Yes, at this point, we do not need SS to Kay for our current living expenses. Things can and will change, so making a tentative decision and revisiting makes sense for us.
Youāll never know which is optimal at the time you make the decision. If you live to be 90, youāll know what you should have done. If you realize at age 72 that you are going to die today youāll know what you should have done. But at the time you make the decision, itās a risk either way, and you have to decide what risk youād rather take.
We can afford to wait, so we will, and then we will have (if the rules donāt change too much) 2 inflation adjusted annuities that may eventually grow to be more valuable than our pensions, which are not inflation adjusted. But if we die when weāre 72, weāll have left some money on the table, or at least with the taxpayers.
If we take SS as soon as we are able, weāll have much lower payouts, and if we live to be 90 and still active weāll really be regretting the lower income.
So weād rather wait and risk leaving money on the table than take it early and risk having too little long after our ability to change our plans much has passed.
āI think the vast majority of people who take SS at 62, take it because they need the money to live on.ā
Or they have reasons to think they wonāt live to a ripe old age.
Thereās also political risk to consider.
The trust fund runs out in 2035 or thereabouts, after which benefits drop by 25% unless the govāt gets its act together. Preserving the status quo, if it happens, could involve more than just raising FICA taxes on our kids and delaying their FRA, it could involve benefit cuts for higher income seniors, some other forms of means testing, higher taxes on benefits, or who knows what. Thereās a school of thought that thinks it is advisable to take what you can get as soon as you can, because the benefit may/will be much reduced in the future.
Predicting investment returns is a snap compared to predicting this, though. 
I like having SS as longevity insurance. I was supposed to die over a decade ago, but since I didnāt, I may live many decades more, like my folks. If I live many more decades, Iād prefer to have as much $$$ coming in to help pay living expenses as possible.
Absolutely spot on.
Agree with both sentiments. Someone with a shorter life expectancy due to serious health issues might take it earlyā¦even if itās just to bank it.
My dad took SS at 62 and died two days before his 64th birthday. When he closed his company, he was on the state high risk insurance - which he could afford and was glad to have. He was looking forward to getting Medicare at 65. My momās insurance was reasonable cost, and later had Medicare and appropriate supplement - she lived to 77.
H and I are working to 65 to feather the nest and transition to Medicare w/o more out of pocket cost for gap insurance. We will draw SS as soon as we retire at 65. Fortunately H and I turn 65 within months of each other, so H doesnāt have to work much longer than a few months into age 65.
We are both getting weary and look forward to retirement. Both have lots to stay busy with. Hās ego is not tied to his job. He is having to travel a lot for work and looks forward to his projects and hobbies.
I will likely outlive DH - itās been suggested that he begin drawing earlier than me and I would wait as long as possible so that my payout will be larger for longer. It makes sense to me in a divide and conquer sort of way. We are only in our 40ās though and are not planning on the Ss they are telling us we will get so it will be more of a bonus if there is anything left for us.
Yes, the risk is higher for late boomers, generation X, and younger people. Anyone in these categories should be wary of making any assumptions about Social Security in retirement planning. Medicare has similar risks.
Really, the goal of retirement planning is save enough to be able to join the capitalist class (i.e. able to live comfortably on oneās own savings/investments, and/or vested interest in solidly funded pension plans) by retirement age or earlier, in order to avoid ending up in the dependent class (i.e. worried about cuts to Social Security and/or Medicare, or needing financial support from family or charities).
Over the years weāve taken 3 different 2-night retirement planning classes with different financial planners. (The wcere coordinated through community college night program / flyer in mail. Itās about $60/couple including appt to review personal info. The planners hope to drum up some business but are not pushy). I think they all pointed out the factor about older husband possibly delaying SS to improve widow outlook.
They also brought up various other good talking points, including long term care considerations. I highly recommend doing couples even if many years from retirements. One benefit is that it got me to track our spending monthly, at an aggregate level. It has been very helpful to our planning process! (DH is great at the other angle, with tremendous spreadsheet investment tracking/planning. But if you donāt know how much income you need per month it is all for naught.).
Note - We get weekly postcards for free dinners / SS planning info from financial planners. Weāve turned them all down, leery of pushy sales pitch.
@colorado_mom Did you find that the advice/recommendations varied much from planner to planner or was it pretty consistent?
Iāve only gone to meetings at the library or civic center. Anythingās night at a restaurant revolves around variable annuities.
Has it been discussed on this thread, feelings about fixed annuities?
@doschicos - The advise/recommendations among planners was fairly consistent. For example, they mentioned LTC insurance at varying levels of detail (though none sold it) ā¦ with the them that probably not worth investigation for those with few assets or very high assets. (It is where we learned LTC policies can be used for in-home care). There is a slight skew toward life insurance options for those that sell it. They all encourage attendees to get their SS estimate.
The latest class was by a planner that sells no investments but charges big management fee (probably too steep for us)- he is enthused about rental property in general, ie he is not a real estate agent (it is something we are not inclined to do at this point in life.) DH previously attended that a class by same planner aimed only at Annuities ā¦ and @bookworm - the planner (and now DH) are not keen on annuities in the present economy. The challenge becomes - if stocks are too volatile and you dislike rental property and annuities, then What Else?
It was neat to be in class with other people pondering the same topics.
āHas it been discussed on this thread, feelings about fixed annuities?ā
Based on past discussions, a lot of us arenāt proponents.
I am not a fan of long term care policies - especially seeing how much and how long my parents paid into it, and how it covered nothing for either of them, and would have covered very little even if they had used it. I am hoping the assisted death with dignity movement gains traction and I can choose to end my life with dignity when ready!
I am not a fan of LTC policies either. I suppose I may change my tune if I ever succeed in submitting the documentation required to satisfy the planās elimination period for my mother. The carrier paid out a total of six days of in-home care by the time my father died.
It is a bit of a double-edged sword. This generation does not want to spend a penny on themselves, and by having the LTC plan, my mother thinks that every expense should be paid for by the LTC carrier. However, the hoops that need to be jumped through are exhausting. We would all be better off if we could just pay a retired nurse under the table to take care of her when needed.
Iām not a fan of long term care policies. You really have to read carefully to know what you are buying, whatās included vs excluded. The price vs benefits is a calculation each person has to make, likelihood the company will remain solvent and pay out, whether they can raise premiums and by how much and what your options are when that happens are all things we weighed and decided NOT to buy.
I did interview a LTC company and asked them what it would take to qualify for benefits and ultimately opted It was unlikely H and I will ever qualify. Heck, my folks in 80s/90s donāt qualify for benefits yet. My aunt only qualified in the last month of her painful death from lung cancer.
Also agree that annuities arenāt very attractive in the current low interest rate environment. Real estate does take some management and is somewhat illiquid, but CAN provide a stream of income and some inflation protection.
If doing LTC, then I would recommend one of the plans which offers some life insurance benefit if you donāt use the LTC, like Lincoln Moneyguard. I do think itās not always something which pencils: if you have an early disability, say living with care needs for 5 years or longer, then you will likely outlive the benefit (the plans with which I am familiar seem to limit the years of payout) or if you only have a short time, weeks or months, of disability before death, then you would have been money ahead to pay OOP for the care. Itās rough to hit the sweet spot.
We bought LTC 10 years ago hoping it would primarily reduce the anxiety, and potentially guilt of trying to balance cost with care. The thought was that any LTC payments could allow us (or more likely our children) to avoid the angst of wanting a caring and nice environment, but not being able to afford it ā with too many assets to qualify for Medicaid, and too little to self-insure. Like all insurance, we actually hope we NEVER need it! Sure, Iāll be ticked if I need it and canāt get the insurance company to comply. But just like home or auto insurance ā Iād rather pay into the pool and be a lucky one and never need to use it.
On the other hand, we made the best decision we could 10 years ago, buying early at lower premiums, with the hope (and history) that rates would rise, but little. That hope died 3 years ago, when we turned 60, and the premiums have increased over 50% from where we started. Legally companies are not allowed to raise rates based on age, but the coincidence was interesting. They ARE allowed to raise rates as long as they do so across the board for all similar policies. Of course most people around the same age bought similar policies!