When to Start Social Security

cmarlin20October 11, 2007

My DH will be 62 soon, and wonder is it financially best to start at 62 or wait until 66 for the increase. Will he ever make up the difference. WE do not need the money at 62.

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zone_8grandma

I don't think there is one right answer that fits everyone. You can calculate the break-even point. For me it was about 10 years. (I started taking it at 62).

If your husband has a family history of longevity, he might want to wait; if not then he might be better off taking it at 62. Longevity is only one factor - does he plan to contine working beyone 62?

If you don't need the money, then waiting makes sense. That is, unless Congress decides to make changes to the system (almost a given). I would expect that they would grandfather anyone already on SS. That's just my best guess, however.
JMHO, FWIW

    Bookmark   October 11, 2007 at 11:52AM
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chisue

DH took his when he was 65 (+ the few averaging-up months). I took mine starting in January of the year I was turning 65 (simplified my budget to put it on a full year basis).

I have no confidence SS will continue to be solvent and pay out 100%. Also, while DH will probably live LONG, my health isn't as wonderful.

    Bookmark   October 11, 2007 at 3:27PM
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acey

AARP had an article on this very thing in the October issue of their Bulletin.

Do you have a SSI benefit to count on as well? Is yours more than his? If not, I've read that it makes more sense for the woman to take hers early, and let the man (who typically has earned more)take his at age 69 or 70. Assuming that the husband is the first to die, (again, the typical scenario) the spouses benefits will not be reduced like they would be if he chose to take his benefits earlier.

I used to read that anyone should take the money ASAP, but I think times have changed and we are living longer and will have more expenses. Just my 0.02 worth.

    Bookmark   October 11, 2007 at 6:55PM
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chisue

My earnings were so minimal (stay at home wife/mother) that my benefits are based on my DH's benefits. Together we receive 150% of his benefits. Should he predecease me, I would receive 100% of his benefits.

    Bookmark   October 12, 2007 at 11:09AM
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terrig_2007

My mom will start drawing her SS in January '08, two months shy of her 66th birthday. She's had a very successful business for 30+ years but she is tired and ready to retire.

    Bookmark   October 12, 2007 at 3:31PM
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celticmoon

Cmarlin, I'd offer that the big question is not whether you need the money at 62, but what your money needs might be 20-30 years later (assuming you plan on even possibly sticking around).

I'm fresh off some tedious number crunching and surprised at just how damaging inflation can be over a long time. Of course I knew inflation was a beast, I just didn't know it was quite that bad. And while Quicken Financial Planner says everything is fine and the Monte Carlo simulator says everything is fine, laying it out by hand and seeing our living expenses dollars double over 20 years and triple over 32 years was a bit shocking. (I used 3.5% for inflation.) Some of our income streams will be fixed and others, well, I'm not convinced the COL increases can really keep pace. Not to that degree. But every bit helps.

In our scenario the numbers happen to work better over time with me taking mine early and for DH to take his (larger) as late as possible.

    Bookmark   October 12, 2007 at 4:59PM
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Jonesy

When I asked a soc sec rep. that question, the lady told me to do the math. It would have taken me 10 years to make up for the loss in those 3 years. I may not live that long and it would have been a loss.

    Bookmark   October 13, 2007 at 1:32AM
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chisue

My cousin had a pleasant surprise when she applied for SS. She's been divorced for many years, but is eligible to receive payments based on her ex-husband's benefits because they were married for at least 10 years.

Gee, if a guy lived a long time and had several ex-wives, the government could pay all of them SS benefits!

    Bookmark   October 14, 2007 at 12:48PM
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susie53_gw

Many women do not know this. If you were married for 10 years or more , divorced and never remarried, you can draw off your exhubby. This can mean 100's of dollars to many.. Pass the word....

    Bookmark   October 14, 2007 at 8:36PM
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Tashina Knight

I don't have time to look it up right now, but I don't think it's an either or. You can pay back SS and reset.

So you can take the $$ at 62, then at 65 or 67 reevaluate. If you want the higher amount, you pay back (with interest?) the amount you got from them and reset. Since she doesn't need to spend it, you could stick it in CDs between 62 and 67.

Here's a post about it with a link to the SS site.

Here is a link that might be useful: withdrawing SS claim

    Bookmark   October 15, 2007 at 10:27AM
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celticmoon

Fascinating, Charlotte!!

I followed the link to the government site and it reads a little confusing. Says you have to "meet the above" (= no decision made yet) AND repay the money (= decision must have been made). BTW The Orman site claims you do NOT have to pay interst on the money being returned. Wild.

What do you bet this loophole gets stitched shut in the next couple years?

    Bookmark   October 15, 2007 at 11:58AM
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dave100

I put my ex-wife through college during our marriage and she has likely out-earned me over the past couple of decades -- I wonder if I should check out the possibility of drawing off her benefit. Would it reduce her check in any way ? ( don't want to upset any apple carts now.....)

    Bookmark   October 15, 2007 at 12:32PM
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zone_8grandma

I wonder if I should check out the possibility of drawing off her benefit. Would it reduce her check in any way ?

It would not affect her check.

    Bookmark   October 15, 2007 at 1:50PM
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dave100

Ahh -- in checking out details, I overlooked the fact I would only be entitled to 50% of her check .. I doubt our wage disparity would make up for that .....

    Bookmark   October 15, 2007 at 2:01PM
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celticmoon

Charlotte, now you have me thinking... what about all the taxes paid on the SS draws starting at age 62? If you give back that SS money, say at 65, you think the Feds give back the income taxes? Or would it mean filing amended tax returns?

Might get kinda complicated...

    Bookmark   October 15, 2007 at 10:16PM
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