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Financial Conversations with Fitz #99 - Should we take Social Security at 62 or Wait - 03/13/2012

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Wow!  What a weekend of weather!  Records set everywhere. Here it is raining this morning.   We do need that! Still a big question of Supply and demand on small grains.  More reports coming out Friday.  Lots of teams to follow this week for basketball.  High school moving on to spring sports.   Looks like the DOW will open slow today.  Chinese still talking about their economy will slow down.    

I read an interesting article this week in the finance news.  I have discussed this with several clients recently.  Should I or Shouldn’t I???? Collecting Social Security when you are eligible at 62 is tempting but sometimes it is better to wait.   Last week we talked about 401K 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.   If you are healthy at 62 you probably have a good life ahead of you.   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.   The other big factor is health insurance.  That has to be in your planning.   You could spend your social security on just buying insurance.

Again there are several good calculators available on the net to try different scenarios.   One of those you can get your actual figures thru 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.AnalyseNow.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.   I will be glad to visit with you about your thoughts.   We have 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.