Thanks guys. Well, we just turned 59 so a few years yet before we get into the SS .
Next big decision is what to do with the 401k. Lots of ideas here already.
Wow, this is your last week of working life? Congrats!
Thanks!
Well, Igloo. The plan is to start collecting the pension and enjoy the cheap health care while it lasts. Then who knows?
Maybe some consulting in our future.
So sax, what are you going to do to celebrate? My vote for the very first thing is to do something you couldnât do while you were working. Maybe go somewhere youâve always wanted to, but couldnât, because of the job. Congratulations!
We are grabbing the kayaks and the dog, throwing them in the truck and heading out to hit as many waterways as we can for the time being. Of course itâs supposed to snow tomorrowâŠbrrrrrrrrr. Iâm also going to buy the Husband an extremely expensive bottle of courvoisierâŠnot Louis the XIII expensive but memorable.
Thatâs the plan.
Thanks bus driver!
Yay! So jealous! Iâd love to be set up to retire at 59. I hope we get to that goal, but as it gets closer, it seems harder.
Yay for you ! Congrats sax! Send pics from the kayak trips to those of us still using an alarm clock instead of the sunrise!
@âsax
Congratulations! Your family must be very excited about the upcoming retirement.
I am somewhat older than you, and I wish I could retire soon also.
This is on my mind a lot recently: When we retire, should we drain more money from our retirement account but not receive SS for the first few years, or should we drain less money from our retirement account but start to receive a reduced amount of SS?
It seems most FAs would recommend the former (i.e., postpone receiving SS as much as you can.) I agree that when you have more than enough money, the former approach could be better. But if this is not the case for your family, you could be nervous if you notice that the nest egg gets much smaller before 66 yo.
@mcat2â
I hope others will chime in, but depending on your number of years between retirement and Full Retirement Age (66), it may be worth it to wait. That is assuming you have funds to get you from work-stoppage retirement to SS FRA.
Obtain the most recent SS statement for you and your spouse and determine the difference between collecting at 62 v. collecting at 66. Remember also if you start collecting at 62, your and your spouseâs lower benefits are fixed for life. Your combined annual benefit amount from SS could be viewed as an annuity, the cost of obtaining of which if you have to purchase it in the market would be a substantial sum. Calculate the different annuity values for yourself. Hereâs a WSJ article on this issue:
http://www.wsj.com/articles/SB10001424052702303342104579097183009704484
There have also been recent posts in this thread regarding the new book about maximizing SS benefits and different claiming strategies.
The best thing I read in the WSJ today:
http://www.wsj.com/articles/route-to-an-8-million-portfolio-started-with-frugal-living-1426780320
I loved the old corporate stock certificates I looked through as a young associate when doing corporate due diligence. Most old certificates were beautifully engraved and were printed on paper like that made by Crane for US currency.
Thanks for the info. It will be very useful to us.
Currently, without further insight about this matter, we are thinking of collecting at 64, even though we are pretty sure we could possibly collect more unless we die prematurely. We just think the money in 401K/tIRA is less likely to be âraidedâ than the âpromissed/entitledâ money in SS. It is more about the peace of the mind rather than rational thinking, I think.
We have actually started to collect a âsmallâ pension for many years, starting at 55. It is a huge reduction (almost a half only?) because we started to collect before 65 (we are allowed to collect it 10 years prior to the full retirement age which is 65.) If we could go back and change it, we would. But we can not.
We are leaning toward me collecting SS at age 70, since we donât need that money and that would it to grow as much as possible. S isnât entitled to SS and due to the govt offset, isnât entitled to spousal SS eithe .
@mcat2â
Hereâs a SS webpage that lists the incremental reductions for each year below FRA.
Mcat, here is one of many opinions on IRA vs SS. Kiplingers suggest this is a good strategy for those with $200,000 to $600,000 in their retirement accounts.
Thanks to this thread I have discovered that each persons circumstances are different when it comes to retirement monies,tax rates and needs. good grief even the state you live in.You really have to keep reading and run the numbers.
We are 3 years from 62. I have no idea what we will do.
I shudder to think of having retired right before the 2008 recession. Talk about planning going out the window. Those poor guys.
Every year you delay taking SS up to age 70 is essentially getting about a guaranteed 8% âreturnâ (after inflation!) on your money, from the increase in benefits.
Will you get that kind of return in your IRA? MaybeâŠ
Plus, by reducing the balance of your IRA before taking SS, you might wind up reducing how much of your SS benefit is taxable.
The tradeoff, of course, is will you live long enough to make delaying SS worthwhile.
My feeling right now, as the one who will get the larger benefit, is that I should delay until 70, even if I donât live that long, because my W will most likely live long enough to make it worthwhile.
SS is longevity insurance, to protect against your outlasting your money. It is different in that people will think of it as an investment in a way that they donât think of homeownerâs insurance; was it a financial mistake to purchase homeownerâs if your house didnât catch fire?
For those who can afford to postpone SS, delaying is a great investment. If youâre in average health, it is calculated to be actuarially fair â so especially for females and given that life expectancy continues to increase, itâs even better.
The argument that you should claim early to make sure that you are protected from the government changing the rules is, IMO, unconvincing. The government can confiscate from those who have already filed as well as those who have not yet filed. Being âgrandfathered inâ is not guaranteed.
I receive SS now (since age 62). I did it because my children were young enough to receive benefits that offset the effects of my early filing. I accept the money, since I try to maximize the familyâs financials. But to be honest, my family is not who the safety net was intended for, and I would be miffed, but not upset, if means testing eventually took it away.
Ps @sax, congratulations.
I donât think very many people look at SS that way.
My definition of âinsuranceâ is a lot closer to this: âA risk-transfer mechanism that ensures full or partial financial compensation for the loss or damage caused by event(s) beyond the control of the insured party.â
SS is either 1) a pension plan that you pay into your entire working life in return for a stream of income when you retire; or 2) a massive pay-as-you-go welfare program to transfer money from young people to old people, in order to prevent old people from starving and being homeless. Or both. 
But calling it insurance? Eh⊠outlasting your money is not beyond your control.
I also believe if they change the SS it will be effective as of a certain age. It would think it has to be that way because for the older generation - theyâve been relying on SS for 30+ years. So it will probably be something like, if you are 55 years old or older as of year 20XX then you arenât impacted for the new SS rules.
However, I have seen new hires get letters from the SS administration saying that SS will not be available for them. So they are aware of that up front. The older generation has been depending on it for years and definitely plan on using it once they reach that point.
However, if there isntâ any money left thatâs another problem itself. I mean the govt. is already practically bankrupt.
If the employee is paying FICA taxes, why would SS be not available when they retire? I donât understand this.
I donât know. They are just making them aware that the money will run out. Iâm sure something will happen though. The question is what?