1 2 3 Previous Next 99 Replies Latest reply on Dec 1, 2013 12:11 AM by Sharon

    Collecting benefits before 66

    JRR
      I reach "full retirement age", 66, in Sept. 2012, still working FT, but plan on starting collecting benefits a few months before, to take advantage of the $38,880 I can earn before losing 1/2 the benefit amount.  This means my benefit will be 3% less, but there are more fun things I can enjoy NOW with the extra money - the extra money means less and less as I get older.
       
      Any thoughts on htis line of thinking?    
        • 1. Re: Collecting benefits before 66
          casmus
          I don't understand what you are saying. you will get full benefits if you retire at 66 in Sept. 2012. If you collect a few months before, you will not get full benefits, no?
          • 2. Re: Collecting benefits before 66
            JRR
             
            I will get "full benefits" as of Sept. 1, but I am starting my benefits as of March 1, and settling for 96.5% - sacrificing a few hundred $$ over six months, but receiving several thousand $$ in added income - I have more use for the funds now than later -
            The year of reaching full retirement, SSA will let me earn up to $38,880 while collecting benefits  and I ma taking advantage of that -
            • 3. Re: Collecting benefits before 66
              I haven't looked at this for a while but I believe there is an exemption for all of your earnings prior to the date you begin to draw benefits in the initial year.  You should check out the SSA website and research this before taking the plunge. 
              • 4. Re: Collecting benefits before 66
                JRR
                The exemption is up to $38,880 max; I visited the SSA office to file for my. Benefits and double checked my research...
                • 5. Re: Collecting benefits before 66
                  Beachlover
                  I did a lot of number crunching before I decided to start collecting SS at the age of 62 despite all the advice against doing so. I will be 64 in April. I work 3 days a week, a 30 hour week, have my own health benefits.  I am well paid for what I do and have four days off.  However, I do not make enough to make ends meet without my SS.  And at this point in my life, time is precious, more so than money. My mother died at 59, my dad at 68.  My mom put off doing a lot of things she wanted to do, saying she would do those things when she retired.  She never got to retire. The lessons I learned from her early death are: Life is short. Don't put off doing things you really want to do.  Take advantage of the time now.  I have enough funds to travel to see friends and family, take a yearly vacation; to do lots of things where I live, Santa Fe. And I am even able to put aside a little money each month to put into my modest portfolio.  I live alone so maybe that makes my lifestyle affordable. In any case, make a "bucket list", do the math, and then decide. Having more money is not a guarantee that you will live long enough to enjoy it!
                  • 6. Re: Collecting benefits before 66
                    howyou
                    I like the idea of living life while you have it.  I am tired of people worrying about money, money, money.
                     
                     I suppose one could take a "public" job and double dip...draw a fat pension from the public trough and then go back and work for the same salary, at the same job.  That appears to be a popular where I live.
                     
                    People are drawing up to 80% of their previous salary and making another $40, 50 , 60,000 at more public work.
                     
                    Who couldn't live on an $80,000 + penion plus another salary.
                    • 7. Re: Collecting benefits before 66
                      NickWunder
                      With your family history, sounds like you'd made a reasonable choice since a key to this decision is how long you will live.  While none of us know that answer, my family history is generally living into late 80's and 90's so waiting tell 70 to collect social security may be best for me.  The thing I worry about is since I'm not yet in the system, will the future changes to social security affect me more than those who are in the system?  I'm 62.
                      • 8. Re: Collecting benefits before 66
                        JDThompson
                        I still have a few years to go, (I'm 58) but last time I got my SS summary I tried a simple Excel summary of how much I would draw at age 62 and compared it what I would draw later if I waited (without allowing for any significant change in salary). Drawing early gets money coming in earlier, so the aditional money you get by waiting is offset by the years you drew your reduced amount, right?
                        My spreadsheet shows the breakeven point to be at at age 77 - when the amount you have drawn already at a reduced amount equals the amount you started drawing later at a higher amount. I didn't count in taxes or additional income - just the SS amount.
                         
                        Bottom line is that you take the gamble - if you live past age 77, you made a poor choice, but you're ahead if you retire early and use the time to enjoy. If you think you will still be enjoying yourself past age 77 and might need more money to do it than your reduced amount, you'd better wait a while longer. However, if you see yourself hanging at the house watching TV (or worse, taking a dirt nap) then you can get by with the reduced benefit of retiring early. I don't think I'll try to save up my SS money to pay for my health care. If Medicare/Medicaid/VA etc are going to let me go because I can't pay, well, I guess I've reached my "best used by" date.
                         
                        jdt   
                        • 9. Re: Collecting benefits before 66
                          JerryD
                          I wholly concur with the use of a spreadsheet to put realistic numbers to your decisions. It is so easy to tweak the assumptions and play with the numbers to assist in these difficult decisions.
                           
                          Depending how much of a control freak you are, you can take this process to whatever level that helps you make major decisions. Keeping up the analysis as each tax year passes also helps you maintain control of your retirement circumstances.
                          • 10. Re: Collecting benefits before 66
                            uday
                            I don't understand how you will get the extra cash by collecting benefit earlier than due?
                            • 11. Re: Collecting benefits before 66
                              Daffyted
                              Assuming you are talking about Social Security benefits, your benefit will increase for each year you continue to work because you are still paying into the program as well as is your employer.
                              • 12. Re: Collecting benefits before 66
                                MannyG
                                JDThompson said...
                                I still have a few years to go, (I\'m 58) but last time I got my SS summary I tried a simple Excel summary of how much I would draw at age 62 and compared it what I would draw later if I waited (without allowing for any significant change in salary). Drawing early gets money coming in earlier, so the aditional money you get by waiting is offset by the years you drew your reduced amount, right?
                                My spreadsheet shows the breakeven point to be at at age 77 - when the amount you have drawn already at a reduced amount equals the amount you started drawing later at a higher amount. I didn\'t count in taxes or additional income - just the SS amount.
                                 
                                Bottom line is that you take the gamble - if you live past age 77, you made a poor choice, but you\'re ahead if you retire early and use the time to enjoy. If you think you will still be enjoying yourself past age 77 and might need more money to do it than your reduced amount, you\'d better wait a while longer. However, if you see yourself hanging at the house watching TV (or worse, taking a dirt nap) then you can get by with the reduced benefit of retiring early. I don\'t think I\'ll try to save up my SS money to pay for my health care. If Medicare/Medicaid/VA etc are going to let me go because I can\'t pay, well, I guess I\'ve reached my \"best used by\" date.
                                 
                                jdt   

                                 I'm with you, at 62 I'm done working.Not going to wait until I'm to old to enjoy my retirement just so i can have a little more money.
                                 
                                • 13. Re: Collecting benefits before 66
                                  By collecting SS at say 62, your monthly / annual benefit payments are lower than they would be if you didn't start collecting until age 65, 68, 70.  As noted in another post, each year you wait your benefit amount increases.  

                                  So ... by starting to collect sooner rather than later, the amount you receive between say age 62 and age 65 is 3 years x your monthly amount - which by waiting until 65 you would not have received.

                                  Take the amount at age 65 and subtract the amount you get at age 62.  Divide that difference into the total 3 year difference and that will tell you how many years it'll take you to end up with the same amount of money from SS if you wait longer to collect at say age 65.  

                                  Don't know if I made this easy to understand but I hope this helps you. 
                                  • 14. Re: Collecting benefits before 66
                                    Chrysalis

                                    Hi, Nick-

                                     

                                    You bring up a point that concerns me, too. It seems to me that most of the time when changes are made to government programs, things get worse. Eligibility requirements get stricter, or benefits decrease, etc. It doesn't matter if you're talking about government pensions or welfare or social security or whatever. However, people who are already in the system are "grandfathered in" and avoid many, if not all, of the cut-backs. In other words, when things improve (like instituting a COLA) everybody gets it, but when things get worse, only the newbies get hit. That's my observation, anyway.

                                     

                                    It seems to me (at age 61.5) that there's a better than even chance that by the time I reach age 66 they will have moved the goal post-- changed the age for full retirement or changed Medicare benefits, or some other  unhappy situation. I'm thinking I might be better off just signing up for SS as soon as I can so I can be "grandfathered".

                                     

                                    Yes, my monthly SS benefit will be lower than if I waited. And I am still working (as an independent consultant) and I intend to keep working as long as clients want to hire me. So if I earn more than a certain amount, I will lose some SS income. But so what? If I don't earn much money, SS will be there as a cushion. If I earn over the limit, I won't need the SS, anyway. And whatever SS benefits I do collect, if I don't need them to survive, I can invest them and let the money grow until I do need it (like over age 66). Then I can pay the saved money back to myself monthly to make up the deficit I have because I signed up for SS when I was only 62.

                                     

                                    Am I thinking straight? Or am I being foolish and simplistic?

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