www.CostaRicaTicas.com

There really needs to be some meaningful reform of the Social Secuirty system for a multiplicity of reasons. It just needs to be updated but since it is a sacred cow in terms of political protectionism, no politician is going to propose anything too meaingful as it will be seen as too radical. A sure way to get thrown out of office.

SS cost of living increase of 5.8% for 2009:
http://www.associatedcontent.com/articl ... _cola.html

I'll see if I can quickly add a couple corrections/additions to what's posted here, without going back and reading it all a second time.

The "final three years" thing may refer, mildly, to the end of "indexing" at age 60. This means that if you stopped working at age 50, say, all your credited years up to that point are getting bumped up by -- not the inflation rate, but -- the wage increase rate each year, as if you had earned your old wages at equivalent modern rates.

This stops at 60, and, you are left "frozen", dollar-wise, in your account totals on which the future benefits are calculate. (Hint: TAKE IT EARLY!)

Argument #2 to grab and run at 62 (if you've stopped or reduced earning) is that, by my last calculation for myself, it would take me 16 years more -- 78!!! -- to break even -- without interest -- and the dollar amounts collected.

20 years away from that breakeven point, for me? Given 20 years head start, I think I'll outlive the IRS' collecting abilities on which my payments after that will rely. Totals I'll get starting at 62 are likely to far outweigh the total by waiting. But, wait! There's more!!!

Reason #3 to grab and run, or retire, is really really obscure and can be looked up by searching "Kotlikoff's" recent articles. There is actually a Social Security procedure (and form) by which you can pay back the sum of the smaller checks you got, and re-calculate your S.S. checks henceforth at the age 66 or age 70 higher levels. Yes, it's a big lump sum, but you end up, as I recall, some 14% annually better off. Plus safe from an early USGov default!

Now go forth, and support those chicas & their families!!! Until, of course, they discover that we all are NOT made of money, and we all have to move over to obscure hidden valleys in Colombia...

Brother Diego's post could be the most important info you get all year. If you are at or near retirement age, print out that post and take it to your CPA or independent financial advisor--they will confirm his sage advice. As he said in item #3, that take-the-SS payments-now-and-repay-it-in-cheaper-dollars-later to re-set your benefit clock is an obscure but real part of the law. It's available to everyone though not everyone's best option. I'd read it somewhere else but thought, "Hey, that's not for me." Now I'm giving it a serious re-think. Note: you have to repay those total payments as a lump sum, I believe.

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"A man accustomed to hear only the echo of his own sentiments, soon bars all the common avenues of delight, and has no part in the general gratification of mankind"--Dr. Johnson
"Amen, brother"-ED

For you recently retired Feds out there, you need to remember that if you are under the Social Security offset law that you may not be eligible to collect one thin dime from social security, no matter what your annual statements say. Generally speaking for every dollar you get in your pension above a certain level you will lose an equal amount from your social security in "offset". In many cases this reduces to a zero entitlement. I'm in that case.
My pension is good and for that, I'm thankful. But, in my post retirement consulting employment I'm kicking in thousands each year to social security knowing full well that I'll be ineligible to collect even a dime of it in the future. I don't mind not being eligible for future benefits, but I find it irksome that I am contributing large amounts to a fund that I can never collect from.

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Providing humanitarian assistance to self employed chicas, one cash grant at a time.

http://www.investopedia.com/articles/re ... tegies.asp is a detailed explanation (with examples) in easy to understand language about how to correctly manipulate your Social Security payout. Bottom line: If you have what is necessary for the repayment, start at 62.

For the guys that are still paying into the fund, God bless ya.....it's mighty fine.....

_________________
"Actual happiness always looks pretty squalid in comparison with the over-compensations for misery. And, of course, stability isn't nearly so spectacular as instability. And being contented has none of the glamour of a good fight against misfortune, none of the picturesqueness of a struggle with temptation, or a fatal overthrow by passion or doubt. Happiness is never grand."
- Aldous Huxley, Brave New World, Ch. 16

El Viejo is 100% correct and it is not just Federal employees. Many state, county and municipal pension funds are exempt the Social Security system.

Based on the Windfall Elimination Provision many people will probably not get any Social Security retirement payments even though they worked other jobs and paid into the system.

two threads going on within this thread:

The first thread seems to have been those who were/are participants in the Federal Retirement System (Federal employees and some U.S. Postal Service staff who were hired way back); the 2nd thread is for those of us who are ONLY SSA eligible.

The FERS (Federal Employee Retirement System) is most different from the "ordinary" SSA (Social Security Admin.) system payments. While it IS possible if you are a FERS participant that to also receive SSA payments, the non-federal employee is left ONLY with SSA.

My remarks to "...take it at age 62...." is for those who are ONLY with SSA AND have the jack to "repay" the payments made from age 62 until whenever one would ordinarily receive the "normal" retirment payment from SSA and does not address those who are so silly as to wait until age 70 to begin drawing. However, silly as it is, you can still begin taking the money at age 62 and pay it back at age 70 and then begin receiving the phat money. I like my plan for age 62: Take the money; live a bit better; squirrel away the "surplus"; pay Uncle Sam back at age 65; and then spend, spend, spend!!! Hooray!

PS: Those guys who keep paying into SSA: Keep up the good work! Don't follow my advice, please, and keep working until age 70. Thanks so much!!

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"Actual happiness always looks pretty squalid in comparison with the over-compensations for misery. And, of course, stability isn't nearly so spectacular as instability. And being contented has none of the glamour of a good fight against misfortune, none of the picturesqueness of a struggle with temptation, or a fatal overthrow by passion or doubt. Happiness is never grand."
- Aldous Huxley, Brave New World, Ch. 16

It should be noted that there are 2 distinct Federal/Postal retirement systems: CSRS--defined benefit--no SSA contribution--pre-1984; AND FERS--defined contribution--SSA contribution--post-1984. As a FERS participant I most certainly will receive SSA payments even if reduced somewhat by my Postal stipend.
About the claim it now/repay it later tactic (Brother Diego's item 3/Brother Steven1's link item 1): it's important to note that the recoupment period is about 4-1/2 years--you're only "in the money" after 4-1/2 years after you repay and start collecting at the higher rate. So if your clan isn't long-lived or you already have health issues, this tactic may not be for you. There may be other reasons you elect not to use this tactic--estate planning, etc.,etc. All I'm saying is it isn't a slam-dunk for everyone. That's where professional advice is so important.

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"A man accustomed to hear only the echo of his own sentiments, soon bars all the common avenues of delight, and has no part in the general gratification of mankind"--Dr. Johnson
"Amen, brother"-ED

Yes, JazzboCR, there can be come pitfalls with taking the money at 62 the least of which is NOT the fact you have to pay for private health insurance as no Medicare until 65.

Thanks for providing the name of the other.....I HAD been a member of that group when I worked for the Postal Service as a ZMT operator in 1977 and for a couple of years after that. In retrospect, best job and benefits I ever had. Woulda, coulda, shoulda.....

Irrespective, those 4.5 years of "recoupment time" are more than made up for by the "early" aspect of being the true captain of your own ship......nobody or thing telling you what to do and the ability to get on an airplane, for example, on a whim. However, I do believe, as you so aptly have put it, that one is wise to seek counsel on the feasability of using this option. As you note, it's not for everyone.....but it's good information to build around!

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"Actual happiness always looks pretty squalid in comparison with the over-compensations for misery. And, of course, stability isn't nearly so spectacular as instability. And being contented has none of the glamour of a good fight against misfortune, none of the picturesqueness of a struggle with temptation, or a fatal overthrow by passion or doubt. Happiness is never grand."
- Aldous Huxley, Brave New World, Ch. 16

Wow! You guys are great -- rarely does a financial discussion thread go in the direction of added value, as more people pile in, but you've done it here. (Especially anyone who tags his posts with Aldous Huxley -- still like his "exit plan" the best... )

Here's the Kotlikoff link:

http://www.esplanner.com/Case%20Studies ... le_dip.htm

and the percent of benefit he cites is 15.8% additional sustainable spending, but other examples given with different circumstances are even higher. Possibility exists that this could be eliminated at some future time -- watch carefully if you're counting on it! -- or that interest could be charged on the payback.

All this points to you doing your own research, but good new ideas are rare in finance, so this was one "discovery" for 2008.

The stronger point for age 62, I thought, was the breakeven point at age 78 (with interest counted, maybe 82?) and the possible insolvency of the USGov. That's what's got my attention.

Also, I was not clear about the indexing provision, another rarely-known thing. It doesn't just apply to someone like the OP who stopped working early. The wage-adjustment indexing of your "youthful" earnings happens for everyone, and continues up to, last I read about it, age 60.

From that point onward, it's your actual earnings that get calculated into the mix, so if we hit a big inflationary zoom, that's going to leave a lot of people's past earnings calculations in the dust, I think, unless they can start collecting soon, and then get the inflation bump-up going for them. (Which I suspect USG will not be able to keep up for very long. They will freeze and/or cap the benefits at some point, so you probably will want to be grandfathered in as early as possible.)

But, if you are still working, those years between 60 and, say, 66 or 70, need to be high-earning years for you to maintain the value of your eventual check. Otherwise, seems like you should cut out early, and nail down those 48 to 96 early checks. Might be all you ever get out of it.

Again, all this as the ignition for your own research, and run the numbers on your particular situation.

Me? -- I've been targeting a Costa Rica standard of retirement living, but if things keep getting worse, I'll be moseying on up Granada-way, or visiting those remote valleys in Colombia where BB57 has his hidden stash of chicas...

What's nice to know is that quality of life is no longer proportional to money, but basically adjustable toward a high level however the money turns out, now that I've got several opciones to outsource myself to...

We are reminded that Medicare is only available to U. S. residents. As I plan to move to CR it won't be available to me. I'm not sure if it applies to medical procedures in foreign countries even if you maintain U. S. residency. And yes "grandfathering" is an important part of the equation but anything Congress can do, they can undo. No part of what we've discussed here most especially Social Security is contractual.

_________________
"A man accustomed to hear only the echo of his own sentiments, soon bars all the common avenues of delight, and has no part in the general gratification of mankind"--Dr. Johnson
"Amen, brother"-ED

Yes, Jazzbo -- the bit I've heard about Medicare planning relating to expats is that the time before age 65 is when the medical situation calls for you to locate affordable care outside USA since you're basically paying for it yourself.

Then, as you approach the "free" care at 65, I guess you have that RV parked in your Ch*ldren's driveway for an address, and go back often enough to get what you need, if your medical care schedule permits.

I'm just guessing that nailing down at least half time residence in Chicaland between 60 and 65 will keep me from getting anything chronic that I'd need to be regularly in USA for.

I'd say a goal would be to have my health in better shape than the US Gov's finances, but that may not be a very high standard to match by then...

Medicare provides zero coverage outside the United States even in emergencies. The only exceptions are you can be covered for emergency care provided in either Canada or Mexico if that is the where the closest facility is located to where the emergency care became necessary. The other exception is that when you use your part B to enroll in an HMO some of those will cover emergency care when you are in another country. That does not apply if you are a resident of that foreign country.

This is the reason most expatriates here drop their part B coverage. It makes little sense to pay almost a $100.00 per month for coverage you will most likely never use.

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Pura Vida
Only Irish coffee provides in a single glass all four
essential food groups:
alcohol, caffeine, sugar and fat.
Alex Levine

I was told that if a hospital accredited, such as Cima and Biblica, that Medicare would be honored there?

Does anyone know for sure (specifically about Cima, Biblica and Medicare)?