Social Security - Or How How to Theorycraft Retirement Like a Raider

Sanrith Descartes

Sanrith Descartes

Veteran of a thousand threadban wars
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Not sure why (probably because I am old), but I actually looked at my social security statement tonight. I had glanced at it before, but for some reason I really read it this time. It took about 20 seconds for me to read and reread the payouts by age to decide to put them into a spreadsheet. The gubmint does everything possible to sell us on the idea of waiting until "full retirement age" to get the "big payout". And it looks like a good plan. On the surface. If you have no idea what opportunity cost is.

Going at 62 with the reduced benefit means 5 years of collecting benefits prior to the full retirement age at 67 (or 70 for you kiddies). The extra benefit you get annually takes years to make up the difference lost in opportunity cost. For me, if I wait until 67, I won't break even until age 88. It takes that long for the extra payment to make up for those 5 years of not taking the cash earlier.

Now, the trick is going early means being hella taxed if you work. The untaxed max is 21k of work income. So the trick is finding a way to get around that income limit. For example, if you and the wife own a business, you can funnel all the distributions to the wife and let her record the income instead of splitting it. Jobs were the bulk of the money is in tips also works.

Lots to think about. But believe me, if you are getting to close retirement you should really start digging into how to game the system.
 
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lurker

lurker

Vyemm Raider
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I started taking at 62 because my clan are burn outs. My dad died when he was 55 and so did my sister. At 62 I felt I was on borrowed time, no way was I going to make it to 67.
 
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Gravel

Gravel

Mr. Poopybutthole
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The only reason to wait, in my opinion, is to give your spouse a higher benefit if there's a big difference in benefit and you don't actually need the money that bad (the surviving spouse can transfer to the larger amount if the higher earner dies). Which also kind of means it doesn't matter and you should just take it early.

But yeah, I've been reading for years about why you should wait and it never looks worthwhile in my opinion. Each dollar of social security is a dollar I don't have to pull from something else, and "something else" offset dollars will almost assuredly earn more in income to make up the break even difference.

If Social Security paid a set amount, it'd be a different story since you could give it to your family. But life is no guarantee so I say take the money as soon as you can.
 
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C

Captain Suave

Caesar si viveret, ad remum dareris.
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Yeah, I'm not sure how I'd gamble on my life expectancy. All my grandparents lived into their 90's but my mom died at 53 from inoperable cancer. I'd probably take the early payouts. SS checks aren't a material part of my retirement plan anyway.
 
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Sanrith Descartes

Sanrith Descartes

Veteran of a thousand threadban wars
<Aristocrat╭ರ_•́>
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Captain Suave said:
Yeah, I'm not sure how I'd gamble on my life expectancy. All my grandparents lived into their 90's but my mom died at 53 from inoperable cancer. I'd probably take the early payouts. SS checks aren't a material part of my retirement plan anyway.
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The only real hurdle for me is I don't want to stop working anytime soon. I love what I do.
 
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