‘I’m 64, my job has turned to crap and I have cancer. Should I wait to 67 to start claiming Social Security?’ – MarketWatch
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” : ‘int.’; const loginBaseUrl = LOGIN_URL[pageSiteProduct]; const loginUrl = `https://${loginUrlPrefix}${loginBaseUrl}/google-login`; const targetUrl = new URL(window.location.href); targetUrl.searchParams.set(‘isGaa’, true); fetch(registerEndpoint, { method: ‘POST’, body: JSON.stringify({ id_token: credential?.credential, displayContextId: ‘SOCIAL_CONNECT’, returnUrl: window.location.href.split(‘?’)[0], editionId: `${EDITION_ID[pageSiteProduct]}`, registrationSource: `${REGISTRATION_SOURCE[pageSiteProduct]}` }), headers: { ‘content-type’: ‘application/json’, } }) .then((response) => { if (!response.ok) { console.error(‘GoogleEA: Social Connect Invalid Status Code’); return; } return response.json(); }) .then((userState) => { if (!userState) { console.error(‘GoogleEA: Social Connect No Data’); return; } window.location.href = `${loginUrl}?target=${encodeURIComponent(targetUrl)}`; }) .catch((err) => { console.error(`GoogleEA: Social Connect Err: ${err}`); }); } }; })() ]]]]]]]]>]]]]]]>]]]]>]]>
Brett Arends’s ROI
Last Updated: July 29, 2023 at 4:05 p.m. ET First Published: July 26, 2023 at 6:34 a.m. ET
Rules of thumb aren’t going to work for this guy
Or would you rather be back in the office?
Getty Images/iStockphoto
[]This worker is 64, wants to retire in a few months, hates his job, has cancer. He wants to know if he should postpone claiming Social Security until he’s 67.
[]My take on his post was: Wait, what?
[]If I were in this guy’s shoes, I wouldn’t wait long enough to write the post before quitting my job—and, probably, claiming Social Security.
[]Especially because it turns out he and his wife have paid off their mortgage, own $1.2 million in investments and a property generating $24,000 a year, and have a pension paying another $22,000.
[]The good news, at least, is that the poster says his cancer is “under control.” But cancer is cancer.
[]If this were me, I’d be out the door. I wouldn’t want to waste one more of my remaining days at a job where things had, as the poster writes, “turned to sh.t” and where I was being treated with disrespect.
[]According to government data, even the average 65-year-old man—never mind one with cancer—should only expect to live on average another 17 years.
[]I’d make the most of every single day.
[]Yes, in usual circumstances, financial planners generally advise delaying the start of Social Security as long as possible up to the age 70. That’s because each year we hold off claiming, our annual benefits go up by an average of around 7.5%. But the main reason why that’s so attractive is the longevity insurance. Those checks will last as long as you do, even if you or your spouse make it to 90 or 100. And that can be very useful.
[]But up until about age 80, you will receive more money in total if you start claiming earlier. A guy who delays claiming until 67 won’t even catch up with the guy who starts claiming at 65 until they are both 79. (This, naturally, assumes they are in line for the same benefits). The guy who delays claiming until 70 won’t catch up with the guy who starts at 65 until they are both 81. So you have to wait into your 80s before you see a profit at all from waiting.
[]And why would you wait if you didn’t have to?
[]The poster doesn’t say what his annual budget is, but he admits that he and his wife live in a high cost of living area. That means there is almost certainly a ton of equity locked up in the house, in addition to all the other assets.
[]People talk about the “4% rule,” meaning you supposedly can withdraw 4% of your portfolio in the first year of retirement, adjust upward each year for inflation, and run minimal risks of running out of cash. By that measure this couple could collect $48,000 this year from their $1.2 million portfolio, in addition to everything else.
[]But if they really want security they could use that money to buy a lifetime annuity with full survivor benefits, meaning the surviving spouse keeps getting the money after the first one has gone. Assuming they are both about to turn 65, in the current annuity market that would generate annual income of $76,000 a year at current rates. Or $60,000 a year with an annual 2% increase.
[]The poster should go and talk to a qualified financial adviser—as usual, one that gets paid a straight-up fee for advice, not commissions for selling you financial products. Every individual situation has a gazillion ins and outs to consider.
[]But if this were me, I suspect I’d be out of there so fast it would be like one of those classic cartoons, where the character’s hat is left hovering in the air after he’s gone.
I’m 50 and divorced with no kids. I have an MBA but am afraid I’ll still be working when I’m 70.
[]Have a question about your own retirement savings? Email us at [email protected]
[]Brett Arends is an award-winning financial writer with many years experience writing about markets, economics and personal finance. He has received an individual award from the Society of American Business Editors and Writers for his financial writing, and was part of the Boston Herald team that won two others. He has worked as an analyst at McKinsey & Co., and is a Chartered Financial Consultant. His latest book, “Storm Proof Your Money”, was published by John Wiley & Co.
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