’ll get penalized by having to pay back monies? Then my monthly payment will be lower?
@@HolySchmidt what form do I use to cancel my SS for this year and have it restarted in 2021?
@@paperchaser9565 I believe the form you are referring to is SSA 521. Remember though that you have to pay back everything you received AND you can only do it during the first 12 months after you start receiving Social Security. Also you can only do this one time. Here is the link: www.pdffiller.com/jsfiller-desk18/?requestHash=3a8476fd3a3b42d62f0b5dd83bbbcbe06a42a17759863ca1fe7b5125b927931b&et=l2f&projectId=577935500#f1ef89918ca2012127e4e478795d54ba
@@paperchaser9565 Yes they will lower your payment by $1 for every $2 you earn above that amount up to $48,600 (in 2020) of earnings then it goes to $1 for every $3. You theoretically get it back after you hit Full Retirement Age
The best year to retire is when you are 64 and your company offers you $40,000 to retire 6 months before you planned on retiring.... ;o)
My parents are both 83 and they can barely even leave the house. Take it at 62 and enjoy retirement before you get too old to travel and have fun.
Do the crazy hot matrix ...
Every man should watch that breakdown because it is SOOO true!
I don't think it's correct to look into this without looking at inflation. A $2,000/month benefit today isn't going to be worth $2,000 in 7 years in todays dollars. Baring deflation, the today's dollars are worth more than future dollars. Also worth investigating is Cost of Living Adjustment's. Obviously a bigger payment is going to grow more over time through COLA than a smaller payment.
The biggest think money can’t buy is time.
Terricfic analysis with some caveats. Many variables exist and this is contingent on predicting the future. With so many variables one is less likely to get all the correct answers. A person's health can change with a visit to the doctor. I would say that as one gets older their quality of life will surely diminish regardless of how old they live. The life expectancy is higher today then it use to be due to medicine. I had a relative with memory issues who was alive but her mental facilities were severely impaired.
Thank you for your video, it was well done. My question is, I retired at 67 and claimed my benefits. My wife who is 64 and not working will receive less then half of my benefits when she applies for her own retirement. At what age should she apply for spousal benefits?
It looks like she can get 1/2 of your full benefit if she waits until her full retirement age. The SSA has a calculator that may help you with this question.
also maybe consider getting Mike Piper's little book "Social Security made simple"
she should grab her ss as soon as possible. Then when you claim she will be able to start collecting the high of hers or yours. This can't be done until you start to collect.
Mr. Schmidt
If my EX-spouse is younger than me, AND she HASN’T yet reached her SS benefit claim age, AND her benefit will be higher than mine, do I understand you correctly to say I should file ASAP because I will get a “bump” when she does in fact claim?
Thanks!
You only have NOW
In the words of a very smart person, live like you only have today, plan like you will live forever.
I never understood taking SS @ 62 UNLESS you absolutely need the money. Then it’s completely understandable. I will hold out as long as I can unless circumstances change. I have a running argument with my friends who insist they’re right by taking it at 62. I try to explain that everyone’s finances are different and I’m greeted with “What if you die before you max out how much you get?” To which I respond, “I won’t care because I’ll be dead!” There is no right answer to this.
You are exactly correct. The biggest danger that the elderly face is running low on money, not some hypothetical “break even” point.
Inheritance!
plan and implement with the assumption you will live to be 100...because you may...
Everyone leaves out taking social security at 60 for widows/widowers
The best age to begin collecting Federal welfare is 70. If you don't believe me look at your SS statement. This is not difficult, let's not make it difficult.
Troll
Question, if I am 62 years old , still healthy and and can make 60 K annually, should I file SS ?
I would think "No" especially if you don't yet have 35 years of covered work paying Social Security Tax. Or if some of those years had much lower income than you are making now.
I guess you can file SS and still work but that gets complicated and while you are working your benefit will be less still.
The government is not stupid they hope is that most people would not make it yet they will dangle a bigger paycheck hoping you go after it and would not make it.
since this includes everything in your other "good reasons to file early" video, you might as well delete that second one
But if you retire at your FRA. Mine is 66 and 2 months, can I continue to work my full time job without getting penalized?
You do not mention that if you have never married and have no eligible children, and you die before you start receiving benefits, NO ONE gets those benefits.
Given that fact pattern no one could disagree.
What is you file early and invest the money?
I’m 55 and wife is 58 she wants to retire @ 59.5 😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂
I told her I’m not retiring until 70.5👍
I’m guessing we will not be married much longer 😎🥃 winning
In what basis can anyone count on living to 70 years and even beyond?
And even in the current state of health at 50?
@@davido3026 That is something to take into consideration, however, I am in good physical shape and my family tends to make mid 80’s +
My friend is a CPA and teaches accounting at a prestigious business school has filed at 62... That's enough reason for me to file early !! All the gobbledygook about filing makes it more confusing than it needs to be. I just watch what successful people that are much smarter than I do and try to emulate those choices. But, to each their own...
Robert, I sure hope you're in the same financial situation as your CPA friend. Emulating successful people can be good, but only if everything matches up. A better way of looking at it is, how much money will you need coming in every month, once you are retired? Where will that money come from?
I'm sorry but one of the very dumbest reasons to do something is just because someone else did it. as jody said, your situation may not match his. knowledge is power. it would be wise for you (and everyone) to try and understand as much "gobbledygook" as you can before deciding
Not sure that's a good reason
You’ve really got to think for yourself and not do something because “smart” people do it. You’re setting yourself up for failure. Better to hunt down good advice based on your own individual circumstances, because it’s actually always more complicated than it seems and taking the easy way is actually taking the dumb way
If you can live that long.
I am so glad I sought council in this matter. At 58 I gave my boss four years notice. I was going to jump ship at 62 and start collecting SS, a reduced benefit of $1748.00. Did you know if you start drawing more than 36 months before your FRA you gain an extra (permanent) penalty? I kept working, much to my boss's delight until my wife and I got the commie virus furlough last March. We sold our home at a good price and relocated to a low property tax state. NJ to TN, there is $1000. a month in your pocket. I will wait not for FRA in a few months ($2450.00) but live off assets until 70 ($3200.00). My financial councilor's words ring in my ears- "Don't worry about breaking even, worry about being old and broke". As I have a reasonable expectation to live past 100 waiting will add hundreds of thousands to my portfolio. My wife's parents both made it past 95, so we will wait for her to collect as well.
Expected long life is a good reason to wait
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The life expectancy's in both of your claiming age videos seems low by at least 4 years. I believe your stated average life span of 78 years is for someone born. This is biased low because it includes those dying young from childhood illness, accidents, etc. The Social Security actuarial life expectancy of a 62, 67, and 70 years old should be used to evaluate each claiming age. For example Social Security has the life expectancy of a 62 year old as 82 for males and 84 1/2 for females. This is important because women could benefit from waiting and claiming their benefit at 70.
Makes sense... when doing my calculations I considered the longevity of my parents too, tho I didn’t assume I’d last fully to 89/90 as they did.
Thanks for the observations.