Beware of 2020's Stealth Social Security Cut

[jpak]

https://www.fool.com/retirement/2019/12/29/beware-of-2020s-stealth-social-security-cut.aspx

Many people spend years looking forward to turning 62. That's because 62 is the first age at which most workers can claim retirement benefits from Social Security, and a large fraction of older Americans choose to start getting monthly checks from Social Security as soon as possible.

If you're going to be eligible for Social Security for the first time in 2020, however, there's something you need to know. Under laws that took effect more than 35 years ago, the benefits that you'll receive will be less than what people in a similar position in 2019 received. That's because lawmakers back then dealt with potential financial difficulties for the program by instituting new rules that effectively reduced how much those hitting early retirement age will get from Social Security.

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As an example, say that you're turning 62 in 2020 and were an above-average earner throughout your career, therefore qualifying for a full retirement monthly benefit of $1,800 from Social Security. Because your full retirement age is 66 and eight months, retiring at 62 means that you're getting your benefits 56 months early. That will result in your getting a Social Security check each month equal to 71 2/3% of your full retirement amount, or $1,290.

However, someone who turned 62 in 2019 and had the same earnings history and full retirement age benefit would receive slightly more. Because the full retirement age applying here was 66 and six months, claiming at 62 is just 54 months early. The 2019 retiree got 72 1/2% of their full retirement monthly benefit, or $1,305. That's $15 per month higher.

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[Sherman A1]

1. Interesting

My advice (and everyone has their own economic reality) is to go as soon as you can.

Life's too short.

[Skittles]

6. not always

one in four people live to their late 90's

[Sherman A1]

7. Perhaps

but the peace of mind of not having to deal with a crap job that is breaking you both physically and mentally is worth a considerable amount. I went at 62 and am more than happy I did. Watched my cousin work until 70 something and she had a debilitating stroke within 3 months after retiring. The gentleman I bought my first house from in 1977 retired moved away and was dead in 3 months. So yeah some folks live into their 90s and 3 out of 4 don't as you pointed out in your response.


Others may like their jobs, may need or want to continue to work, but my advice stands "go as soon as you can".

[Skittles]

9. it's a personal choice, certainly

but "take it as soon as you can" is NOT sound advice for everyone

[Sherman A1]

15. I believe it is sound advice

No one is guaranteed tomorrow and was pointed out, 3 out of 4 don't make it to their 90s (along with life expectancy decreasing in the The Wealthiest Nation in Human History) so the odds are against you.

As soon as you can does always come with the caveat (which I mentioned earlier) of "everyone has their own economic reality" but I encourage everyone to get out and live their life beyond the workplace.

[former9thward]

16. Life expectancy is only declining because of choices people are making.

According to the CDC most of the decline (and the decline is minor) is caused by drug overdoses and suicide. So if you are not in those categories you don't have to worry unnecessarily about declining life age.

But as you said everyone has to make their own choice about working. The problem is most people have not built a life outside of working. You can't just start doing that at 62 or 65. Not reality. Most people when they stop working basically seem to stop life. At least from what I have noticed.

https://www.aafp.org/news/health-of-the-public/20181210lifeexpectdrop.html

[Sherman A1]

20. Yes, life expectancy is declining because of the use of drugs, but it is still a fact

that it is declining. As to people having a post worklife world in which to exist I have seen the opposite of you state so as to it being "most" people are not is open to debate.

[samplegirl]

18. Not for me

as I would not make enough! So I’m waiting. With inflation I’ll be lucky when I turn 66 1/2 to be getting enough!

[Skittles]

21. exactly

It really bothers me when people say everyone should take it as soon as they can - that is ridiculously selfish advice. Hang in there samplegirl!

[catbyte]

2. I chose to start collecting Social Security at 62, mainly because I didn't trust the gop not to

do something really nefarious to benefits before reaching full retirement age--like raising it to 70 or something. I lost about $200/mo by not waiting, but I have a pension from the university I worked at so it wasn't that much of a hit. I've been collecting it since the middle of 2017 and I'd still be waiting another 1.5 years or so to collect. A bird in the hand is worth two in the bush.

[GemDigger]

3. I signed up the day after this clown got elected

for the very same reason.

[samplegirl]

19. I'm sure I

will get screwed!

[JonLP24]

4. Why I support Sanders or Warren

They both support expanding social security.

[Wounded Bear]

5. I went on early SS at 62...

because the kind of shit jobs I was getting were killing me, and my bennies were about the same monthly amount.

That was 6 years ago. Well, plus the place I was living was a room in a shithole owned by a RW idiot and her loud mouthed other tenant. I really had to get out of there.

[keithbvadu2]

8. BUT, do NOT click on the "The $16,728 Social Security bonus" paragraph at the end.

BUT, do NOT click on the "The $16,728 Social Security bonus" paragraph at the end.

It looks like part of the article but is actually a lead-in to a come-on.

I think it is probably the scam where they get your credit card and sign you up for their newsletter which is very easy to start and almost impossible to cancel.

[CousinIT]

10. This is part of the transition when they raised the retirement age to 67...

...for those born in 1960 or later. Used to be 65. Not only did they raise the age, they reduced benefits for those retiring at 62 and 65. FULL benefits can only be had now at 67.

Asshole GOP would like to raise it to 70 and cut benefits again instead of raising the cap or increasing taxes. Of course. God forbid a greedy-ass billionaire had to pay five cents more tax on anything - especially something THEY will never need.

Actually, the GOP would love to just dump the SS trust fund onto Wall St. and do away with it.

I honestly hate those evil bastards.

[TexasBushwhacker]

12. They never consider that cutting Social Security pulls money OUT of the economy

Raising the retirement age means people have to work longer, so they hold onto jobs that would have opened up to younger workers.

[CousinIT]

13. Yep. It's really a stupid scheme.

Penny-wise, pound foolish, as they say.

Last I checked, retirement at 62 wasn’t a standard option anymore as of 2019 or so - maybe earlier. The ages listed are 65, 67, and 70. 65 is now “early” retirement. 67 is retirement age. And 70 is late retirement w/ maximum benefits (this is for those born 1960 or later.

[TexasBushwhacker]

14. They also need to quit taxing Social Security n/t

[CousinIT]

17. Yea that was a Ronnie Ray-Gun stunt.

Ugh!

[Amera]

11. Trump cares about ivanka's money

That's all.