When do you start to think of yourself as "old"? Maybe the older you get, the further out you place it.
When I was 6, teenagers seemed old and wise. When I was a teen, my parents in their late 30s seemed old and stupid.I thought 50 would probably feel old, but I didn't. When AARP sent me a "welcome to being a senior citizen" greeting at 55, it was starting to feel more like it.And 60 seems different. Maybe because at 62 I'll be eligible for senior discounts and Social Security.My wife will hit 62 in February, and she plans to apply for Social Security next month. She doesn't want to miss a single check.I've tried to convince her to wait until 66 so she can get the maximum benefit, but she'll have none of that.Everyone's circumstances are different. You have to look at your financial situation and life expectancy and make your own decision. Start taking benefits early, at 62, and you'll be taking a future income haircut of about 25 percent.The four years of "extra" money you get from not waiting until 66 will evaporate in about 14 years, so by the time you're 76 the decision will start costing you. If you live to be 82 or 92, it's really going to hurt.Many people don't know that if you start taking payments and change your mind, you can repay all the money (without interest!) 12 months after you file and essentially start over again, but this time at a higher rate. You can only do that once, however.But if you need the money right now, of course filing at 62 is the route to take. Or if people in your family have shorter life expectancies, get the money while you can still spend it. Or you may get hit by a truck next week, and then it's a moot point.My wife grew up in Miami, where her aunt and uncle ran a neighborhood dry cleaner and laundry. Nancy recalls the early 1950s when her Uncle Ed paid his workforce in cash every week. He told them they needed to report their earnings and make their Social Security payment so they could collect when the time came.She was only 6, and she worried about the workers."What happens if they don't do it?" she asked her Aunt Ina."Their earnings record won't be correct, and they'll have less money to live on," her aunt said. Record-keeping at small businesses wasn't as rigorous as it is now.I've known many people who lived a good life despite having no significant funds to live on other than Social Security. My grandparents had no pension or savings, but they owned their home and lived quite nicely.Of course, Social Security was a much better deal for my grandparents than it will be for me. They took out a lot more than they ever put into the system. In 20 years, Social Security will likely look a lot different. Something is going to have to change or both Social Security and Medicare will run out of funds.The most common suggestions are to increase payroll taxes (especially on wealthier citizens), reduce cost-of-living adjustments for those already receiving benefits or gradually raise the retirement age.The Associated Press calculated that if two years ago Congress had implemented a plan to apply the Social Security tax to all wages, not just those below $110,000, almost all (99 percent) of the projected funding shortfall would have been eliminated.If they did it today, it would only wipe out 72 percent. The time to act is now.Jim Witt is executive editor of the Star-Telegram817-390-7704Twitter: @jimelvisHave more to add? News tip? Tell us
