Thank you to everyone for providing information on the thread.People look at Social Security in different ways. Some are concerned about breaking even while others view it as longevity insurance. I'm in the longevity insurance camp - choosing to earn some DRCs will provide a higher benefit for the rest of one's life, helping to insure a decent standard of living even if one lives a very long time and has spent down their nest egg. Social Security is the best inflation-adjusted annuity you can get and it can make sense for some people to make the most of it. The money left on the table while earning DRCs is the cost of creating that higher benefit.The open social security calculator recommends the following:
‘file for your benefit to begin ( retroactively) as of 7/2024 at 66 and 11 months’
What does retroactively mean in this case? Retroactive to my FRA benefit for the past 6 months? Or retroactive only to the previous month of July?
If I don’t go retroactive to include the last 6 months as is permitted, wouldn’t that leave money on the table? 6x2345=14070. If I earn delay credits and take a higher rate say in January 2025, I get about 2517 which is 172 more per month but it takes about 6-7 years to earn back the 14070 I didn’t take when I could have. That’s why I was asking about the tax impact of taking the payments retroactively.
Am I thinking about this the right way?
The Open Social Security calculator let's you choose different mortality tables and even let's you set a specific "Assumed age at death". When I played with that setting and plugged in a number typical of the women in my family, it pushed out my recommended claiming date. To change those settings, click the box labeled "Click here to select situation(s) that may apply to you" at the top of the page, then select "Mortality Table".
It is very helpful. In addition to retroactive payments and DRCs, I learned the Social Security agency reps are only giving a limited amount of the information that’s necessary to make an informed decision.
Statistics: Posted by oakbluffs — Sat Aug 03, 2024 2:21 pm — Replies 24 — Views 2434