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Another Spousal Social Security Benefit Question
06-17-2018, 07:34 AM
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#1
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Recycles dryer sheets
Join Date: Feb 2011
Location: Nottingham
Posts: 212
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Another Spousal Social Security Benefit Question
Morning. I did a search online here for Spousal Benefits and I think I am getting a better picture but wanted to double check.
Our situation:
Me: Planning to take SS at age 62. I'm the higher income but Spouse still has a good SS pension at FRA.
Spouse: 5 yrs older. Planning to take SS at age 70.
What I think we can do. I file for SS at age 62 (my FRA is 67). Spouse files for spousal benefits at age 67. Spouse files for her own SS benefit at age 70.'
I plugged the numbers into a spreadsheet and seem favorable. Even though her own SS benefit at FRA would be a good bit more than her spousal benefit, the delay in taking SS benefit till 70 results in a better overall number. This scenario is even better than both of us taking SS at FRA. The only scenario better is we both wait till 70 which is nice but a cashflow issue.
And this does assume a living to a ripe old age.
So ... can we do this? Numbers are nice!
Thanks
Kannon
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06-17-2018, 07:40 AM
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#2
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Administrator
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,124
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Have you tried this free estimator?
https://opensocialsecurity.com/
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
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06-17-2018, 07:46 AM
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#3
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Recycles dryer sheets
Join Date: Feb 2011
Location: Nottingham
Posts: 212
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Yes - that is where I got the alternative idea. Just seems too good.
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06-17-2018, 08:03 AM
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#4
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,349
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Quote:
Originally Posted by kannon
What I think we can do. I file for SS at age 62 (my FRA is 67). Spouse files for spousal benefits at age 67. Spouse files for her own SS benefit at age 70.'
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Pay attention to the "deemed filing" wrinkle in the law:
https://www.ssa.gov/planners/retire/deemedfaq.html
__________________
I thought growing old would take longer.
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06-17-2018, 08:16 AM
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#5
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Recycles dryer sheets
Join Date: Feb 2011
Location: Nottingham
Posts: 212
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Based on "deemed" information, I think we are ok, spouse turned age 62 before Jan 2, 2016.
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06-17-2018, 08:37 AM
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#6
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Recycles dryer sheets
Join Date: Oct 2007
Location: Georgetown
Posts: 423
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Quote:
Originally Posted by Alan
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I used that calculator and now I am totally confused. Here is recommendation:
Quote:
The strategy that maximizes the total dollars you can be expected to spend over your lifetimes is as follows:
You file for your retirement benefit to begin 11/2027, at age 70 and 0 months.
Your spouse files for his/her retirement benefit to begin 7/2020, at age 62 and 1 months.
Your spouse files for his/her spousal benefit to begin 11/2027, at age 69 and 5 months.
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First, I am surprised that with new "deeming" rules my wife can file for benefits on her own and then change to spousal benefits. Second, and more surprising, my wife would change to spousal benefits when I turn 70 instead of FRA. I had thought that maximum spousal benefits are 50% of FRA benefit.
I can't believe calculator is wrong; so, what of my assumptions were wrong?
thanks,
Marc
edited to add another question:
Calculator came up with PV of $900K. Would this be a good number to add to my current assets to calculate withdrawal rate?
__________________
"Adventure is just bad planning"
Roald Amundsen
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06-17-2018, 02:39 PM
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#7
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,349
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Here's my take:
Quote:
Originally Posted by Marc
I can't believe calculator is wrong
Believe it. What you posted makes no sense.
Calculator came up with PV of $900K. Would this be a good number to add to my current assets to calculate withdrawal rate?
No. Just reduce your expected spending by the amount you will receive. Others will give you a different answer, but that's the most popular one.
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__________________
I thought growing old would take longer.
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06-17-2018, 02:57 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Mar 2013
Location: Coronado
Posts: 3,706
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Quote:
Originally Posted by Marc
Quote:
The strategy that maximizes the total dollars you can be expected to spend over your lifetimes is as follows:
You file for your retirement benefit to begin 11/2027, at age 70 and 0 months.
Your spouse files for his/her retirement benefit to begin 7/2020, at age 62 and 1 months.
Your spouse files for his/her spousal benefit to begin 11/2027, at age 69 and 5 months.
First, I am surprised that with new "deeming" rules my wife can file for benefits on her own and then change to spousal benefits. Second, and more surprising, my wife would change to spousal benefits when I turn 70 instead of FRA. I had thought that maximum spousal benefits are 50% of FRA benefit.
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While you and your wife are both living and married to each other, she can only claim spousal benefits if you have already filed your own claim. If you are waiting until 2027, then that's the earliest date at which she can file a spousal claim. Everything she gets prior to that date has to be on her own record.
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Maybe off topic? kinda sorta - - divorced spousal SS
06-17-2018, 03:12 PM
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#9
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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Maybe off topic? kinda sorta - - divorced spousal SS
I worked really hard planning my retirement! But I am not perfect and missed a few things regarding SS. I was just planning to take it at age 70, and hadn't thought beyond that.
Thank goodness I was posting on this forum. In 2013, some very intelligent members of the Early Retirement Forum suggested an SS plan for me that I hadn't even thought of or heard of. I adopted it enthusiastically and it has worked out beautifully.
Here's how it goes: In 2014, I reached age 66 (FRA) and took divorced spousal SS (which in many ways is similar to spousal SS). This was half of his SS, but did not affect him and he never knew about it. My own SS based on my employment continued to grow as if I hadn't taken divorced spousal SS. This wouldn't have been the case had I started divorced spousal before FRA. Anyway, this month I turned 70, and will switch over to my own SS which is larger by now. I received a Letter of Award this week that says in writing (for the first time) that I will be getting what I calculated I would get, to the dollar.
The thing is, in 2015 there was a law passed to close this loophole. I think that I, and some others up to a certain age, were grandfathered in. But anyway I would be cautious to get up-to-date information if trying this approach. This is why I didn't post in the present thread until now; I don't want to give anyone outdated advice, and I really don't know what the present law dictates.
In about 3-4 weeks, I'll get the first deposit based on my own SS. I'll see a "raise" of $555/month.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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06-17-2018, 07:15 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
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Quote:
Originally Posted by Marc
Calculator came up with PV of $900K. Would this be a good number to add to my current assets to calculate withdrawal rate?
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Since my retirement goal is a regular income, I would deduct the SS (monthly or annual) benefit from my target income.
Things like the 4% SWR guideline apply to people who want a constant income from their retirement savings. I assume you are planning to start SS some years after you retire, so you will probably want higher withdrawals before you start SS than after.
Note that Firecalc handles this for you.
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06-17-2018, 07:31 PM
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#11
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Recycles dryer sheets
Join Date: Oct 2007
Location: Georgetown
Posts: 423
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Quote:
Originally Posted by cathy63
While you and your wife are both living and married to each other, she can only claim spousal benefits if you have already filed your own claim. If you are waiting until 2027, then that's the earliest date at which she can file a spousal claim. Everything she gets prior to that date has to be on her own record.
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Cathy, so the calculator is correct? My wife can claim on her own in 2020 and then switch to spousal benefits in 2027?
The $1000 bump starting in 2020 could be found money.
thanks,
Marc
__________________
"Adventure is just bad planning"
Roald Amundsen
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06-17-2018, 09:13 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Mar 2013
Location: Coronado
Posts: 3,706
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Quote:
Originally Posted by Marc
Cathy, so the calculator is correct? My wife can claim on her own in 2020 and then switch to spousal benefits in 2027?
The $1000 bump starting in 2020 could be found money.
thanks,
Marc
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Yes, as far as I know, it's correct that she can claim on her own record and then switch to spousal when you file your own claim.
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06-17-2018, 10:45 PM
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#13
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Thinks s/he gets paid by the post
Join Date: Sep 2011
Location: Placerville
Posts: 1,788
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Just to clarify;
If spouse is eligable for their own benefit, they must take that. THEN they can apply for spouse's 50%. What they get is the difference between the two so that they still get their benefit plus the difference to make up to the 50% of their spouse's.
Think of it like a mortgage with the 1st the individual's SS benefit. The 2nd is the difference to bring it up to what ever 50% of their spouse's benefit is, IF it' indeed is a greater amount. It is how SS manages the dollars against the account.
If the spouse only applied for their spouses 50%, then the bucket of money that has been accruing from there life time earnings isn't being reconciled. I know it sounds confusing, but it's all about the book keeping, keeping the records of what a wage earner has built up against what they are drawing. First from their own account, then up to 50% of their spouses.
You aren't 'switching' to 50% of spousal benefits, you are applying for the difference between the two.
In fact; to keep the two buckets of funding separate, you will get two checks from SS; one from your own earnings and one from the difference up to 50% of the spouses earnings.
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06-18-2018, 02:24 AM
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#14
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Administrator
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,124
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Quote:
Originally Posted by skipro33
In fact; to keep the two buckets of funding separate, you will get two checks from SS; one from your own earnings and one from the difference up to 50% of the spouses earnings.
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Nice to know. That makes it all very obvious. Just about 3.5 years before I get to FRA, DW is 9 months younger than me so these threads are always of interest to me.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
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06-18-2018, 05:29 AM
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#15
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gone traveling
Join Date: Mar 2015
Posts: 3,508
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Quote:
Originally Posted by skipro33
In fact; to keep the two buckets of funding separate, you will get two checks from SS; one from your own earnings and one from the difference up to 50% of the spouses earnings.
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Is that true? I've never heard of anyone receiving two physical checks.
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06-18-2018, 05:48 AM
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#16
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Dryer sheet aficionado
Join Date: May 2013
Posts: 45
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Quote:
Originally Posted by cathy63
While you and your wife are both living and married to each other, she can only claim spousal benefits if you have already filed your own claim. If you are waiting until 2027, then that's the earliest date at which she can file a spousal claim. Everything she gets prior to that date has to be on her own record.
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Yes, this is the reason for the calculator's output in this case. Good explanation.
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06-18-2018, 05:51 AM
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#17
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Dryer sheet aficionado
Join Date: May 2013
Posts: 45
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Quote:
Originally Posted by W2R
I worked really hard planning my retirement! But I am not perfect and missed a few things regarding SS. I was just planning to take it at age 70, and hadn't thought beyond that.
Thank goodness I was posting on this forum. In 2013, some very intelligent members of the Early Retirement Forum suggested an SS plan for me that I hadn't even thought of or heard of. I adopted it enthusiastically and it has worked out beautifully.
Here's how it goes: In 2014, I reached age 66 (FRA) and took divorced spousal SS (which in many ways is similar to spousal SS). This was half of his SS, but did not affect him and he never knew about it. My own SS based on my employment continued to grow as if I hadn't taken divorced spousal SS. This wouldn't have been the case had I started divorced spousal before FRA. Anyway, this month I turned 70, and will switch over to my own SS which is larger by now. I received a Letter of Award this week that says in writing (for the first time) that I will be getting what I calculated I would get, to the dollar.
The thing is, in 2015 there was a law passed to close this loophole. I think that I, and some others up to a certain age, were grandfathered in. But anyway I would be cautious to get up-to-date information if trying this approach. This is why I didn't post in the present thread until now; I don't want to give anyone outdated advice, and I really don't know what the present law dictates.
In about 3-4 weeks, I'll get the first deposit based on my own SS. I'll see a "raise" of $555/month.
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This strategy of applying for spousal-only while allowing your own retirement benefit to grow is known as a "restricted application." It is still available to people who were at least age 62 as of 1/1/2016 (i.e., people born 1/1/1954 or earlier).
An analogous strategy is also still available to widow(er)s, regardless of DoB.
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06-18-2018, 06:17 AM
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#18
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Dryer sheet aficionado
Join Date: May 2013
Posts: 45
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Quote:
Originally Posted by joeea
I've never heard of anyone receiving two physical checks.
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In theory, if the checks are supposed to come from the same trust fund, they're supposed to be combined.
https://secure.ssa.gov/apps10/poms.nsf/lnx/0202401025
But people would get two separate checks in some cases. For instance:
*Spouse A is getting disability benefits (coming from DI trust fund)
*Spouse B is getting retirement benefits (coming from OASI trust fund) and a spousal benefit on Spouse A's work record (which comes from DI trust fund because it's based on a disability benefit).
In such a case Spouse B's two benefits would come as separate payments.
Also, it's certainly possible that benefits that are supposed to be combined might not actually get combined for whatever reason.
Quote:
Originally Posted by skipro33
You aren't 'switching' to 50% of spousal benefits, you are applying for the difference between the two.
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Just quoting this because I think it's an important point that many people misunderstand.
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06-18-2018, 06:32 AM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2007
Posts: 9,958
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Quote:
Originally Posted by Marc
Cathy, so the calculator is correct? My wife can claim on her own in 2020 and then switch to spousal benefits in 2027?
The $1000 bump starting in 2020 could be found money.
thanks,
Marc
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Just be sure you are using the correct number for the spousal benefit. It is 50% of your benefit at FRA not 50% of your benefit at 70. The number is frozen at your FRA. This number is your spousal benny alone. You get either your own benny or a spousal benny...the cap is the higher of the 2 benefits.
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06-18-2018, 06:45 AM
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#20
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Recycles dryer sheets
Join Date: Oct 2007
Location: Georgetown
Posts: 423
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Quote:
Originally Posted by ivinsfan
Just be sure you are using the correct number for the spousal benefit. It is 50% of your benefit at FRA not 50% of your benefit at 70. The number is frozen at your FRA. This number is your spousal benny alone. You get either your own benny or a spousal benny...the cap is the higher of the 2 benefits.
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Yes, I understand. As FRA is 66 and 6 months for me, the total when I turn 70 is:
100% + 28% +50% = 178% of FRA
Thanks to everyone on this forum!
Marc
__________________
"Adventure is just bad planning"
Roald Amundsen
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