Taking Social Security at age 62

[MillCreek]

https://www.foxbusiness.com/personal-finance/when-taking-social-security-at-62-could-be-wise

Much of this article confirms my earlier research, especially about the part on decreasing the amount I would draw monthly from the 403(b) and putting me into a lower tax bracket.

[K Frame]

Wow?

Once size for all advice doesn't actually fit everyone?

Whoda thunk it?

[Ben]

Whatever the earliest day is that I can file the paperwork before I turn 62, that's when I'm filing for it.

[MechAg94]

It seems to me that taking the money you don't control first would be better than living off the money you have in hand then taking that govt check later when you have a lot less.

[K Frame]

All of this is predicated on one thing...

that you want to retire early.

I probably won't retire until at least 68, if I survive that long.

[brimic]

I know quite a few people who retired at 62, (including both of my parents) and because of odd rules or circumstances, were told they need to spend a good chunk of their 401k/pensions right away because they had too much money in them() Parents bought a new car each, I know a guy who bought a $30K bass boat based on what his financial adviser told him.

[grampster]

I went at 62 1/2 because my birthday is in August.  Staying on the job after age 62 in August till after the first of the year got me check for 5 weeks vacation, a bonus I qualified for but had to work to January to get it and I had several large accounts that paid me a lot of commissions in February.   Waiting a few extra months was a no brainer under the circumstances.   I've never regretted getting SS early.  Between what I get and Swmbo gets, a pension and a nice chunk in an IRA we're fine so far, 13 years later.

[MillCreek]

I am kind of thinking about 62.5, which would be the summer of 2022.  My wife turns 65 in Q1 that year, and the summer of 2022 will be when the school year ends.  It would be unheard of for a schoolteacher to retire before the end of the school year.  I am trying to persuade her that we should both turn in our keys at the same time.  She realizes that finances will permit this, but I think she is struggling with leaving her job.  With any luck at all, she will have a terrible class that school year and will be eager to leave.

[Ben]

It seems to me that taking the money you don't control first would be better than living off the money you have in hand then taking that govt check later when you have a lot less.

This is part of my thinking. Though currently, I'm living off some taxable (non-retirement) equity income because I wanted to wait a while to draw my gov pension so I don't have to take such a large "early" penalty. Basically 5% for every year under 62. I'll probably start drawing it at 60 with the 10% penalty because then I can, as you said, spend less of the money that I control, and keep that invested. The invested money should cancel out the penalty over time.

I look at the fed.gov pension pretty much as an annuity. It's money I get, but I basically have no control over the chunk my monthly payment comes from. I see SS the same way, hence that also gets taken at the first opportunity. I'll hit my TSP (gov 401K) sometime later since I have a lot more withdrawal options on it now with the new rules on them (they used to be kind of like an annuity as well). Then my Vanguard retirement IRA gets drawn on last.

My other reason for drawing early is I simply don't want to be hit by a bus while I'm waiting to "get that bigger monthly chunk 'O dough."

[French G.]

Dunno for me, not to keen on ever retiring. Assuming a functional government I hope to have three streams of passive income. Navy reserve retirement at 60, 401k, and SS. With our government I could easily have zero. Got 16 years to think about it, hopefully I am alive for it. My 401 won't be massive, so I lean towards retirement and SS as early as possible, let the 401 earn interest. And if I can live on other money, why not keep the 401 more aggressive longer? Certainly in the realm of possibility for it to double between age 60 and 70 if I don't touch it.

[brimic]

Dunno for me, not to keen on ever retiring. Assuming a functional government I hope to have three streams of passive income. Navy reserve retirement at 60, 401k, and SS. With our government I could easily have zero. Got 16 years to think about it, hopefully I am alive for it. My 401 won't be massive, so I lean towards retirement and SS as early as possible, let the 401 earn interest. And if I can live on other money, why not keep the 401 more aggressive longer? Certainly in the realm of possibility for it to double between age 60 and 70 if I don't touch it.

I’m in the exact same boat, except without military service, but my line of work is very hard on the body. Right now I’m learning alternate skill sets while also taking business classes and earning certifications on my company’s dime. I might make it to 62 doing what I’m doing, but the odds are against me.

[MillCreek]

My other reason for drawing early is I simply don't want to be hit by a bus while I'm waiting to "get that bigger monthly chunk 'O dough."

I actually ponder this very point, and it is one of the drivers for me to try to manage my finances so that we can retire at a reasonable age while we are still young and healthy enough to enjoy it.  Working in healthcare, and especially when I was the system risk manager for the hospice service line, has convinced me that life has no guarantees, and I saw way too many people die before their time.  I am going to be pissed if I die in harness, or soon after retirement, and my wife is entertaining her new boyfriends in my paid-off house enjoying my high six-figures retirement plan money.

[Larry Ashcraft]

Wife took her SS at 65 when she retired.  Our financial guy recommended I wait until 70 to get mine, but we opted to take it at 67.  We didn't really need it, since we were living on hers, but the numbers said it was the thing to do for us.  We opened a savings account just for my check, and then when we needed to make a major purchase (like buying a used travel trailer to live in while we built the new house) the money was there.

We just got a notice from the  financial people that we need to start taking a check from our 401k this year, so we're starting to plan on that.

[grampster]

Here is the definition of being retired by grampster.    "It's like being a little kid again, but you have money and no one to tell you where to go or what to do."

[Northwoods]

All of this is predicated on one thing...

that you want to retire early.

I probably won't retire until at least 68, if I survive that long.

Why?  You have no kids (that you know of) to support through college.  You seem frugal enough to have the means to retire quite early. 

[MillCreek]

So after pondering this thread, I wrote a check yesterday for $ 60K to pay off the house. I had been thinking about it for a while, and decided there was no time like the present.  I bought the house for $ 465K in the summer of 2015, and have been making substantial payments on the principal at irregular intervals.  It is now worth about $ 600K or so.

Especially given the nature of the local healthcare market, and my job, I decided it was a good idea to pay it off while I still had a job, so come what may, we would have a roof over our heads.  I had always planned to pay it off before retirement so this just accelerated the process a bit. I had the money in the bank earning crap interest, as opposed to paying 4% interest on the mortgage.

This will be the second house I have paid off, in my history of owning four houses in the inflated Seattle market.

[zxcvbob]

Why?  You [Mike] have no kids (that you know of) to support through college.  You seem frugal enough to have the means to retire quite early.  

Because bitching about work is what gives meaning to his life. :D  Six months after retiring (whenever that is) he'll kick the bucket.

[Ben]

Because bitching about work is what gives meaning to his life. :D  Six months after retiring (whenever that is) he'll kick the bucket.

Not to veer the thread (hey, what am I talking about OF COURSE to veer the thread), but that is a weird phenomenon to me. It's not something I just "read about" that happens to people - it has happened what I would almost consider a disproportionally high amount of times to people I'm acquainted with IRL.

I can't seem to go a year without running into someone I know, used to work with, etc. who doesn't tell me, "Hey, remember John Doe? He retired last year and had a heart attack and died three months later." Or was diagnosed with cancer or something else that puts the kibosh on retirement. It was actually an item on my "reasons to retire early" checklist.

[Northwoods]

Before my dad retired (the first time) he had a graph on the fridge showing life expectancy vs age at retirement.  It was a clear relationship where retirement at 55 gave a life expectancy of I think 85.  Retirement at 70 gave an expectancy of 72.  Or something close to that.  And it was pretty linear in between.

[BobR]

I have already missed the early retirement window. :(


I will retire this October when I turn 66 and take full SS. That will give me the SS, Military and VA retirements to play with, along with money from my TSP every month. I should do OK, we will sell out present house and move to NV and see what we can scare up to purchase. My wife is already receiving SS due to her SSDI being turned into plain SS when she turned 65 so there is that also.


bob

[MillCreek]

https://www.marketwatch.com/story/should-i-claim-social-security-at-70-or-take-it-earlier-and-invest-the-money-11642720300

This is a factor playing into my decision on when to take Social Security.  Maybe not so much investing my monthly SS check, as much as using it to decrease withdrawals from my retirement accounts, and allowing them to keep earning a return.

[Ben]

Well, I turned 62 in DEC and I'm getting my first SS check in MAR. Just got the "approved" email last week. Looking at my reply here two years ago, all my reasons are pretty much the same. I started taking my gov pension (with an early withdrawal penalty) last year. I will be using the pension and SS money to pay bills, and I continue to let my TSP grow.

Same with my Vanguard stuff. I'm only paying myself quarterly dividends and capital gains from both the Vanguard taxable and IRA accounts and otherwise letting them grow. Right now I'm getting way more money annually than I need to live on without touching any of my investment profits (other than said dividends and capital gains). I could have gone more years without drawing SS, but again, there's the "hit by the bus" reasoning that came into play for starting it now.

[K Frame]

You'd better be drawing enough to maintain Steve in the manner to which he's become accustomed!

[Ben]

You'd better be drawing enough to maintain Steve in the manner to which he's become accustomed!

His Vanguard account is bigger than mine. 

[Brad Johnson]

My nephew is about to finish his Masters with the possibility of going PhD. I'm trying to convince him to start a ROTH through Vanguard. Even if it's just $50 a month, it gets him in the habit and starts something that can grow for the next four or five decades.

I have another ten years before I qualify for retirement through my current job. If they don't nerf retirement plans, I can retire and then go back full time after a year. Double-dip five or six years while for the extra cash, then retire for real somewhere around 70. Weighing that against just working until 70 to up the years-of-service calc. Will depend on where I stand in terms of salary at the time.

Brad