Considering retiring

[MSerfozo]

You're a casino guy, right?  Or is it your wife who always wants to stay at a casino on your epic trips?

Anyway, think of it as a bet.  But you're betting on how long you expect to live - and draw your SS benefit.

If you run the benefit you get at different ages, you'll find that the total amount will be the same at your SS actuarial age.  Based on your numbers, that's at about 77.33 years old in Aug 2036.  ~$415,000.

If you plan to die before then, you should take it ASAP.  If you plan to die at around 77, then it doesn't matter.  If you plan to live to 90, you should wait - $876,000 vs $928,000.

And you should look up the benefit amount if you wait until 70 to receive benefits.  It will still be about the same when you're 77, but a huge amount higher at 90.

Obviously, you have to draw down your savings for your living expenses, but there are a few advantages to that.

    If you're not drawing, you can't be taxed on SS if a dream job drops in your lap and you continue to work.

    Drawing down an IRA or 401(k) will reduce the amount of RMD (Required Minimum Distribution) you'll have to take out at 73 yo.

    If your die and your wife gets your survivor benefit, she'll get the higher amount.

 

Personally, I'm waiting until 70 to start receiving SS.  I'm working part time, when I want to, and supplementing the income with IRA distributions.  I plan to still be riding when I'm 90!

 

[Tonik]

31 minutes ago, Tpoppa said:

Yes.  And if you didn't spend that 45k and instead put it into an index fund for 11 years it would likely grow around 250%.   Which extends the break even point even further.

My advice is take it right away.  My Fidelity guy agrees.

 

Or if I draw down current investments while I wait to get SS I lose the income that money would get me.

[Tonik]

31 minutes ago, Tpoppa said:

Yes.  And if you didn't spend that 45k and instead put it into an index fund for 11 years it would likely grow around 250%.   Which extends the break even point even further.

My advice is take it right away.  My Fidelity guy agrees.

 

Or if I draw down current investments while I wait to get SS I lose the income that money would get me.

[Tonik]

29 minutes ago, MSerfozo said:

You're a casino guy, right?  Or is it your wife who always wants to stay at a casino on your epic trips?

It's the wife, although I am betting she will win and I get celebration sex.

[Tpoppa]

I say take it as soon as possible, adjusting for tax brackets the first year, assuming you retire after age 62.

Copied/pasted...

Social Security only counts earned income, such as wages or net business income, when calculating benefits. 
Investment income, such as dividends, interest, and capital gains, is not considered earned income for Social Security purposes. 
However, you may need to pay income taxes on your investment income. 
If your total income, including your investment income, is above certain thresholds, you may owe taxes on some of your Social Security benefits. 

[Tonik]

8 minutes ago, Tpoppa said:

If your total income, including your investment income, is above certain thresholds, you may owe taxes on some of your Social Security benefits. 

Damn it. We will certainly be above the 44k limit I just found with Google. Time for more math.

[Tpoppa]

The more important question is...what motorcycle should I buy myself for a retirement gift?

99% I'm retiring in March.

[Tpoppa]

This is the most comprehensive Federal tax calculator I've found.  You can plug in earned income, capital gains, interest, dividends, standard deductions, etc.

https://www.aarp.org/money/taxes/1040-tax-calculator/

Edited yesterday at 12:25 AM by Tpoppa

[Tonik]

6 minutes ago, Tpoppa said:

The more important question is...what motorcycle should I buy myself for a retirement gift?

99% I'm retiring in March.

Goldwing.

[Tpoppa]

1 minute ago, Tonik said:

Goldwing.

If I was going to do a lot of 2 up touring, the GW would be at the top of the list.  For 1 up I prefer something under 550 lbs.

[Wahoo]

When I retired a little over 5 years ago at age 62 and 2 months, I ran the numbers on taking SS then or waiting until I was 66 and 6 months (my full retirement age).  My so-called “break even point” was age 79.   
 

Figuring I may not live that long,  I started collecting SS immediately and left my very healthy tsp account alone (that’s the federal government version of a 401k) 

I collect a substantial federal pension and my wife gets a smaller pension from the school (same one as Tonik) 

five years later, I still haven’t touched a dime in the tsp which continues to increase every month 👍

Edited yesterday at 12:55 AM by Wahoo

[Wahoo]

85% of our ss is taxable by the fed but they’ve been talking about eliminating that.  Who knows.  Would be nice 

Ohio doesn’t tax SS benefits (regardless of your income level) so that’s a good thing 

Edited yesterday at 01:02 AM by Wahoo

[snot]

To bad you are not closer to me. I know a guy with a wood shop looking for help. He needs a talent craftsman 10 hours a week. Or at least he was a year ago.

He makes carts for competition shooting.

[Tonik]

1 hour ago, Tpoppa said:

If I was going to do a lot of 2 up touring, the GW would be at the top of the list.  For 1 up I prefer something under 550 lbs.

Tad heavier than 550 but the 24 FJR is looking pretty good to me for one up.

[mello dude]

@Tpoppa   - That tax calculator is nice.. .thxz

[jschaf]

When I retired last summer, one of the things that I took into serious consideration is that insolvency of Social Security may cause benefits to be reduced in the not too distant future. In the past, I was one of the I'll wait until 70 to collect guys, but a 20% reduction in benefits in say 2033 would extend the "break even" point out to absurdity.  I'm definitely in agreement with Tony & his Fidelity guy. Get it while you can.