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Old 05-27-2016, 08:28 AM   #41
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Originally Posted by DFW_M5 View Post
Why do you think you can't file at 66 (your FRA) for 1/2 of your DH's who is older and already receiving SS, and then claim your own at 70. Unless I had a brain dump which is entirely possible, that option is still available.
She noted that she's 61. That option was retained only for people who were 62 by year-end 2015. Fortunately, I made it in under the wire (turned 62 in 2014), so will be applying for a Restricted Spousal benefit at age 66, after carefully verifying that the law will still allow me to collect my own at 70.
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Old 05-27-2016, 08:28 AM   #42
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Please don't sign up for survivor benefit plan. A term policy is much cheaper. Not to mention statistically you will out live him. SSB is not cost effective IMHO. Run your numbers. See what you think.
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Old 05-27-2016, 08:33 AM   #43
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Originally Posted by Looking4Ward View Post
If I'm not spending SS dollars from the ages of 62 to 70, then I'm spending my own. And if I'm spending my own, those are dollars that are no longer invested. I'm not exactly sure what sort of amortized return I could expect on those invested dollars over the 8 year period but it does factor into the equation.

Of course, we must keep in mind that any plan needs to evaluated from time to time. One can choose to turn on the SS spigot anytime from age 62 onwards. It's not an age 62 or wait to 70 decision.

Here's a radical thought: Compromise and turn on SS at one's full retirement age, thus getting a bigger SS check for the remainder of life, and preserving capital that would have otherwise been spent waiting until 70. I may yet do this.
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Old 05-27-2016, 09:00 AM   #44
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Originally Posted by athena53 View Post
She noted that she's 61. That option was retained only for people who were 62 by year-end 2015. Fortunately, I made it in under the wire (turned 62 in 2014), so will be applying for a Restricted Spousal benefit at age 66, after carefully verifying that the law will still allow me to collect my own at 70.
Yes, but what she described is not the file and suspend scenario. The following describes file and suspend which I believe is the loophole that was closed:

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Under current rules, the older spouse can claim benefits at age 66, the current full retirement age, and immediately suspend them. That allows the younger spouse (as long as she or he is above age 62) to claim spousal benefits and defer his or her own claim. When the older spouse reaches 70, he or she will be able to start claiming benefits that will have grown to the maximum amount, and the younger spouse can collect either his or her own benefit or a spousal benefit, whichever is larger.
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Old 05-27-2016, 09:30 AM   #45
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Yes, but what she described is not the file and suspend scenario. The following describes file and suspend which I believe is the loophole that was closed:
No, pretty sure both file-and-suspend and restricting benefits options are gone for people KM's age and younger: https://www.fidelity.com/viewpoints/...security-rules
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Old 05-27-2016, 10:03 AM   #46
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No, pretty sure both file-and-suspend and restricting benefits options are gone for people KM's age and younger: https://www.fidelity.com/viewpoints/...security-rules
Ouch, I erroneously thought this elimination only applied to the scenario of claiming a spousal from a spouse who had filed and suspended their SS. Looks like my DW will also end up having to take half mine or her own since she will turn 62 in July.



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If you were planning to delay your own benefit and claim only spousal benefits instead—you may do so from your full retirement age until age 70 only if you are at least 62 years old in 2015. If you turn 62 in 2016 or later, this strategy will no longer be available for you.
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Old 05-27-2016, 10:34 AM   #47
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Another good point is quality of life - money at 63 often can be enjoyed a lot more than money at 70 and beyond.
That's why I'm taking early CPP (Canada) at 60 rather than wait until 65. If I outlive the break even point, then I'll be happy to have been "wrong". I retired early at 53 for a reason...so I could enjoy life now instead of when I'm 75.
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Old 05-27-2016, 10:38 AM   #48
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This subject has come up every so often.

When I ran FIRECalc with my savings and SS, I found that what I can spend varies less than 1%, whether I take SS at 62, FRA, or 70. This is for a 30-year run. YMMV.
Glad it comes around. It's a handy emetic.
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Old 05-27-2016, 10:40 AM   #49
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Please don't sign up for survivor benefit plan. A term policy is much cheaper. Not to mention statistically you will out live him. SSB is not cost effective IMHO.
I strongly disagree. Whether you take the military Survivor's Benefit Plan is a complicated decision. Much depends on how important the pension money would be to the survivor, relative age and health of both of you, etc. I >did< run the numbers, and in our situation no term life insurance policy could come close to matching the benefits offered through the SBP. In any comparison, don't forget to include the "wild cards" of unknown future inflation rate (covered by SBP) and the rate of return you'd earn on any payout from a term life insurance policy. Not even close in our case, once we included realistic assumptions for all the unknowns/unknowables.
At the >very< least, know that the first small part of the SBP benefit (about $300/mo to the survivor) is highly subsidized by the government, costs less than $20/mo, and nearly every military retiree (spouse) should take that.
Don't let a sharpie insurance salesman, annuity salesman (same thing), or barracks accountant talk you out of the SBP. It's not a "slam dunk" either way, but in some (most?) situations it is clearly the best course of action. I'm happy we signed up for it.
See lots more here and in other places on this forum. Also, if you are a "numbers person" want to use some calculators that will show you the amount of subsidies you'd get through the SBP, I highly recommend the DoD's "Office of the Actuary" site (here) and especialy the two spreadsheet downloads (SBP subsidies) and (SBP: Comparison to Life Insurance costs). This is a big decision, be careful.
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Old 05-27-2016, 11:28 AM   #50
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Yes this is our point..my own money upon my death can be given to our adult children but SS cannot..so why not spend that down and save your own until you have to take distribution?
Works perfectly if you die early.... but is suboptimal (less to your kids) if you live long. Pick your poison.
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Old 05-27-2016, 11:33 AM   #51
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Wouldn't it make the most sense for the person most likely to live the longest to delay, which I think would normally be the female spouse if both are healthy or the healthiest of the two otherwise?
No because the lower earning spouse received the SS that was received by the higher earning spouse if the higher earning spouse dies. So if as the higher earnings spouse I wait until 70 then we collect my benefit until both of us die.... based on joint mortality there is a 50% chance that one or the other of us will live to be 94 so that is well past the breakeven point which is usually in the low to mid 80s.
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Old 05-27-2016, 12:22 PM   #52
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Originally Posted by DFW_M5 View Post
Ouch, I erroneously thought this elimination only applied to the scenario of claiming a spousal from a spouse who had filed and suspended their SS. Looks like my DW will also end up having to take half mine or her own since she will turn 62 in July.
If her own will be more than half of yours she will have to take her own. That is the point I was making. I had been thinking about taking spousal at 66 (FRA) for me and letting mine grow to 70. But, I was 61 at the end of 2015 and that option is not open to me. Actually my full FRA SS is slightly higher than DH's would have been (he took his early as we had 2 minor children who received benefits by him doing that).

So I will probably take it in early 2017.

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Money is money. If you want more money early, taking SS early is not the only way. You can take more out of your retirement account, knowing that you have a larger SS check coming.
But...that is the point. You don't know you have a larger SS check coming. Sure, you likely have a larger SS check coming but it may not grow as much as you thought it would grow because there could be legal changes to the program that reduce future benefits. I am not fond of the idea of taking more money out of my retirement account because I assume that there will be no future reductions to benefits.
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Old 05-27-2016, 12:27 PM   #53
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Originally Posted by NW-Bound View Post
This subject has come up every so often.

When I ran FIRECalc with my savings and SS, I found that what I can spend varies less than 1%, whether I take SS at 62, FRA, or 70. This is for a 30-year run. YMMV.
I noticed this exact same thing. And when I ran it, the difference in how much was left (on average) at the end of 30 years varied a bit - roughly 4% less if I wait until 70 instead of 62 for SS.
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Old 05-27-2016, 12:43 PM   #54
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If her own will be more than half of yours she will have to take her own. That is the point I was making. I had been thinking about taking spousal at 66 (FRA) for me and letting mine grow to 70. But, I was 61 at the end of 2015 and that option is not open to me. Actually my full FRA SS is slightly higher than DH's would have been (he took his early as we had 2 minor children who received benefits by him doing that).
DW's may be close to 1/2 mine at her FRA of 66. I am 5 yrs older and am planning to wait until 70 depending on how the market performs. Sorry for my confusion, I thought you were referring to the file and suspend strategy, but honestly, I was unaware of the restricted application being eliminated.
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Old 05-27-2016, 06:36 PM   #55
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I noticed this exact same thing. And when I ran it, the difference in how much was left (on average) at the end of 30 years varied a bit - roughly 4% less if I wait until 70 instead of 62 for SS.
I still have not reached 62 yet, so still have some time to mull over it some. I had been thinking to have my wife claim it early (we are the same age), and for me to delay my higher SS till 70. That seems to be the conventional wisdom.

But in view of recent government changes, I am not so sure any more. If my spending power is the same whether I delay mine or not, then why not claim it early to have the money in hand? Same as another poster has noted, they may reduce your future benefit but are not going to make it retroactive and have you disgorge past benefit.

There are other issues to consider, such as taxes and RMD of IRA/401k at 70. Playing the shell game with the gummint is no fun!
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Old 05-27-2016, 07:21 PM   #56
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But...that is the point. You don't know you have a larger SS check coming. Sure, you likely have a larger SS check coming but it may not grow as much as you thought it would grow because there could be legal changes to the program that reduce future benefits. I am not fond of the idea of taking more money out of my retirement account because I assume that there will be no future reductions to benefits.
If you think it's at least somewhat likely that benefit changes will short those who defer, by all means you should take SS immediately. My feeling/hope is that any changes won't affect those 62 or older whether or not you've started collecting. The longer the problem stays unaddressed, the less likely that is, so check back with me in 2023 when I'm first eligible.
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Old 05-27-2016, 07:32 PM   #57
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No, it's not fair for me or some people. My wife is much older than I am and she cannot get SS, because she's been a housewife all her life. So, she has to wait for me to get SS, and when I get SS she'll be 75, and I will have to get SS at 62 for her to get medicare at 75. So, it's not gaming the system. Nobody should be taking SS at 75 yrs old. You are just generalizing, which is really not appropriate for everyone.

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I'm glad they got rid of "file and suspend". I don't think people should be gaming the system. Make no mistake, if it was still legal, I'd do it too but I'm glad they got rid of it.
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Old 05-27-2016, 07:41 PM   #58
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Social Security has age requirements. Nothing "not fair" about that.

People who make the choice to not work make the choice to not be able to collect Retirement benefits. Nothing unfair about knowing the rules and making grown up choices.


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Old 05-27-2016, 11:06 PM   #59
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No, it's not fair for me or some people. My wife is much older than I am and she cannot get SS, because she's been a housewife all her life. So, she has to wait for me to get SS, and when I get SS she'll be 75, and I will have to get SS at 62 for her to get medicare at 75. So, it's not gaming the system. Nobody should be taking SS at 75 yrs old. You are just generalizing, which is really not appropriate for everyone.
If you have been divorced for two years then she doesn't have to wait for you to file to collect on your benefit. Just sayin...

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If you are divorced, your ex-spouse can receive benefits based on your record (even if you have remarried) if:
  • Your marriage lasted 10 years or longer;
  • Your ex-spouse is unmarried;
  • Your ex-spouse is age 62 or older;
  • The benefit that your ex-spouse is entitled to receive based on his or her own work is less than the benefit he or she would receive based on your work; and
  • You are entitled to Social Security retirement or disability benefits.
If you have not applied for retirement benefits, but can qualify for them, your ex-spouse can receive benefits on your record if you have been divorced for at least two years.
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Old 05-27-2016, 11:22 PM   #60
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Social Security has age requirements. Nothing "not fair" about that.

People who make the choice to not work make the choice to not be able to collect Retirement benefits. Nothing unfair about knowing the rules and making grown up choices.
I'm not a US citizen so I may be wrong, but it seems to me that the only part that is truly unfair is that single people can't designate a beneficiary, even though they contribute at the same rate as married person with a non-working spouse.
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