<p>OK, so this post is a takeoff of another very interesting thread about retirement.</p>
<p>Looking for opinions and experiences specifically regarding the wisdom of collecting SS retirement benefits as early as possible (62) vs ‘normal’ retirement age of 65-67.
Not personally interested in delaying till 70 for higher benefit.</p>
<p>So, my DH is 4 years older than I and could file early in 3 years at age 62.<br>
I would continue to work FT, my job provides health insurance and a cash balance pension.</p>
<p>His family genes are not good so we are thinking to have him collect at 62.
We figure it would take many years to recoup the dollars he would collect early by waiting to collect later at higher amount. The SS received early would allow us some small luxuries but are not essential to our everyday expenses. It would be nice to have ability for some vacations that we’ve not been able to afford till now before REAL old age sets in.</p>
<p>He would continue at some PT employments he currently has with earnings below whatever the IRS limit is so he would not lose any $$$ due to work?
I am not clear about this though.<br>
Do MY earnings ‘count’ against his SS benefit? Or just his earnings?
We are married and file jointly.</p>
<p>Any thoughts are appreciated. I know I can research this online at IRS but you folk are much more enlightening!</p>
<p>I suggest you subscribe to [Retirement</a> Income Visions](<a href=“retirementincomevisions.com - This website is for sale! - retirementincomevisions Resources and Information.”>http://www.retirementincomevisions.com/) and read articles from the archives. This is a decision that should be made only with knowledge of ALL the facts. Your health and your spouse’s are one factor which may influence your life expectancy. Your accumulated nest egg and your goals and financial responsibilities are other factors. AFTER you educate yourself about the factors and the pros and cons of each decision, you can then decide what is right for your family.</p>
<p>BUT, an accounting friend suggested to take it at 62, and if able, safely invest the income (as in VERY safe). If healthy at 65, go back and basically “change your mind”. Supposedly the IRS will then ask you to return any $$$ they paid to you (but you can keep any of the investment income), and reamoratize for the higher amount. If you are lucky and health is good, you’re back where you started – except you’ve made a small amount in the meantime. If you are NOT healthy (or worse), you do not reamoratize, but you were at least able to collect for the extra years. This only applies if you do not need the income.</p>
<p>Caveat: You need to verify. Since my decision is several years off, and I do not yet know if I will need the income, I have not researched this suggestion. It is strictly based on a friend’s observation, although I did see a news article outlining the approach recently.</p>
<p>It depends. I am a teacher in a state that doesn’t have teachers participate in SS. SO…my SS benefit is only $120 a month. It doesn’t go up dramatically when I become 66. Once I am eligible for medicare at age 65, that amount of SS will go directly to pay medicare costs. That being the case, I’m going to collect at age 62…it’s not like I have a lot to gain by waiting. I will collect it for the three years and that’s that.</p>
<p>The Social Security Administration has revised the rule about paying back benefits. Now, a person can only do so if he or she pays the money back within the first 12 months of first collecting SS benefits. (See link below.) And please note that most of the relevant SS law comes from the SSA ([The</a> United States Social Security Administration](<a href=“http://www.ssa.gov/]The”>http://www.ssa.gov/)), not the IRS. </p>
<p>Thanks for the responses, I have some links to pursue. My head is swimming with all the info but I know things will become clearer after I have time to digest it all ( I hope).</p>
<p>I guess I’m oblivious…I didn’t know that some professions do not contribute into SS.
Is this a state specific thing for teachers, thumper?
Our DS may end up teaching her in NJ (if he’s fortunate); wonder if it’s same here.</p>
<p>Yes, thanks, megdog, for the correction. I did mean that info could be found on SSA site not IRS…I can only say that I still had IRS on my mind from filing many tax returns for our family.</p>
<p>As I mentioned in the retirement thread, if you could take taxes (and penalties) out of the equation then a very strong case can be made for taking SS at age 62. Unfortunately, from the perspective of us well-off CC crowd, SS was designed to assist the poor. While I’m all for that, it greatly complicates computation of anticipated payments.</p>
<p>With spouse working full-time, 85% of your SS payments will probably be taxable. For those in the 25% bracket that reduces your payment by more than a fifth … plus whatever cut your state insists on. And taking payments at 62 will be a problem should you decide to return to the workforce. Factor in the possibility of divorce or adverse change in tax treatment and the decision gets really complicated.</p>
<p>I’m not advocating taking early versus waiting. All I’m saying is … it’s complicated.</p>
<p>Is the real point to collect SS at age 62 or to retire at age 62? If the real point is to retire then you likely have other retirement income/funds. If you can manage a few years on just these other funds then you/he could retire at 62 but not draw the SS until 65 or later depending on the funds you have.</p>
<p>I’m not advising to go one way or the other and haven’t done all the calcs (I’m not at that point yet) but the point is that for many the retirement age doesn’t have to equal the SS draw age.</p>
<p>musicmom- teachers in NJ pay into social security</p>
<p>I believe Suze Ormann changed her opinion on taking social security at 62 because every year you delay taking ss your benefit rises 6-8%. She says delaying is a good return in comparison to current returns. I believe she also feels the economic crisis is cause for everyone to work longer and have a shorter but financially stable retirement.
As less and less workers have pensions and rely on a 401k for retirement income taking ss at 62 will not be a viable alternative.</p>
<p>musicmom…there are just more than a handful of states where teachers do NOT pay into social security. CT is one of them. There is also a SS offset for those of us who worked elsewhere prior to coming here as teachers. Our state teachers retirement offsets a goodly portion (2/3 ) of any SS benefit we would otherwise be eligible for. If not for that offset, my SS benefit would be about $350 per month (I haven’t worked in SS jobs for 27 years so my contributions were small).</p>
<p>ucsd<em>ucla</em>dad: DH has worked a different career path than I have. Stretches of self-employment, multiple part time jobs over the years.
He was the primary caregiver for our two children when they were young. He will continue with some part time work that he enjoys, the income will not be high. He has no pension.
We know nothing is certain but we’re planning to remain together. I have the old fashioned job with pension/retirement health benefits/etc. I plan to work till 62 or full 66 and 4 months to maximize my SS benefit. Then, we would both ‘retire’.</p>
<p>Our case is perhaps not as typical as some (if there is such a thing).
If DH decides to collect at 62, it would not be a large sum per month. If he delays till 66, it wouldn’t be that much larger.
MUCH clearer in my case that I should continue to full retirement age as difference between 62 and 66+ yrs is quite significant. Good thing that I mostly still feel 35ish and do love my work on all but the craziest days.</p>
<p>Another strategy I plan to do is when I reach 66 years old(full retirement) to get SS base on my husband’s SS(I get half of H since he is older and retires already) and wait until I’m 70 to get my SS.</p>
<p>We are in same situation as musicmom. Wife unit is 4 yrs younger, but she has to latch on to my SS to get her half. We decided that unless we need money to supplement our retirement income, it would be better to wait and maximize my base to maximize her SS income - she gets half when I am alive and full when I am dead.</p>
<p>If we both were of same age or if her own SS was more than half of mine than it is a toss up. The break even point for collecting at 62 or 66 is at the age of 78 or 79 - i.e if you die before 78 you collect more $. If you die after 78, you lose.</p>
<p>It is a personal decision. There are no wrong or right answers.</p>
<p>Based on family history and my current health, I plan to live until I’m 95. Consequently I plan to postpone collecting SS as long as I can.</p>
<p>What is tricky is figuring out the spouse thing. Currently my BIL (who, due to his job, did not pay into SS on his own behalf) is collecting half of my sister’s benefit, while she continues to work. It’s a nice bit of extra money. </p>
<p>I need to figure out how to maximize both of our SS payments, and that gets tricky.</p>
<p>It is tricky.
Both of my DH’s parents died quite young (early 60s). He does know that his grandparents lived much longer though. He (and I) would love to have a few extra dollars and the time to enjoy them in case he is not fortunate. You just don’t know.
In our case, it is not a large sum he would collect at 62. But after 30+ years of marriage and raising 2 children, the prospect of some time and funds to enjoy that time is appealing.
I would work to maximize my SS benefit but that’s OK. It would be lovely to have him around to cook dinners (he is a great cook!) and maybe take some trips with money no longer earmarked for those terrific but money sucking offspring of ours.</p>
<p>I appreciate the willingness of folks to share their thoughts on this.</p>
<p>Another thing for me (as a teacher in a state where I don’t contribute to SS)…I am not eligible for my husband’s MUCH higher benefit at any point in time…even if he dies.</p>
<p>I’m planning to take it at 62 (or when I quit). I figure that over time, I can make 6-8% on investing it. My wife will likely work 7 years past me, and has her own SS. I also have a state pension (which I’ll start collecting at 65), nothing too big, but between the two, we could easily live and have left over for travel. And then with my IRAs, and my wife adding to savings for 8-10 years, we might be fat. </p>
<p>If I really worked at it, I could probably grow 60% of our food. (But I won’t.)</p>
<p>And as for longevity, well, I already died once, so who knows?</p>