It's been over a year since I've been on this board. So took a while to
jump through verification hoops before I could sign on & see what others have
written.
A lot of good points have been made. I'll focus on one -- the break even
on SS:
1. Contention: SS will go to hell because it's under-funded. Maybe it
will go to hell, maybe not. I do believe that benefits will probably be
adjusted downward in order to keep it alive. I also think downward adjustments
will be on a pro rata basis which will reflect the decisions you make when
taking SS.
2. Points about present value vs future value: Good point made about
present $ being more valuable than future $. Almost always true but there
exists today a situation where money funds are buying foreign treasuries with
small NEGATIVE interest rates. Which means the situation is reversed but I
doubt if that will last for long. In current near-zero interest rate
environment, 8% looks great. But if you're old enough to remember the near 20% CDs
of the 70s, you know how things go in cycles. The only thing I can predict
with accuracy is that we will head into another cycle starting when ?
3. Someone said break-even is around 78, with present value vs future
value consideration kick it up to around 80 unless inflation goes crazy then
who knows how much older. If you're in poor health & aren't going to do
anything to help yourself, definitely take SS now in order to maximize it before
kicking off. Let's say you know you'll live beyond 80, taking SS early may
still be a good idea IF you have the discipline to invest your SS & make
more than 8% a year. Big question: do you have the discipline?
4. There has been a lot of healthy discussion from all angles. What do
financial planners say? Unless you have poor health, the consensus is WAIT
till 70. In fact, I saw this on CNBC recently.
5. I've been able to do better than an 8% average for quite a long time &
kind of expected to wind down after 65 but the market (last 5 years) was
like a VP play with double pay on all 4 OAKs. The downward trend of VP
combined with the upward trend of the market made it easy to stay home & forgo a
lot of so-so VP offers. So why am I going to wait till 70?
a. Can live without the money & not worried about health of SS.
b. It's a guaranteed 8%. Some may argue the "guaranteed" but the basic
premise is you get 8% with little risk.
c. KISS. When I kick off, I don't want my spouse to try to do what I do.
I just want things to auto-deposit & she can ignore the rest.
6. TRIAL PERIOD: Whatever decision you make can be reversed within a
year. In other words, if you elect to take SS, you have one year to change your
mind if you pay back everything you received. It used to be no time limit
but that changed when SS got tired of some people using them for no-interest
loans.
7. If you do wait till 70 to collect full benefits, study collection of
half your SS by spouse. Does not lower your benefits at 70. Ameliorates the
pain of waiting. Lowers the break-even age.
[Non-text portions of this message have been removed]
Posted by: TedChee@aol.com
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