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re: S/S - Do you plan to take at 62/67/70
Posted on 12/5/23 at 12:48 am to HeartAttackTiger
Posted on 12/5/23 at 12:48 am to HeartAttackTiger
62, next year.
Posted on 12/5/23 at 1:43 am to llfshoals
Took it at 64 after watching our President let in the world so that I could pay to feed and house the folks crossing our borders
Posted on 12/5/23 at 4:37 am to meansonny
Yes you could continue to supplement the Roth but I’d wouldn’t pull money out that account till it was the last account available
Posted on 12/5/23 at 8:15 am to Gorilla Ball
quote:
Yes you could continue to supplement the Roth but I’d wouldn’t pull money out that account till it was the last account available
If we’re talking about “leaving money on the table,” this has to come into the discussion.
Like I’ve said a few times, the decision to draw early or late is nuanced. Many clients I work with have a 401k/IRA only, so drawing SS to mitigate taxes with a well balanced portfolio is a worthwhile exercise. Helps with RMD planning too.
This post was edited on 12/5/23 at 8:19 am
Posted on 12/5/23 at 8:37 am to slackster
I'm 61 and taking my SS as soon as I turn 62. I'm in great health and already retired. It should make sense for me to wait until age 70. I'm taking it at 62 instead because SS, at least in its current form will not last much longer in my opinion. The government just keeps giving our SS fund away plus trillions of our tax dollars. SS Disability fraud is also rampant. SS, the US dollar and our entire financial system don't have a long life expectancy.
This post was edited on 12/5/23 at 8:43 am
Posted on 12/5/23 at 12:46 pm to 98eagle
quote:
I'm 61 and taking my SS as soon as I turn 62. I'm in great health and already retired. It should make sense for me to wait until age 70. I'm taking it at 62 instead because SS, at least in its current form will not last much longer in my opinion. The government just keeps giving our SS fund away plus trillions of our tax dollars. SS Disability fraud is also rampant. SS, the US dollar and our entire financial system don't have a long life expectancy.
Does the government have a history of retroactively changing SS to impact those who have already retired?
Does the government have a history of changing SS to impact those who are retiring in the next 48 months?
I get it. The system is broken.
But politicians only stay in power through elections.
I don't see the fear (because of the political history of changes to SS) that many see on here. I don't even know where those irrational fears stem about taking away a benefit that is already being received.
Posted on 12/5/23 at 12:48 pm to slackster
quote:
If we’re talking about “leaving money on the table,” this has to come into the discussion.
Like I’ve said a few times, the decision to draw early or late is nuanced. Many clients I work with have a 401k/IRA only, so drawing SS to mitigate taxes with a well balanced portfolio is a worthwhile exercise. Helps with RMD planning too.
What is the AGI of those families who are taking SS to help with paying their taxes?
I appreciate your insight.
Posted on 12/5/23 at 2:43 pm to HeartAttackTiger
Probably 67, the difference between that and 70 isn’t that big of a difference unless you live Till about 98. I don’t remember the exact formulas for myself
Posted on 12/5/23 at 3:24 pm to HeartAttackTiger
Summary: Everyone's situation is different.
I'm 62, working fulltime, making plenty, wife (no pics) is doing the same.
Both of us in excellent health (no meds, very active
), most of the the generation before us (parents/ aunts/uncles) on both sides lived into their deep 80s or 90s.
We don't need the SS now and the 8%/year "return rate" is not bad.
So waiting until at least age 67, and maybe for only one of us then, with the other waiting until 70.
I'm 62, working fulltime, making plenty, wife (no pics) is doing the same.
Both of us in excellent health (no meds, very active
![](https://images.tigerdroppings.com/Images/Icons/IconPimp.gif)
We don't need the SS now and the 8%/year "return rate" is not bad.
So waiting until at least age 67, and maybe for only one of us then, with the other waiting until 70.
Posted on 12/5/23 at 5:11 pm to meansonny
quote:
What is the AGI of those families who are taking SS to help with paying their taxes?
It’s not SS to help pay taxes, it’s SS to avoid them or more of them altogether.
If you’re actually retired and having to live on your assets and eventually SS, it is often better to use SS rather than assets early. If that doesn’t answer your question, clarify it for me and I’ll try again.
Posted on 12/5/23 at 5:26 pm to slackster
quote:
It’s not SS to help pay taxes, it’s SS to avoid them or more of them altogether.
If you’re actually retired and having to live on your assets and eventually SS, it is often better to use SS rather than assets early. If that doesn’t answer your question, clarify it for me and I’ll try again.
What is the AGI of your clients who are using SS to avoid paying taxes?
Posted on 12/5/23 at 5:52 pm to meansonny
Typically $40-$70k in cash flow needs. I know that doesn’t directly answer your question, but that’s what we’re solving for. How do we get $5-6k net of taxes per month in most of those discussions.
Posted on 12/5/23 at 6:05 pm to slackster
I appreciate it.
I recognize those numbers are for today.
(I'm 46. 10 to 20 years out).
My concern with early ss income is that it will limit me to about $50k-$60k annual.
That feels more like a restrictor plate than a retirement.
I'm guessing that of those $5k to $6k, a married couple would be getting about $4k from ss (today's retirees)?
I recognize those numbers are for today.
(I'm 46. 10 to 20 years out).
My concern with early ss income is that it will limit me to about $50k-$60k annual.
That feels more like a restrictor plate than a retirement.
I'm guessing that of those $5k to $6k, a married couple would be getting about $4k from ss (today's retirees)?
Posted on 12/5/23 at 6:25 pm to meansonny
Are you going to work and draw SS?
Posted on 12/5/23 at 6:35 pm to slackster
The plan was to draw 401k and Roth.
Expected annual income would be closer to 100k to 120k.
Use the Roth to limit tax liability.
Defer the ss to 67 or 70.
I don't know what health will be. But I don't think I will be needing that same annual amount 75+
Expected annual income would be closer to 100k to 120k.
Use the Roth to limit tax liability.
Defer the ss to 67 or 70.
I don't know what health will be. But I don't think I will be needing that same annual amount 75+
Posted on 12/5/23 at 7:16 pm to meansonny
Gotcha.
You’re not capped on withdrawals from 401k/IRA with SS - I’m not sure if you realize that. The only clawback happens if you have earned income from a job, not passive income from rentals, retirement accounts, investments, etc.
Depends what the numbers look like as you near retirement, but you could probably make a case for a few strategies. Defer and use investments or take SS, 401k up to taxable limit, then Roth the rest of the way.
Let's assume your early SS at 62 is $4000/mth combined. Thats plausible with a target of $10k month in retirement.
In today's dollars, you could draw $48,000 from SS, $24,000 from 401k/IRA, and $52k from Roth and only pay $100 in federal income taxes. Alternatively, you could draw SS, $10k from IRA, $22k from qualified dividends and LTCGs, and $40k from Roth and pay $30 in federal taxes.
Of course, you could draw $120k from Roth and pay no taxes, but what a disaster that would have been from a savings standpoint - you saved the Roth while paying marginal tax rates on it just to draw it out at 0%. That’s the polar opposite of why you should use a Roth. (I realize that’s extreme, just driving home the point) Using the Roth here and there is one thing, but be mindful of what you’re paying when it goes into the thing.
Drawing everything out of your IRA would arguably make more sense than the Roth. IRA withdrawals would need to be $115,302 to net $120k, which is an effective rate of less than 12%. That’s much less that your marginal rate likely is right now. (Only using federal taxes)
You’re not capped on withdrawals from 401k/IRA with SS - I’m not sure if you realize that. The only clawback happens if you have earned income from a job, not passive income from rentals, retirement accounts, investments, etc.
Depends what the numbers look like as you near retirement, but you could probably make a case for a few strategies. Defer and use investments or take SS, 401k up to taxable limit, then Roth the rest of the way.
Let's assume your early SS at 62 is $4000/mth combined. Thats plausible with a target of $10k month in retirement.
In today's dollars, you could draw $48,000 from SS, $24,000 from 401k/IRA, and $52k from Roth and only pay $100 in federal income taxes. Alternatively, you could draw SS, $10k from IRA, $22k from qualified dividends and LTCGs, and $40k from Roth and pay $30 in federal taxes.
Of course, you could draw $120k from Roth and pay no taxes, but what a disaster that would have been from a savings standpoint - you saved the Roth while paying marginal tax rates on it just to draw it out at 0%. That’s the polar opposite of why you should use a Roth. (I realize that’s extreme, just driving home the point) Using the Roth here and there is one thing, but be mindful of what you’re paying when it goes into the thing.
Drawing everything out of your IRA would arguably make more sense than the Roth. IRA withdrawals would need to be $115,302 to net $120k, which is an effective rate of less than 12%. That’s much less that your marginal rate likely is right now. (Only using federal taxes)
Posted on 12/5/23 at 8:48 pm to HeartAttackTiger
I'll probably die mid 60s so the earlier the better
Posted on 12/5/23 at 8:57 pm to slackster
quote:
You’re not capped on withdrawals from 401k/IRA with SS - I’m not sure if you realize that. The only clawback happens if you have earned income from a job, not passive income from rentals, retirement accounts, investments, etc.
Good to know.
I saw income as income.
(401k is deferred income from a job).
quote:
401k up to taxable limit, then Roth the rest of the way.
That was the plan for the larger income years.
But if retirement gets different treatment, I get a lot more options as you Illustrated.
Posted on 12/6/23 at 7:04 pm to HeartAttackTiger
quote:At the point SS begins to track linearly y2y, it becomes a question of retirement readiness. At that point, if you "need" SS as a retirement adjunct, work until 70, or as long as you can to maximize retirement payment. If you don't need SS as a retirement adjunct, taking early SS may make more sense.
S/S - Do you plan to take at 62/67/70
Posted on 12/6/23 at 10:50 pm to UpstairsComputer
quote:
'm mid 40's, SS should be long since bankrupt and sliced apart by then. My guess is I won't be allowed to start at 62.
I am in the same boat. I have even contemplated a career change into a public sector retirement position. I could work 20 years in that system and collect a sizable pension and a trimmed down Social Security check either on the Windfall Offset or straight cuts to social security.
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