Social Security Decision

[joeea]

Our solution is for my wife to claim at 62 and I will claim spousal. At 70 I will claim my age 70 benefit and she will continue at the age 62 rate.

I assume you were born before 1/1/1954?

 

[joeea]

If we both are alive after that, we lost, but who the heck cares at 80?

Most 80 year olds.

 

[joeea]

If your wife's benefit is less than yours then if either of you claims before 70 then if she outlives you she will receive less after you die than she would have had you both waited until 70.

No, that's incorrect.

As long as you wait until FRA, you get 100% survivor benefits should you become widowed.

Actually it is 70.5 I think.

No, that's incorrect.

Waiting even a day past 70 is leaving money on the social security table.
You appear to be confusing RMD ages with SS ages.

The only way to max out the high earner benefit, which becomes the survivor benefit, is for both of you to wait until the high earner begins to draw at 70.5. At least I think that is currently the case.

No, that's doubly incorrect.

You might want to get professional help before making your social security claiming decisions.

 

[Sunset]

If your wife's benefit is less than yours then if either of you claims before 70 then if she outlives you she will receive less after you die than she would have had you both waited until 70. Actually it is 70.5 I think. The only way to max out the high earner benefit, which becomes the survivor benefit, is for both of you to wait until the high earner begins to draw at 70.5. At least I think that is currently the case.

You have shown you NEED to learn the facts about SS, otherwise you are going to probably make the wrong choice for yourself, and miss out on some $$$.

There are calculators online for free, an excellent one is: https://opensocialsecurity.com/
And it's easy to use.

 

[walkinwood]

In the OP's scenario, what happens if the OP passes away before claiming SS?

I found the answer by Larry Kotlikoff
https://www.forbes.com/sites/kotlik...wife-get-if-i-die-before-filing/#7a82625e3549

Hi Larry, I am 67 and my wife is 59. I won't file until 70. If I die before I start my benefits at age 70, will my wife immediately start getting what I would be entitled to when I die, including the increases for delaying? Thanks, Raul
Hi Raul, If you die before your wife, her unreduced widow's rate would be equal to what your benefit rate would have been if you had started drawing your benefits in the month of your death. However, if your wife started drawing the widow's benefit before full retirement age (FRA), they would be reduced for age.

 

[troutnut1]

I was born before the 2015 law change cutoff of Jan 1, 1954, and my wife just missed that being born in Febuary 1954. So she just took her’s at age 64 and in July I can get half of her full retirement age benefit when I turn 66. Getting half of hers for 4 years will help me delay until 70. It’s called “filing a restricted application”. People born after the Jan 1954 cutoff don’t have that option.

(Oops!) I see someone already covered this pretty well.

 

[Starsky]

Maximization and common sense are two different things. Maximization is based on an actuarial population, not your specific situation. True maximization would require you to know your own exact lifespan.

IMO, better to take SS as soon as possible than to wait and potentially never use it at all. Is the 8%/yr. difference worth having a bird in the hand? Since you are giving up a full year of actual benefits to get 8% more benefits per year, it would take roughly 12.5 years of retirement to break even on delaying past retirement age - regardless of how long you choose to delay past FRA (up to age 70). I can see working and waiting to maximize your take home $$ if SS was all you had, but when you're retired and not worried about finances, why maximize if it's just a scorecard?

 

[Spock]

My wife (15 mos. younger) is the significantly lower earner and claimed at 62. I'm waiting until 67 1/2 as that will put her at FRA so she can get the maximum spousal benefit (reduced somewhat by her own filing at 62). Her spousal benefit will not go up after that (max is 50% of my PI at her FRA), so I claim and she gets to add a max spousal benefit to her own. Plus, this also gives her a very good survivor benefit on my earnings, but not as much as if I delayed until 70.

I'm still exploring spousal benefits, but this sounds way out of whack with what I think I learned here: https://www.ssa.gov/OACT/quickcalc/spouse.html


Correct me if I'm wrong, but spousal benefits are a % based on the higher incomes PIA regardless of when the higher earner starts SS. Waiting to start yours is not going to increase hers.
The % is permanently locked in based on the age that the spouse starts their own benefits. The only thing related to the higher earner is that the higher earner has to start SS benefits before the spouse can collect the spousal benefit portion.

no?

 

[Sunset]

Maximization and common sense are two different things. Maximization is based on an actuarial population, not your specific situation. True maximization would require you to know your own exact lifespan.

IMO, better to take SS as soon as possible than to wait and potentially never use it at all. Is the 8%/yr. difference worth having a bird in the hand? Since you are giving up a full year of actual benefits to get 8% more benefits per year, it would take roughly 12.5 years of retirement to break even on delaying past retirement age - regardless of how long you choose to delay past FRA (up to age 70). I can see working and waiting to maximize your take home $$ if SS was all you had, but when you're retired and not worried about finances, why maximize if it's just a scorecard?

If you are not worried about finances, then delaying to maximize the long term payout, is long term insurance in case you live long.
If you die quickly, example: age 63/64/65.. etc, then you won't care and didn't need it anyhow.

One cannot predict the future, so if you don't need it, then delaying to 70 maximizes the payout, which is good in case some unforeseen thing like being sued strips away most of your money

 

[Which Roger]

If you are not worried about finances, then delaying to maximize the long term payout, is long term insurance in case you live long.
If you die quickly, example: age 63/64/65.. etc, then you won't care and didn't need it anyhow.

One cannot predict the future, so if you don't need it, then delaying to 70 maximizes the payout, which is good in case some unforeseen thing like being sued strips away most of your money

+1 IMO, the "when to take SS" discussions over-emphasize maximizing expected payout and under-emphasize the role it can play as longevity insurance. I understand that for the longevity insurance scenario, the answer is still "it depends", but having this as a goal instead of (or balanced with) maximizing payout changes the equation.

 

[Spanky]

It appears the most common SS strategy employed is the lower earning spouse taking it at 62 and the higher one at 70.
Everything else is up for grabs.

That seems to be the common approach. It is also possible for the higher one claims spousal SS.

 

[travelover]

That seems to be the common approach. It is also possible for the higher one claims spousal SS.

If born before 1954

 

[Crabby Mike]

I'm still exploring spousal benefits, but this sounds way out of whack with what I think I learned here: https://www.ssa.gov/OACT/quickcalc/spouse.html


Correct me if I'm wrong, but spousal benefits are a % based on the higher incomes PIA regardless of when the higher earner starts SS. Waiting to start yours is not going to increase hers.
The % is permanently locked in based on the age that the spouse starts their own benefits. The only thing related to the higher earner is that the higher earner has to start SS benefits before the spouse can collect the spousal benefit portion.

no?

No, the post you responded to was correct. It doesn't matter who's the higher earner, either spouse can take spousal on the other. By waiting until one's own FRA, one can get 50% of the spouse's PIA, assuming the spouse has filed for their own. Also the "file and restrict" option for those of us born before 1954 requires that the one taking spousal benefits waits until his/her FRA to file.

 

[joeea]

IMO, better to take SS as soon as possible than to wait and potentially never use it at all.

Is that what you mean by "common sense"?

Is the 8%/yr. difference worth having a bird in the hand?

Definitely for some. Apparently not for you.

Since you are giving up a full year of actual benefits to get 8% more benefits per year, it would take roughly 12.5 years of retirement to break even on delaying past retirement age - regardless of how long you choose to delay past FRA (up to age 70). I can see working and waiting to maximize your take home $$ if SS was all you had, but when you're retired and not worried about finances, why maximize if it's just a scorecard?

Because if you know you have more guaranteed inflation-protected income coming later, and for the rest of your life, you can safely spend more of your nest egg now?

Because delaying until 70 maximizes the survivor benefit for some spouses?

Because, while you may not be "worried about finance", it may still be nicer to have higher lifetime income?

While many folks do indeed choose to start their benefits the day they turn 62 like you and don't care that they will collect less in benefits over their lifetime, others choose differently. Some would call that common sense.

 

[Spock]

No, the post you responded to was correct. It doesn't matter who's the higher earner, either spouse can take spousal on the other. By waiting until one's own FRA, one can get 50% of the spouse's PIA, assuming the spouse has filed for their own. Also the "file and restrict" option for those of us born before 1954 requires that the one taking spousal benefits waits until his/her FRA to file.

Maybe the difference is the pre-1954 file-and-suspend options?
Or where does the non-file-and-suspend math involve higher spousal benefits by having the higher earner wait to claim?

 

[Spock]

....

While many folks do indeed choose to start their benefits the day they turn 62 like you and don't care that they will collect less in benefits over their lifetime, others choose differently. Some would call that common sense.

"Common sense" can not apply to a topic that is unique (uncommon) to each individual circumstance AND perspective. Like 4% SWRs, its not a once size fits all answer.

While I can pull draw 100K more over my projected life time by waiting... it will also take me 17 years to reach the break even point where I would have more $ in my pocket by waiting
and it will take another 11 years after break even to get that additional 100K... since I'll probably be drooling into my diaper by then the extra 100K isn't going to make any difference to me.

 

[Starsky]

Is that what you mean by "common sense"?


Definitely for some. Apparently not for you.


Because if you know you have more guaranteed inflation-protected income coming later, and for the rest of your life, you can safely spend more of your nest egg now?

Because delaying until 70 maximizes the survivor benefit for some spouses?

Because, while you may not be "worried about finance", it may still be nicer to have higher lifetime income?

While many folks do indeed choose to start their benefits the day they turn 62 like you and don't care that they will collect less in benefits over their lifetime, others choose differently. Some would call that common sense.

I'm just suggesting that if you have enough money so you're set for life, and your assets aren't diminishing, than maximizing Social Security based on an expectation of living to a certain age is just a numbers game and has no impact on the quality of your life. Also, there is a break-even point for delaying, and it takes a while to get there. So just take it now and be guaranteed that you'll use it. If you wait, you may not get to use it; or may not get the benefit for delaying SS. Not everyone lives past 78 years old. In the U.S. you have a 40% chance of getting to 80. As I said, for people who need the money, it's a legitimate concern. Just not for the OP (and many people on this forum).

I paid in. I want to make sure I get paid out. Just my .02. To each his/her own.

Edit: To illustrate, imagine I made you this offer as a friend: I am 67 years old and my health is uncertain. I will pay you $1000 per month for the rest of my life starting right now, or I will pay you $1250 per month for the rest of my life starting in four years, assuming I'm still alive. Which offer would you take? Your answer will be your guide. Do you think it would change if you knew I had a heart attack at age 55?

 

[RunningBum]

"Common sense" can not apply to a topic that is unique (uncommon) to each individual circumstance AND perspective. Like 4% SWRs, its not a once size fits all answer.

You're the one who brought up common sense, now it doesn't apply

it will take another 11 years after break even to get that additional 100K... since I'll probably be drooling into my diaper by then the extra 100K isn't going to make any difference to me.

Might make the difference between getting that diaper changed, or sitting in it.

I'm just suggesting that if you have enough money so you're set for life, and your assets aren't diminishing, than maximizing Social Security based on an expectation of living to a certain age is just a numbers game and has no impact on the quality of your life.

...

I paid in. I want to make sure I get paid out.

How does making sure you get paid out improve your quality of life? Serious question. The potential for $100,000 extra doesn't mean anything to you, but "making sure you get paid out" does?

 

[Spock]

You're the one who brought up common sense, now it doesn't apply

ummm... what? wasn't me.

Might make the difference between getting that diaper changed, or sitting in it.

Not from what I've found recently with placing my parents. Excellent facilities with high personal recommendations from friends are one staffing change (about every 3-6 months) from being a s__t hole. Took several institutions to find a place for mom in 2013. Took dad to the same place last year and couldn't get him out of their fast enough.


If anything the medicaid facilities get more inspections than non-medicaid. Now if you want to go super-high-end private facilities, maybe... but that extra 100K isn't going to cover a single year there.

 

[RunningBum]

ummm... what? wasn't me.

My mistake, mixed up posters

 

[Starsky]

How does making sure you get paid out improve your quality of life? Serious question.

Lighten up Francis...I never said it did.

It's exactly my point. It doesn't improve the quality of my life, so why scheme to maximize how much I get?

The potential for $100,000 extra doesn't mean anything to you, but "making sure you get paid out" does?

Getting paid is just fair, since it's been deducted from my pay for so long. I'm not freaky about it, I just have a choice in the matter and choose to get the money. (Don't know where the $100K came from. We're just talking about 8% of my SS check)

From Supermensch: The Legend of Shep Gordon one of my favorite quotes (and a fantastic movie):

The three most important things a manager does:
1) Get the money
2) Always remember to get the money
3) Never forget to always remember to get the money

 

[Bir48die]

What I continue to say is to each his own. Everyone has their reasons for making the decisions they do. Then live with them. If you want to claim early then do it. If the portfolio is beefy and you feel like you can self insure "when you're in diapers" then so be it. If you see taking late SS as an annuity for your spouse and for potential asst living or medical bills then that's good too. Every time a new SS string starts they end up back in the same spot.

 

[RunningBum]

Lighten up Francis...I never said it did.

It's exactly my point. It doesn't improve the quality of my life, so why scheme to maximize how much I get?



Getting paid is just fair, since it's been deducted from my pay for so long. I'm not freaky about it, I just have a choice in the matter and choose to get the money.

From Supermensch: The Legend of Shep Gordon one of my favorite quotes (and a fantastic movie):

The three most important things a manager does:
1) Get the money
2) Always remember to get the money
3) Never forget to always remember to get the money

Sounds like an emotional decision, to make sure you get something even if it's less than you'd get if you wait. I like to make financial rather than emotional decisions about my financial future. That's not scheming, it's making a long-term, big-picture choice.

 

[Starsky]

Sounds like an emotional decision, to make sure you get something even if it's less than you'd get if you wait. I like to make financial rather than emotional decisions about my financial future. That's not scheming, it's making a long-term, big-picture choice.

You don't know if it's less than you'd get if you wait if you're dead. I prefer certainty over speculation. YMMV

 

[RunningBum]

Well, I mixed you up with Spock again, who calculated coming out $100K ahead with expected life expectancy by waiting, but apparently doesn't care. You guys do whatever you want. For me, "making sure I get mine" is way, way, way behind longevity insurance as a factor. If I die before 70, not taking SS won't be on my mind. My only question is whether I'm paying a fair price for longevity insurance, especially with possible cutbacks in the future.