Jim
your statment is pure Bull Shit
<<By 2015 we will have 3 taking out for every 1 paying in.>>
geeze no wonder the investing public has had their ass handed to them over the last 3 years.
Dec. 29, 2002, 6:28PM
Individuals will vary on when to start Social Security checks
By RONALD LIPMAN
I'm about to turn 62 next year. I have enough savings to support myself right now. When should I begin taking Social Security distributions?
A. There is no clear answer to your question.
If you want, you can begin collecting benefits when you turn 62. Starting early is good because you'll be receiving payments for a longer period of time, but it's not so good because your monthly checks will be 23.33 percent smaller (assuming you were born in 1941).
Waiting a few years means you will collect full benefits. However, under recently enacted rules, your age for full retirement benefits is 65 years, 8 months. Only people born before 1938 are eligible for full Social Security benefits at age 65. Eventually, everyone will need to reach age 67 in order to collect full benefits.
Waiting even longer -- until as late as age 70 -- will increase your monthly benefit by 7.5 percent for each year you delay receiving payments. It's just that waiting means you will have missed out on even more payments. (Note, the rate of increase varies depending on your age.)
In deciding when to start collecting, you need to consider a number of factors.
The most important is how long you think you are going to live. Social Security will keep paying your monthly benefit until your death, but if you think you won't make it much past 70, then collecting your benefits early would net you more money. On the other hand, if people in your family live into their 90s, then delaying your payments may be the better choice.
If you are still working, each additional year you work may result in higher benefits when you retire. But if you start collecting Social Security benefits before you quit working, your benefits may be substantially reduced.
Here's how it works: If you begin collecting Social Security before you reach your full retirement age (which for you is 65 years, 8 months), you will lose $1 of Social Security benefits for each $2 you earn above $11,520. And in the year you reach age 65, you will lose $1 of benefits for each $3 of earnings above $30,720 until you reach age 65 and 8 months. Also, depending on how much you earn, as much as 85 percent of your Social Security benefits can be taxable.
Another consideration relates to your spouse, if you have one. Survivors benefits can be collected for many years, and the longer you delay collecting, the larger those benefits will be. However, if you're married to a spouse who worked, his or her benefit may exceed the survivor's benefit. In that case, delaying may not be important because your spouse would only collect the higher of the two benefits, not both added together.
Also, you have money to support yourself right now. Many people who decide to collect Social Security early do so because they need the money. It's a necessity that cannot be delayed. For you, though, there is no immediate need to start collecting because you have sufficient savings.
Remember also that Medicare doesn't provide health benefits until you're 65. So if you have not yet retired, you may want to continue working and delay collecting Social Security until at least age 65. That way you will have continuous health coverage. If your employer provides you with health coverage after you retire, then that benefit should be factored into your decision as well.
Interestingly, most of the materials I have found on this subject quote expert after expert, and the majority of these experts recommend collecting benefits as early as you can. The consensus seems to be that having increased cash flow at an earlier age will net you more in the long run. The experts say the break-even point is somewhere between age 80 and 100. In other words, if you agree the break-even point is age 80 and you think you'll live until 90, then it may be best to wait until age 70. On the other hand, if you think 75 years is all you've got, then it's best to start collecting now.
In fact, over 60 percent of eligible recipients choose to take their payments early even though their monthly payments will be 20 percent to 30 percent lower than if they waited to receive full benefits. And only about 2 percent wait until age 70. Either it really is better to collect early, or most people simply want their money as soon as possible.
To learn more, request a copy of a booklet called Understanding the Benefits by calling the Social Security Administration at 800-772-1213. You may also request other booklets, such as Disability Benefits, Retirement Benefits, Medicare and Survivors Benefits.
If you have access to the Internet, you should visit www.ssa.gov. You can read and print dozens of booklets, including the five mentioned above. They also have three different calculators that will help you figure out when it's best for you to begin collecting. In fact, just about everything you would ever want to know about Social Security is available online.
The only thing they won't tell you is when it's best to start collecting benefits.
Ronald Lipman is an attorney with the Houston law firm of Lipman & Associates. He is board certified in estate planning and probate law by the Texas Board of Legal Specialization.
Send questions for this column to State Your Case, Houston Chronicle, P.O. Box 4260, Houston 77210.
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