Modelling when to take Social Security and other pensions

[mountainsoft]

I retired at 55. Six years later I am approaching the point where 'when to take Social Security' (SS) becomes more than an academic question.

I have been modelling different scenarios around taking SS at 62, 65, 67 and 70 years of age.

How has any modelling you have done played out?

What I do is log on to "My Social Security" account and determine the amounts that would be paid at each age (62, 63, etc.). Then I multiply each of those values by 75% to account for the "haircut" if social security is not fixed before the trust fund runs out.

Next, I enter each value in "Flexible Retirement Planner" as a separate entry in the "additional inputs" section. I use a "track inflation" COLA and assume 85% of SS will be taxed.

I also enter all other values in FRP as usual, pensions, savings, other income sources, etc.

Once I have everything in FRP I can experiment by selecting different SS options for my wife and I. For example, if I start at 62 and she starts at 67. Or if we both start at 62, or both at 70.

I find there is a tradeoff. The longer we wait to take SS, the more of our personal retirement savings we'll spend down. It's a matter of balancing how low we want our savings to get before we start SS.

A couple years ago it looked like 62 was going to be the best time for both of us to start SS. As our retirement savings have grown over the last few years, we will probably be able to wait until 64 or 65. We still have a couple years before we retire, so we may end up pushing the SS start dates even further.

Basically, we will wait and see where we are when we get closer to starting SS. If we need the money, we'll take it. Otherwise, we'll postpone SS as long as possible.

 

[pb4uski]

A few years ago before opensocialsecurity.com was around, I did this simulation. Assumes $1,000/month PIA at age 67.... 70% at age 62 or 124% at age 70. Table looks at differential cash flows and IRR of taking at 70 depending on how long you live to. Also looks at accumulated value of differential cash flows at various accretion rates (5% real base rate).

Note that since the cash flows in the first table don't include any estimated COLA adjustments, the IRR's and 5% accretion rate are real, not nominal. The second table assumes that COLA is 2% annually and nominal rate of return is 7%.

How long do you expect to live?

	Claim at 62	Claim at 70	Difference	FV at	5.00%	IRRs (real)
62	8,400		-8,400	8,607		N/A
63	8,400		-8,400	17,645		N/A
64	8,400		-8,400	27,135		N/A
65	8,400		-8,400	37,099		N/A
66	8,400		-8,400	47,562		N/A
67	8,400		-8,400	58,547		N/A
68	8,400		-8,400	70,082		N/A
69	8,400		-8,400	82,193		N/A
70	8,400	14,880	6,480	79,663		N/A
71	8,400	14,880	6,480	77,006		N/A
72	8,400	14,880	6,480	74,216		N/A
73	8,400	14,880	6,480	71,287		N/A
74	8,400	14,880	6,480	68,212		N/A
75	8,400	14,880	6,480	64,982		N/A
76	8,400	14,880	6,480	61,591		N/A
77	8,400	14,880	6,480	58,031		-3.19%
78	8,400	14,880	6,480	54,292		-1.65%
79	8,400	14,880	6,480	50,367		-0.40%
80	8,400	14,880	6,480	46,245		0.62%
81	8,400	14,880	6,480	41,917		1.48%
82	8,400	14,880	6,480	37,373		2.20%
83	8,400	14,880	6,480	32,602		2.81%
84	8,400	14,880	6,480	27,592		3.33%
85	8,400	14,880	6,480	22,332		3.77%
86	8,400	14,880	6,480	16,808		4.16%
87	8,400	14,880	6,480	11,008		4.50%
88	8,400	14,880	6,480	4,919		4.80%
89	8,400	14,880	6,480	-1,475		5.06%
90	8,400	14,880	6,480	-8,189		5.29%
91	8,400	14,880	6,480	-15,239		5.49%
92	8,400	14,880	6,480	-22,640		5.67%
93	8,400	14,880	6,480	-30,413		5.83%
94	8,400	14,880	6,480	-38,573		5.97%
95	8,400	14,880	6,480	-47,142		6.10%
96	8,400	14,880	6,480	-56,139		6.22%
97	8,400	14,880	6,480	-65,586		6.32%
98	8,400	14,880	6,480	-75,505		6.41%
99	8,400	14,880	6,480	-85,921		6.50%
100	8,400	14,880	6,480	-96,857		6.57%

Below is with 2% COLA included:

	Claim at 62	Claim at 70	Difference	FV at	7.00%	IRRs
62	8,400		-8,400	8,689		N/A
63	8,568		-8,568	18,160		N/A
64	8,739		-8,739	28,471		N/A
65	8,914		-8,914	39,685		N/A
66	9,092		-9,092	51,868		N/A
67	9,274		-9,274	65,093		N/A
68	9,460		-9,460	79,434		N/A
69	9,649		-9,649	94,976		N/A
70	9,842	17,434	7,592	93,770		N/A
71	10,039	17,783	7,744	92,324		N/A
72	10,240	18,139	7,899	90,615		N/A
73	10,444	18,501	8,057	88,624		N/A
74	10,653	18,871	8,218	86,327		N/A
75	10,866	19,249	8,383	83,699		N/A
76	11,084	19,634	8,550	80,713		-3.23%
77	11,305	20,027	8,721	77,342		-1.26%
78	11,531	20,427	8,896	73,554		0.32%
79	11,762	20,836	9,074	69,317		1.59%
80	11,997	21,252	9,255	64,596		2.64%
81	12,237	21,677	9,440	59,353		3.51%
82	12,482	22,111	9,629	53,547		4.24%
83	12,732	22,553	9,822	47,136		4.86%
84	12,986	23,004	10,018	40,073		5.39%
85	13,246	23,464	10,218	32,308		5.85%
86	13,511	23,934	10,423	23,788		6.25%
87	13,781	24,412	10,631	14,457		6.59%
88	14,057	24,900	10,844	4,252		6.89%
89	14,338	25,398	11,061	-6,892		7.16%
90	14,625	25,906	11,282	-19,044		7.39%
91	14,917	26,425	11,507	-32,281		7.60%
92	15,215	26,953	11,738	-46,682		7.78%
93	15,520	27,492	11,972	-62,334		7.95%
94	15,830	28,042	12,212	-79,329		8.09%
95	16,147	28,603	12,456	-97,767		8.22%
96	16,470	29,175	12,705	-117,753		8.34%
97	16,799	29,758	12,959	-139,401		8.45%
98	17,135	30,354	13,218	-162,832		8.54%
99	17,478	30,961	13,483	-188,177		8.63%
100	17,827	31,580	13,752	-215,576		8.71%

 

[RetMD21]

A few years ago before opensocialsecurity.com was around, I did this simulation. Assumes $1,000/month PIA at age 67.... 70% at age 62 or 124% at age 70. Table looks at differential cash flows and IRR of taking at 70 depending on how long you live to. Also looks at accumulated value of differential cash flows at various accretion rates (5% real base rate).

Note that since the cash flows in the first table don't include any estimated COLA adjustments, the IRR's and 5% accretion rate are real, not nominal. The second table assumes that COLA is 2% annually and nominal rate of return is 7%.

How long do you expect to live?

	Claim at 62	Claim at 70	Difference	FV at	5.00%	IRRs (real)
62	8,400		-8,400	8,607		N/A
63	8,400		-8,400	17,645		N/A
64	8,400		-8,400	27,135		N/A
65	8,400		-8,400	37,099		N/A
66	8,400		-8,400	47,562		N/A
67	8,400		-8,400	58,547		N/A
68	8,400		-8,400	70,082		N/A
69	8,400		-8,400	82,193		N/A
70	8,400	14,880	6,480	79,663		N/A
71	8,400	14,880	6,480	77,006		N/A
72	8,400	14,880	6,480	74,216		N/A
73	8,400	14,880	6,480	71,287		N/A
74	8,400	14,880	6,480	68,212		N/A
75	8,400	14,880	6,480	64,982		N/A
76	8,400	14,880	6,480	61,591		N/A
77	8,400	14,880	6,480	58,031		-3.19%
78	8,400	14,880	6,480	54,292		-1.65%
79	8,400	14,880	6,480	50,367		-0.40%
80	8,400	14,880	6,480	46,245		0.62%
81	8,400	14,880	6,480	41,917		1.48%
82	8,400	14,880	6,480	37,373		2.20%
83	8,400	14,880	6,480	32,602		2.81%
84	8,400	14,880	6,480	27,592		3.33%
85	8,400	14,880	6,480	22,332		3.77%
86	8,400	14,880	6,480	16,808		4.16%
87	8,400	14,880	6,480	11,008		4.50%
88	8,400	14,880	6,480	4,919		4.80%
89	8,400	14,880	6,480	-1,475		5.06%
90	8,400	14,880	6,480	-8,189		5.29%
91	8,400	14,880	6,480	-15,239		5.49%
92	8,400	14,880	6,480	-22,640		5.67%
93	8,400	14,880	6,480	-30,413		5.83%
94	8,400	14,880	6,480	-38,573		5.97%
95	8,400	14,880	6,480	-47,142		6.10%
96	8,400	14,880	6,480	-56,139		6.22%
97	8,400	14,880	6,480	-65,586		6.32%
98	8,400	14,880	6,480	-75,505		6.41%
99	8,400	14,880	6,480	-85,921		6.50%
100	8,400	14,880	6,480	-96,857		6.57%

Below is with 2% COLA included:

	Claim at 62	Claim at 70	Difference	FV at	7.00%	IRRs
62	8,400		-8,400	8,689		N/A
63	8,568		-8,568	18,160		N/A
64	8,739		-8,739	28,471		N/A
65	8,914		-8,914	39,685		N/A
66	9,092		-9,092	51,868		N/A
67	9,274		-9,274	65,093		N/A
68	9,460		-9,460	79,434		N/A
69	9,649		-9,649	94,976		N/A
70	9,842	17,434	7,592	93,770		N/A
71	10,039	17,783	7,744	92,324		N/A
72	10,240	18,139	7,899	90,615		N/A
73	10,444	18,501	8,057	88,624		N/A
74	10,653	18,871	8,218	86,327		N/A
75	10,866	19,249	8,383	83,699		N/A
76	11,084	19,634	8,550	80,713		-3.23%
77	11,305	20,027	8,721	77,342		-1.26%
78	11,531	20,427	8,896	73,554		0.32%
79	11,762	20,836	9,074	69,317		1.59%
80	11,997	21,252	9,255	64,596		2.64%
81	12,237	21,677	9,440	59,353		3.51%
82	12,482	22,111	9,629	53,547		4.24%
83	12,732	22,553	9,822	47,136		4.86%
84	12,986	23,004	10,018	40,073		5.39%
85	13,246	23,464	10,218	32,308		5.85%
86	13,511	23,934	10,423	23,788		6.25%
87	13,781	24,412	10,631	14,457		6.59%
88	14,057	24,900	10,844	4,252		6.89%
89	14,338	25,398	11,061	-6,892		7.16%
90	14,625	25,906	11,282	-19,044		7.39%
91	14,917	26,425	11,507	-32,281		7.60%
92	15,215	26,953	11,738	-46,682		7.78%
93	15,520	27,492	11,972	-62,334		7.95%
94	15,830	28,042	12,212	-79,329		8.09%
95	16,147	28,603	12,456	-97,767		8.22%
96	16,470	29,175	12,705	-117,753		8.34%
97	16,799	29,758	12,959	-139,401		8.45%
98	17,135	30,354	13,218	-162,832		8.54%
99	17,478	30,961	13,483	-188,177		8.63%
100	17,827	31,580	13,752	-215,576		8.71%

In the simplified situation where you don't care about survivor or spousal benefits it is just a matter of how long you live, right?

 

[pb4uski]

Yes... and spousal benefits are an issue for us and that is why I prefer opensocialsecurity.com .... it covers off such things.

But the analysis is indicative.

 

[bada bing]

Another way to model SS is to treat it as a bond while it's being deferred and to adjust your AA on your other portfolio assets to reflect that "bond".

SS is actually a very good bond at today's interest rates. A rough estimate of the value of mortality credits for age 60-70 decade is 3% per year. Although actuarial mortality credits aren't linear, my first approximation is to assume so over the decade. Subtracting mortality credits from annual payout increases leaves an interest return on a "SS bond" of ~3.5% for 62 to FRA and ~5% for FRA to 70. That's a much better return than a comparable 30 year treasury. SS internal ROR has not been adjusted in recent years to account for the fall in interest rates and you can arbitrage that against your portfolio AA.

It also seems appropriate to use the same 3.5% & 5% (real) return numbers to compare with alternative portfolio returns for taking early. If you factor in risk, there doesn't seem to be much chance that deferring SS isn't a smoking deal. I wouldn't want to bet on 5% real portfolio returns now.

The limitations of the above estimates are that you individually have to be the same or better mortality risk as the current actuarial table. If you're likely to die early, absolutely take SS early. If you don't have portfolio assets to cover spending while deferred, the choice is also moot.

 

[statsman]

Spousal benefits were not a big issue for us. DW started at 65 @ ~91% of the maximum benefit for age 65 at the time on her own work record. She's 6.5 years older than I am, so by the time I get to 70, she'll already be 76.5.

I just turned 62. My benefit is ~93.5% of the maximum benefit. I figure I'll wait at least until 65 also, then re-evaluate whether to go out further.

 

[Exchme]

Concur with the Pralana Gold recommendation. It will provide a very comprehensive look at the impact of different SS start ages on your overall financial condition. As the developer states in the Pralana Gold 2021 User manual (https://pralanaretirementcalculator.com/manuals/) on pp 138-9:

"The analysis Pralana performs during this process is considerably more involved than just determining the start ages that result in the largest long term income; it also examines the long term effects of this income on the interest on your savings, taxes, and survivor scenarios to provide you with the best overall solution which, in turn, will enable you to maximize your standard of living."

After using Pralana Gold and iterating various scenarios, it was clear that in our case taking SS at approx FRA made the most sense. For us taking SS at 62 or 70 resulted in sub-optimum results. However, "sub optimum" results were within 3% of the "optimum" result.

When I used the same scenarios in ORP I got the same results, with annual disposable income levels changing by $1,000 to $2,000 at most.

Bottom-line: DW and I have FRA as a pencil mark on the wall for us to begin taking SS, a number we feel free to change if and when circumstances change (health, zombie apocalypse, etc.) without much concern.

Congrats, that's the best kind of cross check between complex analyses- try two tools and compare, glad you got similar answers!

I'm normally very cheap about software, but figured with my retirement, there was a lot more money riding on the decisions I needed to make than the cost of the software. So I bought a copy of Pralana Gold in February and have been very happy. You do need Excel and need to have an interest and willingness to learn.

I got P-G primarily for Roth planning. There are some shortcuts in the tax packages in free alternatives like I-ORP or Bogleheads' Retiree Portfolio Manager that can affect me and Pralana handles them rigorously (non-deductible contributions to mine and my wife's IRAs, lots of pre-existing cap gains in taxable, inherited IRA, NIIT, phaseouts, IRMAA). Since it also applies a tax rate to your heirs, you can avoid the errors a lot of people make there too. It reports the overall asset allocation and allows you to reset allocations within accounts several times to keep the overall AA tuned in. It takes work, but it's the only consumer level tool I know of that allows you to build a reasonable Roth plan, everything else people do is riddled with logic problems, primarily asset allocation issues.

In the SS module, with my usual return and life expectancy assumptions is 70 for me (much higher earner) and 65-67 for my wife depending on the details. That compares well with opensocialsecurity.com.

 

[lesjrp]

I too retired at 55 and am just at the point where I can apply for benefits at age 62. I also just finished up a SS modeling exercise last week.

I considered the estimated annual payout for 62,63, 64, 65, 66+10M and 70. I considered the cumulative after tax difference for each year, the after tax investment earnings on that difference (assumed a 4.5% investment return), the months to break even and my age at break even among other factors. All scenarios showed a break even between 79 and 81 vs. starting the SS benefit at 62. So that is 17 - 19 years before break even.

After mulling it for a bit, and knowing that in our situation we conservatively won't depend on SS, I ended up just feeling happier taking the benefit now and getting a monthly 'paycheck' vs. making more money in my 80's. ;-)

Excellent point. I probably won’t care at that point since I will likely have more than enough.

 

[chassis]

Hi all,
I retired at 55. Six years later I am approaching the point where 'when to take Social Security' (SS) becomes more than an academic question.

Our NW is $5m. Half our net worth is in stocks and bonds, targeting 5% growth. It has repeatedly exceeded that, but I think the market is a bit weird, recently.

One quarter of NW is in company pensions that grow about 1.5% a year.

One quarter is in property we own free and clear.

I have been modelling different scenarios around taking SS at 62, 65, 67 and 70 years of age. I am making the following assumptions:

*SS continues to increase by 8% for each year you delay starting it.
*SS COLAs matches the recent decade with +1.5% per year
*I will pay 40% tax on my SS
*I will pay 20% tax on gains from investments to cover income delayed by not taking SS.

What I am looking at is the impact on my investments if I pull from there to replace income I am not getting because of not starting SS, and what that money would deliver at 5% compounding, out until I am 80 and 85.

My modelling shows very clearly (if correct) that taking SS at 62 is the best route. This is because although you get a smaller SS payment, the invested funds remain invested and have longer to compound to 80 and 85.

So many financial advisers push the 'leave it until late' mantra for SS. I am not clear at all that works for everyone, even leaving aside the question of longevity.

On our company pensions, the same logic applies, to me at least. As these grow so slowly, conserving the equivalent funds as investments is even more obvious, and I should start those pensions asap. It is hard to know our exact budget in post-Covid life, but I estimate SS plus pensions could leave us with a SWR of zero.

How has any modelling you have done played out?

Cheers,

B

@Brianjone5 This is good thinking. The "leave it in" mantra is an example of conventional wisdom in personal finance that is not wisdom at all. As well spelled out in your post.

I agree with your logic and am likely to take the same approach when I reach age 62. The breakeven analysis, in addition to PV, FV and sum of flows analyses help frame the decision well.

 

[gamboolman]

On Open Social Security

How do you input/account for Spouse getting the 1/2 Spousal Benefit?

I am not very computer literate - so apologies in advance, but would appreciate any advice and guidance.

Thanks, gamboolman....

 

[qwerty3656]

True, but SS is at 6-8% plus inflation. AFAIK, OP is only compounding his AA by 5%.

I hope the OP follows up after looking into other programs. I am keenly interested in what they find..

The 5% and the 6%-8% are not comparable numbers. The cashflows start on different dates, but end on the same date. A simple example I will either give you (a) $100 this year plus $105 next year or I will give you b) $150 next year - which do you choose? (option (a) grows at 5% and option (b) grows at 50%)

 

[pb4uski]

On Open Social Security

How do you input/account for Spouse getting the 1/2 Spousal Benefit?

I am not very computer literate - so apologies in advance, but would appreciate any advice and guidance.

Thanks, gamboolman....

Since you input both your and your spouse's birthdates and PIA amounts, the program includes spousal benefits if it is applicable.

Another thing for people to keep in mind is that opensocialsecurity.com also includes mortality in its calculations... the proability that you and/or your spouse will be alive to receive the SS benefit for that claiming strategy. Prelana and ORP don't consider moratilty in their calculation to my knowledge. You can select different mortality tables using the checkbox at the top of input page.

Opensocialsecurity.com also allows you to select your own real discount rate for the time value of money. The default is the 20 year TIPS rate. I disagree with the author on that assumption since so few people invest in TIPS. I prefer to use the estimated real rate of return on the funds that will be used if SS is deferreed, which is usually signficantly higher than the 20-year TIPS rate.

 

[ProGolferWannabe]

Here's another way to look at when to take SS. It has its limitations, the primary one being that it works only if you have no plans to leave a big estate to your heirs. That is a big IF for many of us.

https://www.early-retirement.org/forums/f28/laurence-kotlikoff-maximize-my-ss-com-77660.html#post1604411

I thought this was insightful. I had never considered how when taking social security could impact the size of one’s estate. So, conversely to the example shown about not caring about the size of one’s estate…..if you do care about how much coin you leave the kids (e.g. more being better), taking social security sooner rather than later might be a sensible option. If we only knew when we would expire, planning would be much simpler.

 

[RunningBum]

Excellent point. I probably won’t care at that point since I will likely have more than enough.

Unless you don't have enough at that point. Then you will care. Wouldn't the larger monthly benefit be nice in that case? Maybe not likely for that to happen, but not impossible?

 

[RunningBum]

I thought this was insightful. I had never considered how when taking social security could impact the size of one’s estate. So, conversely to the example shown about not caring about the size of one’s estate…..if you do care about how much coin you leave the kids (e.g. more being better), taking social security sooner rather than later might be a sensible option. If we only knew when we would expire, planning would be much simpler.

Is it though? If you do care about leaving your heirs more, this is where breakeven analysis comes into play. Assuming you spend the same in either case, if you outlive the breakeven point, you will leave your heirs more by delaying SS. And of course if you die earlier, you leave your heirs more by taking SS sooner.

Another factor in this is, if you die early, you likely won't have chewed through a lot of your investment savings. So even though you didn't optimize SS benefits for your heirs, you still left them a lot. If you live past the breakeven, you might have used more of your savings, but at least you optimized SS and left as much as you could.

 

[Time2]

Here my complexities which I assume many others have.


I don't need any income.

I want to do maximum Roth conversions before I turn 72 yrs old.

I want my younger wife to get my maximum SS benefit when I'm gone.


I have not run any analysis, but these 3 items make me think I should wait until 70. My wife is 5 years younger, I don't know whether delaying hers will help us keep Roth converting in a low tax bracket or not. I expect about $32k of SS at 70, not including COL adjustments over the next 4 years.


Do any of the programs use these type of complexities in their calculations?

 

[chassis]

I want my younger wife to get my maximum SS benefit when I'm gone.

Do any of the programs use these type of complexities in their calculations?

The only thing that matters for this point is when you take your SS. So take yours at age 70. Your spouse, if a low or non-earner, can receive a maximum of 50% of the earner's benefit, when the low earner starts claiming at full retirement age. If your spouses' full retirement age is 67, the highest monthly amount she will receive is if you claim when you turn 70 and she claims when she turns 67.

Portfoliovisualizer has a "financial goals" feature which allows you to enter custom cashflows, whether positive (contributions) or negative (withdrawals). If you do your own side calculation for SS income, based on various claiming scenarios, you can enter this into Portfoliovisualizer to see the impact on your total net worth.

No calculator that I am aware of will sift and sort all of your possible claiming options to arrive at the "best" scenario for you. Financial advisors are happy to take your money and provide with that service. I prefer to run the numbers myself. I recommend that, running the numbers yourself.

 

[Time2]

Your spouse, if a low or non-earner, can receive a maximum of 50% of the earner's benefit, when the low earner starts claiming at full retirement age.

I need to clarify this. Are you saying If I start at 70, my wife can also collect 50% on my earnings?
Or My wife can only get 50% of my earnings when she files at 67 years old. (that doesn't seem right)

If your spouses' full retirement age is 67, the highest monthly amount she will receive is if you claim when you turn 70 and she claims when she turns 67.

Are you saying she cannot wait until 70 and get the additional 8% per yr?
Now I'm confused!!

 

[latexman]

The 5% and the 6%-8% are not comparable numbers. The cashflows start on different dates, but end on the same date. A simple example I will either give you (a) $100 this year plus $105 next year or I will give you b) $150 next year - which do you choose? (option (a) grows at 5% and option (b) grows at 50%)

a) $205 vs. b) $150

Yes, your example a) and b) are not comparable. Obviously, a).


I really didn't think of the cash flow timings from OP other than when to collect SS at 62, 67, or 70, because they did not speak of them. I just looked at the returns.

 

[ProGolferWannabe]

Is it though? If you do care about leaving your heirs more, this is where breakeven analysis comes into play. Assuming you spend the same in either case, if you outlive the breakeven point, you will leave your heirs more by delaying SS. And of course if you die earlier, you leave your heirs more by taking SS sooner.

Another factor in this is, if you die early, you likely won't have chewed through a lot of your investment savings. So even though you didn't optimize SS benefits for your heirs, you still left them a lot. If you live past the breakeven, you might have used more of your savings, but at least you optimized SS and left as much as you could.

The answer to your question is “yes”. I said it “might” be a sensible alternative, and a logical factor to consider.

 

[Lawrencewendall]

I'm a big fan of PC. The free version allows creating multiple scenarios (I have 8 created, don't know what the max is) which you can compare side by side. I verified that the numbers are the same for each scenario. Here's what it tells me.

 

[chassis]

I need to clarify this. Are you saying If I start at 70, my wife can also collect 50% on my earnings?
Or My wife can only get 50% of my earnings when she files at 67 years old. (that doesn't seem right)






Are you saying she cannot wait until 70 and get the additional 8% per yr?
Now I'm confused!!

@Time2 have you read this? https://www.investopedia.com/ask/an...ousal-benefits-calculated-social-security.asp

Your wife can receive a maximum of 50% of your benefit. Period. No more. To receive 50% she must claim at her full retirement age, example 67.

Because you said you don’t need the money, have you considered claiming before your full retirement age and investing the money? Then your wife can start claiming at her full retirement age and receive 50% of your (reduced) benefit, and invest the money. This is a strategy different from your first question.

The return on delayed social security filing is very small, and the payback occurs late in life, in practical terms at the actuarial death age. Therefore I see delayed claiming as non-beneficial to me.

It matters very little, and it matters very late. Therefore it doesn’t matter.

 

[lesjrp]

Unless you don't have enough at that point. Then you will care. Wouldn't the larger monthly benefit be nice in that case? Maybe not likely for that to happen, but not impossible?

True, and I won’t be taking SS till 70 anyway, because I am playing the reduce tax strategy, Roth conversions, best guesses/fears on tax rates. However when I am in my 80s, I am guessing the decision I make now will be less significant to me. But that’s probably the case with a lot of decisions I made in the past when I am in my 80’s.

 

[Time2]

@Time2 have you read this? https://www.investopedia.com/ask/an...ousal-benefits-calculated-social-security.asp

Your wife can receive a maximum of 50% of your benefit. Period. No more. To receive 50% she must claim at her full retirement age, example 67.

Maybe we are talking about two different things. My point is my wife's benefit after I die.

"When a Social Security beneficiary dies, his or her surviving spouse is eligible for survivor benefits. A surviving spouse can collect 100 percent of the late spouse’s benefit if the survivor has reached full retirement age",
From, https://www.aarp.org/retirement/social-security/questions-answers/social-security-spouse-dies.html

And,

• The rules are different for survivor benefits. A widow or widower whose spouse waited until 70 to file for Social Security is entitled to the full amount the deceased was getting — including the delayed retirement credits — so long as the surviving spouse has reached full retirement age.
• From, https://www.aarp.org/retirement/soc...ximizing-spousal-social-security-benefit.html

Because you said you don’t need the money, have you considered claiming before your full retirement age and investing the money? Then your wife can start claiming at her full retirement age and receive 50% of your (reduced) benefit, and invest the money. This is a strategy different from your first question.

She doesn't need to collect 50% of my benefit, her benefit will be more than 50% of mine.

Are you saying she could collect 50% of mine before FRA, then when she is FRA, she can collect on her own at full benefit?

The return on delayed social security filing is very small, and the payback occurs late in life, in practical terms at the actuarial death age. Therefore I see delayed claiming as non-beneficial to me.

It matters very little, and it matters very late. Therefore it doesn’t matter.

 

[mh]

Does open social security have provisions to take into account spouse “child-in-care” and disabled dependent benefits ? I’m pretty sure since I qualify for those at 62 , it’s pretty much a no brainer for me to start at 62 since spouse is ten years younger than me, But it would be nice to use something to verify it.