Social Security Questions

[Pea-n-Me]

Let's take your longevity to age 85 and you come up with these numbers:

collect $1,000 at age 62 - by the time you reach age 85 you will have collected: $276,000
collect $1,500 at age 67 - by the time you reach age 85 you will have collected: $324,000

Now these are simple numbers and don't account for cost of living increases and other factors.

If you wait until full retirement age before collecting benefits than you can continue working and still get your full social security. People who start collecting their SS benefits before reaching full retirement age will have to pay a penalty on any income earned above $18.000.

If you wait until full retirement age before collecting benefits and continue to work while collecting benefits, then social security will recalculate your income and increase your benefits every year to reflect your increased earnings. I think it all maxes out at 70 years old.

It is good to look at these numbers.

But I think if we look at the bigger picture, we have to take into consideration, at what cost is someone waiting until full retirement, and will that have an impact on their actual health and longevity? I believe it can.

If someone is still working after 62 and enjoying it, maybe working from home, making decent money, at a good place in life and doesn't mind continuing to work, then great, and more power to them.

But I'm not sure that describes most people. Some are absolutely miserable in their jobs and the day to day grind is causing them a lot of stress that can very well lead to health problems like hypertension, heart attack, diabetes, unhealthy habits, etc. Waiting till full retirement could cost them that way.

I have someone close to me for which the latter was the case. (Don't we all?) It was good for him to leave his job as his stress levels were off the charts. He made it work and has a whole different type of lifestyle now (which involved not only leaving his job, but moving and downsizing and getting rid of some other headaches in his life, etc.). For him it was a good thing even though it may have involved a smaller benefit, and he is now, finally, enjoying his less-harried life.

I guess everyone just needs to look at their own situation.

 

[gwynne]

Let's take your longevity to age 85 and you come up with these numbers:

collect $1,000 at age 62 - by the time you reach age 85 you will have collected: $276,000
collect $1,500 at age 67 - by the time you reach age 85 you will have collected: $324,000

Now these are simple numbers and don't account for cost of living increases and other factors.

If you wait until full retirement age before collecting benefits than you can continue working and still get your full social security. People who start collecting their SS benefits before reaching full retirement age will have to pay a penalty on any income earned above $18.000.

If you wait until full retirement age before collecting benefits and continue to work while collecting benefits, then social security will recalculate your income and increase your benefits every year to reflect your increased earnings. I think it all maxes out at 70 years old.

Yes, but. These types of tables assume you will have a job. Age discrimination and/or corporate realignment/downsizing is a bigger problem than most folks realize. One can "plan" to work, but suddenly find themselves downsized or laid off. If they are able to get another job at all, the new job may not pay anywhere near what they were earning in their high earn years.
If someone is basing a portion of their retirement on years of full time work after age 62, it's wise to have a serious plan B.

 

[Wood Nymph]

But I think if we look at the bigger picture, we have to take into consideration, at what cost is someone waiting until full retirement, and will that have an impact on their actual health and longevity? I believe it can.

If someone is still working after 62 and enjoying it, maybe working from home, making decent money, at a good place in life and doesn't mind continuing to work, then great, and more power to them.

But I'm not sure that describes most people. Some are absolutely miserable in their jobs and the day to day grind is causing them a lot of stress that can very well lead to health problems like hypertension, heart attack, diabetes, unhealthy habits, etc. Waiting till full retirement could cost them that way.

It is a very sad thing that people have jobs that would stress them out so much that the only way they can escape their suffering is to retire. But I know more people who take SS benefits at age 62 rather than wait for full retirement age, so it does seem as if most people are anxious to leave their jobs.

But a person who can work full time until full retirement, especially if they can continue to contribute to their retirement accounts and receive health insurance benefits from their employer will most likely have a lot more money set aside for retirement than the person who stops working at age 62.

 

[Wood Nymph]

Yes, but. These types of tables assume you will have a job. Age discrimination and/or corporate realignment/downsizing is a bigger problem than most folks realize. One can "plan" to work, but suddenly find themselves downsized or laid off. If they are able to get another job at all, the new job may not pay anywhere near what they were earning in their high earn years.
If someone is basing a portion of their retirement on years of full time work after age 62, it's wise to have a serious plan B.

Yes, anyone can get laid off and everyone should have a plan B, no matter what age they are.

 

[Pea-n-Me]

Yes the longevity statistics are skewed lower because a LOT of people die before the are 65 (accidents, over doses, cancer, etc). So, "the average" life expectancy statistics are pretty meaningless. If you live to be 65, odds are very good that you live AT LEAST till 80, and probably a lot longer. Will some die before then? Of COURSE. That's how statistics work. But, most (and that's the important thing), MOST will live to be quite elderly. You've got to play the odds, unless there is something in YOUR personal health history that dictates otherwise. The "average" 65 year old will live another 18.4 years (more for women, slightly less for men). Taking benefits at the earliest age you can (62) has a break even point of age 75.5 (about). If you think you'll live LONGER than age 75.5 (and MOST people will), you'll get more by waiting till your full retirement age.

Heck, even my chain smoking dad beat those odds....he died just before his 84th birthday. And, his sister, my aunt, still going strong at age 92.5! All her marbles intact, and walks a mile a day. She could easily go to 100. LOL Both of them would have come out on the "you lose" side of taking benefits at age 62. Since my Dad worked till he was 70, that was a non-factor. He took them as late as he could and STILL ended up on the winning side....despite being a smoker!

Interesting. Can you post a link to these numbers?

Numbers like these don't look at quality, either; just numbers. There can be a big difference between quality and quantity.

I think, IME (of working with patients), that living to be "quite elderly" isn't always what it's cracked up to be. There are a LOT of isssues that come along with it, with how much one gets in their SS check often being the least of their problems.

Health, for many people, often starts to deteriorate, even for those who've been very healthy, in the 70s and 80s (and in many cases, the 50s-60s or before). The nineties can be very tough if someone makes it that far. The person who is jumping out of airplanes, still working, or walking a mile a day in their nineties is pretty rare (as I've discussed with my 93 yr old mother on many occasions, as she liked to cite these examples herself). We recently had three in their 90s at the same time on my hospital unit and all three were confused with serious health problems.

My mother has been extremely healthy, coming from a family of long livers, with at least one who lived into his 100s. As recently as last fall - at 93 - my mother's vision was measured at 20/20 and her bloodwork was like that of a 20 yr old - the PCP and I would always just marvel at it when reviewing it. Yet the past several months have seen more the realities of an older body come up - a fractured hip (not from a fall, but just from sitting too forcefully), and now cancer - with issues of confusion and falling from the treatment for the cancer. She just can't believe it because she has always been so "healthy" and one of her doctors even (I think half joking around, but Mom took him seriously) predicted she'd live to 100, so this has all been kind of hard for her to swallow, naturally.

But bodies that, from an evolution standpoint that weren't meant to live this long, just weaken over time, and cells start to change that can turn into things like cancer, even when people have been really healthy all their lives. For many, this happens before the nineties, too. I deal with it all the time; just the other day I had a conversation with someone in their 80s who has a terminal disease yet was saying he was hoping to live another "couple of years" in order to enjoy time with the grandchildren.

Anyway, I don't know if people are always realistic about longevity.

 

[gwynne]

Yes, anyone can get laid off and everyone should have a plan B, no matter what age they are.

Lots of workers think they have a plan B. Layoffs in your 30's, 40's and early 50's are generally very different than what happens when a 63 year old is laid off. That person in their 60's may not work again.

So, older workers kind of have to see their income as year to year, period. Each year it works out, great. And FWIW, I don't think this situation is decent or fair. But, it's where we are these days, unfortunately.

 

[Wood Nymph]

Lots of workers think they have a plan B. Layoffs in your 30's, 40's and early 50's are generally very different than what happens when a 63 year old is laid off. That person in their 60's may not work again.

So, older workers kind of have to see their income as year to year, period. Each year it works out, great!

ETA: Anyone who works as long as they can will make more money than someone who stops working at 62. That is basically what I am saying.

 

[Pea-n-Me]

And what you are saying supports my suggestion that people hold off filing for their social security benefits as long as they can. You never know when you are going to lose a job, so having the higher monthly SS check that comes with delayed filing is better for someone who unexpectedly lost their job.

But the point is, someone who is in their 60s who is either unhappy at a job or unable to find a job, may not be able to delay.

 

[gwynne]

And what you are saying supports my suggestion that people hold off filing for their social security benefits as long as they can. You never know when you are going to lose a job, so having the higher monthly SS check that comes with delayed filing is better for someone who unexpectedly lost their job.

Actually no.
Making your own solid plans, on your own terms is much better IMO. (Rather than waiting for someone else to make the decision for you.)
Health, job stability, they all play a part in this. A blanket wait is really not great advice. It's very individual.

 

[dclpluto]

For most people With your ss, pension, 401k rmd or whatever your retirement fund is you should bring home about the same amount or more if you were still working. Before your rmd time you should just take a minimum amount of what you need. If your not going to have the same amount income bring home pay of when you retire you know what you have to do. Up your 401k or whatever you have do what it takes. Enjoy retirement

 

[Wood Nymph]

A blanket wait is really not great advice. It's very individual.

Correct - and I was returning to amend my comment.

There are really two things going on here:

1. how much money can you get from social security - period. And this is where the guess work and longevity tables come in.

2. how much money you will have in the bank when you retire - and no matter how you calculate, someone who continues to work will have more money in the bank than someone who stops working at 62 regardless of when they start to collect their SS benefits

The challenge is to figure out what is best for you and no one can make that prediction for you.

 

[vacationer1954]

... people have jobs that would stress them out so much that the only way they can escape their suffering is to retire.

<raises hand>

 

[snappy]

It’s all a guessing game. With pensions not being offered as often, and pension plans being terminated, you may be dependent on your 401K, 403B OR IRA. I like that for now anyway 85% instead of 100% of your SS is taxable. My husband will get his first benefit next month, at 66 and 9 months. He retired last July. Had to wait until our youngest graduated college and got a job with benefits. Sometimes it’s all about the healthcare .

 

[barbaraann]

People retiring at age 62 are still 3 years shy of getting their Medicare benefits. So healthcare is most surely an issue. My mom took out a Blue Cross health insurance policy that she should have cancelled when she reached 65. The older and older she got, the Blue Cross policy got more expensive. Her Social Security benefit was never that much, but having that policy sure put a big burden on her for a lot of years at the end of her life. My mom was saving expenses, for years because she had a roommate, but when that person died it was very hard. She never wanted to burden her kids, but we finally had to step in whether she liked it, or not.

 

[gwynne]

People retiring at age 62 are still 3 years shy of getting their Medicare benefits. So healthcare is most surely an issue. My mom took out a Blue Cross health insurance policy that she should have cancelled when she reached 65. The older and older she got, the Blue Cross policy got more expensive. Her Social Security benefit was never that much, but having that policy sure put a big burden on her for a lot of years at the end of her life. My mom was saving expenses, for years because she had a roommate, but when that person died it was very hard. She never wanted to burden her kids, but we finally had to step in whether she liked it, or not.

Am I understanding this correctly? Your mom was paying for a regular Blue Cross policy after age 65? I am surprised between her health care providers and the Blue Cross claims processing someone didn't step in and say, "Hey, you qualify for medicare. You don't need this."
It was good you stepped in.

 

[mnrose]

Interesting. Can you post a link to these numbers?

Numbers like these don't look at quality, either; just numbers. There can be a big difference between quality and quantity.

I think, IME (of working with patients), that living to be "quite elderly" isn't always what it's cracked up to be. There are a LOT of isssues that come along with it, with how much one gets in their SS check often being the least of their problems.

Health, for many people, often starts to deteriorate, even for those who've been very healthy, in the 70s and 80s (and in many cases, the 50s-60s or before). The nineties can be very tough if someone makes it that far. The person who is jumping out of airplanes, still working, or walking a mile a day in their nineties is pretty rare (as I've discussed with my 93 yr old mother on many occasions, as she liked to cite these examples herself). We recently had three in their 90s at the same time on my hospital unit and all three were confused with serious health problems.

My mother has been extremely healthy, coming from a family of long livers, with at least one who lived into his 100s. As recently as last fall - at 93 - my mother's vision was measured at 20/20 and her bloodwork was like that of a 20 yr old - the PCP and I would always just marvel at it when reviewing it. Yet the past several months have seen more the realities of an older body come up - a fractured hip (not from a fall, but just from sitting too forcefully), and now cancer - with issues of confusion and falling from the treatment for the cancer. She just can't believe it because she has always been so "healthy" and one of her doctors even (I think half joking around, but Mom took him seriously) predicted she'd live to 100, so this has all been kind of hard for her to swallow, naturally.

But bodies that, from an evolution standpoint that weren't meant to live this long, just weaken over time, and cells start to change that can turn into things like cancer, even when people have been really healthy all their lives. For many, this happens before the nineties, too. I deal with it all the time; just the other day I had a conversation with someone in their 80s who has a terminal disease yet was saying he was hoping to live another "couple of years" in order to enjoy time with the grandchildren.

Anyway, I don't know if people are always realistic about longevity.

Here'a one example:
https://www.verywellhealth.com/understanding-life-expectancy-2223950

For each year you survive, your life expectancy (the number of years MORE you will live) increases. Age 65= 83+ years, age 75= almost 87 years. Taking benefits too early could be very detrimental in your later years. And, I completely agree that decline can be very quick in your later years. My aunt is well aware that she could "go" at any time. On the other hand, she wants the time she has left to be as healthy and productive as possible. So she keeps on learning and growing. She is my personal model for aging gracefully.

And, yes, your later years can be fraught with health issues....which makes it even more important, IMO, to have as much income in terms of Social Security as you possibly can. The person who took the $1000 a month when 62 (hypothetical example) is going to find that this is a pretty small amount when they are 92.

 

[mnrose]

It’s all a guessing game. With pensions not being offered as often, and pension plans being terminated, you may be dependent on your 401K, 403B OR IRA. I like that for now anyway 85% instead of 100% of your SS is taxable. My husband will get his first benefit next month, at 66 and 9 months. He retired last July. Had to wait until our youngest graduated college and got a job with benefits. Sometimes it’s all about the healthcare .

It is ALL about healthcare for us. DH desperately wants to retire, but he carries the health care for our family. If we had reliable health care at an affordable rate, we'd be all set financially and could easily "afford" to retire. But, health care is the big UNKNOWN in the equation. Right now, we would chew through around $200K in health care expenses (between insurance and out of pocket costs) to get us to age 65 when we are eligible for medicare. Unfortunately, that amount puts a big dent in our "comfort" level about how long our money will last. It's pathetic. I hate seeing him bust his hump physically JUST to keep us in health insurance....damaging his own just to protect ours. His job is very physical. At 60, it's not easy.

 

[Pea-n-Me]

An interesting read from the Pew Research Center:

Growing Old in America: Expectations vs Reality

https://www.pewsocialtrends.org/2009/06/29/growing-old-in-america-expectations-vs-reality/

 

[barbaraann]

Am I understanding this correctly? Your mom was paying for a regular Blue Cross policy after age 65? I am surprised between her health care providers and the Blue Cross claims processing someone didn't step in and say, "Hey, you qualify for medicare. You don't need this."
It was good you stepped in. [/QUOTE

My mom had Medicare, but every time she went to the doctor, she gave them her Blue Cross Card, in stead of her Medicare one. My mom was very healthy, so she did not make many trips to the doctor. However, when I think of all the money Blue Cross got, that my mom could have save, it makes me cringe.

 

[vacationer1954]

Are you sure it wasn't a Medicare Advantage Plan? I believe with a Medicare Advantage Plan you present for service your plan's card (i.e., your Blue Cross card), and they deal with coordinating your benefits with Medicare. It is essentially a way to buy into a better health plan than Medicare is willing to offer, while still getting all you deserve from Medicare. You are effectively only paying for the "advantage".