Social Security at age 62

[Sunset]

The rule on survivorship SS, is not all that easily found, they give example of early taking of SS, but seem to neglect to tell folks delaying doesn't count.

So if I take SS at FRA or delay to age 70, my surviving spouse gets the same either way (assuming her's was less) survivor SS.

This makes it a little tricky because if I delay and say die at age 75, it would have been better to take it at FRA.

My original plan had been to delay to 70 as larger benefit, don't need it right away, and it would leave the max in survivorship, but that last one is false.

Thankfully I have a few years to decide and learn.

This is not my understanding at all. If I died at 72, having started my benefit at 70, my surviving wife would get the benefit I was receiving (reduced by a factor if she was below FRA for this benefit) This Forbes article explains it well:

Forbes Welcome
....

I'm happy to realize I didn't understand it. Which I blame on the SS site, as it only talks about FRA and early SS reduced benefits, but totally ignores the Delayed Retirement Credit benefit for survivor spouses.

Once again forum members have the answers

 

[Sue J]

I'm planning on taking SS at my FRA of 66 and 2 months but may possibly take it at 65 when I hit Medicare age.

My own SS benefit is fairly small - $557 at 62, $774 at 66 and 2 months.

DH gets a public employees pension so he gets WEPed and GPOed. So I look at my SS as if I was single.

I have a part time job (for fun) but my annual earnings are under the limit for it causing a reduction in my SS benefit payment.

The reason I want to wait until at least Medicare age is that the full SS payment (not just the taxable portion) is counted toward the MAGI for Obamacare. So in addition to paying 15% tax on 85% of my small SS, I'd lose another chunk to a reduced health insurance subsidy.

I guessed that the subsidy loss would be about 8% to 9% but when I put the numbers in the subsidy calculators it's more like 15%-16% of the increased MAGI due to the annual SS payment.

DH's COLAed pension pays for all of our monthly expenses so I don't need to take SS early. I'm comfortable with waiting until Medicare age of 65 or just 14 months later at FRA of 66 and 2 months.

 

[Yarnstormer]

Wow this is complicated!
If I do not marry, I plan to claim widow benefits as early as age 60. I will claim my benefits at FRA or 70, whichever makes sense at the time.
I had not considered how ss income would affect health insurance subsidies. That's years away for me but definitely something to consider when the time comes.


Sent from my iPad using Early Retirement Forum

 

[gayl]

Then I discovered that if I waited until age 66 (my FRA) and then claimed divorced spousal SS, my own SS would continue to grow from age 66-70 even though I was receiving divorced spousal SS during those years. This strategy either has or will be ending soon due to changes in SS law last year, but it was allowed in 2014 when I turned 66 and did it.

I originally FIREd in 2004, had to return to seasonal work in 2008, back out now. I'm in the 'window' where I can file restricted.

Here's my question in that I plan on doing what you did:
- What if he hasn't filed?
- Do I need his SSN?
- What will I eventually need to complete this? (Ie: are my divorce papers showing date of marriage / divorce enough?
- Would an uncertified copy of marriage licence in sealed envelope from county be enough? Shredded my original

Thanks!

 

[W2R]

I originally FIREd in 2004, had to return to seasonal work in 2008, back out now. I'm in the 'window' where I can file restricted.

Here's my question in that I plan on doing what you did:
- What if he hasn't filed? I had no idea if he had filed, since we don't keep in touch. But, I didn't have to know.
- Do I need his SSN? I am pretty sure that you do. I had my ex's SS number since it is emblazoned in my brain after 23 years of marriage.
- What will I eventually need to complete this? (Ie: are my divorce papers showing date of marriage / divorce enough? I had to send them a marriage certificate as well as a divorce decree and I think other documentation, maybe my birth certificate? I don't remember except that it was a royal pain in the behind to get all of this together and send it off. They are very thorough about documentation and photocopies wouldn't do; they want the ones with the raised seal on them. They did return all of them to me after *they* photocopied them, though.
- Would an uncertified copy of marriage licence in sealed envelope from county be enough? Shredded my original

Thanks! Probably not, but you can ask. You can always send off for another certified copy of your marriage license. That is what I did, since he took ours when we divorced.

I have NO idea if you can do any of this now that the new law is in place. But it would be worth looking into, for you to find out, and it sounds like you are doing that.

When I applied online, somehow in that process I got a phone number of a real live human being to call, if I had questions. Either it was online, or else they sent it to me in the mail? I forget. Anyway, I called that number and the SS worker who I talked to was wonderful and so helpful. Amazingly, she was far away in Seattle whereas I am in Louisiana and have never been out there. Anyway, she gave me her name and individual phone number so that I could talk to her specifically when I called after that, and she remembered me and my particular case when I did. So, I'd suggest keeping an eye out for any phone number like that and call if you have more questions.

 

[PapaBear67]

I'll take at first opportunity...62. If I survive to the break even point 78 1/2, I'll be the longest living male ever in my family by 8 1/2 years.

If Longevity runs in your family, I would say, begin to take it only when you will need it. If you don't need it, let it grow. If you need it, don't wait.

 

[thatguy]

I'm 72. I retired at 57. 20/20 hindsight is telling me that I should have waited till FRA for Social Security. My pension had a $400 reduction at 62 so I filed for SS. Wife did not retire till my FRA( she was 55). That point where we only had our pensions is where my SS would be necessary. We hope to wait till age 70 for her SS. There is retirement savings to smooth out the bumps.

 

[gayl]

Dad died at 89 after 3 strokes and 12 heart attacks

Mom died at 90 but she was always healthy ex 3 bouts of cancer.

We tend towards longevity but no guarantees

 

[Animorph]

DW and I will have about the same SS PIA's. She is 5 years younger. I'll be 62 this year, so we don't qualify for the file and suspend schemes anymore.

I plan to delay my SS until age 70. This will maximize my benefit, and I will get an extra delay year compared to DW due to different FRA's.

DW will take hers at 62.

If DW survives me, she will receive my higher benefit.

The higher benefit lasts until we're both gone. The lower benefit lasts until one of us is gone. So it seems important to max out at least one benefit. Actuarially, the probability of two people both living longer than just a single person is smaller. That and assumed market gains after early SS benefits argue for taking the second benefit early.

 

[mamadogmamacat]

expect to take it at 62, parent/grandparents, etc, of the same gender as me, died at: 67, 54, 58, with rumors of similar ages for generations prior to that but no written records. Will not need the money, but it will pay for a lot of extras, hopefully enjoyable ones if my actual life plus health allow.

 

[gerntz]

When bennies are cut, I'd bet they start with top end cuts first & work down, leaving the bottom alone, vs. an across the board cut. JMO.

 

[papadad111]

This FA is definitely a quack. SS won't run out on 2034, they will just pay 30% less if Congress does nothing from now (2016) to 2034. If Congress raise taxes for social security, it will cover full 100% payments beyond 2034.

+1. Many ways to fix this "problem". Scare monger FA for sure

Even a simple 3 or 4 percent surcharge to future 401k withdrawals will help close the gap

 

[oneill225]

Good Thinking

DW and I will have about the same SS PIA's. She is 5 years younger. I'll be 62 this year, so we don't qualify for the file and suspend schemes anymore.

I plan to delay my SS until age 70. This will maximize my benefit, and I will get an extra delay year compared to DW due to different FRA's.

DW will take hers at 62.

If DW survives me, she will receive my higher benefit.

The higher benefit lasts until we're both gone. The lower benefit lasts until one of us is gone. So it seems important to max out at least one benefit. Actuarially, the probability of two people both living longer than just a single person is smaller. That and assumed market gains after early SS benefits argue for taking the second benefit early.

Excellent strategy. Maximize the higher benefit as a long-term hedge while enjoying the smaller benefit, now.

 

[Hermit]

The fine folks at SSA sent me a letter today that said I was now getting survivor's benefits and that I may be able to receive larger benefits if I apply for benefits on my own account. They failed to mention that if their assertion that it is actuarially neutral to claim on my benefits now or at 70, I would be foregoing the monthly amount I am getting as survivor benefits between now and age 70. They are suggesting I might want to give up an amount approaching $60,000 without any mention of that loss!

 

[mathjak107]

we are going to try to hold out as long as can and hopefully make 70 .

we want to reduce dependency on the markets as much as we can . we rather spend down for the years delaying and possibly have decades more of one of us being less dependent on markets .

fidelity has a new in house social security optimizer tool . it is not on the website .

it analyzes all kinds of scenario's to find the most dollars .

so for us this is what it got :

i am 63 and my wife 65 . she has been collecting since 62 but she will stop at her fra letting her benefit grow to 70 .

when she hits 70 i will be 67-10 months and i will file restricted application for 1/2 hers .

when i hit 70 i will file for my benefit and once i do she gets 4200.00 added to her benefit since 1/2 mine is more than her full

 

[ShokWaveRider]

I plan on taking mine at FRA. It is like an 8% return on a CD. I am currently 62, but have medium longevity in the family. So 65/66 is a good option. Other than that, it would put me over the limit for a good ACA subsidy if I took it now...

 

[mathjak107]

it is NOT at all like getting 8% on a cd. you are not counting the checks you are giving up receiving in that number , any spousal adders when you file that your spouse gets nor the loss of growth on the assets you are spending down delaying . getting an increase of 8% in amount is not a return of 8% at all because that 8% has a cost attached to it . . you can see about a 6% real return if one of you lives to 95 or 5% at 90 but basically until you hit break even you have zero return .

 

[Archman]

In my situation,I took Social Security at age 63½, and therefore drawing less from my retirement savings, My break even point is at age 86,assuming the markets cooperate. Taking less from your investments mitigates the sequence of portfolio bad returns that might occur early in retirement.

Sequence-of-returns risk involves the actual order in which investment returns occur. Typically, negative returns earlier in retirement have a more severe impact on your portfolio than negative returns later in retirement. That’s because your portfolio’s value is reduced by both negative market performance and any withdrawals you take to fund your day-to-day expenses. This means that a smaller amount is left behind to experience any potential future growth.

 

[mathjak107]

The exact same average return can see a 15 year difference in how long the money will last just depending on the order it come in at.

 

[Fedup]

My husband took his beginning of the year, not FRA but over 90% of his at FRA. I plan to delay either at FRA or 70. I was not paying the actuary game but it worked out that way.

 

[Archman]

My husband took his beginning of the year, not FRA but over 90% of his at FRA. I plan to delay either at FRA or 70. I was not paying the actuary game but it worked out that way.

I'm getting 83.3% of my FRA.

 

[daylatedollarshort]

it is NOT at all like getting 8% on a cd. you are not counting the checks you are giving up receiving in that number , any spousal adders when you file that your spouse gets nor the loss of growth on the assets you are spending down delaying . getting an increase of 8% in amount is not a return of 8% at all because that 8% has a cost attached to it . . you can see about a 6% real return if one of you lives to 95 or 5% at 90 but basically until you hit break even you have zero return .

I think those are important points many of the popular finance articles do not take into consideration.