Let's talk Social Security

[azgreg]

I turn 62 in May. If I elect to take SS then I'll be liable for a penalty. The penalty is a reduction in benefits of $1 for every $2 I make over $24,800. Based on how much I currently make and what my SS benefits project to be the penalty will wipe out the entire benefit. Now supposably when I reach full retirement (67) the penalty would be repaid if I read it right on the SS site.

 

[Russ Smith]

I turn 62 in May. If I elect to take SS then I'll be liable for a penalty. The penalty is a reduction in benefits of $1 for every $2 I make over $24,800. Based on how much I currently make and what my SS benefits project to be the penalty will wipe out the entire benefit. Now supposably when I reach full retirement (67) the penalty would be repaid if I read it right on the SS site.

Just saw this.

My take is i've always planned on taking it at 62. I turned 60 in November so 2 years away. I'm somewhat changing on that in that if the markets hold up the next 2 years and don't crash I may wait . My last estimate is 2310 a month at 62, 2460 at 63, 3280 if I wait until 67. So wait 5 years get 1000 more a month or 12K a year. But you lose 5 years of payments which is 138,600 dollars. So it will take 11.5 years at 67 to make up that 138K. So my break even is 78.5 if I wait.

My plan is still 62 but if the markets are fine, I'll wait a year and do the numbers again. My main plan is to use the SS money to pay health insurance.

 

[Dback Jon]

I'm 63 and still working - so taking now would lead to the reductions. My Dad lived to be 92, Mom 88 so waiting makes sense for me - and also would benefit my husband, who is 58 - because my earnings are greater than his, he'd get the bump to my benefits if I passed before him.

 

[Weenus O'Baggins]

I'm 63 and still working - so taking now would lead to the reductions. My Dad lived to be 92, Mom 88 so waiting makes sense for me - and also would benefit my husband, who is 58 - because my earnings are greater than his, he'd get the bump to my benefits if I passed before him.

I legit thought you were my age

 

[Dback Jon]

I legit thought you were my age

Seriously?

Thanks (I think)

 

[Russ Smith]

A friend of mine just started at 62. He said he did the whole thing via phone interview which I thought was pretty fascinating. The same administration screaming about fraud in everything, that has taken over Social Security, is still allowing new applicants to screen by phone with no ID required.

 

[Brian in Mesa]

I hope to never need it or rely on it much. It was started to help those in society that outlived normal life expectancy and was not originally supposed to be a source of retirement income for everyone. It should have been adjusted as life expectancy increased, IMHO.

 

[oaken1]

My plan involves taking SS at 62...then cheating. I have a few ventures set up to make supplementary income which I set up under my sons names.
Taxes will still be paid on the income but it will be paid on my boys forms...for that inconvenience the plan is to cede them 60% of the total earnings..enough to cover the taxes..plus a few bucks for the inconvenience...
but the added benefit is that they can still earn from my ventures after I die without having to deal with probate...it is simply a matter of changing a password and listing a new depositing account.

I have been a victim of my own ambition in a way... a large portion of my lifes earnings came as a contractor or a small business owner..often,..."off the books"...so what has been paid in to SS is not going to provide me with a substantial income for retirement...however,...three divorces does not leave me room for retirement income either.
so my choices are simple...find a hustle...or die under a bridge.

while I spend a lot of time on line...I am not a troll...so a bridge is out of the question.
so the plan...collect SS...get a part time gig and earn the maximum allowable per year...
then maximize my side hustle to build wealth and increase my standard of living.
its amazing what you can earn money doing...writing,...forging swords,...woodcraft,....growing premium weed...producing useful products from your premium weed...
I know a guy.... bought a few patterns, set up some jigs to increase production speed,...then went to work selling bird houses on ebay... made about $5k a month after expenses...on frikkin bird houses!!
so yeah, I plan to emulate his methods of success... but with my own Oaken style....and without ebay,..im not a fan

 

[Superbone]

I retired over 3 years ago and I'm currently 63. I'm waiting until 70. I want the max for the rest of my life. It will take care of my basic expenses from that point on. Assuming the government gets in gear and fixes the depletion issues. My mom just turned 87. I'm in the best shape of my life. My 401k savings will easily get me to 70 and I most likely won't ever depend on SS anyway.

 

[Bada0Bing]

I retired over 3 years ago and I'm currently 63. I'm waiting until 70. I want the max for the rest of my life. It will take care of my basic expenses from that point on. Assuming the government gets in gear and fixes the depletion issues. My mom just turned 87. I'm in the best shape of my life. My 401k savings will easily get me to 70 and I most likely won't ever depend on SS anyway.

That's kinda similar to my plan. I'm 52, but it's gonna be a struggle to get to 60...getting pretty burnt out on the corporate grind lol.

Do you mind if I ask what you do for insurance? That's my main concern. I'm in great shape now, but I wouldn't want to burden my family with any unexpected medical debt. I haven't looked into it much yet, but premiums seem so expensive, and they just keep getting worse.

 

[Superbone]

That's kinda similar to my plan. I'm 52, but it's gonna be a struggle to get to 60...getting pretty burnt out on the corporate grind lol.

Do you mind if I ask what you do for insurance? That's my main concern. I'm in great shape now, but I wouldn't want to burden my family with any unexpected medical debt. I haven't looked into it much yet, but premiums seem so expensive, and they just keep getting worse.

Luckily I had very affordable COBRA from my job that lasted 36 months. I just started ACA this month and I have 20 months until Medicare. Yeah, ACA premiums suck now and I'm pulling too much income to get subsidies so I'm paying a little over 1K a month and that's just for me. Another thing I'd highly advise is maxing out an HSA. I was able to pay all my COBRA premiums out of it. Unfortunately, we can't pay ACA premiums out of it but I pay for all other medical expenses out of it.

 

[Bada0Bing]

Luckily I had very affordable COBRA from my job that lasted 36 months. I just started ACA this month and I have 20 months until Medicare. Yeah, ACA premiums suck now and I'm pulling too much income to get subsidies so I'm paying a little over 1K a month and that's just for me. Another thing I'd highly advise is maxing out an HSA. I was able to pay all my COBRA premiums out of it. Unfortunately, we can't pay ACA premiums out of it but I pay for all other medical expenses out of it.

Thanks for the reply. I completely agree about the HSA. I've been maxing it out since it became available to me like 10 years ago and I rarely use it.

3 years of cobra is awesome!

 

[Superbone]

I completely agree about the HSA. I've been maxing it out since it became available to me like 10 years ago and I rarely use it.

I did the exact same thing as soon as it was offered. And like you with very few exceptions, I didn't use it until retirement.

 

[Russ Smith]

Luckily I had very affordable COBRA from my job that lasted 36 months. I just started ACA this month and I have 20 months until Medicare. Yeah, ACA premiums suck now and I'm pulling too much income to get subsidies so I'm paying a little over 1K a month and that's just for me. Another thing I'd highly advise is maxing out an HSA. I was able to pay all my COBRA premiums out of it. Unfortunately, we can't pay ACA premiums out of it but I pay for all other medical expenses out of it.

3 years is awesome. We got 18 months, retired at 58.5. Now on ACA and not too thrilled, premium is lower but deductible is higher, out of pocket is higher and Anthem is not nearly as good as Cigna for COBRA was. denied my knee shots, they won't allow more than 30 days of medications(we did get a vacation waiver to get an extra 30 days).

On the cost, you probably know it but realize premiums are set on income, so if you have cash in CD's or savings accounts withdrawing from that does NOT count as income. So you can lower your premium by keeping your income in the "sweet spot".In our case it's easier because Lucy isn't 59.5 yet so she can't withdraw penalty free from her IRA. So we're living off my IRA's plus our combined savings and only the IRA withdrawals count as income. Our only other income is interest from CD's and savings, and then some company stock she sold.

 

[Superbone]

3 years is awesome. We got 18 months, retired at 58.5. Now on ACA and not too thrilled, premium is lower but deductible is higher, out of pocket is higher and Anthem is not nearly as good as Cigna for COBRA was. denied my knee shots, they won't allow more than 30 days of medications(we did get a vacation waiver to get an extra 30 days).

On the cost, you probably know it but realize premiums are set on income, so if you have cash in CD's or savings accounts withdrawing from that does NOT count as income. So you can lower your premium by keeping your income in the "sweet spot".In our case it's easier because Lucy isn't 59.5 yet so she can't withdraw penalty free from her IRA. So we're living off my IRA's plus our combined savings and only the IRA withdrawals count as income. Our only other income is interest from CD's and savings, and then some company stock she sold.

Yeah, I ran the numbers and I'm better off in the long run not worrying about the ACA subsidies and doing my Roth conversion. I use Boldin retirement software. It's great.

 

[Russ Smith]

Yeah, I ran the numbers and I'm better off in the long run not worrying about the ACA subsidies and doing my Roth conversion. I use Boldin retirement software. It's great.

I'll have to look into that software

I've played around with the Roth conversion because I'm pre Social security so my tax rate is sort of artificially low. I guess my concern has been the 5 year rule. I have a Roth 401K from a previous employer. at one point Vanguard told me if I wanted more options on how it was invested I had to change what account it was in so I did. And then last year I went to withdraw from it and found out I had restarted the 5 year rule on that money when did that so I couldn't withdraw. It was a small amount so not a huge deal that I have to wait but it got me aware of the 5 year rule.

If I Roth converted I'd end up using much of my cash to pay the conversion taxes and then have the money tied up for 5 years in the Roth. So you definitely need some sort of software or tool to figure out the sweet spot in how much to convert.

 

[Rivercard]

I turn 62 in May. If I elect to take SS then I'll be liable for a penalty. The penalty is a reduction in benefits of $1 for every $2 I make over $24,800. Based on how much I currently make and what my SS benefits project to be the penalty will wipe out the entire benefit. Now supposably when I reach full retirement (67) the penalty would be repaid if I read it right on the SS site.

I believe that is correct, though I don't know if you would get the full reimbursement amount at 67 or if it is prorated over time somehow.

I'm 62 and not filing yet as I'm still working and making way too much money. Trying to figure out when is the best time/strategy to quit working and maximize SS *benefit. Losing work provided insurance is a factor as well of course.

* why is SS considered a "benefit" when we've paid into it for our entire working career?

 

[Bada0Bing]

* why is SS considered a "benefit" when we've paid into it for our entire working career?

I guess the way I think about it is, we've been paying into it, yes, but we've been paying for the folks currently receiving benefits.

When we pull SS funds, it's a benefit from the folks currently working.

 

[Russ Smith]

Yeah, I ran the numbers and I'm better off in the long run not worrying about the ACA subsidies and doing my Roth conversion. I use Boldin retirement software. It's great.

Are you using the free version or a paid version?

I looked tonight and turns out I have an existing account I think they bought out another company that I had previously signed up with or something. Just curious what version you like?

 

[Superbone]

Are you using the free version or a paid version?

I looked tonight and turns out I have an existing account I think they bought out another company that I had previously signed up with or something. Just curious what version you like?

I've had the paid version for four years now. Grandfathered in for the price of 4 years ago. They just rebranded from New Retirement to Boldin.