Social Security timing for couples

[Tiger8693]

As I have understood it, SURVIVOR benefit is different, in that if the lower earning spouse starts at 62 (or anytime prior to FRA, but higher earning spouse starts at FRA (or anytime after):

the lower earning spouse would get the FRA benefit of the higher earning spouse (max after the calculation) upon the higher earning spouses death.

In other words, when the lower earning spouse starts her own benefit only impacts SPOUSAL benefit. And spousal benefit only comes in to play if it (50% of higher earning spouse benefit) is higher than the lower earning spouses claimed benefit on their own.

Complicated, but this is how I understand it.

Also, in advance, I know that there is a calculation for what the SURVIVOR benefit is which may or may not equal the FRA benefit of the higher earning spouse. My point is, that the calculation for SURVIVOR is not reduced because the lower earning spouse starts here own benefit before FRA.

 

[MissMolly]

As I have understood it, SURVIVOR benefit is different, in that if the lower earning spouse starts at 62 (or anytime prior to FRA, but higher earning spouse starts at FRA (or anytime after):

the lower earning spouse would get the FRA benefit of the higher earning spouse (max after the calculation) upon the higher earning spouses death.

In other words, when the lower earning spouse starts her own benefit only impacts SPOUSAL benefit. And spousal benefit only comes in to play if it (50% of higher earning spouse benefit) is higher than the lower earning spouses claimed benefit on their own.

Complicated, but this is how I understand it.

Also, in advance, I know that there is a calculation for what the SURVIVOR benefit is which may or may not equal the FRA benefit of the higher earning spouse. My point is, that the calculation for SURVIVOR is not reduced because the lower earning spouse starts here own benefit before FRA.

Mostly correct with a bit of clarification: the survivor must be full retirement age when claiming survivor benefits to get an unreduced benefit. Also, the survivor, assuming they wait until they are full retirement age, would get whatever benefit amount the deceased spouse was drawing. It is not based on the deceased spouse's full retirement age benefit.

 

[gwraigty]

As I have understood it, SURVIVOR benefit is different, in that if the lower earning spouse starts at 62 (or anytime prior to FRA, but higher earning spouse starts at FRA (or anytime after):

the lower earning spouse would get the FRA benefit of the higher earning spouse (max after the calculation) upon the higher earning spouses death.

In other words, when the lower earning spouse starts her own benefit only impacts SPOUSAL benefit. And spousal benefit only comes in to play if it (50% of higher earning spouse benefit) is higher than the lower earning spouses claimed benefit on their own.

Complicated, but this is how I understand it.

Also, in advance, I know that there is a calculation for what the SURVIVOR benefit is which may or may not equal the FRA benefit of the higher earning spouse. My point is, that the calculation for SURVIVOR is not reduced because the lower earning spouse starts here own benefit before FRA.

Wrong. A neighbor was impacted by this. He started his SS benefits at 62. He died at 70. She was 61. She had to file for survivor benefits right away, as she was left totally without an income, no life insurance, no savings. She was doubly impacted negatively because he started collecting well before his FRA, AND she couldn't wait until her FRA to collect survivor benefits.

Here is the applicable information about survivor benefits from the SS website:

https://www.ssa.gov/planners/survivors/ifyou.html

If the person who died was receiving reduced benefits, we base your survivors benefit on that amount.

Widow or widower, age 60 — full retirement age — 71½ to 99 percent of the deceased worker's basic amount;

 

[Tiger8693]

Wrong. A neighbor was impacted by this. He started his SS benefits at 62.

But this is not what I said. I stated that "the higher earning spouse starts at FRA or later"....

 

[Tiger8693]

Mostly correct with a bit of clarification: the survivor must be full retirement age when claiming survivor benefits to get an unreduced benefit. Also, the survivor, assuming they wait until they are full retirement age, would get whatever benefit amount the deceased spouse was drawing. It is not based on the deceased spouse's full retirement age benefit.

Agree on both of your clarifications. Thanks!

My point was more that given the higher earning spouse waits until FRA or later to claim, and what was not stated is assuming that survivor benefit is not needed until after the lower earning spouse has reached FRA (I'm hoping I make it that long ), then the lower earning spouse taking her own benefit at 62 doesn't impact that survivor benefit calculation.

 

[gwraigty]

But this is not what I said. I stated that "the higher earning spouse starts at FRA or later"....

Maybe I misunderstood your post. I was addressing this part:

As I have understood it, SURVIVOR benefit is different, in that if the lower earning spouse starts at 62 (or anytime prior to FRA, but higher earning spouse starts at FRA (or anytime after):

the lower earning spouse would get the FRA benefit of the higher earning spouse (max after the calculation) upon the higher earning spouses death.

Considering survivor benefits only...

The SS website makes it clear that the survivor benefit is based on what the deceased's benefit was at the time of death. It is only the FRA amount if the higher earning spouse claimed at FRA and never received a COLA.

If the higher earning spouse claimed earlier than FRA, as in my neighbor's case, no, the survivor benefit won't be based on a FRA benefit. If the higher earning spouse waits until 70 to claim, then the survivor benefit is based on that higher amount. Isn't this often a suggested claiming strategy on this forum, to maximize survivor benefits for a lower earning spouse?

It's further complicated by when the survivor claims. A survivor can claim as early as 60, but won't get the full benefit of the deceased. The survivor has to reach their own FRA to get that. This can be problematic, as in my neighbor's situation.

Could they make it any more confusing? Probably.

 

[Tiger8693]

Maybe I misunderstood your post. I was addressing this part:



Considering survivor benefits only...

The SS website makes it clear that the survivor benefit is based on what the deceased's benefit was at the time of death. It is only the FRA amount if the higher earning spouse claimed at FRA and never received a COLA.

If the higher earning spouse claimed earlier than FRA, as in my neighbor's case, no, the survivor benefit won't be based on a FRA benefit. If the higher earning spouse waits until 70 to claim, then the survivor benefit is based on that higher amount. Isn't this often a suggested claiming strategy on this forum, to maximize survivor benefits for a lower earning spouse?

It's further complicated by when the survivor claims. A survivor can claim as early as 60, but won't get the full benefit of the deceased. The survivor has to reach their own FRA to get that. This can be problematic, as in my neighbor's situation.

Could they make it any more confusing? Probably.

Agreed, it is confusing. Tried to clarify what I meant in my statement:

"When the lower earning spouse takes their own benefit (62, FRA, 70) doesn't matter as long as higher earning spouse waits to FRA or beyond".

It is interesting that waiting beyond raises it even more!

Earlier posts weren't very clear on this great survivor benefit, and as you stated, good SS claiming strategy for spouses, when trying to maximize a surviving spouses SS income. Thanks!

 

[joeea]

As I have understood it, SURVIVOR benefit is different, in that if the lower earning spouse starts at 62 (or anytime prior to FRA, but higher earning spouse starts at FRA (or anytime after):

the lower earning spouse would get the FRA benefit of the higher earning spouse (max after the calculation) upon the higher earning spouses death.

No, that's incorrect.

The surviving spouse would get the benefit the higher-earning spouse got at the time of death, assuming the lower earner doesn't claim survivor benefits before their own FRA. That's not necessarily the FRA benefit.

For example, if you want to maximize survivor benefit, the higher-earner should delay until 70.

 

[Perryinva]

It really is only a narrow window that the survivors benefit is reduced (62 to FRA), and not as common an age to be a widow(er) compared to more later in life. HOW MUCH the survivor is entitled to is a much larger variable tied to what age the larger earning spouse filed and how old they were at death. As long as you are willing/able to sacrifice some nestegg to maximize that SS annuity’s benefit, then it is a good way to compensate.

 

[Tiger8693]

No, that's incorrect.

The surviving spouse would get the benefit the higher-earning spouse got at the time of death, assuming the lower earner doesn't claim survivor benefits before their own FRA. That's not necessarily the FRA benefit.

For example, if you want to maximize survivor benefit, the higher-earner should delay until 70.

This is exactly what I said earlier.

 

[Tiger8693]

It really is only a narrow window that the survivors benefit is reduced (62 to FRA), and not as common an age to be a widow(er) compared to more later in life. HOW MUCH the survivor is entitled to is a much larger variable tied to what age the larger earning spouse filed and how old they were at death. As long as you are willing/able to sacrifice some nestegg to maximize that SS annuity’s benefit, then it is a good way to compensate.

+1

 

[Rianne]

No, that's incorrect.

The surviving spouse would get the benefit the higher-earning spouse got at the time of death, assuming the lower earner doesn't claim survivor benefits before their own FRA. That's not necessarily the FRA benefit.

For example, if you want to maximize survivor benefit, the higher-earner should delay until 70.

Actually, what tiger said is correct, just worded differently. Our situation changed since my last post in 2018. We decided to take DH full pension (when he dies, it dies too). Therefore, taking his SS at 70 would leave me with much better survivors SS benefits. If he lives longer than me, well he's in great shape. He will also leave life insurance to me. I do not have a LI policy on me. There are many factors that go into making this decision.

 

[Perryinva]

We did the exact same thing with/for my DW. My full pension vs even 50% survivor, much less 100%, difference is more than the premium for a LI policy that easily compensates for its loss ( by paying off the house+ and eliminating that expense for her) and coupled with age 69 or later SS, as far as security of income for expenses and preserving the portfolio are concerned, she will be more than just fine. My goal is not to leave her wealthier than when I was alive, but well taken care of.

 

[MarieIG]

We were looking at a Social Security Optimization website. It indicated that I should claim early 62 1 month; and DH (the higher earner with more years of credit) later at 70.

We also want the survivor to have a larger SS check.

 

[gwraigty]

We were looking at a Social Security Optimization website. It indicated that I should claim early 62 1 month; and DH (the higher earner with more years of credit) later at 70.

We also want the survivor to have a larger SS check.

Just curious, but has anyone used the calculators and come up with a different basic recommendation for high earner vs. low earner? That's what the recommendation usually seems to be, based on postings here, and my own results.

I understand the reasoning is based in part on the lower earner benefit essentially "disappearing", if not taken at all. However, it ignores other things: a desire for the highest monthly SS income; a desire for maximum room for Roth conversions; ACA subsidies, etc., etc.

No clue yet on which direction we're leaning towards in this area. I don't believe that just because a calculator says "Do this," that it should automatically be done.

 

[karen1972]

I was surprised at how that all worked, my dad was 10 years older than my mom which changes the calculations since mom taking SS early was almost always statistically going to pay off. He took his at 65 and mom took hers at 62 1/2. I was worried moms was way too low and she complained all the time how little it was but then realized spousal benefits were based off from dads FRA original amount (ie no COLA).

Dad would have had to live past 90 for moms choice to have been a bad one, he passed at 82, mom was 72 and picked up dads SS which has been indexed to inflation for 17 years and thus was substantially higher than anything she had been receiving. On top of that my sister was only 16 when dad turned 65 so she got SS benefits while still a dependent which was an unexpected windfall. Overall the rules worked out very well for my parents and SS became quite a financial benefit to them. I haven't seen much advice talk about age gaps which changes the calculations.

 

[joeea]

Just curious, but has anyone used the calculators and come up with a different basic recommendation for high earner vs. low earner?

Of course. Play around with any calculator. Put in different combinations of earnings, relative ages, and anticipated age of death. You'll find many that don't follow the usual "high earner delays until 70" pattern.

However, it ignores other things: a desire for the highest monthly SS income

Which calculator ignores that?

No clue yet on which direction we're leaning towards in this area. I don't believe that just because a calculator says "Do this," that it should automatically be done.

Right. Calculators can only operate on what you put in. I don't anyone believes in doing anything "automatically".

 

[gwraigty]

Of course. Play around with any calculator. Put in different combinations of earnings, relative ages, and anticipated age of death. You'll find many that don't follow the usual "high earner delays until 70" pattern.


Which calculator ignores that?


Right. Calculators can only operate on what you put in. I don't anyone believes in doing anything "automatically".

Thanks. I haven't played around with them extensively. I used Open Social Security when I first read about it, and got the 62/70 low earner/high earner recommendation. My earnings are zero and will remain so. Things that have changed since I last used it are my husband's income and our estimated PIA's. Using it now, I don't get that recommendation anymore. More like 65/66 with deaths at 80, 67/70 with deaths at 90. That's also with changed proposed retirement dates.

Still, that calculator presumes you want the most money out of the system, which may be counter to managing income for other purposes that I mentioned in my last post. An interesting exercise, to be sure, but one I'm not close enough to having to make a decision on.

 

[joeea]

Still, that calculator presumes you want the most money out of the system, which may be counter to managing income for other purposes that I mentioned in my last post. An interesting exercise, to be sure, but one I'm not close enough to having to make a decision on.

As the Open Social Security Calculator states:
"The calculator runs the math for each possible claiming age (or, if you're married, each possible combination of claiming ages) and reports back, telling you which strategy is expected to provide the most total spendable dollars over your lifetime.

Please note that this calculator should not be the only analysis you do, as there are various factors that it does not consider, such as:

The fact that delaying benefits reduces longevity risk and therefore may be preferable even in some cases in which it is not the strategy that maximizes expected total spending, or

Tax planning reasons or other unrelated reasons why it might be better for you to file earlier or later than the calculator suggests."

Yup. If you don't want the most money, then there are endless possibilities.

 

[Rianne]

One thing to consider. We cannot take SS early due to ACA income requirements. I'd rather have affordable HC than SS right now. Exceeding ACA income requirements by $10K does not offset paying $24K in HC premiums, does not even include deductibles and this is the least expensive bronze plan.

 

[Dtail]

One thing to consider. We cannot take SS early due to ACA income requirements. I'd rather have affordable HC than SS right now. Exceeding ACA income requirements by $10K does not offset paying $24K in HC premiums, does not even include deductibles and this is the least expensive bronze plan.

It will be the same concept for me when I turn 62 until 65 y.o.

 

[StephieJean]

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!

What about the Windfall Act? won't this affect one if they receive a pension?

 

[MissMolly]

Not necessarily. I have a pension but always paid into SS so Windfall Elimination doesn't apply to me.

 

[Rianne]

Not necessarily. I have a pension but always paid into SS so Windfall Elimination doesn't apply to me.

Same. Ours is a private pension. Does not affect SS.

 

[jimandthom]

My spouse can't collect on my SS --- should I die first. I however do get 1/2 of his Civil Service Pension. He can collect my small private pension which also grows each year until I have to take it at 70+

I'll be 66 next May. Open Social Secuirty put us at 67 and a couple of months, without considering a hair cut.

We are doing a quarter at a time, with the 1st allowed filling to be for Jan 2020 if I pull slightly before FRA.

Right now its summer, the weather is beautiful and not going to concern much about it.