What Age Should I Collect Social Security If I Don’t Need It?

[@davidfolts5893]

One of the sharpest gentlemen in the world of financial planning, James Conole, is.

[@RootFP]

Thank you 🙏🏼

[@jeffhencie]

Absolutely agree.

[@Navrongo]

Excellent, succinct analysis. The fourth consideration is not just "Would you rather maximize your guaranteed income, or leave more money to heirs" but more specifically "Would you rather maximize your guaranteed income ...AFTER THE BREAKEVEN POINT... or leave more money to your heirs?" For me, most of the expensive things that I hope to do in retirement, I hope to do them before the breakeven point, around 78-80.

[@joec5544g]

First time viewer... I'm 60 and in a very similar position to the lady used as an example... I've watched many videos on the topic, I fully understand all of them, but yours was the only one that really addressed all of the angles... It's appreciated, take care..

[@cathy1775]

I’m new to this podcast. It’s great! Clear, concise, reasonable .

[@RootFP]

Awesome, thank you! And welcome!

[@janethunt4037]

Thank you for this! You have a clear and concise explanation to this big question. We are pondering this right now.

[@RootFP]

You are so welcome!

[@erickarnell]

I really like the tool of choosing personal preference between guaranteed income (income insurance ) and investments intended for heirs. Very useful mental exercise.

[@RootFP]

I’m glad that was helpful!

[@xporkrind]

Love all of your videos, but this one was especially informative. Thank you

[@akdavis3450]

James, I just love how you cover topics in a manner that makes it clear that there is no one size fits all answer with retirement planning. You make it abundantly clear that it always depends on individual circumstances, but you provide such great explanations and illustrations. For everyone who is fortunate enough to listen to you, I truly say thank you!

[@asdd5033]

When considering the Opportunity Cost of not taking SS early, do not forget that the U.S. Gov't is giving you a guaranteed return of approximately 6% annually (from 62 to FRA) and 8% (from FRA to 70). There are very few investments available to provide that return as safely as that.

[@leeward1717]

Plus a govt computed cola

[@randolphh8005]

If you don’t need it, take it early, because you can’t predict when you die. There is no guaranteed return when you are dead, so from a pure financial perspective it makes no sense to take the risk of waiting. If you need it, the opposite is true, because it is a protection against longevity. If it is needed, delay at least one person in a couple, at a minimum to 65, preferably longer. My wife took at 63, I will take at 70 for the larger check and survivor benefit. We are using it as part of our spending plan. Totally disagree with the opportunity cost discussion if SS is a part of the plan. You should delay some and spend the portfolio. There is no risk SS goes down. There is always a risk your portfolio will go down over a ten year period. If you have dependents, it is a no brainer for one to take early(assuming a few years of eligibility), the dependent and both parents can get benefits on one record!

[@WallaceDunn]

@@randolphh8005 there is an absolute risk that SS will be reduced at or around 2035... or retirement year will be pushed to 75, and increased payments while working, or a combination of the above.

[@jerrylabat550]

I agree, he didn't include COLA adjustments (which come close to the inflation rate). He also neglected to include the additional return needed to cover the income tax impact of paying taxes on 85% of the social security benefit. I think it is safe to include this for anyone that has enough resources to say they would invest it. So if their effective tax rate is 15%, they would need an additional 13+% return. To come out ahead they would have to average over 20% return - that isn't happening. This analysis is flawed because that rate declines as the investment balance accumulates, but over the 8 year window it likely has to exceed 15% annualized to break even.

[@TheFirstRealChewy]

​​​​@@randolphh8005 Take it early, take it late. Either will work, it just depends on your situation. Just as important is how that money is invested. If you delay taking SS then you'll want to do as much as you can to convert or spend the tax deferred investments. The double edge sword of more social security benefit is that there is even more to tax if you have RMDs. Even nice to consider when married due to the Widow's Tax Trap.

[@clbcl5]

For me it worked out mathematically at the beginning of the covid shut down and the stimulus checks and I was driving uber which completely died on day 1 of the shutdown I filed. My wife was deemed essential so the S.S. payments just built up to a very nice savings which came in handy. When it really did not matter when anyone starts that around 78-80 you would have collected the same dollar amount in total. I chose to collect a.s.a.p. and save it.

[@leeward1717]

I have risk off assets in Trad IRa and my Roth 401k for 63-65 for ACA subsidy max , Risk off assets 65-70, leaving the rest of my equity portfolio to grow and do Roth conversions until 70.

[@walts9364]

Nice discussion. Can you address how the ss computes the family max. How do they come up with 150% or 180%? Can you discuss various cases involving family max. For example under 19 in school and also adult disabled children and how this can impact spousal benefits and child benefits. Thank you. Specifically with respect to taking early and also considering some part time work which could cut into these. And how to consider a pension and 401k in this case.

[@isana615]

Thank you so much for your insight! I appreciate your podcast. 😃

[@roburb73]

I was about to type out a question about pensions and then you mentioned it :) That was going to be a huge issue, as I have a military pension and my wife will have a federal employment pension, combined will add to more than $125k inflation protected dollars.

[@RootFP]

I’m glad that question got addressed!

[@premaharishankar5620]

Thank you, very clear presentation

[@Ethernet480]

I take it a step further. I really don’t think cumulative dollars matter at all unless you are slated to run out of money or you have goals to leave inheritance. To me, it’s all about max cash flow over the remainder of my life. Focusing on Cumulative benefit seems like it runs the inline with the same mindset that maximizes a nest egg…ending with the highest balance

[@ethompson2719]

I waited 40 months pass FRA of 66 and LOST $194 a month in Tier 2 Railroad retirement payments Total of $7760 that I will Never Ever get... Waiting when you have a secondary Tier is a total Scam Forget +8 % a year on $1600+

[@murrays1555]

Another great episode, James, but I wanted to mention a couple thoughts/factors that you didn't bring up. I probably could have written the same question with my wife and I being retired at ages 62 & 58 and not needing social security to pay the bills. The ah-ha movement I had some time ago is that I don't really care if we get the maximum payments from SS or if we maximized our net worth at death since, well, we won't be here. What we do care about is reducing our odds of running out of money should we be fortunate enough to live a long life. I view delaying SS as insurance against disastrous returns early in our retirement and not a means to provide a larger inheritance for our daughter. As you said, we always have the option of turning on SS should we have more down markets driving our withdrawal rates over 6%. Second, you mentioned rate of return pushing the break even point out, but didn't mention that inflation/COLA pulls the break even point back since the annual increase you get from delaying benefits is compounded by COLA providing an even larger difference in first year and future payments. This also means that delaying works as a hedge against higher inflation. Finally, we are currently making large Roth conversions in order to minimize our IRA withdrawal tax rate. Taking SS early would reduce how much we could convert/withdraw from our IRA in any given tax bracket. Delaying SS provides more flexibility in controlling current and future taxes. I'd love to hear you discuss these points in a future episode and thanks to you and Ari for the great podcasts! -Murray

[@joec5544g]

Wow, that was longer than the video.

[@ede3237]

However if you have a spouse younger than you at 65 years old, hold out longer for SS. The surviving spouse would appreciate the higher monthly check if you were earning more.

[@RootFP]

You should absolutely consider your spouse in your claiming strategy

[@tomm.8892]

Many good points to consider, you have a good channel. For me/us, waiting and watching for any changes to our circumstances that would trigger us to stop waiting. I was the higher wage earner, and I expect my wife to outlive me by numerous years. Best for me to wait for her sake.

[@ylee1737]

If you get older, there is a much higher risk of not being able to recover from negative return years. So, at old ages, I think safer options like SS with COLA are more desirable.

[@franciscomedina3522]

You are the best

[@TheFirstRealChewy]

If I don't need it, then I don't need it. It means I can delay it and in turn spend more of my money earlier in retirement. If I die early then I enjoyed more of my invested money before I died. Any money left is a waste. If I live long then at least I have guaranteed money so I can be more aggressive with investments and spend more freely. I'd be less worried about a market crash, so less stress in my older years. Less stress is a great thing. If my goal is to leave money for beneficiaries then I do the same thing. The difference is that I'd be spending most of the money on the beneficiaries. This way I am still spending most of my investments early in retirement and allowing them to save and invest most of their income. They technically still inherited the money, but I get to be around to help direct how the money is used. If I die early then its not an immediate tax burden. If I live longer then I at least have more guaranteed money.

[@leftysidewinder]

If you hustle bank account welcome bonuses using the social direct deposits to generate $2,000-$3,000 in taxable interest from the social security direct deposits, then it’s a no brainer to take social security asap, right?

[@janeyan7266]

Is the amount of 401k converting to Roth considered to be income for SS taxable threshold?

[@ralphl7643]

I'm convinced the spiraling Federal debt will mean SS and Medicare will be much more heavily means tested in a few years. If you have investments and a bad hip, I'd take the SS money and get the surgery as soon as you can.

[@rhondavigil795]

How about take it at 62 and invest it in the market???

[@RootFP]

That’s always an option if the circumstances are right

[@88888gerald]

ill guess....70 why? consider social security as a long term safety net....dont worry about how much you collect...and if you wait..you will always be in better shape with more money later...

[@88888gerald]

other reasons....the more your benefit is..the less you pay in taxes...also...peace of mind....a larger benefit makes your lifestyle easier and more fun...

[@roniltataria8712]

Wouldn't it make sense to collect it starting at 62 if you don't rely on it solely since it takes about between 7 and 10 year to get to the break even point if for example if someone collected it at 65, 67, or 70? No one knows how long you are going to live.

[@petertu7359]

The break even point is the age at which it would have been better to wait to receive Social Security. If you live longer than the break even age, you are worse off if you began collecting benefits earlier. I would argue that since you don’t know how long you will live, it is always better to delay collecting benefits. Collecting early is basically getting you will die sooner than the actuarial tables. Historically, that has been a bad bet: people have generally lived longer than actuarial predictions since average age of death has increased (except during the pandemic).

[@leeward1717]

Could result in a tax torpedo depending on other source of income

[@angelocalima6338]

What doyou think my strategy retire 65 or 67 then use the 401k until 70 after that ,start social security benefit so it will decreased the RMD @ 75 years old .I am 63 years old.👁️👁️👁️👁️👁️👁️👁️👁️👁️👁️👁️👁️👁️I set aside my 401k around 200 k fixed accounts to survived until 70 years old 5k yearly withdrawal.

[@jacksummer854]

90% of seniors should wait until at least their FRA or 70.

[@joec5544g]

That's not what the video was really addressing... Read the thumbnail.