New book about SS: "Get What's Yours"

[Bestwifeever]

It's not funny -- it's reality. My plan is age 70 at which payment would be 3,551 a month based on the current law but could change if the law changes or the health of SS deteriorates.

"Ironic" was the word I should have used vs "funny" (which I intended as ironic, not hah hah).

 

[mathjak107]

I agree with Spanky- it's sad reality. Many people are planning on retiring with SS only, or SS plus small savings, so they start SS at age 62 to make the savings last.





That thought has occurred to me; I retired last year and turned 62 last month. No intention to file for SS till age 70. I've been through crappy markets and would really have to do some analyses to figure out whether it would make sense to file for SS before that in the event of a crash. Is liquidating under 4% of your portfolio for a few years in a down market something to be avoided by taking SS early? Is the reduction in SS for the rest of your life worth what you'll gain when your investments recover? I'd try to model something based on the last financial crisis ups and downs.

it may be worth taking it early in that case. just figuring the money you are giving up in the equation while waiting without even figuring in the fact you will be spending down equities may make the difference hardly worth waiting for .

the ole ss increases by 8% a year never figures the checks you are not getting or the gains you are giving up with your portfolio at max levels as part of it.

you also are not exempt from medicare increase that exceed the amount of ss increase as would be the case if you are collecting. .

assuming even age 85 all you need to beat is about 4% returns .

 

[eytonxav]

if your wife takes it at 62 she can never really switch to a spousal.

what she gets is a bump up in her own when you file.

it will work out to less than 1/2 your full since her early benefit is used as a base.

basically they take 1/2 your full and subtract her full had she waited. the difference is added to her own benefit.

spousal benefits for those with their own work records are only a fra thing.

Right, thats why I used the term bumping in my post, as she would apply for her spousal at FRA which in essence bumps her benefit. What would be costly would be applying for both her own and spousal at 62 which is a mistake that some may make.

 

[mathjak107]

there is no choice of spousal at 62 . you have no option to do that unless you have no work record of your own . so i am not sure what you mean ?

she only gets the boost up when you file for yours . it is automatic for a spouse i believe once you file. i don't believe she has to file for the bump , it just happens automatically i think .

 

[Bestwifeever]

Right, thats why I used the term bumping in my post, as she would apply for her spousal at FRA which in essence bumps her benefit. What would be costly would be applying for both her own and spousal at 62 which is a mistake that some may make.

Pretty sure if she files at 62 she is locked in and cannot reapply later--Kotlikoff's discussion here: Social Security Q&A: After Filing Early, Can I Switch to Spousal Benefits at 66? - Forbes

Your situation seems to be similar to the "Larry and Pat" scenario at this link: Kiplinger & Social Security Solutions

 

[mathjak107]

correct she can never get a true spousal. she always is stuck with her own once she files at 62 . she justs gets a bit added to it if 1/2 the husbands is more but it isn't a spousal benefit nor will she get 1/2 the husbands amount . it will be less added to her own.. .

 

[samclem]

the ole ss increases by 8% a year never figures the checks you are not getting or the gains you are giving up with your portfolio at max levels as part of it.

The "how do I get the most dollars--in theory?" approach doesn't answer the question of greatest importance to me (and many retirees of all income levels): "Which approach results in the highest monthly government-backed, inflation-adjusted annuity that I cannot outlive?"

 

[eytonxav]

there is no choice of spousal at 62 . you have no option to do that unless you have no work record of your own . so i am not sure what you mean ?

she only gets the boost up when you file for yours . it is automatic for a spouse i believe once you file. i don't believe she has to file for the bump , it just happens automatically i think .

Assuming I file first at my FRA, I erroneously thought my DW could file at 62 and then file for an adjustment once she turns 66 to something less than 1/2 of mine. Any how, for our situation we still need to compare her filing for benefits at 62 vs at her FRA and see what the break even would be for her filing early if she gets a positive spousal adjustment immediately at 62. I need to plug our situation into one of the software apps and see when the breakeven would occur and actually read that book

 

[prudent_one]

Curious to know if the pay software suggests a different optimum claiming strategy than the one at bedrockcapital.com

 

[ejman]

Does the author mention what the impact on these strategies will be when benefits are reduced by 25% in the next 15 or so years?

 

[mathjak107]

Assuming I file first at my FRA, I erroneously thought my DW could file at 62 and then file for an adjustment once she turns 66 to something less than 1/2 of mine. Any how, for our situation we still need to compare her filing for benefits at 62 vs at her FRA and see what the break even would be for her filing early if she gets a positive spousal adjustment immediately at 62. I need to plug our situation into one of the software apps and see when the breakeven would occur and actually read that book

to see what she gets as an early benefit if you file just take 1/2 your full , subtract what her full would have been if she didn't file early and add that difference to her early benefit.

that is what she gets if she files early and then gets the kicker added when you file.

 

[LRDave]

Will she file for benefits at age 70?

She files for spousal benefits at the same time I file for my benefits. I will be 70 she will be 68.

 

[LRDave]

Does your DW have 40 quarters of social security earnings herself (I am assuming she must to be able to file for benefits at 64).

I ask because a dear friend who is a retired teacher with a WEP/GPO pension just told me yesterday that she is four quarters shy of qualifying for social security, which for her would be minimal (the 36 quarters she has are from long ago jobs) but might qualify her for spousal and survivor benefits against her DH's SS, which she doesn't think she is entitled to right now. She asked if I thought she go back to work for a year in some random job to get the quarters. I didn't give her an opinion but it sounds like she should?

She has 8 years as a full-time salaried employee with significant SS contributions and then 5 other years with part-time employment. I assume that if the part-time work was spread out over a full year, she would get credit for those quarters too. (?)

 

[eytonxav]

to see what she gets as an early benefit if you file just take 1/2 your full , subtract what her full would have been if she didn't file early and add that difference to her early benefit.

that is what she gets if she files early and then gets the kicker added when you file.

Thanks, I need to run the numbers and go through one of the software solutions. Perhaps for us, the better strategy will be having DW file for a restricted spousal at her full retirement age (I will have already claimed mine), and letting her own grow and taking it at 70.

 

[Kimo]

I'm not sure how they can make a whole book out of this subject. There is one review on Amazon's site (favorable) and this pretty much sums up the contents of the book:





The excerpt from the back cover blurb goes on about how few Americans can actually afford to wait till age 70, which is preaching to the choir here. The book probably is useful for special situations such as benefits for dependent children, disability, etc. but a review of the many threads here would probably serve the needs of most of us.

I am familiar with the file and suspend strategy but we are just over 10 years apart in age, will I be able to still take advantage of this?
Thanks

 

[mathjak107]

well she has to be at least 62 and then you can file and suspend but it would be silly since you will be 72 and have gotten no benefit from waiting and not filling at 70

 

[Kimo]

well she has to be at least 62 and then you can file and suspend but it would be silly since you will be 72 and have gotten no benefit from waiting and not filling at 70

Kind of what I thought but I never confirmed it, thank you very much! I believe with our age difference there are no strategies available to use regarding the two of us.

There are still are basic strategies for either one of us as an individual. Thanks again!

 

[MildlyEccentric]

I would not have guessed the optimum strategy:

DW files for benefits in Dec. of the year she turns 64.
I file for spousal benefits in that same Dec. after reaching FRA.
I file for my benefits the month I turn 70.
DW files for spousal benefits the same month.

Typical ages are when claimant or spouse turn 62, FRA or 70. I find the strategies which involve claiming at atypical ages can be driven by the assumptions about life expectancies. Did the recommendation assume conservative life expectancy numbers (e.g., 100/100) or did it employ some actuarial based methodology.

 

[Philliefan33]

Kind of what I thought but I never confirmed it, thank you very much! I believe with our age difference there are no strategies available to use regarding the two

That's the conclusion I am coming to also. DH is 11 years older than me, and I can't figure out any "file and suspend" strategy that works with an age difference that large. To make it more confusing for us, DH is affected by WEP/ GPO. does any of the software being discussed account for the WEP/GPO ?

 

[Kimo]

That's the conclusion I am coming to also. DH is 11 years older than me, and I can't figure out any "file and suspend" strategy that works with an age difference that large. To make it more confusing for us, DH is affected by WEP/ GPO. does any of the software being discussed account for the WEP/GPO ?

I haven't found anything that works with the 10 year gap, I am not saying there isn't something out there but I have looked quite a bit......

 

[target2019]

Curious to know if the pay software suggests a different optimum claiming strategy than the one at bedrockcapital.com

I stumbled upon the bedrockcapital calculator yesterday. If anyone has done comparisons or used the calculator, I'd be interested in what you found.

For us it chose the restricted application option as recommended solution.

 

[H2ODude]

A little off topic, but since we have a good number of SS educated folks following this, I have SS question. I am subject to a small nip in benefits because of the pension windfall thing. Does the annual statement of benefits that you receive or the calculator from the SS.gov site include these reductions or are they arrived at at the time you file for benefits? I've assumed they are already baked in. Not a big deal but it would make a difference.

 

[pb4uski]

I stumbled upon the bedrockcapital calculator yesterday. If anyone has done comparisons or used the calculator, I'd be interested in what you found.

For us it chose the restricted application option as recommended solution.

I just ran it this morning. It confirmed our plan to have DW file for her own benefits at her FRA, to have me (the higher earner but about a year younger) file and suspend at my FRA and for DW to apply for spousal benefits at my FRA and then for me to begin collecting benefits at age 70.

 

[Tadpole]

A little off topic, but since we have a good number of SS educated folks following this, I have SS question. I am subject to a small nip in benefits because of the pension windfall thing. Does the annual statement of benefits that you receive or the calculator from the SS.gov site include these reductions or are they arrived at at the time you file for benefits? I've assumed they are already baked in. Not a big deal but it would make a difference.

Your annual statement should have a section like this:
http://www.ssa.gov/myaccount/SSA-7005-OL.pdf

We can’t provide your actual benefit amount until you
apply for benefits. And that amount may differ from the
estimates stated above because:
(1) Your earnings may increase or decrease in the future.
(2) After you start receiving benefits, they will be adjusted
for cost-of-living increases.
(3) Your estimated benefits are based on current law. The
law governing benefit amounts may change.
(4) Your benefit amount may be affected by military
service, railroad employment or pensions earned
through work on which you did not pay Social
Security tax. Visit www.socialsecurity.gov to
learn more.

Number (4) says that the effect of WEP is calculated at the time of your application for benefits.

 

[H2ODude]

Thanks Tadpole. It's sort of a complicated case and I've not found any definitive answers, and am reluctant to raise it with SS. I worked for one local government for 15 years; paid into pension plan and SS was not withheld. When left, pulled all my contributions out (with no interest paid, thanks). Worked several jobs then found myself back in public sector once again, for 15 years. This last one we had SS (woohoo, got my credits). It also allowed me to buy up to 10 years time if had worked in other government service for which I would receive no benefit. That would be me, since I had no benefit from government 1 (where no SS was taken). So I bought 10 years with after tax dollars, allowing me to bail with 25 years at 60.

So it's sort of a mystery to me if the pension of government 2, in which I paid 15 years of SS, yet is paying out based on 25 years service (10 of which was not SS elsewhere) would click the radar for the penalty. Guess I'll just have to wait a few more years and find out.