- quote -

Thanks! I'll check it out.

Elizabeth

"Elizabeth Richardson" <erichktn[at]worldnet.att.net> wrote:

- quote -

I know I'm responding to a old post, but I've found a pretty good answer to your
question.

http://www.fpanet.org/journal/articl...p0306-art8.cfm

has an article addressing the break even time to delaying benefits under various
spend/invest options. It also gives the probability of surviving to that age.
At the bottom of the article is a link to a downloadable spreadsheet that allows
you to plug in your age and expected benefit, and it will calculate your
specific numbers.

-- Doug

On Oct 15, 12:28 pm, "Elizabeth Richardson"
<erich...[at]worldnet.att.net> wrote:

- quote -

IIRC, there is a 7% boost in SS every year you delay past full
retirement age. If you can get more than 7% after taxes on your
investments, then you should take SS as soon as you get to full
retirement age.

I will be delaying SS for a few years despite being able to get more
than 7% on investments recently because I wish to convert some regular
IRAs to Roth IRAs and need to keep my income down until 2010 when
there is no conversion ceiling.

--
Ron

"joetaxpayer" <joetaxpayer[at]nospam.com> wrote in message
news:SP-dnSJRxp6wqmTbnZ2dnUVZ_gednZ2d[at]comcast.com...
- quote -

I think there's something in calculating the reduction between age 62, full
retirement, and beyond. I say beyond because after full retirement, SS
continues to increase the benefit for a few years, I think until age 70.
Since I'm not working anymore, it seems to me there should be a break-even
point when you include the annual return on investments and the percentage
of decrease/increase in SS. For a number of reasons, I expect to live well
into my 90s; there is no question that delaying SS benefits is the right
decision, but for how long? Yes, I can plug the numbers into the SS
calculator, multiply by number of years of life-expectancy and see the
differences. Theoretically, SS is an inflation-indexed annuity, but I
anticipate inflation for the elderly to be greater than "normal" inflation.
Another variable for you, Joe.

Elizabeth Richardson

"Fred J. Tydeman" <tydeman[at]tybor.com> wrote in message
news:Jd11RFbi8Eoq-pn2-z3KhCXuGNjtX[at]localhost...

- quote -

Fred, thanks for posting that link. And thanks to Doug, who responded with a
very interesting excerpt, and who prompted me to read the articles linked at
the bottom of Fred's link. One of the stats posted was that each year you
wait to take benefits is like getting a risk free 7-7.5% inflation adjusted
return. Perhaps that number came up in the Alicia Munnel articles, but I
didn't see it so plainly when I read them. Maybe I should print that out in
a big typeface and put it under a magnet on my refrigerator.

Elizabeth Richardson

On Sep 24, 1:35 pm, "Elizabeth Richardson" <erich...[at]worldnet.att.netwrote:
- quote -

You can use the payout from an inflation-adjusted immediate annuity to
eliminate the need for specifying your date of death, as follows:

If you started collecting Social Security in month N and the first
month's benefit payment would buy an inflation-adjusted immediate
annuity beginning in month N+1 whose initial monthly payout exceeds
the increase in monthly benefit you would get by delaying until month N
+1, then you should start collecting at month N.

You can get inflation-adjusted annuity figures from
http://www.aigretirementgold.com/vli...=RequestaQuote

Dave

"Fred J. Tydeman" <tydeman[at]tybor.com> wrote:


- quote -

This appears to be real. So you can hedge against dying early by taking SS at
62, then if you are in good health, return the money at 70 and reapply for the
higher payments. Weird.

But the URL referenced is also worth reading for some of the links at the bottom
of the page, one of which takes you off to a discussion forum at Morningstar on
the topic of when to start SS.

Moderators: I hope you will forgive me for
extracting one of the posts, which is a pretty good answer to Elizabeth's
original question:

============quote

When will the tortise pass the hare?

Twins A and B have equal earning histories. At full retirement age of 66, both
would get $24,000 a year, but B takes SS at 62 and gets 75% of that ($18,000). A
takes SS at 70 and gets 132% of that ($31,680). Neither person spends a penny of
the money, so we are only watching total savings. We will use real dollars, so
there is no cola adjustment before or after the start of SS benefits.

With no interest earnings, A's savings will pass B's savings at age 80 (348,480
vs 342,000).

With no interest from age 62 to age 70, but 5% real interest (above inflation)
on all savings after age 70, A will pass B at age 85. (This was your original
question.)

With 5% real interest on all savings from age 62, A will not pass B until age 90
(1,131,585.90 vs 1,121,808.81).

With 4% real interest on all savings from age 62, A will pass B at age 86. With
3% real interest on all savings from age 62, A will pass B at age 84.

As you suspected, the early collection of benefits gives B a head start, but it
is always overtaken at some point. The larger the real return assumed, the
longer it takes for A to catch B.

Al

========end quote

-- Doug

On Tue, 25 Sep 2007 09:54:13 -0500, "Elizabeth Richardson"
<erichktn[at]worldnet.att.net> wrote:

- quote -


Delay, delay, delay? You'll be dead and won't collect anything.
THumper

On Mon, 24 Sep 2007 18:35:54 UTC, "Elizabeth Richardson" <erichktn[at]worldnet.att.net> wrote:

- quote -

The following book discusses your issue.
Retire Early? Make the Smart Choices by Steven Silbiger.
It discusses the many issues involved with taking Social Security
early at 62 or waiting for normal retirement age of 66 or longer to 70.
It has a chapter on estimating your age of death, which is one of
the issues.

However, it does not discuss the option of starting taking SS at 62,
and then at age 70, doing a "withdraw your application" whereby
you return all your early SS payments (but not the earnings on those
SS payments), and start collecting the higher SS payment of a 70
year old. This is discussed at:
http://www.retireearlyhomepage.com/cheap_annuity.html
---
Fred J. Tydeman Tydeman Consulting
tydeman[at]tybor.com Testing, numerics, programming
+1 (775) 358-9748 Vice-chair of J11 (ANSI "C")
Sample C99+FPCE tests: http://www.tybor.com
Savers sleep well, investors eat well, spenders work forever.

Elizabeth Richardson wrote:
- quote -

If the other articles haven't done the math enough to prove the point
either way, I'm thinking there's a project for me and excel.
Since date of death (sorry to be blunt) is likely the unknown, with most
other variables pretty well known, it seems the resulting analysis
should produce a curve that starts with one dying 1 year hence, and of
course that person should have taken the SS money, all the way to, say,
living to 100, and showing the increase that delaying benefits would
offer. And the resulting advice would be 'if you plan to live past X
age, delaying Y years will benefit you Z$$.
(of course, the SS tax bubble needs to be studied along with this, but
'other income' becomes an extra variable too many. One can use the
pre-SS benefit years to convert IRA to Roth, and lump-sum the savings
observed.)

JOE
www.blog.joetaxpayer.com

"HW "Skip" Weldon" <skip5700removethis[at]hotmail.com> wrote in message
news:l1qhf3d4dq0mg7uflqjh19904nt8drgdfu[at]4ax.com...
- quote -

Well, Skip, that's sort of what I thought. The "Optimal" time is delay,
delay, delay. Some days this feels counter-intuitive, so I needed to be
reassured/encouraged.

Elizabeth Richardson

On Mon, 24 Sep 2007 19:05:06 -0500, "Elizabeth Richardson"
<erichktn[at]worldnet.att.net> wrote:

- quote -

We'd need a crystal ball to determine the optimal time. Absent that
and assuming reasonable health plus no problems with the earned income
limitation, my general approach is that if one needs the income before
full retirement date (in your case 66), take it. Otherwise, wait for
the full benefit.



-HW "Skip" Weldon
Columbia, SC

"David Moore" <dsmoore[at]stat.purdue.edu> wrote in message
news:fd98uf$2d3q[at]odds.stat.purdue.edu...
- quote -

This was the article and website that made me realize I should be delaying
my benefit. There was a discussion on this issue a few months ago. I am
simply asking is anyone has insight on an optimal time to start taking
benefits.

Elizabeth Richardson

dsmoore[at]stat.purdue.edu (David Moore) wrote:

- quote -

A direct link is here. http://crr.bc.edu

Most of the papers deal with the societal and policy implications of Social
Security.

- quote -

A direct link to this paper is here: http://crr.bc.edu/stories/Briefs/ib_35.pdf

It addresses the issues pretty directly. Scott Burns wrote several articles
derived from this paper. You should be able to find them at www.scottburns.com.

-- Doug

For careful treatment of Social Security issues, it's hard to beat
the work of Alicia Munnell and others at the Boston College Center
for Retirement Research. Click on publications, then on Social Security
under Topics. The original poster might look at Munnell and Soto,
"Why do woemn claim social security benefits so early," for example.

David

"Elizabeth Richardson" <erichktn[at]worldnet.att.net> wrote:

- quote -

This is a question that I am trying to figure out myself. I do know any formula
will start with your date of death. When you know that, it will be too late.

I think that, if you are healthy, with long-lived ancestors, you should delay as
long as possible, given that Social Security is an inflation adjusted annuity,
it provides good insurance against outliving your money.

Conversely, if you are from short lived stock and ill, you probably ought to
start as early as possible. None of us are promised another sunrise.

The question gets more complicated if you are married. The surviving spouse
gets the higher of the two social security payments. Say your husband is
already retired and drawing Social Security at a rate that is higher than your's
would be if you waited to start. Then, his SS payment provides longevity
insurance, because you will get his payment if he dies first. In that case, I
would start drawing as early as possible.

The above is my current thinking. I'd love to hear corrections or additions.

- quote -

As Churchill said, "That is a convention with which I will not put up."

-- Doug

Ok, having been duly convinced that delaying the taking of SS benefits is a
wise financial course for me, how do I go about deciding when is the most
optimal time to start taking benefits? Is this a risk/reward question or is
there a formula I ought to be playing with? (Yes, I know I ended that
sentence with a preposition, but I'm too lazy to reword it.) And if there is
a formula, what is it?

Elizabeth Richardson