Motivational Poster Thread (warning content)

exactly the government wants you to wait the max age to collect SS cause your life expectancy is less. If you take it early you get less but the break even point takes years to even out if you wait. Convinced the wife to start drawing early

 

Given my health problems, and being forced to retire early making my state retirement pension about half what I'd planned on, I took SS early. I don't regret it.

 

Took SS at age 66 in about 2004. $1100 then would buy what $1735 does today with lying statics. The following chart shows the "official. eg lying" statics for the time I have been drawing SS. Ignoring the fact I didn't croak like my brother or sister and never get a dime, they lie like a rug. I bought a brand new off the floor Subaru Forester in 2004. Paid 20.000 for it and about a grand in taxes, registration, tire upgrade and such, $21,000 on the road for mid range car. B ought a replacement for it in 2009, but got a good trade in. Don't remember just what it was but $10,000 range. That car now has 230,000'. To replace it the local dealer, same firm I bout two others, wants about 30,000 and old car in trade. That is at least 50%, paying cash. Chart shows car prices up about 23%, not counting the $90 oil change, $400 to service it and a lot more to fix them, $12.50 for a spark plug, $20 for a windshield wiper, and less miles per gallon of gas that is at times double in price, etc.

Price changes in consumer goods and services in the United States

Took SS money and bought tractor, rental property that had been foreclosed on etc.
80 thousand rental property now valued at 200,000. Tenant wants to buy direct at 180000 cash, Income stream of about 1500 a month after expenses and some what protected against inflation. 401-k, managed by professionals, has made about 5 %.
When you lose 50 % in market fall, you have to double your money to break even and win or lose you pay a management fee. Never thought of GM or US Steel as high risk stocks.

My point it depends on 3 things. How long you live, if you start to draw at 70, you will have to live until 79 to break even, Only then will you be better off in total dollars. Inflation has to be low enough the the actual purchasing power of the dollars you gave up will exceed the value of the dollars you received by waiting until 70. Since the benefit goes up by about 30%, if inflation is at 20 %, in real dollars it moves the break even point out beyond 70. You would have more of the devalued dollars to spend if you do wait, The third factor is there is no guarantee that the payments will continue or that some system will be set up to make them dependent on wealth like Medicare.

 

There is still more to consider. If you have money parked in IRAs, Roths, 401k or 403b you might not want to be tapping that to cover your expenses while waiting to push SS out for the bigger check. If your investments are getting about 7% or more you may be better off sitting on that and taking SS at full retirement age or maybe sooner if you aren’t earning much. Then the investments grow and when you do pass away SS doesn’t pass on to kids or other heirs. If your spouse is still living they get the larger of your or the spouse’s SS benefit and that’s it. Money in investments can pass to spouse or kids. YMMV.

 

Really good point Airtime..I hadn't really thought of that angle. The kids don't have to pay taxes on Roth but do on 401-k. Don't know about wife, think she could roll it over into her plan with no taxes, but would have to pay taxes when she takes it out same as she would on her plan, would have to talk to tax lawyer, but paying taxes on it beats it disappearing like SS.

Dad always said he loved paying taxes, was too many years during 1930's he had no income to pay taxes on. Would rather be making enough to pay taxes on.

 

This is text book KARMA!