Monday, October 11, 2010

spinning the wheel of life


My personality can be a bit quirky -- at times.


And, at 61, you would think I would stop developing new ones.  Quirks, that is.  Not, personalities.



But they keep popping up. 


A new quirk is: putting off decisions.  Big decisions.  I just ignore them.  This from a man who has spent his life as (if you will pardon the disinterment of the word) a "decider."


This trip north has turned out to be a perfect example of Ogden Nash's definition of a sin of omission:


And the other kind of sin is just the opposite and is called a sin of omission and is equally bad in the eyes of all right-thinking people, from Billy Sunday to Buddha,

And it consists of not having done something you shuddha.*


What I "shudda" taken care of was getting the house ready to sell.  My realtor was very candid with me.  Now is not the time to sell.  But she recommended I replace the windows.  I didn't.


Now, I am stuck in another Hamlet vortex.  A financial decision.  Should I apply for Social security benefits at 62?  Or 66?  Or 70?


We all know the logic.  The longer you wait, the higher the benefit. 


If a retiree takes Social Security benefits at 62 (with a 25-percent reduction), rather than waiting another 48 months for full benefits at 66, the break even point is 78. That means the retiree would have to die at 78 for the early benefits and full benefits to equal each other.


But, the world is not economically static.  Factoring in the current value of the benefit, assuming a 4% rate of return, the break even point increases. The retiree would have to live to 84 to make waiting for full benefits worthwhile.


That is how economists think.  I like to think of it as being a little bit like going to Las Vegas.  The government wants me to take early benefits and bets I have the genes of Methuselah.  I bet I will die young and leave a good-looking corpse.


I don't have the genes of Methuselah.  My nearest ancestors are a mixed bag of untimely deaths and healthy centenarians. 


The actuarial tables say I should live to be about 80.  My family tree says that is optimistic.


If I include three generations of ancestors, death seems to be on a rather erratic schedule -- running from 43 to 100.  I have already managed to live longer than a grandmother, grandfather, and great grandfather.  But the average life span is merely 74 years.  The median -- 77.


Those numbers tell me to take the money early and put my full bet on black.


Death may be a dark specter.  Politics is darker still.


Social Security is not as unhealthy fiscally as Medicare.  But it does have a rather serious cough.  Taking early retirement makes sense if only to get my salesman foot in the door before the whole program turns into a personal thank you note from the president to each retiree for being such a good citizen.


So, later this week, I will fill out the form that will start the trickle of Social Security checks down Mexico way in a short three months.


My windows in my unsold house may suffer from my indecision.  But I will soon join that "happy few, we band of brothers," who can speak without ceasing on such topics as COLA and direct deposit.




* --
Portrait of the Artist as a Prematurely Old Man has long been one of my favorite Ogden Nash poems.  It is well worth reading in full.

12 comments:

Adrienne said...

We have the same set of decision points (although the windows have been replaced) on retirement stuff. Decided to take the PERS lump sum option because we didn't want to play the actuarial game on Ken's longevity - we already know mine ;} As for "shuddah", well, here's my 6-point plan:

1) Get out your calendar for the next two months (but don't procrastinate).
2) Pick a day, a weekend, a week.
3) Pick a friend, significant other, spouse, child, self.
4) Schedule and pay for (if it actually costs money) an activity or trip that you have been meaning
to enjoy, but just "haven't gotten around to it."
5) Can't think of anything? That's what Google is for. Be creative.
6) Do it!

NWexican said...

At the risk of sounding like a fanatic(which I just might be)
THANK GOD FOR GOD!!!!
That is a whole lot of worry for a guy that is at the threshold of what the rest of us working idiots can only dream about!! From what I gather about retirement one has a whole lot of time to cross the T's and dot the I's....
I say give all of that to the HIGHEST POWER.

- Mexican Trailrunner said...

Good move, Steve! Bird in the hand, and all that . . . Besides, who knows what changes they will make to the entitlement ages in the next couple of years.
Enjoyed your post about retirement and how we tend to define ourselves by out titles. I also think we define ourselves by our compensation. We seem to feel that we have no worth if we are not being compensated monetarily for something.
Maybe this is what leads to all these 'border promotions' we hear down here.
Glad to hear it's 4 more weeks for you, not 4 more months! Carry on, duckie.

Tancho said...

Well Amigo, I pondered the same issue for awhile when I was coming up to the d-day.
I figured the old saying that a bird in the hand was, you know the rest.
It's not that the SS is going to make it or break it for me, I don't plan on living on it totally either. I hope that I had been wise in my money earning years to do that. So, Being the generous soul that I am, I figured I would take the lesser amount and give the benefit of the balance to the government, they certainly need it.
Now the payment gets deposited automatically in the bank account, and I don't worry about it.....
As far as the windows go, I personally would let the new owners of the house worry about them, naturally your relief of the responsibility of replacing them will unfortunately provide them a small discount on the home....

Calypso said...

I'm with Tancho - I kicked around waiting and did for a year - When Cd interest returns essentially went to nothing and I was starting to gouge the nest egg - I opted for the take it now approach.

I did get a little more for the extra year I waited. Aside from the 'whether you need the funds' issue - my theory was the entire U.S. fiscal thing is a mess - it is more likely that those getting benefits will be more likely to remain getting them than those yet to get started. So I jumped in and if I live to 84-85 and then start to go negative on the decision - I probably won't care. Also universally advice was take the money and run - so that is what I will impart to you.

Steve Cotton said...

Adrienne -- Great list. I just put it into practice. Now I need to follow through on step 6,

NWexican -- The worry part I turned over to Him long ago. Once rid of the worrying, though, I stopped making some decisions. Just ignored them. And that is fine, too. Life goes on.

Mexican TrailRunner -- The math makes the SS decision extremely simple. What I cannot believe is that I am now old enough to make the decision. Certainly, this is my father's account I'm discussing!

Tancho -- Great minds must run in the same rut. I have considered your window solution. My realtor, of course, wants to keep the selling price high.

Calypso -- If Tancho, you, and I have come to the same conclusion, where could there be any error?

Gloria said...

Good for you Steve, you are entitled to your money, before it's all gone. Get it while it's there. Go for it! :D

Al Polito said...

Steve, the actuaries and other list-makers fail to account for the happiness quotient. If you are a happy, jolly fellow, and feel that you have something valuable to live for, you may well outlive most people of your generation. So don't count on dying so soon.

jennifer rose said...

Take it now before Obama's people spend it all foolishly.

Anonymous said...

Now, when you get that SS money, lay it out for a new BMW. Or, I forgot, you already did that.

anm

norm said...

The house is a millstone around your neck, forget the windows. What kind to buy? A cheap, last about two years window or one at three times the cost that will last 20-30 years.Do yourself a favor and the next owner, take the hit on the selling price and give that millstone to someone who needs the weight around their neck.
As to that SS money, take it. It will have more buying power today than latter.

Brenda said...

Are you aware that if you take it early that later on after living in Mexico and your health improves dramatically. You can opt to at 66 to pay back what you have drawn and sorta of reapply at the higher benefit rate. Look into it. I know I read an article on this somewhere. Good luck