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Old 09-13-2015, 09:03 AM   #1
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SS questions

I know there are several threads and articles on the topic of how to optimize/strategize SS. I reach early SS eligibility this coming year so now I'm digging further into the details.

Two point I'm unable to find clear info on:

Once Ss commences cola is applied each year. However delaying SS does not track the colas applied in those years. Correct? How does this work in case of spouse who's SS is based on my work record? Will she always get 50% of my current SS paymenyt or do our payments diverge if cola is applied to my ss before she reaches 62?

If I wait and we commence ss at the same time (62) i assume her payment will be 50% of my early amount. Correct? There is no additional penalty for taking early ss?
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Old 09-13-2015, 12:01 PM   #2
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We both took SS at 62 - I'm 64 and wife turned 62 earlier this year. The formula for spousal SS is not quite 50% of yours unless you both filed at full retirement age. There's a real convoluted formula they use where they take her SS amount and top it off using yours. Her SS amount came out to be just under 50% of mine at 62 (go figure).

FYI - when you file for SS and receive payments (as I recall - doesn't apply to file and suspend scenarios, or those on Medicare paying out of pocket and not yet retired on SS), you are protected from future increases in Medicare, even if you are not yet 65 and on Medicare. There is a "hold harmless" rule that keeps Medicare from putting those living just off SS from being put in the poor house with Medicare increases. Medicare part B increases to SS recipients is limited to the COLA amount. If you are not on SS - Medicare increases will be passed along until you are... Next year's Medicare part B increase is expected to be aro. 50% to those not currently on SS due to their not being any COLA increase for SS recipients (unless the Fed. Govt. fixes this scenario).
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Old 09-13-2015, 01:48 PM   #3
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My understanding is that your spouse is entitled to 50% of your PIA (what you are entitled to at full retirement age) multiplied by a spousal factor for age when spouse's SS starts (max of 1.0 at spouse's FRA).
This means that your spouse's SS (when you are alive) is not dependent on when you started SS (or your current SS benefit)..........but only on her spousal factor if starting SS early and 50% of your full PIA.

Benefits for Spouses
"A spouse can choose to retire as early as age 62, but doing so may result in a benefit as little as 32.5 percent of the worker's primary insurance amount. A spousal benefit is reduced 25/36 of one percent for each month before normal retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of one percent per month.

For a spouse who is not entitled to benefits on his or her own earnings record, this reduction factor is applied to the base spousal benefit, which is 50 percent of the worker's primary insurance amount. For example, if the worker's primary insurance amount is $1,600 and the worker's spouse chooses to begin receiving benefits 36 months before his or her normal retirement age, we first take 50 percent of $1,600 to get an $800 base spousal benefit. Then we compute the reduction factor, which is 36 times 25/36 of one percent, or 25 percent. Applying a 25 percent reduction to the $800 amount gives a spousal benefit of $600. Thus, in this case, the final spousal benefit is 37.5 percent of the primary insurance amount."
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Old 09-13-2015, 02:09 PM   #4
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Quote:
Originally Posted by fritz View Post
We both took SS at 62 - I'm 64 and wife turned 62 earlier this year. The formula for spousal SS is not quite 50% of yours unless you both filed at full retirement age. There's a real convoluted formula they use where they take her SS amount and top it off using yours. Her SS amount came out to be just under 50% of mine at 62 (go figure).

FYI - when you file for SS and receive payments (as I recall - doesn't apply to file and suspend scenarios, or those on Medicare paying out of pocket and not yet retired on SS), you are protected from future increases in Medicare, even if you are not yet 65 and on Medicare. There is a "hold harmless" rule that keeps Medicare from putting those living just off SS from being put in the poor house with Medicare increases. Medicare part B increases to SS recipients is limited to the COLA amount. If you are not on SS - Medicare increases will be passed along until you are... Next year's Medicare part B increase is expected to be aro. 50% to those not currently on SS due to their not being any COLA increase for SS recipients (unless the Fed. Govt. fixes this scenario).
Any update on the Medicare B increases and when would they be announced? Does anyone know anything definite about this
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Old 09-13-2015, 02:18 PM   #5
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Originally Posted by ivinsfan View Post
Any update on the Medicare B increases and when would they be announced? Does anyone know anything definite about this
We don't want to get off topic, so the short answer is "nothing has been announced yet and probably won't until early October."

Now let's try to get back on topic and answer ken11's questions.
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Old 09-13-2015, 02:29 PM   #6
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If you live anywhere near a SS office and have time, stop by on a weekday morning and talk with someone. The people in the office near us were happy to print out information for our possible SS claiming strategies well in advance of us doing so. We did not make an appointment, just dropped in. Not everyone here seems to have received the same level of service in their local SS offices, but worth a try if you have the time.
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Old 09-13-2015, 02:42 PM   #7
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It amazes me that more than 80% of upcoming retirees or recent retirees don't have all the necessary facts about all SS rules. I'm not going to go into details, it would be too long of a response. Most here have a lot to review regarding SS. Not just the longer I wait the more I get. As this is a very important decision for all. I would review all SS info provided, read, listen, get all info available. Just trying to help all. There is a lot to learn on this matter which can mean extra $$$. Be carful in your decision. I'm just a regular guy like you all. It's a big decision, make the right one... Easy to say...Good luck to all.


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Old 09-13-2015, 02:51 PM   #8
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Originally Posted by MichaelB View Post
We don't want to get off topic, so the short answer is "nothing has been announced yet and probably won't until early October."

Now let's try to get back on topic and answer ken11's questions.
Thanks for the update, but this could be consideration as to when people take their SS benefit, I think the OP was turning 62 this year so it might not apply to him, but a 50% increase would be over 50 bucks a month so I think people 65 and over should be aware of this potential cost of delaying their SS checks. I know people other then the OP will read this thread. I didn't mean to go off-topic, sorry!
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Old 09-13-2015, 03:19 PM   #9
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This attachment from the social security website should help answer a lot of questions.
http://www.ssa.gov/planners/retire/1943.html


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Old 09-13-2015, 09:41 PM   #10
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Originally Posted by ivinsfan View Post
Thanks for the update, but this could be consideration as to when people take their SS benefit, I think the OP was turning 62 this year so it might not apply to him, but a 50% increase would be over 50 bucks a month so I think people 65 and over should be aware of this potential cost of delaying their SS checks. I know people other then the OP will read this thread. I didn't mean to go off-topic, sorry!
I apologize for putting that FYI on there w/o a link to the article (if the OP or others wished to read up on it), but I thought it was worth mentioning as a valid consideration for deciding when to take SS.

Edit: I've had to remove the link as it is temperamental (and they would like you to subscribe to read it, although it was featured on Yahoo IIRC). I've uploaded it as a PDF instead.

Yahoo link (not same article) http://finance.yahoo.com/news/millio...101500900.html
Attached Files
File Type: pdf An Unexpected Spike for Medicare Premiums-.pdf (30.6 KB, 8 views)
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Old 09-14-2015, 01:46 PM   #11
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Originally Posted by 43WorkYears View Post
This attachment from the social security website should help answer a lot of questions.
Full Retirement Age: If You Were Born Between 1943 And 1954


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Great link; and even though it showed benefits for my year of birth (1957) each month between when I turn 62 and 66.5, it didn't show my benefits at 70. Do I get 1.32, 1.28, 1.24, or some other multiplier of my FRA? Also, what would my wife's spousal benefits be? Are they maximized once i reach FRA? Does she also need to reach FRA? Although she is just seven months younger than me, since she was born in 1958 her FRA is 66.66 or nine months after i turn 66.5.

thanks,

Mar
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Old 09-14-2015, 02:18 PM   #12
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If you were born in 1957 then your FRA is 66 and 6 months. If you wait until 70 your benefit will be 128% of your FRA. The 28% is 8% a year times 3 1/2 years.

Also see Early or delayed retirement

Your wife's spousal benefit will be the larger of the benefit based on her work record or 1/2 of your FRA and then further reduced if she starts her benefits before her FRA. See Full Retirement Age: If You Were Born In 1958 for a table of how her benefits woudl be reduced if she starts benefits before she is 66 and 8 months.
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Old 09-14-2015, 02:21 PM   #13
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Originally Posted by Marc View Post
Great link; and even though it showed benefits for my year of birth (1957) each month between when I turn 62 and 66.5, it didn't show my benefits at 70.
1) Do I get 1.32, 1.28, 1.24, or some other multiplier of my FRA?
2) Also, what would my wife's spousal benefits be? Are they maximized once i reach FRA? Does she also need to reach FRA? Although she is just seven months younger than me, since she was born in 1958 her FRA is 66.66 or nine months after i turn 66.5.

thanks,

Mar
1) Your benefit increases 8/12 of a percent of your PIA for each month you defer past your FRA. In your case, since 70 is 42 months past your FRA, if you defer to 70 you would get 1.28 x your PIA.

2) She will get 50% of your PIA if she starts at her FRA of 66 and 8 months. She can't get any more by deferring longer. If you are planning to defer your start date beyond 67 and 3 months, you will need to "file and suspend" when she reaches her FRA. You do not have to start benefits then. She doesn't get anything extra if you defer.
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Old 09-14-2015, 02:45 PM   #14
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1) Your benefit increases 8/12 of a percent of your PIA for each month you defer past your FRA. In your case, since 70 is 42 months past your FRA, if you defer to 70 you would get 1.28 x your PIA.

2) She will get 50% of your PIA if she starts at her FRA of 66 and 8 months. She can't get any more by deferring longer. If you are planning to defer your start date beyond 67 and 3 months, you will need to "file and suspend" when she reaches her FRA. You do not have to start benefits then. She doesn't get anything extra if you defer.
This is correct, here are some links from the SSA Handbook...

Calculation of delayed retirement credits 2/3 of 1% per month for those retiring 2009 and later

Basic Reduction Amounts 5/9 of 1% per month for insured, 25/29 of 1% per month for a spouse.
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