Social security

[Tim]

Not only thing atypical of us

SS gets even more interesting with us with Disabled Adult Child and Child In Care Spousal Benefits -- something that was a surprise in planning that opensocialsecurity was able to map out for our planning.

Made me some money too. Restricted filing. I don’t think a blog can comprehend most scenarios. The calculations are logically, legally and mathematically correct. Your health and life time is your problem. What I like is that it suggests the exact month each needs to file. Opensocialsecurity is fantastic.

[uksho]

jfoxcpacfp - exactly. the numbers really start flipping around and one of several reasons we are pulling SS at 62 and deferring pensions to later dates, VA (fed 62), Kaiser- 65; and UC probably 65 as current revised plans stand. Also with SECURE 1.0 pushing us to maximize Roth conversion opportunities with support on cash bucket instead of pensions; and then use contingency beneficiary to extend the pension to next generation and draw down the pretax funds for us if needed (shifting generational wealth over time).

Since you mentioned pensions, I have a question . Does anyone really need to have bonds or can have everything in equity/ RE if they have a pension?

[blippi]

Since you mentioned pensions, I have a question . Does anyone really need to have bonds or can have everything in equity/ RE if they have a pension?

there are those who see pension or annuities as bond replacement. fiphysician and wade pfau books have covered this.

[billy]

Turf Doc
“If one spouses personal FRA payments is more than half of the other (higher earning) spouses even if the other spouse files at 70 does this mean that getting that half that higher pay when one spouse dies no longer factors in?”

This is not how survivors benefits work.
”Whether that survivor benefit exceeds your own Social Security payment will depend on the amount of your late spouse’s benefit and your own age and family situation. You are entitled to:

• 100 percent of the deceased’s benefit if you have reached your full retirement age (currently 66 for survivors, gradually rising to 67 over the next several years).
• 71.5 percent to 99 percent if you are between 60 — in most cases, the earliest you can draw survivor benefits — and full retirement age. (If you are disabled, the minimum age is 50.)
• 75 percent if you are caring for a child from the marriage who is under 16 or disabled,
• regardless of your own age.”

Basically, once you file you are stuck. Get the greater of yours or spouse. Spouse can only claim 1/2 after the other spouse has filed.[LIST][*]The restricted filling is sunset. One files and the other claims 1/2 of spouse and claims higher benefit later at 70.[*]The file and suspend was eliminated too.

If a spouse dies before ever drawing SS, can't the surviving spouse claim survivor benefits at 60 and then claim their own (presumably higher) benefits at 70? So not being "stuck" once filing?

[billy]

Since you mentioned pensions, I have a question . Does anyone really need to have bonds or can have everything in equity/ RE if they have a pension?

i consider whatever pension or annuities etc as bond equivalents, so collectively my "fixed income" part of the equities/fixed income ratio of investing.

[Larry Ragman]

i consider whatever pension or annuities etc as bond equivalents, so collectively my "fixed income" part of the equities/fixed income ratio of investing.

This approach makes sense. However, just to offer a different perspective, I set the pension aside. For example, if I want $200k in income and I have a $50k pension, I simply concentrate on the AA and savings necessary to generate the $150k.

[Larry Ragman]

If a spouse dies before ever drawing SS, can't the surviving spouse claim survivor benefits at 60 and then claim their own (presumably higher) benefits at 70? So not being "stuck" once filing?

Yes. As I understand it, one can file for survivor benefits without being “deemed” to have filed their own benefits regardless of which is higher. But SS is tricky. Please verify with an expert. For example, I’m not sure but I think you would still be hit by the 2 for 1 rule. Still, if early retired I think this works.

[StarTrekDoc]

Since you mentioned pensions, I have a question . Does anyone really need to have bonds or can have everything in equity/ RE if they have a pension?

Great question - initially we didn't carry bonds at all. We've become a bit more conservative because we can, so have increased bonds even as we have significant pension and RE income flows.

Not in hurry to Retire Early or even reduce time and past leanFI. Still have 10+ year horizon. If we weren't so conservative, yes, would count pension and RE cashflow as bonds OR above the line income requirement and subsequent AA allocation based on risk tolerance.

[billy]

Yes. As I understand it, one can file for survivor benefits without being “deemed” to have filed their own benefits regardless of which is higher. But SS is tricky. Please verify with an expert. For example, I’m not sure but I think you would still be hit by the 2 for 1 rule. Still, if early retired I think this works.

I think you are correct with the 2 for 1, or maybe even 3 for 1 but Im a long ways away from collecting. Also plan on not working at 60 unless for social reasons, in which case the money wouldnt really matter.

[White.Beard.Doc]

History of my advice with Social Security withdrawal strategies:

1. Wait until you can determine breakeven point before deciding when to claim. Typically between 78 and 83, so decide if “you’re feeling’ lucky” about time to die.
   • Also consider that many doctors are male and will be outlived by their non-working spouse. You’ll set the benefits for your surviving spouse when you claim.
2. Then Bob-the-engineer-turned-financial-planner created a scenario in our software including a variable that is rarely (if ever) considered in SS w/d scenarios: what is the impact if delaying SS will result in earlier pre-tax retirement account distributions (we calculate the optimal withdrawal strategy bg within 5 yrs till retirement)
   • Lo and behold, the results changed. If the alternative is to substitute pre-tax dist’s for SS withdrawals, you’re generally better off with earlier SS withdrawals. Now I am not so anti-early withdrawal. I may start mine at FRA (I’m 64) even though I’d always planned for age 70 (now 72). Not certain yet.
   • Of course, you also need to consider that you’ll lose $1 from your benefit payments for every $2 you earn above $18,960 (2021) if you are under FRA .

Engineers are a special breed and I have respect for their capabilities. If you can tame one, it adds a new dimension to problem solving.

I plan on waiting until 70 to claim. (Are you stating above that you can now wait until 72 to claim SS? I thought that 72 is the new age to require RMDs.)

My spouse worked less years and will plan to claim SS at FRA, and to then convert to spousal benefits in the future.

We expect to have high passive income throughout retirement, so that would reduce benefits until FRA due to claw back and taxation.

For us, the SS is primarily a longevity insurance policy as we currently have plenty of other assets. Although we don’t have a pension per se, the cash flow we receive from RE is like a pension. We have transitioned our RE portfolio to around 95% professional management, but there are still a handful of properties that we personally manage. This is a downside of RE as you age.

[Hatton]

I plan on waiting until 70 to claim. (Are you stating above that you can now wait until 72 to claim SS? I thought that 72 is the new age to require RMDs.)

My spouse worked less years and will plan to claim SS at FRA, and to then convert to spousal benefits in the future.

We expect to have high passive income throughout retirement, so that would reduce benefits until FRA due to claw back and taxation.

For us, the SS is primarily a longevity insurance policy as we currently have plenty of other assets. Although we don’t have a pension per se, the cash flow we receive from RE is like a pension. We have transitioned our RE portfolio to around 95% professional management, but there are still a handful of properties that we personally manage. This is a downside of RE as you age.

I think 70 is still the max claiming age on SS.

[Auric goldfinger]

70 is the maximum age. Zero reason to defer beyond. I’m 66/2 months this week, which is my full retirement, but will defer until 70. I have analyzed this ad nauseum, as have others. Motley Fool did a nice analysis showing that reinvestment of the proceeds with early claiming outperformed delaying til 70 (assumed that you don’t need theS.S. To live on). However, this assumes investment returns that MAY not be achievable in the next few years. If we have another lost decade? Delaying gets a guaranteed 8%/ year return benefit. So I delay. $3869 at 70, wife $1647 at her full retirement age 67

[HikingDO]

70 is the maximum age. Zero reason to defer beyond. I’m 66/2 months this week, which is my full retirement, but will defer until 70. I have analyzed this ad nauseum, as have others. Motley Fool did a nice analysis showing that reinvestment of the proceeds with early claiming outperformed delaying til 70 (assumed that you don’t need theS.S. To live on). However, this assumes investment returns that MAY not be achievable in the next few years. If we have another lost decade? Delaying gets a guaranteed 8%/ year return benefit. So I delay. $3869 at 70, wife $1647 at her full retirement age 67

This is why I’ll most likely take social security at 62. The combination of the chance that I can outperform 8%, along with no guarantee that I’ll live to 70, will most likely lead me to take the money and run rather than waiting until I’m 70. But honestly, for most of the people who post on this forum, it really won’t matter either way.

[jfoxcpacfp]

I plan on waiting until 70 to claim. (Are you stating above that you can now wait until 72 to claim SS? I thought that 72 is the new age to require RMDs.)

My spouse worked less years and will plan to claim SS at FRA, and to then convert to spousal benefits in the future.

We expect to have high passive income throughout retirement, so that would reduce benefits until FRA due to claw back and taxation.

For us, the SS is primarily a longevity insurance policy as we currently have plenty of other assets. Although we don’t have a pension per se, the cash flow we receive from RE is like a pension. We have transitioned our RE portfolio to around 95% professional management, but there are still a handful of properties that we personally manage. This is a downside of RE as you age.

No, you can’t wait until age 72, I will correct above. I am forever confusing SS and RMD age.

[G]

But honestly, for most of the people who post on this forum, it really won’t matter either way.

This.

I wish by acknowledging this, I could be at peace, but alas....