[CoachKandSportsguy]

oh, that argument! Yes, I know of that argument, I haven't spent much time with it, as one of my projects, after this pandemic work load is eliminated and my work load goes back to normal, is to build a universal retirement planning calculator, to input annual expenses and all income sources, tax rates, etc, to play what if games to optimize different goals at different age brackets with the goal of maximizing taxable assets and minimize tax deferred assets, which pass tax free to heirs . . . ie, the opposite of a working couple, as now one is not working, and has limited time left. .

CFP requires like 4 years of work history to get the final participation trophy. . . after passing the exam. . .

Also note, that there are situations in which to take extra money out of tax deferred retirements accounts instead of spending taxable assets down, resulting in the very win-win of tax free going in and tax free coming out,

but thanks for clarifying your argument, as always. .

sportsguy

[dewilson58]

Is this right?? about 35mil people in their 60's and 5mil people die in their 60's??


Higher than I though.

[CoachKandSportsguy]

Originally Posted by dewilson58

If you do a spreadsheet, (as an example) a couple can take in a couple hundred thousand dollars during the period from early SS to late SS. As a result, at 71 they have over $300k more in saving. Now........how long before the late SS catches up with the early SS and eliminates the $300k pot???? The answer: Well past most people's life expectancy.

So being a financial modeler, the model only took 5 minutes to build, using today's social security answers, as I am 62, and just barely qualified for the max, assuming total income only:

and the answer is
Taking full retirement at 67, (estimated for modeling purposes for my age) equals the same total income as taking it a 62 at 85 years old

Taking full retirement at 70, equals the same total income as taking it a 62 at 84 years old.

Taking but not using between 62 and 69yrs, 11 months and 30 days, assumes a benefits savings of about $234K, assuming taking benefits on your birthday as month 1, using benefit inflation model of 2%, $242K at 3% and $250K at 4% annual benefit increase.

However, I think that the real issue is cost of life style, which isn't being taken into account, as at age 70, the annual income difference is 45.5K per year versus $37.2 per year at 4% inflation if taken at age 62. . . or 8,000+ more a year for a cushion, $16K for a max couple if delayed.

So enough with the financial planning, I have to get outside on a 50 degree new england december day

[retiredguy123]

In my opinion, it is more than a financial calculation. I had my one and only mortgage of $35K when I was 29. I couldn't sleep, so I paid it off in about 3 years. I have been totally debt free since then. I would guess that, if you actually compared people who live debt free to those who routinely borrow money, you will find that the debt free people have achieved a substantially higher net worth.

[dewilson58]

Originally Posted by CoachKandSportsguy

So being a financial modeler, the model only took 5 minutes to build, using today's social security answers, as I am 62, and just barely qualified for the max, assuming total income only:and the answer is
Taking full retirement at 67, (estimated for modeling purposes for my age) equals the same total income as taking it a 62 at 85 years oldTaking full retirement at 70, equals the same total income as taking it a 62 at 84 years old. Taking but not using between 62 and 69yrs, 11 months and 30 days, assumes a benefits savings of about $234K, assuming taking benefits on your birthday as month 1, using benefit inflation model of 2%, $242K at 3% and $250K at 4% annual benefit increase.However, I think that the real issue is cost of life style, which isn't being taken into account, as at age 70, the annual income difference is 45.5K per year versus $37.2 per year at 4% inflation if taken at age 62. . . or 8,000+ more a year for a cushion, $16K for a max couple if delayed.So enough with the financial planning, I have to get outside on a 50 degree new england december day

Mine knocks on the door of 90, probably I'm assuming 1% more return.


But either age, 85 or 90................80% of retirees do not live that long. Bummer.


50 degrees & lobster sounds pretty good.


Happy Holidays.

[manaboutown]

Originally Posted by dewilson58

No, No, No silly boy, Trix are for kids.
Not assuming they die by 70.........even thou a lot do.


If you do a spreadsheet, (as an example) a couple can take in a couple hundred thousand dollars during the period from early SS to late SS. As a result, at 71 they have over $300k more in saving. Now........how long before the late SS catches up with the early SS and eliminates the $300k pot???? The answer: Well past most people's life expectancy.

"The break-even point represents when the cumulative benefits even out. So if you wait until age 70 to start taking benefits, it would take you until age 79 to break even with the benefit amount you’d receive if you started taking them at age 62. If you were to start receiving benefits at age 66, it would take you until age 75 to break even with the benefits you’d receive if you started them at 62."

How to Calculate Your Social Security Break-Even Age - SmartAsset

[dewilson58]

Originally Posted by manaboutown

"The break-even point represents when the cumulative benefits even out. So if you wait until age 70 to start taking benefits, it would take you until age 79 to break even with the benefit amount you’d receive if you started taking them at age 62. If you were to start receiving benefits at age 66, it would take you until age 75 to break even with the benefits you’d receive if you started them at 62."

How to Calculate Your Social Security Break-Even Age - SmartAsset

Wrong. Bad model.

[manaboutown]

Originally Posted by dewilson58

Wrong. Bad model.

How so?

[dewilson58]

Originally Posted by manaboutown

How so?

The model from that website does not take everything into account.


For a fee, Coach could give you a valid model.

[Stu from NYC]

Originally Posted by retiredguy123

In my opinion, it is more than a financial calculation. I had my one and only mortgage of $35K when I was 29. I couldn't sleep, so I paid it off in about 3 years. I have been totally debt free since then. I would guess that, if you actually compared people who live debt free to those who routinely borrow money, you will find that the debt free people have achieved a substantially higher net worth.

Interesting.

In our case we could easily make the payments but the idea of being debt free appeals to both of us.

We were able to take advantage of what was called the marriage loophole.

I took SS at 65 and a year later my wife turned 65. She filed and than stopped it.

As a result she could on her own get half of my SS and delay taking hers until age 70 when she got 40% more based on her earning.

[CoachKandSportsguy]

There are alot of poor models out there, and all depends upon the level at which one qualifies, ie the starting point, as well as the rate of benefit inflation, so when I am down there full time, I will help out anyone with their model. . . The rate of benefit increase will push out the 62 yo starting as there will be a higher amount versus the starting point given today. .. but the model doesn't include any inflation increase in the 70 yo start, so if that is included, then you get closer to dewilson's age of 90. . . again, all about future assumptions, which will be wrong but you won't know how wrong until we get there. . .

But the reason why I have a problem with the cumulative earnings cross over, is that there is a behavioral finance component to the decision, which is called "sufficing income level". Everyone has an income level above which they don't want to work harder as their current income level suffices their desires. So the difference in income level in perpetuity is important for me to maintain a life style for the time i have remaining, given my own personal history. . . ie, that 22% increase in monthly income between taking at 70 and taking at 62 will be significant if there is any shortfall in the economy during my 70's, or other financial issues. . .its 11% more over 67, which makes the decision a bit harder to wait. . . but that's a 3.0%-4.0% increase in perpetual salary per year of waiting. . .

so that's why this total cumulative benefit analysis is not bogus, but not an applicable model to judge when to take the money, but lifestyle with income/assets and total expenses are more important. But that requires a much more thoughtful and personalized financial model with different goals.

[Velvet]

My mortgage decisions are guided in part by what I want to leave in my will.

[retiredguy123]

Originally Posted by Velvet

My mortgage decisions are guided in part by what I want to leave in my will.

So, if whoever is getting the house makes you mad, you can always take out a huge mortgage? Just kidding.

[manaboutown]

Originally Posted by retiredguy123

So, if whoever is getting the house makes you mad, you can always take out a huge mortgage? Just kidding.

Better yet a reverse mortgage? Also only kidding.

[dewilson58]

Originally Posted by retiredguy123

So, if whoever is getting the house makes you mad, you can always take out a huge mortgage? Just kidding.

I'm still struggling with: "what I want to leave in my will"