Wednesday, September 23, 2009

59 years 6 months

Among my peer group of baby boomer friends, I am one of the "older" ones.  Nevertheless it may surprise you to realize that I am able now to take money out of my IRA without penalty. As with most discoveries, it is a mixed blessing.

In keeping with the theme of aging, I feel compelled to share with you that I visited the social security office today. It's been on my to-do-list for years, this visit, to correct my birth date. I discovered in filing income taxes online that my birth date is incorrect with Social Security, and frankly, I've had enough lying about my age in order to file online. Besides, I'm quite sure I won't be able to apply for social security a year early just because the Social Security Administration currently thinks I was born in 1949, not 1950.

Carl will be interested to know that marrying him aged me, because it was my name change in 1983 that triggered this error. I was born in 1950 until then.

I was under the wrong impression that after changing my birthday, I could leave my birth certificate with them and file online when the time comes.  Not so.  I have to go in person again when I want benefits.  Phooey to a wasted morning.  I could have lived with lying about my age a few more years if I had realized I could not multi-task my visit.

After I changed my birthday (and felt instantly a year younger), I decided to check a few facts. This only took two more hours of waiting, luckily with a good book to read.

Here are the facts I confirmed today.

Fact # 1. Early retirement is still age 62.
Fact # 2. Medicare is still age 65.
Fact # 3. Deferred retirement is still age 70.

So the only thing that has changed for us baby boomers is normal retirement age, currently age 66 for me.

So, do you want to guess the penalties and benefits of going on the dole early or late? 32% penalty for going early, 32% benefit for waiting till 70. I don't understand the math, but the difference between early at 62 and deferred at 70 is 75%. My brain is hurting trying to figure the rate of return for waiting 4 years or 8 years....but I'll come back with that later if I develop confidence in my calculations.

All that said, I am thinking that before I see a nickel at any age, all the rules will have changed. But today I feel really American. I've stood in line at Social Security.

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