To Take it or Not?


Stone majesty and misty vales unfold in the distant horizons. Green shaded Blue Ridge mists lay tucked in verdant vales like carpets of smoky silence that cover ancient runes that fall into the haze of history and the sea.

One of Merri's and my great fortunes is that we live in the very middle of nowhere. You can't get anywhere easily from here. Yet when we do go out, our main route is an even greater pleasure. We drive the Blue Ridge Parkway which runs thousands of miles from Washington D.C. all the way south to Georgia. Originally built in the 30s as a WPA project the idea was that members of Congress could have a quick escape from the Capitol if it were invaded. Modern warfare has sort of left this strip of asphalt defunct as an escape route, but what a scenic wonder it remains. The road is a national park and though perfectly groomed and stunningly beautiful it is almost always empty. We cruise slowly along as breathtaking view after view unfolds. You can see miles into the horizon as Blue Ridge line after ridge line unfolds, one after the other grading gently down into the piedmont of North Carolina that then runs into the sea. Old bridges and walls are of those old rugged WPA stone blocks, architectural wonders we'll never see built again here.

So on Merri's birthday we roamed over to Blowing Rock, the oldest resort in the East, where we could enjoy an upscale lunch. I guess being on that road built for Congress on a birthday got us thinking about Social Security. We can collect it soon! That brought up the question, when is it best taking it, so I called my attorney Joe Cox. His reply was that he was going to live to a ripe old age so he'll start taking it as late as possible at 70.

I asked another friend and he said, "My CPA said take it as soon as you can." So I began to check. I first went to http://www.ssa.gov/about.htm and in the Other Benefit Information section clicked on Compute Your own Benefit. This gave me three calculator choices; Quick, Online, Detailed.

I chose the quick which gave me a simple, rough estimate calculator after inputting my age and this year's earnings. What I learned is that at my age and earnings if I retire at age 62 I will receive $1,013.oo a month for the rest of my life. If I wait till my retirement age of 66 I'll get $1,421 a month and if I go on past and wait till I am 70, the monthly payment will be $1,960. The calculator even gave me break even ages for each choice.

If I choose to take the age 62 retirement, I have to die before I am 75 years and 11 months to receive the most money. If I live past this, my best bet is to take the age 66 retirement unless I live past 78 years and 6 months. If I plan to live to be 80 then the retirement at age 70 choice is the best choice. But there are some other considerations. Turns out this is quite a complex subject. The amount of my income affects how much I'll make and I tried various ages, so the years left till retirement also counts. Plus if I earn after I retire, there is an impact too. Perhaps I had better go back and use the detailed choice!

Instead I went to http://www.socialsecurity.gov

Here under the Resources section I clicked onto Your Social Security Statement and ordered a statement. So we'll see.

However there are some other issues. First let's try inflation. Social security is inflation linked and the calculator can even give you the amount it expects it will pay after inflation. Yet there is no guarantee that Social Security will continue to link payments to inflation or will raise the payments fast enough.

In fact while looking around the web I came across the Cato Institute at http://www.socialsecurity.org

This organization is a proponent for social security reform and point out that:

"Personal retirement accounts do not threaten benefits, politicians do". Jo Anne Barnhart, the Commissioner of Social Security, said to the Washington Times, "no proposal that has been put forth affects benefits for current and near retirees." Retirees have paid their dues, and the government must make sure they get the retirement money they have been promised. "While no proposal supporting personal retirement accounts threatens benefits, not changing the current system does. It is widely known that the current system will go bust soon. It is less widely known that Congress has the power, as ruled by the Supreme Court, to cut our Social Security benefits at will and that we do not own any of the money we have put in. In this light, Social Security is to retirement security what slingshots are to national security."

This is a scary thought if we depend on Social Security. I have not felt confident in the plan for a long time. The overall system does not appear to make sense. There is a Social Security trust fund, but it is filed with special treasury bonds. Bonds mean government loans and the only way those loans will get paid back is through increased tax. The U.S. government is building a larger and larger debt. The war in Iraq alone is scary enough. You can see how much this costs at http://www.costofwar.com/The Social Security system has all worked to date because the wave of baby boomers has earned more and more money and paid more and more tax. How will our kids be able to pay their tax, contribute to their Social Security and pay off those bonds too to support our Social Security too? We have to consider that Congress could move the finish line and make us wait later to collect. They have already done this a bit. You have to be older and older to get benefits for each year you were born after 1932. Maybe if we start at 62 to take benefits we won't get delayed and some who are waiting will.

On the other hand I like my attorney's positive confirmation. Darn it I'm going to live to be 90 so I'll wait till 70 and clean up on what I collect. If you have a Scottish ancestry, as I do, our systems might just stay alive longer to make darn sure we collect past our break even age. If so, let's wait till were 80.

So, I'll probably wait. I'm earning more than I know what to do with no anyway. But this may not be the best bet. What I do know is that the most important thing is I enjoyed that ride down the Blue Ridge and didn't worry too much about this. Enjoying life's simple pleasures like those distant Blue Ridge horizons in the here and now is what will make life longer and worth living. I hope to see you up here in the middle of nowhere one day. If you come I suggest you drive the Blue Ridge Parkway.

Until then, may all your horizons be expansive and filled with beauty.

Gary


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