re: Social security claiming strategy

You're not wrong. But, to me, there are political" vs. "financial" considerations. I think they're unique and not contradictory.

Your age and health expectations are the primary drivers. And the political climate looming on the solvency of Fund is a dark cloud over all of us. Even if it's there, will it still be there at all? Partially? Age requirements going to change? Who knows.

"Will It Be There For Me"??

No one can project the future. You could look at family medical histories and make some assumptions and use average life expectancies (note: They ain't great in the US overall compared to other countries so there's that).

Life Expectancy.

You have a very disciplined logic and it should serve you well. At your age, given the uncertainties out there, who knows. This country might be broke and nobody will receive Social Security so get it while you can! Age 62.

Remember: If you take it early for whatever reason the 2/3 you get early is what you get forever 2/3 might be ok for some people but the 3rd lost is likely to be more than a grand a month. But, you'd have access to those funds earlier and could invest them if you didn't need the money. (But some might need the money to live on).

My wife (no pics) and I always had the position that "we won't get to see Social Security when we reach that age", so we disciplined ourselves to take full advantage of 401k programs, IRAs. We had a number of rental units as well and did inherit some money from her parents years ago, which we used to help the kids for college. I still work and she's "semi-retired". But then one day there we were: having to decide on taking Social Security or not (where does time go? )

To me, the goal of retirement is not about money. It's about enjoying what life we have left. What good is financial stability if you're not living long enough or healthy enough to enjoy it. We've all seen people who want to enjoy retirement, but want to go for that last “golden dollar “and screwed themselves out of Social Security when they died, and there were others who developed health issues and couldn’t enjoy retirement.

I like this guy's videos on YouTube.

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Given the tax (penalty) smack they’re going to take, since he’s going to continue working full time, I guess I don’t understand that reasoning either. Maybe he can elaborate further.

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Her income is small. It gives us a pile of money to invest each month that we didn't have before. Yes, there are taxes but there are taxes on SS income whenever you begin to draw. I don't believe the additional taxes will come close to outweighing the benefit. We'll see. We pay taxes on it now or later. May as well start getting the money in the bank.

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I’d take it as soon as you could get it.

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This will be me. Most of my family died in their 60's or at most early 70's, so I will be taking at 62 with the idea that I will be retiring when I start collecting, and just letting SS pay my mortgage. I will have enough money for every other expense unless there is some collapse between now and then.

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I have two financial savy friends. One took at 62 and the other at 70.

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The difference between 67 and 70 for me is 940 a month. Collect till I am 82 and the difference is 8k to the good if I delay. I will not delay it past 67.

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Build a spreadsheet and calculate your break even point for each scenario.

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Do this, but it isn't all about the math. There are multiple tax considerations, but also lifestyle and longevity considerations. I am not married, but if I were married to a younger woman I would absolutely put off social security until I am 70 years old so that she would have more income with an inflation adjustment for longer. Even though SS is not the best return on your money, it is still probably the best vehicle most people have access to.

If you have significant IRA and 401K assets, you should look at the combined tax treatment of SS and those assets, and also look at the impact of RMD's, and then you might even have to consider IRRMA. You see, the Dims are always saying that the "rich" should pay their "fair share", but they already have a bunch of tax "gotchas" that are going to extract what they want out of you in the tax code already.

Your situation is not just about the math. I retired at age 56. I have found in all my calcs that taking SS as soon as possible results in more wealth during my lifetime because I will be drawing down my non-SS assets slower, but I still may put it off until age 70 because at that age my SS benefit will be enough to fund my monthly income needs. Ultimately that decision depends on a lot of things that will happen between now and then.

I know that it increases each year we delay but if we take it the money is growing and as noted if we pass it becomes something we can pass to our heirs. If we don't take it and pass away the government keeps it without disbursing.

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The difference between 67 and 70 for me is 940 a month. Collect till I am 82 and the difference is 8k to the good if I delay. I will not delay it past 67.

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The difference is likely hundreds of thousands if you live until you’re 88 though.

Look, I have clients that take at 62 and others at 70 - it depends on a lot of things - but people notoriously underestimate their own longevity and it usually costs them considerably.

"If we don't take it and pass away the government keeps it without disbursing."
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That's a good point.

Are SS recipients penalized if: (A) they take benefits before Full Retirement Age (FRA) and, (B) continue working and make more than the amount allowed by SS? You could be penalized something like $1 for every $2 earned, making a huge dent in the SS payments. You should look very closely into the penalty for Earned Income when taking before FRA.

It would depend on the survivor benefit for each spouse. Which one is greater