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Social Security timing for couples
Old 05-24-2018, 01:53 PM   #1
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Social Security timing for couples

Hi all and thanks for all the past help. I've a new question. Actually, I just want to be sure I understand SS rules as they apply to my and DW's situation. So, here goes;
I am turning 62 in October of this year, 2018. DW will be 62 in February of next year, 2019. I've paid max SS for over the past 30 years, probably more. DW has only worked part time occasionally and has very little in SS. I WAS planning to take SS at 62, earliest possible time, then delaying DW's SS until her FRA. My understanding is that DW will get 50% of what my FRA would have been if I had delayed taking my SS until FRA. In my case, I'll get just over $2,000 a month at age 62, then when DW is 66 and 4 months, she'll get 50% of my FRA ($2,755) which will be $1,377.

However, reading on SS website, There may be a way to capture more SS. The site says that my DW could claim her own, much smaller SS at 62 and then bump up to 50% of my FRA when she reaches her FRA. SS calculates the original early SS and then supplements that to make up the difference to 50% of my FRA. However, reading further, SS states that this won't work if I take SS first at age 62 because of a 'deeming' provision. Deeming refers to SS deeming that DW is taking the highest benefit she is eligible for. If I'm already taking SS, then SS deems DW will be taking the highest she's available for if she applies at 62 herself, a few months later.

What I am thinking is; If I hold off my early SS until after she starts taking her own SS at her earliest date of 62, and then shortly after I start taking my early SS, (age 62 plus 5 months after DW has already started her SS), then she can draw on her SS benefits at age 62 then bump up to 50% of my FRA SS when she reaches FRA.

The difference between my first scenario and my revised scenario is
1. I take SS at 62 and DW takes SS at FRA with 50% of my FRA.
2. I delay SS until 62 +5 months, when DW starts her own SS at 62, taking in about $600 a month until she reaches FRA and can step up to 50% of my FRA.

The difference between her bringing in $600 a month for 52 months (difference between age 62 and her FRA) and my delaying my own early SS by 5 months is about $20,000 over our lifetime, captured at the beginning of SS benefit draws.

Do I understand our options on when to take SS early correctly?

Thanks!
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Old 05-24-2018, 02:00 PM   #2
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Its complicated! If she take SS before FRA she will not get the full 50% of your amount at her FRA. She only get 50% if she waits until her FRA.
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Old 05-24-2018, 03:03 PM   #3
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She will get a portion of your full retirement benefit up to 50% if she waits until her FRA to claim it. She can't claim her own first, as it will trigger her claiming spousal benefits also as long as you have claimed yours.

If she claims her spousal benefit at her age 62, she will get around 33-35% of your full retirement benefit. When you claim will not affect her spousal benefit, other than you have to be getting your benefit for her to claim spousal.

I know you didn't ask, but I would consider waiting to FRA to claim if possible unless there are health concerns or you have to have the benefit to retire.

Plan 2 above will not work- she will be deemed claiming both her benefit and spousal when she claims.

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Old 05-24-2018, 03:04 PM   #4
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Have you considered paying for a subscription to a Social Security maximizer site?

https://www.caniretireyet.com/compar...y-calculators/

Our fee only adviser subscribes to both, and they gave us essentially the same result.
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Old 05-24-2018, 03:12 PM   #5
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In addition to what homestead said, if you claim your retirement benefit before your FRA, your DW's spousal benefit will be permanently reduced. The maximum spousal benefit is 50% of your retirement benefit that you will receive if you wait until your FRA to claim it and your DW waits until her FRA to claim the spousal benefit. If you claim your retirement benefit earlier than your FRA, the spousal benefit will be reduced as well.

This is explained here: https://www.ssa.gov/planners/retire/applying6.html
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Old 05-24-2018, 03:21 PM   #6
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Originally Posted by VanWinkle View Post
If she claims her spousal benefit at her age 62, she will get around 33-35% of your full retirement benefit. When you claim will not affect her spousal benefit, other than you have to be getting your benefit for her to claim spousal.

I know you didn't ask, but I would consider waiting to FRA to claim if possible unless there are health concerns or you have to have the benefit to retire.

VW


As an example, if OP's FRA is 67 and he claims his retirement benefits at 62, yes, that definitely does affect OP's DW's spousal benefit, permanently reducing it, much the same as survivor's benefits are permanently reduced if the higher-earner claimed retirement benefits before FRA or 70.

Agree with your second part, for reasons of maximizing potential survivor's benefits down the road.
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Old 05-24-2018, 03:23 PM   #7
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Quote:
Originally Posted by gwraigty View Post
In addition to what homestead said, if you claim your retirement benefit before your FRA, your DW's spousal benefit will be permanently reduced. The maximum spousal benefit is 50% of your retirement benefit that you will receive if you wait until your FRA to claim it and your DW waits until her FRA to claim the spousal benefit. If you claim your retirement benefit earlier than your FRA, the spousal benefit will be reduced as well.

This is explained here: https://www.ssa.gov/planners/retire/applying6.html
The spouse's 50% is not reduced unless the spouse claims before his/her full retirement age. It does not matter when the primary benefit is claimed other than reducing the primaries benefit. The spouse can still get 50% of the full retirement benefit if she/he waits til FRA.
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Old 05-24-2018, 03:27 PM   #8
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If he claims at 62, and she waits til her full retirement age to claim her spousal benefit, she will get 50% of his FRA benefit even if he claimed it early. She is only penalized if she claims it before her full retirement age.
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Old 05-24-2018, 03:35 PM   #9
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https://www.ssa.gov/OACT/quickcalc/spouse.html

This calculator will show the amount the spouse will receive depending on when she/he claims the spousal benefits.
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Old 05-24-2018, 03:44 PM   #10
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Originally Posted by skipro33 View Post
I am turning 62 in October of this year, 2018. DW will be 62 in February of next year, 2019. I've paid max SS for over the past 30 years, probably more. DW has only worked part time occasionally and has very little in SS. I WAS planning to take SS at 62, earliest possible time, then delaying DW's SS until her FRA.
Why start at the earliest possible date?

If you have a significantly higher benefit, and you don't need the benefits immediately, and you believe your wife will live longer than you - then you should seriously consider delaying your benefits until age 70. You will receive 132% of your FRA amount for the rest of your life. And as a survivor, your wife will then receive that high amount for the rest of her life.

Even if you don't want to wait until 70, there are several other filing strategies that would almost certainly be better than starting at 62.

I strongly recommend spending $40 to explore all the possibilities using https://maximizemysocialsecurity.com/. I believe it's the best SS website I've tried.

The subscription will tell you your optimal strategy and let you explore others for a full year. Well worth the money, IMHO.
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Old 05-24-2018, 03:55 PM   #11
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Quote:
Originally Posted by gwraigty View Post


As an example, if OP's FRA is 67 and he claims his retirement benefits at 62, yes, that definitely does affect OP's DW's spousal benefit, permanently reducing it, much the same as survivor's benefits are permanently reduced if the higher-earner claimed retirement benefits before FRA or 70.

Agree with your second part, for reasons of maximizing potential survivor's benefits down the road.
Don't mix spousal and survivor.. they are not one and the same. Your first sentence is inaccurate.
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Old 05-24-2018, 03:56 PM   #12
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skipro --

I think the question you need answered is will SSA automatically reevaluate your wife's existing benefit when you claim on your own record after she has already claimed on hers? If yes, then your plan doesn't really work.
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Old 05-24-2018, 03:58 PM   #13
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VanWinkle, I guess I must stand corrected! I haven't found anything to refute what you say.

OP, please disregard my misinformation.
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Old 05-24-2018, 04:02 PM   #14
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Don't mix spousal and survivor.. they are not one and the same. Your first sentence is inaccurate.
I wasn't mixing them up. I understand the difference. I genuinely thought that spousal benefits were reduced if the primary benefit amount was reduced, much as survivor benefits are reduced.

As I'm going to be 55 next week, nowhere near being able to claim yet, can I plead "youthful" ignorance?
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Old 05-24-2018, 04:03 PM   #15
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SS has been hashed over and over and over again here. I see benefits taking early and waiting. Take it early spend it and keep your investments earning. Don't take it and spend your investments and get a bigger check later in life. I can take it early invest it and spend my money I had for retirement. I can wait and die or get a bigger check which I don't need any way especially when I am older.

There was a poll not to long ago with different questions about if you need SS for living. If I remember right there was a large % that said they don't need it and could do fine with out SS. If that is the case why not take it early spend it give it to charity or invest it for a legacy for your choice.

A lot of ways to cut the pie and each situation is different. I'm going to most likely take it early and spend and charity the rest.
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Old 05-24-2018, 04:10 PM   #16
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If I remember right there was a large % that said they don't need it and could do fine with out SS. If that is the case why not take it early spend it give it to charity or invest it for a legacy for your choice.
Because in most cases, they would end up with more (for charity or for a legacy) over their lifetime by waiting until FRA or 70 before starting their benefits.

Once you estimate your lifespan, the rest is just math.
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Old 05-24-2018, 04:31 PM   #17
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Originally Posted by gwraigty View Post
I wasn't mixing them up. I understand the difference. I genuinely thought that spousal benefits were reduced if the primary benefit amount was reduced, much as survivor benefits are reduced.

As I'm going to be 55 next week, nowhere near being able to claim yet, can I plead "youthful" ignorance?
It's ok, I have been wrong many times before. Just keep reading and it will help reduce the inaccuracy.

Best to you,

VW
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Old 05-24-2018, 06:56 PM   #18
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The reason I was considering taking SS at 62 is because FireCalc shows, along with my FA, that if I don't touch my IRA, (I live O.K. on just my pension) until RMD at 70 1/2, I end up with a bigger pile by the end of my life. So basically, I won't have to touch my IRA for the next almost 10 years, using SS instead to supliment my pension for the 'fun' stuff.



The question is, though, about 'deeming';

https://www.kiplinger.com/article/re...l-advisor.html


Say John applies for his benefit first. Then Mary applies for her own benefit before her full retirement age, intending to delay taking the higher spousal benefit. Not possible, says the Social Security Administration. It automatically "deems" her as taking the highest benefit she's eligible for -- in this case, the spousal benefit.
To get around the deeming provision, the lower earner should apply for her retirement benefit before the higher earner applies for his. The Social Security Administration will not automatically switch her to the spousal benefit once she is eligible; the wife will have to file an application for the spousal benefit, Blair says.
Having the lower earner file early could make sense for couples who want to bring in some money while the higher earner delays.


The second part of my question is; does DW get 50% of what my FRA would have been if she waits until her FRA even though I start taking SS at 62? I believe so, but SS website doesn't do spousal benefits on any of it's calculators.


I'll sign up for the recommended site mentioned here though, and I'll make an appointment with SS to discuss the implications of my options.
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Old 05-24-2018, 07:59 PM   #19
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Originally Posted by skipro33 View Post
The reason I was considering taking SS at 62 is because FireCalc shows, along with my FA, that if I don't touch my IRA, (I live O.K. on just my pension) until RMD at 70 1/2, I end up with a bigger pile by the end of my life. So basically, I won't have to touch my IRA for the next almost 10 years, using SS instead to supliment my pension for the 'fun' stuff.



The question is, though, about 'deeming';

https://www.kiplinger.com/article/re...l-advisor.html


Say John applies for his benefit first. Then Mary applies for her own benefit before her full retirement age, intending to delay taking the higher spousal benefit. Not possible, says the Social Security Administration. It automatically "deems" her as taking the highest benefit she's eligible for -- in this case, the spousal benefit.
To get around the deeming provision, the lower earner should apply for her retirement benefit before the higher earner applies for his. The Social Security Administration will not automatically switch her to the spousal benefit once she is eligible; the wife will have to file an application for the spousal benefit, Blair says.
Having the lower earner file early could make sense for couples who want to bring in some money while the higher earner delays.


The second part of my question is; does DW get 50% of what my FRA would have been if she waits until her FRA even though I start taking SS at 62? I believe so, but SS website doesn't do spousal benefits on any of it's calculators.


I'll sign up for the recommended site mentioned here though, and I'll make an appointment with SS to discuss the implications of my options.
The answer is yes she will receive 50% of your Primary retirement amount(FRA) if she waits to her FRA to claim it. It won't matter if you claimed early!!

There is a link above in one of my posts to figure out what percentage she gets at 62, 63, 64, 65, 66, 67..... It does not increase after her full retirement age- 50% is the most she can get. She does not get more than her spousal benefit even if collecting her own at FRA(assuming hers is lower than the spousal benefit.
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Old 05-24-2018, 08:00 PM   #20
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Originally Posted by skipro33 View Post
The reason I was considering taking SS at 62 is because FireCalc shows, along with my FA, that if I don't touch my IRA, (I live O.K. on just my pension) until RMD at 70 1/2, I end up with a bigger pile by the end of my life. So basically, I won't have to touch my IRA for the next almost 10 years, using SS instead to supliment my pension for the 'fun' stuff.



The question is, though, about 'deeming';

https://www.kiplinger.com/article/re...l-advisor.html


Say John applies for his benefit first. Then Mary applies for her own benefit before her full retirement age, intending to delay taking the higher spousal benefit. Not possible, says the Social Security Administration. It automatically "deems" her as taking the highest benefit she's eligible for -- in this case, the spousal benefit.
To get around the deeming provision, the lower earner should apply for her retirement benefit before the higher earner applies for his. The Social Security Administration will not automatically switch her to the spousal benefit once she is eligible; the wife will have to file an application for the spousal benefit, Blair says.
Having the lower earner file early could make sense for couples who want to bring in some money while the higher earner delays.


The second part of my question is; does DW get 50% of what my FRA would have been if she waits until her FRA even though I start taking SS at 62? I believe so, but SS website doesn't do spousal benefits on any of it's calculators.


I'll sign up for the recommended site mentioned here though, and I'll make an appointment with SS to discuss the implications of my options.
You need a second opinion on when to file for yours to make sure it is the right decision.
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