Enrolling in Medicare, drawing down Social Security

[Anonymous]

Anonymous wrote:I would definitely talk to a savvy financial advisor. My layperson's understanding is that you should always delay taking SS for as long as possible.

You may have another 20-30 years to live and you may very well outlive your spouse, even though he is younger. You don't know what will happen with your spouse and his job; if you don't need it now, don't take it. And talk to your financial advisor about the level of giving you can afford, both out of current income and in planning for the future.

I thought that too but I recently learned that there is another school of thought. Take your money right away because you could die at any point and you might not have received much/any of your social security. Sure the risks are relatively low but there is still a risk.

[Anonymous]

Anonymous wrote:your monthly social security benefit goes up 8% for each year you wait to claim. You won't get that kind of guaranteed return anywhere else. So unless you have a life-shortening illness or a family history of dying in your 60s or 70s, I would wait as long as you can to claim, and use other resources to "pay it forward" like income from a part-time job if you want one, or from any other savings or income.

Ok, I get that but what about the unrealized monthly payments - I guess I need to use a calculator!

[Anonymous]

Remember if you take before 65 you can't make over a certain amount income or benefits get cut. Just in case you find yourself needing or wanting to work.

[Anonymous]

I just ran the numbers and the calculator recommended that I claim benefits at 62 and that DH waits til 70 to claim. I guess that maximizes our payments.

[Anonymous]

Anonymous wrote:

Anonymous wrote:your monthly social security benefit goes up 8% for each year you wait to claim. You won't get that kind of guaranteed return anywhere else. So unless you have a life-shortening illness or a family history of dying in your 60s or 70s, I would wait as long as you can to claim, and use other resources to "pay it forward" like income from a part-time job if you want one, or from any other savings or income.

Ok, I get that but what about the unrealized monthly payments - I guess I need to use a calculator!

There's a breakeven point...usually in late 70s or around 80. This article explains https://www.aarp.org/retirement/social-security/questions-answers/retirement-benefit-break-even-age.html

So unless you think you are likely to die before then, it pays to wait. Some expenses also are likely to increase as you get older, like home care or assisted living, so you might be glad to have the extra money. On the other hand, it's probably easier to travel and do other stuff when you're on the younger side.

[Anonymous]

Anonymous wrote:Remember if you take before 65 you can't make over a certain amount income or benefits get cut. Just in case you find yourself needing or wanting to work.

It's actually before full retirement age, which has gradually increased to age 67. And while your benefits do get cut based on earnings, once you hit your full retirement age they are recalculated to incorporate the benefits you missed out on and your earnings while retired. Here's an explanation https://www.ssa.gov/policy/docs/program-explainers/retirement-earnings-test.html and a calculator https://www.ssa.gov/oact/cola/RTeffect.html

[Anonymous]

Anonymous wrote:

Anonymous wrote:Remember if you take before 65 you can't make over a certain amount income or benefits get cut. Just in case you find yourself needing or wanting to work.

It's actually before full retirement age, which has gradually increased to age 67. And while your benefits do get cut based on earnings, once you hit your full retirement age they are recalculated to incorporate the benefits you missed out on and your earnings while retired. Here's an explanation https://www.ssa.gov/policy/docs/program-explainers/retirement-earnings-test.html and a calculator https://www.ssa.gov/oact/cola/RTeffect.html

So I can't draw till I'm 67 in order to avoid penalties?

[Anonymous]

OP, my advice would be less financial and more… philosophical?
I think you have the privilege of being financially comfortable enough to basically do as you please. You can afford to draw at 62 and have extra 5 or 8 years of charitable giving and enjoying the thought of it. So why not do it?
I don’t know much about Medicare and I sure hope your DH keeps his job so you still have the same choice between Medicare and his insurance as you do today. I would not be thinking about it just yet.
Good luck with whatever you decide!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Remember if you take before 65 you can't make over a certain amount income or benefits get cut. Just in case you find yourself needing or wanting to work.

It's actually before full retirement age, which has gradually increased to age 67. And while your benefits do get cut based on earnings, once you hit your full retirement age they are recalculated to incorporate the benefits you missed out on and your earnings while retired. Here's an explanation https://www.ssa.gov/policy/docs/program-explainers/retirement-earnings-test.html and a calculator https://www.ssa.gov/oact/cola/RTeffect.html

So I can't draw till I'm 67 in order to avoid penalties?

Actually it’s age 70 where you can receive the full social security benefit and earned income. Before age 70, benefits will be cut if your earnings exceed the social security allowable threshold.

[Anonymous]

Anonymous wrote:OP, my advice would be less financial and more… philosophical?
I think you have the privilege of being financially comfortable enough to basically do as you please. You can afford to draw at 62 and have extra 5 or 8 years of charitable giving and enjoying the thought of it. So why not do it?
I don’t know much about Medicare and I sure hope your DH keeps his job so you still have the same choice between Medicare and his insurance as you do today. I would not be thinking about it just yet.
Good luck with whatever you decide!

Thanks. PP, I appreciate your holistic comments here.

Look, the possibility of an extra grand/month @ 70 speaks to my more thrifty Midwestern ways. I also know that I could make a difference in some folks' lives, especially when they may need to make decisions with great consequence

Still need to talk this through with DH, who may not be as on board here. He grew up UMC and doesn't always get how even modest amounts of money can be lifechanging.

[Anonymous]

Compare where you will be at 80 if you:
1) take SS at 62 and invest/save that money. Treasuries are safe. Get short term ones you hold to maturity. Buy the actual bills or notes not Treasury FUNDS. You can also ladder bank CDs and not risk.
Vanguard is low cost and you can buy Treasuries at auction as well as bank CDs with no commission.
Or
2) Take SS at 70 and do the above.
Or
3) Take SS at 70 and live on it.

I took SS at 62 and follow #1.
I am 73 now. My husband works and I only have Medicare A (free) because I am required to because I collect SS. My husband's excellent large group plan means I have no penalty when he quits work and I start Medicare as my primary insurance, with his retiree plan (or supplemental) as secondary.
Right now his large group plan in my primary. I had 2 knee replacements, cancer treatment and lots of other stuff and Medicare A had nothing to pick up because his plan was very good. Otherwise, hospital would have collected from both.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why don't you take both at 65?

I was clear about 65 for Medicare, but should have also been explicit about Social Security in my OP. The earliest I would draw down for SS would be 65. I am thinking if I filed for it @ 65, I could spend 3-5 years "paying forward" to people in need from part of my monthly check. When DH retired, I would probably stop as that would be part of our monthly income.

I've just always assumed I would wait as long as we could manage, but started thinking about this possibility over the last month or so.

Your full retirement age is not 65. Mine for example is 66 and a half . It is going up by people’s age. Find out what your full age is (which is different than max. It goes up 8% per year, until you reach age 70 so you should try to delay it if you are healthy)

[Anonymous]

Anonymous wrote:Compare where you will be at 80 if you:
1) take SS at 62 and invest/save that money. Treasuries are safe. Get short term ones you hold to maturity. Buy the actual bills or notes not Treasury FUNDS. You can also ladder bank CDs and not risk.
Vanguard is low cost and you can buy Treasuries at auction as well as bank CDs with no commission.
Or
2) Take SS at 70 and do the above.
Or
3) Take SS at 70 and live on it.

I took SS at 62 and follow #1.
I am 73 now. My husband works and I only have Medicare A (free) because I am required to because I collect SS. My husband's excellent large group plan means I have no penalty when he quits work and I start Medicare as my primary insurance, with his retiree plan (or supplemental) as secondary.
Right now his large group plan in my primary. I had 2 knee replacements, cancer treatment and lots of other stuff and Medicare A had nothing to pick up because his plan was very good. Otherwise, hospital would have collected from both.

Did you consult with someone to decide about staying on your DH’s plan or going on Medicare?

[Anonymous]

If you are well off I don’t really understand why you want to use your ss money to help others?

[Anonymous]

Anonymous wrote:If you are well off I don’t really understand why you want to use your ss money to help others?

?