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Financial Conversations with Fitz #28 - Should we take Social Security at 62 or wait? - 07/21/2009

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The sun is out…but it has been cool.   The corn is looking good, but a little inconsistent in spots. Degree days are at about 1355…..A bit behind but noticed a lot of tasseling starting towards the end of the week.  Had fun with the WIT Farm Pre Tours last Friday.  Visited the COOP, Ethanol Plant, Wind Farm and Wooge WRP project.  Had a nice visit at the Mt Valley Winery.   Participated in a bit of Sensory Perception.   A great visit at the Robotic Dairy set up at Buffalo Center…..Amazing is all this ole farmer can say.   Technology combined with Mother Nature has done well.  A great tour given by the family.  It is amazing how many neat things we have in our own North Iowa that people from thru out the USA enjoy taking a look at.   Grain Prices are crazy..Swings of 6 to 40 cents/day.  Corn I.00 plus in a month.  Keep close track!!!!! 

Wow!!!  Our busy  month continues in July!!!!!   We had fun at Puckerbrush and Indian Days with parades and celebrations.   Fun walking the routes in our crazy shirts and green shoes…… TSB Steppin Up to help our Community!!!!! Welcome to the WIT people.  Sounds like about 1200 units in town.   Another  parade in Leland coming up Saturday….!!!!   Don’t forget our Pool Party in Thompson on Monday night.   Have fun with the family and support a good cause.

I read an interesting article this week in the finance news.   Collecting SS when you are eligible at 62 is tempting but sometimes it is better to wait.   Last week we talked about 401 K planning, so I thought I would add the other portion of people’s retirement to complete the financial plan.   Most people do draw at 62 thinking it is mine, so why not take it.   As I mentioned last week that if one is healthy at 65, there is a good chance you will live to 87.   By drawing early at 62 with the new rules you will only get 75% of it.   For example if $1,000 benefit, you will get $750 rather than $1,000 at 66.  Or if you wait until 70 you could get $1,300.   Not many people do this unless they have a considerable retirement beside SS or if their company is still able to pay them a considerable wage.  It does take about 12 years to collect as much as if you started getting checks at 62.  You will, so to speak, break even at 78.  If you are healthy and employed you will collect $300 more per month for as long as you live.  Also SS does have a cost of living factor built into it.   This is usually more than most annuities can guarantee today.  It may be impossible for some households to wait because the breadwinner has lost a job or is no longer able to work.   In this case it is better to start drawing as soon as possible to avoid going into debt.

Again there are several good calculators available on the net to try different scenarios.   One of those you can get your actual figures through www.socialsecurity.gov.   Be sure you get the government one before you put lots of information into the site.  There are a lot of look alikes out there.   There is a commercial one at www.AnalyzeNow.com that is sort of interesting.   It is written by a retired Boeing executive.   If you aren’t sure, be sure to stop into our offices to check with us.   If one of us can’t help you we can always have you visit with Howard Peters our investment specialist.   He has other planning tools available. 

Remember that you should deal with people in community banks and organizations that when they put something together for you that they will be sitting with them at ball games, church or community events.  So, if in doubt give us a call.