Another SS Staff Story

[2017ish]

...
As to why the higher PIA would want to wait under your stated conditions, I guess they wouldn't need to. One might say that, if a couple were st\et-for-life with other income streams, neither would even have to claim SS at all. But maybe you could ask your DW why she is waiting? It would be interesting.

...

We don't have any other income stream, just portfolio.

If we get SS$, we expect to give it to hypothetical grandkids' education, as it isn't included in our planning yet (we are 57/56). But, planning (like you) for longevity. DW for 105. If the SS law doesn't change to prevent us from drawing, if our portfolio fares worse than any historical run in the US despite heavy international diversification, if/when she declines mentally, if our sons predecease her, or are otherwise unable to assist her monetarily, and if the US government continues to function, delaying SS to 70 provides her with a last ditch COLA'd revenue stream (at near the maximum SS amount) that would allow her to more than keep food on the table.

Putting it that way makes me sound like a member of the tin-foil hat brigade!

 

[fosterscik]

I don't see that statement anywhere in the SS Online document that I cut and pasted. In fact, it specifically says "workers basic amount"...

Is the statement you quote above in a document on the SS website? If so, could you tell me the document number? Thanks!

See: https://www.ssa.gov/OP_Home/handbook/handbook.04/handbook-0407.html

407.1
How Is The Widow(Er)'S Benefit Rate Computed?

The widow(er)'s insurance benefit rate equals 100 percent of the deceased worker's primary insurance amount plus any additional amount the deceased worker was entitled to because of delayed retirement credits. (See §720.)

 

[pacergal]

It's also an assertion allocation issue. SS is a COLA"d income stream. Those that already have a large COLA'd pension already have longevity insurance and may see less of an advantage in delaying SS than the rest of us.

This scenario is our household. Our pension covers our expenses. All of our calculations ran to age 100 to be safe. If the SHTF, our investments will provide more and our long term care plan if needed.

The SS calculators show about $200,000 difference between taking at 62 and 70 over our lifetime.
DH and I will get approx the same amount, and we are the same age, so we are frequently trying to decide when to take SS. We are leaning towards 62.

AM I missing something?

 

[Pilot2013]

See: https://www.ssa.gov/OP_Home/handbook/handbook.04/handbook-0407.html

Thanks for the info! More to think about now...

 

[H2ODude]

This thread for me was first alarming, then confusing, then in the end reassured me we were on right track. We're both 66, don't really need the SS, but both claimed on hers (the lower) and will claim on mine at 70. Well, the SS at 70 will all go to pay the taxes on the RMD's. Texas P's paragraph has been concerning me a lot:

"BTW, what you mention is actually more likely to happen after one spouse dies... the surviving spouse is now considered single and the tax brackets are reduced and the higher Medicare premiums kick in at a lower income... this has hit my oldest sister.... she was surprised that after she lost her husband she lost a check from SS AND she is now paying more income tax AND her Medicare premiums have increased..."

This is the reason I'm figuring just how much tax pain I can take now in Roth conversions to minimize these effects. The fact that the survivor will be paying at a single person rate alone makes it attractive to move more now.

 

[Pilot2013]

We're both 66, don't really need the SS, but both claimed on hers (the lower) and will claim on mine at 70.

Ok. This one is making me think now. So, can the lower earner start at 62, 63... whatever age, and then the higher earning spouse file on the lower spouses SS until they hit 70? If so, I have not put that in to my calculation.

 

[MissMolly]

Ok. This one is making me think now. So, can the lower earner start at 62, 63... whatever age, and then the higher earning spouse file on the lower spouses SS until they hit 70? If so, I have not put that in to my calculation.

If the higher earning spouse was born on or before Jan 1, 1954 and if they wait until their full retirement age (which is probably 66) then they can file for 50% spousal while allowing their own to grow until they are 70.

 

[Pilot2013]

If the higher earning spouse was born on or before Jan 1, 1954 and if they wait until their full retirement age (which is probably 66) then they can file for 50% spousal while allowing their own to grow until they are 70.

What if you were born after 1954?

 

[Bestwifeever]

What if you were born after 1954?

You should live longer than we will.

 

[MissMolly]

What if you were born after 1954?

Then you can't do it. For those born after Jan 1, 1954, whenever you file, you are "deemed' to be filing for all amounts you are eligible for and will be awarded the highest amount available to you. Which means you stop accruing credits.

 

[Koolau]

BTW, what you mention is actually more likely to happen after one spouse dies... the surviving spouse is now considered single and the tax brackets are reduced and the higher Medicare premiums kick in at a lower income... this has hit my oldest sister.... she was surprised that after she lost her husband she lost a check from SS AND she is now paying more income tax AND her Medicare premiums have increased...

Forgive me for hijacking a hijacked thread here: I've thought a lot about this lately (DW and I both turned 70 recently - that gets you thinking about your own mortality.) So here's my hijack: Texas Proud's sister's situation is something I am concerned about (which ever one of us dies first.) That's yet one more reason to "control" the amount of funds subject to RMDs. That's yet one more reason to keep income at a "manageable" level (assets are okay - the enemy is income ) when it comes to gotchas!

So even though we're 70, I'm still looking at converting more to Roths. I haven't figured it out yet, but in that triangulation, I want to include the fact that eventually we will no longer be a couple. One of us will be a single, at least most likely. (I realize we could both die in the same year, otherwise this is at least something to consider.)

Conversion to Roth in our case will not increase our tax rate (it's gonna be 25% unless everyone's rate is reduced.) So it almost doesn't matter when I take the income as long as it doesn't trigger one of the gotchas like increase MC cost or AMT, etc. Once one of us dies, the gotchas come sooner and more "evil" since it costs almost as much for a single to live as a couple - yet suddenly tax tables change, MC gotcha changes, etc., AND in our case pension drops from 100% to 25% if I go first. Heh, heh, that might actually help DW avoid the gotchas, but doesn't exactly help pay the HOA dues.

Well, as mentioned more than once, I'm thinking on all this and hope to decide what to do as soon as I get any indication of what tax changes might be coming.

Now returning you to our hijacked thread as YMMV.

 

[REWahoo]

Koolau, your hijack deserves its own thread as it is definitely a topic worth discussing. How about clicking that little red and white "report post" triangle and asking those nice mods if they will move it to a new thread for you?

 

[Pilot2013]

You should live longer than we will.

Not necessarily!

 

[Pilot2013]

Then you can't do it. For those born after Jan 1, 1954, whenever you file, you are "deemed' to be filing for all amounts you are eligible for and will be awarded the highest amount available to you. Which means you stop accruing credits.

Thanks. That's what I wondered.

 

[Independent]

Forgive me for hijacking a hijacked thread here: Once one of us dies, the gotchas come sooner and more "evil" since it costs almost as much for a single to live as a couple - yet suddenly tax tables change, MC gotcha changes, etc., AND in our case pension drops from 100% to 25% if I go first. Heh, heh, that might actually help DW avoid the gotchas, but doesn't exactly help pay the HOA dues.

I agree that topic is worth its own thread.

I'll mention that I started a thread with a poll regarding the bold some time ago. I'm one of the people who voted "it takes about 2/3 as much to support the survivor as the couple".

 

[racy]

How about "was planning on taking SS at age 70, but died at 69, and with my dying breath said "could have used the extra cash those last 7 years..."

If one needs the money (i.e. the "utility" as mentioned), then take it.

 

[mathjak107]

Show me an investment that is guaranteed to earn 8% return, over and above inflation, with no risk of principal loss or dips and I'll consider collecting at 62.

ss is not an 8% return . it is only an 8% growth rate .your actual return would be less the checks you are giving up , spousal benefits you are not getting and increases in medicare because you are not covered by hold harmless .

you also have to figure in the loss of gains on any extra money spent down delaying .

in short to see your first penny of roi takes 22-24 years comparing it to a balanced fund being spent down .

 

[mathjak107]

How about "was planning on taking SS at age 70, but died at 69, and with my dying breath said "could have used the extra cash those last 7 years..."

it certainly would be poor planning if you did not take the full draw amount including what ss would give you down the road ,day 1 .

it makes little sense waiting until 70 to take a raise .

most who delay just lay the extra money out that they will get from ss and once ss kicks in at 70 their draw falls off a cliff as a 69% bigger check takes the strain off of withdrawals .

if you don't have the assets to delay safely then you can't really afford to have a choice of delaying in my opinion .

delaying is only for those who have the choice without depriving themselves of the income they will eventually see .

you should be drawing your full amount day 1 of retirement . all that should change at 70 is the ratio of what makes up your income not the amount .

 

[Koolau]

Koolau, your hijack deserves its own thread as it is definitely a topic worth discussing. How about clicking that little red and white "report post" triangle and asking those nice mods if they will move it to a new thread for you?

No, I think I'm done hijacking. Agree the mods are nice, but I think I'll let someone else take the lead now. Aloha

 

[Independent]

Just an update on my experience with SS staff.

I got a letter on June 21 stating that they were going to start my benefit in July (first check in August). The letter included an amount. It was the amount I expected based on deferred retirement credits through age 70.

I got a second letter on July 5 stating they were going to start my benefit in July (first check in August). The letter included an amount. It was much less than the amount I was expecting. Not as low as my PIA, but quite a bit lower than the amount in the first letter.

So, I tried calling my local SS office. I got a different individual than I talked to earlier. He spent a little time on it and figured out that the second letter amount would have been correct if I had started three years ago when I turned 67. I should have caught that myself - I filed and suspended at 67, so that's a possible wrong number.

He put me on hold, spent time talking to somebody else, and came back and said someone had messed up and he got the ball rolling to correct it. But, it was very unlikely it would be fixed before my first check. Expect it to be wrong.

He warned me there was a possibility I'd get a very big payment - that would be the retroactive payment for the last three years if the system thinks that's what I had requested. Don't spend it if I get it.

Okay, I got that. Somehow, somebody put the right stuff in the computer, then later somebody put the wrong stuff in the computer. I'll see how this plays out.

-----

Going a little further, my guy on the phone warned me that my checks in 2017 would be a little lower than I might expect because I would not get credit for the Deferred Retirement Credits I earned in 2017 until the system recalculated benefits at the beginning of 2018. But, I'd get a retroactive payment when that recalculation occurred.

I think my first letter said the opposite. It had two numbers, one without the 2017 DRCs, the other with. It seemed to say I would get the higher number starting in August.

I told him I thought the rule he was using only worked for people who started benefit before age 70, those who deferred all the way started with the correct number. And, there wouldn't be a retroactive benefit in that case (earlier thread on this). He said he wasn't really sure, he has seen so few people wait to 70 that he doesn't have a lot of experience with this.

That wasn't terribly reassuring in terms of getting my first problem resolved.

I'll update this thread again, hopefully with "it finally worked right".

 

[Blue Collar Guy]

Just an update on my experience with SS staff.

I got a letter on June 21 stating that they were going to start my benefit in July (first check in August). The letter included an amount. It was the amount I expected based on deferred retirement credits through age 70.

I got a second letter on July 5 stating they were going to start my benefit in July (first check in August). The letter included an amount. It was much less than the amount I was expecting. Not as low as my PIA, but quite a bit lower than the amount in the first letter.

So, I tried calling my local SS office. I got a different individual than I talked to earlier. He spent a little time on it and figured out that the second letter amount would have been correct if I had started three years ago when I turned 67. I should have caught that myself - I filed and suspended at 67, so that's a possible wrong number.

He put me on hold, spent time talking to somebody else, and came back and said someone had messed up and he got the ball rolling to correct it. But, it was very unlikely it would be fixed before my first check. Expect it to be wrong.

He warned me there was a possibility I'd get a very big payment - that would be the retroactive payment for the last three years if the system thinks that's what I had requested. Don't spend it if I get it.

Okay, I got that. Somehow, somebody put the right stuff in the computer, then later somebody put the wrong stuff in the computer. I'll see how this plays out.

-----

Going a little further, my guy on the phone warned me that my checks in 2017 would be a little lower than I might expect because I would not get credit for the Deferred Retirement Credits I earned in 2017 until the system recalculated benefits at the beginning of 2018. But, I'd get a retroactive payment when that recalculation occurred.

I think my first letter said the opposite. It had two numbers, one without the 2017 DRCs, the other with. It seemed to say I would get the higher number starting in August.

I told him I thought the rule he was using only worked for people who started benefit before age 70, those who deferred all the way started with the correct number. And, there wouldn't be a retroactive benefit in that case (earlier thread on this). He said he wasn't really sure, he has seen so few people wait to 70 that he doesn't have a lot of experience with this.

That wasn't terribly reassuring in terms of getting my first problem resolved.

I'll update this thread again, hopefully with "it finally worked right".

Yeah, Im real comfortable about the whole thing now. seems only 2 % of men wait till they are 70 to collect.https://www.fool.com/retirement/gen...the-average-american-start-collecting-so.aspx

 

[H2ODude]

Not sure about that presentation of data. Yeah, I started at 66 when DW reached FRA, but meanwhile my considerably higher is waiting til I turn 70. So I'd guess the chart would say I took it at 66 (true) but I also am waiting to draw on my amount till 70 (true). I'm sure there are a lot of other two income couples with disparate income histories that are doing the same.