It just occurred to me that maybe we could arrange a swap. The US will accept all the Albertans into the US where they fit better, Canada will deport send them all down, then the Canadians will accept a corresponding number of Americans. Call it a “prisoner of conscience swap”.
Anyhow, I just looked it up. The problem is Alberta only has ~4M residents. Won’t make a dent in the number of Americans ready to rejoin a sane country.
Plus, quite a few of those Albertans are in the “sane” pile. After all, in 2010, Calgary elected Naheed Nenshi, the first Muslim mayor of a large city in N. America. At that time, Toronto had elected Rob Ford, and the joke was that the mayors had been mistakenly swapped.
Redneck Albertans can’t just cross the border… they have to go straight to Texas.
Just when Texas is on the verge of turning purple, if not blue???
He could’ve just said ‘any nation with a per capita income over $15,000 that isn’t the United states’ and it would’ve been accurate
I spent almost my whole career as a government employee, and could have retired at 55 with a full pension. I stayed on for 3 reasons: I still had a couple of years left on my mortgage, I liked my job and co-workers and felt that my bosses appreciated me (and I have an actual medal to prove it), and I had just started to work on my department’s conversion of their existing financial system to SAP*, and wanted to see that through to the end. I eventually retired after 42 years at 63. I have my government pension, CPP, OAS and a nice RRSP with no need to draw on it yet. No healthcare financial worries as a Canadian - my government retiree health insurance plan is a minimal cost and covers the few items like my glasses and dental care not covered by tax-funded healthcare…
*For all of the horror stories over SAP, we had the benefit of being one of the last Canadian federal government departments to convert, so had all the experience of what not to do to draw on, as well as pretty much carte blanche from Treasury Board to change our internal procedures and processes to better fit the SAP standards instead of customizing SAP to fit the idiosyncrasies of pre-existing procedures. This also allowed me to fix all the many problems that our division had with the ancient prior system.
That’s what I did on leaving the navy – only it was after six years so no retirement – and it lasted until 1992 when peace broke out. It was more than a decade before I matched my pay there, if you didn’t take inflation into account.
In January 2015 I calculated things out and decided after my 66th birthday March the next year, between the SSA bump and the extra amount into the current 401k I’d have enough and started the paperwork rolling. In February we were discovered by the bean counters as a cost center (help desk) and everything changed.
The main and almost only metric was Average Handle Time and my best stat, First Call Resolution, was no longer even measured. It was a miserable fourteen months made tolerable only because the immediate supervisors – resisting pressure from above – were less dogmatic than they might have been with me.
Needless to say, after the review in October I got no merit increase in pay. It wouldn’t have made much of a difference in those last six months but I always had maxed out the increase for the preceding eleven years. I had a diminishing number in the corner of the whiteboard in my cube and when a coworker noticed it, he said, “So, how long?”
Without even glancing at the board but looking at my watch I said, “Eighty-five days, five hours and… mark – forty-two minutes.”
“You’re not looking forward to it, are you.”
“Not one little bit.”
I’m 22 years away from this milestone of a birthday and am pretty ignorant of the Social Security system (despite having a mom who made her career working for the agency). I don’t factor in SS into my retirement out of ignorance, and conservative estimation. What is this “bump” you speak of?
Tripler
Inquiring minds want to know. . .
As between starting to draw your benefit at age 62 and age 70, under current law you’ll draw a larger amount each year you wait to start. The change occurs on your birthday.
e.g. at age 67 you can draw $2,000 per month. If you wait until just after you’re 68th birthday to start drawing, it’ll instead be $2160/mo. Whatever your starting benefit amount is, that becomes locked in for life. And each year your cost of living increase will be a percentage off that baseline. SO if inflation in 2022 is, say, 2%, somebody who was getting $2000 would inflation increase by 2% of 2000 = $40, whereas somebody getting $2160 would inflation increase by 2% of 2160 = $43.20.
The tradeoff with starting later in life is that nobody knows how long they’ll live. By waiting you may get more dollars per month for fewer months before your untimely demise.
All this is current law and subject to change.
Every year you hold off on taking SS past your full benefit year (age 67 for you, age 66 for those born before 1960) up to age 70 you receive an 8% bonus per year. For every year you take SS before your full age benefit year down to age 62 (minimum age to pull normal SS) you take a penalty.
So take SS at age:
62 - 71.6% of benefit
67 - 100% of benefit
70 - 124% of benefit
However I assume DesertDog is just talking about the bump to his income of starting to pull SS period.
Ah, no, your and LSL Guy’s answers were correct. Your SSA benefit is based on your 35 best-paid years and like I said earlier in my post, the peak of those were in the halcyon days of the cold war.
I’ve read this thread with great interest, as I’ve been wrestling with the problem of when to start drawing SS. One step I’m going to take soon is talking to a financial planner. I’ve actually been ‘retired’ since 2014, and I’m turning 61 this summer.
I currently receive a military retirement pension and VA disability compensation. My handicapped son receives an SSI allowance. My wife has not worked for almost 20 years, for health reasons, although she did earn enough credits to eventually draw SS. We’re all on a Tricare health plan. Neither of us have living parents that we might be called on to take care of, and there are no grandchildren. We are definitely homebodies, such that the pandemic made almost no changes to our lifestyle.
While we have no IRA or such, and no real savings, the above incomes will continue as long as we live, thus ensuring we can continue as we’re living now, with some caveats. SS will just be extra, really, although turning 65 will change our medical situation somewhat. Should I pass, my wife will only receive 55% of my military retirement pension, and the VA source will stop altogether. Life insurance for me, then, is key.
We do have plans to move downstate in a few years, so that’s a big expense coming up. I consulted simple SS calculators, looking at projected monthly payments for every year between 62 and 70, then figuring what each would yield, total-money-wise, out for age 80, 90, even 100. Trying to see if there was a real difference, if there was an acceptable loss, say, from retiring at 62, given that no one knows their own expiration date. (As an aside, looking at our parents’ medical history doesn’t seem to apply, as all four of them succumbed to diseases almost directly related to smoking, and we have never smoked.)
The best answer I’ve come up with is I dunno. Thus, that visit to a financial planner, probably starting with one associated with our credit union, and going further if we think we need it.
That makes sense @LSLGuy and @Tamerlane! Thank you both!
Tripler
“Subject to change” is the key phrase to me.
When I was 40 I too assumed it would not be there. At now 62 I’m mostly sure most of it will be there for most of my out-years. But I have planned for not having it, been fortunate and disciplined enough to now be able to do without it, but also mostly expect to enjoy my share of the windfall when it occurs.
As an aside…
The percentages @Tamerlane quotes are enshrined not in law, but in SSA internal regulations / procedures. When those numbers were computed many years ago, the idea was to make it actuarially equivalent whether any given recipient took theirs at 62 or at 70. Across the bulk of the citizens, whether everyone took 62 or everyone took 70 or any mix in the middle would work out to a wash for SSA and their budget. At least that was the theory.
In the intervening years as inflation and risk-free interest rates have collapsed and longevity has increased, these now-obsolete percentages amount to a one-way winning bet for the vast majority of healthy citizens; if you can afford to wait past 62, it’s an awesome almost-guaranteed investment paying a real nice rate. Even if SSA or Congress was to change the rates and rules, there’d be some warning such a change was coming so anyone over 62 at the time could lock in the existing good deal or something close to it.
With all due respect counting up total money received is exactly the wrong way to think about SS. It’s an extremely common way to think about it, as you’ve seen on countless websites offering calculators. But it’s bunk. And it will lead most people to the wrong decision. In it’s defense, it is very simple to understand; shame it’s so wrong.
My advice:
Check out this website, get their book from your library for free or from Amazon for a few bucks, and educate yourself on what’s really at stake here. Then maybe spend the $40 to see their calculations in action. SS is a great program, but there are a lot of trapdoors where a mistake in the beginning while you’re still learning is 100% unalterable later. You must get this right the first time; there are (practically) no do-overs or mulligans.
Particularly for somebody who already has military, VA, and SSI situations, getting all the nuance points right will be key. It sounds like the rest of your situation is pretty well fixed; you don’t have hardly any knobs to turn or levers to pull. So making sure you set the knobs right on this one can make the difference between shuffling along and cruising along. And maybe even skipping along. Good luck!
Very true. It can get a little complicated and very few people have educated themselves properly. At its most simplistic the breakeven point is around 80 years old. If you don’t take it early and you die younger, you didn’t maximize your benefits. You didn’t get jack shit.
If you are working fulltime when you take your benefits, much of those benefits are taxable so it’s generally best to wait.
If you’re retired at 62 with little or no income coming in and you only have enough money saved to take you to age 82 or so you should wait and maximize your benefits. You will dearly need the extra money in those later years.
Take my situation. I am 57 and retired. I will run out of non-401k cash in a year or so and will be living on drawing down the retirement accounts. Anything that I take out of those accounts is not only taxed as income but will no longer earn tax free investment income. Anything that I do to reduce what I take from those accounts (short of going back to work and fuck that) is very beneficial. I will start to draw as soon as I turn 62.
That common saying about waiting to take your money until you are 70 as a sound investment is just laughable if you think it’s a one size fits all truism. I am certain that its the government pushing that shit out there.
Actually that’s wrong.
50% or 85% of your benefits are taxable as ordinary income if your total income from all sources, including jobs, investment interest, dividends, and IRA/401K withdrawals is high enough. That has nothing to do with whether you’re working or not. And nothing to do with your age.
As a separate matter, if you’re below your “full retirement age” = FRA = 66ish for you and me, and you receive SS, and you’re working a job and earning W-2/1099 income above a threshold, 50% of your benefits are flat withheld, not taxed; you never even get them. This 50% benefit withholding stops once you get to your FRA. Then they’ll start drip-feeding those withheld benefits back to you slowly. If you live long enough you’ll get them all back … eventually.
But meanwhile it’s a double whammy: working before age ~66 and taking SS benefits means a big chunk are withheld and what you do get are taxed at least partially as income.
So the pundits’ advice on that topic is pretty unanimous: Don’t do that.
I certainly don’t think it’s a one-size fits all. As I said in my post above where I discussed this:
Bolding here, not in the original. If you, any you, fit both those criteria, waiting is smart. My wife is not healthy and started hers at 62. I am healthy and will start mine at 70. We both have plenty of money. But she didn’t have both things, so it was 62 for her. That’s smart.
You tell me you don’t have both things either. So it sounds like 62 is the smarter thing for you too.
Speaking to this from the government’s POV who has to pay the whole bill on all of us …
If everyone waited to 70 it would save the government money this year and the next few, but would cost them a lot more in the out years and get even worse 20-30 years from now. Their total lifecycle costs are much larger if everyone waited to 70. Not smaller.
Their other concern is that so few people have much savings that soon enough SS will morph into essentially UBI for elders. It will have to or else 50+% of the people in the 60-70 demographic will be homeless. They really don’t want to get into the situation where almost everybody is taking at 62, and that reduced benefit number doesn’t keep a roof over their head and groceries in their fridge. That’s the stuff of revolutions. And it’s coming at high speed. The generation that was mostly able to save a nest egg is fast retiring, to be replaced by a generation of soon-to-be-retireds where fairly few did so.
So no, the “wait to 70” idea is not a government plot to cheat you out of your money.
I absolutely oversimplified the working while collecting SS discussion and I apologize for that but, as you said, the point still stands.
As for the rest, you are acting like I was arguing with you but I was fully agreeing with you. I was attempting to expand on your point that one size does not fit all.
I apologize for misreading you. Yeah, this stuff is complicated and it’s always hard to know when to quit spewing out details that obscure the big picture.
Functionally it already is and sorta has been since it started. It’s certainly that for my mother, who has some very modest savings but no other income (incidentally she was able to, just barely, work and wait until 70 to take it).
Nothing has been more successful in alleviating poverty in the elderly. In 1959 ~35% of the elderly were impoverished, by 1999 that had dropped to under 10% (with almost twice as many poor women as men). It has, IMHO, been the most impactful and beneficial social program in U.S. history., which is one of the reason I kinda see red when some folks talk about phasing it out. It’s one of the reasons that those “very special episodes” you saw on tv shows in the 1970’s with old women reduced to eating canned dog food have disappeared.