Taking Social Security early.

seniorPicWhen I retired early I was a little concerned about if we would have enough income from my company pension and investment.  We decided to take Social Security early as  backup. Back then you had the option to payback what you collected  from Social Security without any interest on that money. So in theory you could borrow the money, pay it back before you reach 70, then reapply for your Social Security at age 70 to get the higher amount.

Well this was to good to be true, they have now discontinued this, even though not many people used this option. So before you take your Social Security early at 62 please think through all your options, your health, if you are married, if you really need the money now, remember at 65 medicare part ‘B’ is taken out of you payment, further reducing your payment.  Remember if you are married and your spouse dies, the surviving spouse gets the higher of the two Social Security payments.   If they  both are low you only get one.  If you take Social Security early that amount is now fixed lower for life.

Normally if you take Social Security early at 62 you break even if you died between 75 to 80, but again you have to calculate your own individual rate.  Obviously you lose out if you live longer  and your spouse had to live on a lower Social Security.

So really think and plan ahead before taking Social Security early, also consider with everything that is going on with the government they may discontinue the early option.

Social Security something to consider

Its easy to apply online for your benefits.

I personally signed up to a apply online, but due to a wait to receive my password, I went to my local Social Security office.  A new one happened to open up  locally, and was close by.

To apply online click here:- or call:  1-800-772-1213.

I took my Social Security early at 62;  although reduce. For me I break even or gain if I die before approx.83 (pun intended).

The reason I took it early was my concern that the Government may change the rules. Due to this unknown and the possibility of being grandfathered in before any changes, I decided to take it at age 62.

Update Dec 2010.

There was a loophole in Social  Security rules that allowed you to pay back, without interest, what you received in Social Security payments before you reached 70.  You may then re-apply for a bigger payout.  Apparently they just discontinued this, which shows me that you cannot bank on any existing Social Security rules as they can change at any time.

Private and Company Pensions

Presently I managed to retire early because I qualified for my company’s defined benefits pension plan.  After 30 years and 60,000 hours it was a long time coming.  The closer I got to the 60,000 hours the more anxiety I had that I would not make it, due to lay offs and  work options getting less and less.

Finally I got the hours and was laid off at 59 1/2 so I had 6 months before I got my pension at 60. Then I got seriously sick, which is another story.

Now I am concerned about if my pension will be there in the future with all this worldwide economic problems.

Please leave comment about what you would like to see in this area.

Financial topics

Financial topics As of this date July 2010 I am standing on the side lines until I see what is happening with the world markets. At present everything is in flux. The best books I have read recently are below. They are based on the Modern Portfolio Theory  and are a good basic start to long term income investing. Try your local library first.

Also I suggest that you look at the American Association of Individual Investors the AAII.com. It is a not for profit organization that helps individual investors learn to invest. Presently at $49  now $29 a year for membership you get a monthly magazine and access to their web site. They have local chapters in most states and club meetings usually once a month where speakers present topic on investing. You can click on their link above for further details. I would highly recommend them as I have been a member for many years. They also have a life time membership deal that may beneficial. After many years I wished I had paid the one time life time fee as after approx. 5 years it becomes free for life.

New Portfolio for 2010

After this market decline we had to re-think our portfolio strategies.  We are working on a new target.  Once we have researched a good replacement plan,  we will begin to post our concepts here.

If you have found an alternative plan, please leave a post.