Social Security question for you.

[MissMolly]

Thank you, prompted me to do some digging and discover the changes to the budget act of 2015 wasn't as I thought. So if I file at 64, she then turns 62 and can collect half of my FR benefit (66.5), or half my benefit at that time (64)?

Neither one exactly. Spousal benefit calculation will always start with your FR benefit at 66.5 (regardless of when you file), but then will be reduced depending on how early before her FR age she files. If she waits until her FR age, she will get 50% of your FR benefits regardless of when you file.

 

[VanWinkle]

The date you apply for your benefits will directly determine how much of your FRA benefit your spouse will get for spousal benefit. She has reduced her own benefit by applying at 62, but the reduction of spousal benefit will be determined by when you apply for your benefit. My wife has a very small FRA benefit of 440.00 and has claimed at age 63 2months for a 364.00 benefit. Her amount for her own benefit will always be reduced by that amount. If I wait to
her FRA for my benefit, she will get 50% of my benefit less the 76.00 early benefit penalty. It will pay her much more if I wait to apply until her FRA.

Will I wait? Maybe, but I know I can apply at any time if needed(like a severe market downturn)

Good luck on your decision,

VW

 

[ivinsfan]

The date you apply for your benefits will directly determine how much of your FRA benefit your spouse will get for spousal benefit. She has reduced her own benefit by applying at 62, but the reduction of spousal benefit will be determined by when you apply for your benefit. My wife has a very small FRA benefit of 440.00 and has claimed at age 63 2months for a 364.00 benefit. Her amount for her own benefit will always be reduced by that amount. If I wait to
her FRA for my benefit, she will get 50% of my benefit less the 76.00 early benefit penalty. It will pay her much more if I wait to apply until her FRA.

Will I wait? Maybe, but I know I can apply at any time if needed(like a severe market downturn)

Good luck on your decision,

VW

Sorry this isn't correct....

or I'm not understanding what you are trying to say..

 

[Teacher Terry]

So I used the calculator and it recommended I take it at age 65 and 1 month when my full retirement age is 66. Due to WEP I am only getting 360 month and I earn over what’s allowed. So the first year I would earn 4320 and they would keep 2400 because I am working. Sounds stupid to me.

 

[SumDay]

I was trying to explain spousal benefits to a friend last week, and found this recent Forbes article: https://www.forbes.com/sites/tomhag...ity-spousal-benefits-calculated/#5edf8d646929

Just thought it might help someone else here wade through this SS quagmire.

 

[geerman]

Yes and no. If, when she files, spousal benefits are higher than her own benefit, then she will awarded the higher of the two. But she will get only one or the other. Even if awarded spousal, she will not be able to delay her own until a later date. Once she files, she will be deemed to be filing for everything she is eligible for.

Thanks! Very helpful, the 2015 budget change to SS wasn't quite what I thought, prompted to check further and learn. My question now is if I file at 64, and at that time she also files (at 62), is she eligible for half my FR (66.5) benefit or half of my age 64 benefit?

 

[MissMolly]

Please see Post #26 where this was answered.

 

[kaneohe]

As much as we debate it and take sides, I agree and have written that in the past. If you get on opensocialsecurity.com and compare the EPV of their optimal solution, taking as early as possible, taking at FRA and taking as late as possible, the EPVs are not all that different. For us for example:

As early as possible..........................................95.8%
Optimal solution (62/1 for DW, 68/9 for me).......100.0%
FRA.................................................................98.6%
As late as possible (FRA for DW, 70 for me)..........98.9%

So the EPVs are all pretty close... widest difference is 4.2% so that is the "worst" mistake one could make looking solely at EPVs and not other factors.

Note: Since we are both over 62, I added 5 years to our birth year so I could do an as early as possible scenario... used 2017 CSO nonsmoker preferred mortality and 3.0% real discount rate and no haircut in 2034.

Thanks for this comforting (and quantitative!) post. I took mine before I found this site and bogleheads and didn't realize there a learned/sophisticated answer. The ignorant caveman answer to me was to take it soon so I wouldn't deplete my assets. It was very comforting during 2008/2009 and after to have an assured source of income coming in so I didn't feel compelled to do anything foolish. Maybe your post should be a sticky!

 

[ivinsfan]

Thanks for this comforting (and quantitative!) post. I took mine before I found this site and bogleheads and didn't realize there a learned/sophisticated answer. The ignorant caveman answer to me was to take it soon so I wouldn't deplete my assets. It was very comforting during 2008/2009 and after to have an assured source of income coming in so I didn't feel compelled to do anything foolish. Maybe your post should be a sticky!

Maybe but the poster admits when he did the calculations he wasn't really aware of how spousal benefits work. Every couple will have a different set of calculations, it's a little more uniform for singles.

 

[REWahoo]

The ignorant caveman answer to me was to take it soon so I wouldn't deplete my assets. It was very comforting during 2008/2009 and after to have an assured source of income coming in so I didn't feel compelled to do anything foolish. Maybe your post should be a sticky!

Don't forget to include your equally informative post in that sticky as well. You aren't the only member here who found there was real value in opting to start SS benefits during a deeply depressed market. It was great to have that lifeline.

 

[pb4uski]

I feel like we are sort of in the catbird seat now at 63.. ~3 years to FRA and 7 years to maximum benefits... if our investment results stall to a point where we are uncomfortable we just start SS... otherwise let it grow.

 

[REWahoo]

I feel like we are sort of in the catbird seat now at 63.. ~3 years to FRA and 7 years to maximum benefits... if our investment results stall to a point where we are uncomfortable we just start SS... otherwise let it grow.

That's a great position to be in.

 

[VanWinkle]

Sorry this isn't correct....

or I'm not understanding what you are trying to say..

Which part is not correct? I can explain further if needed.

 

[Floridatennisplayer]

I feel like we are sort of in the catbird seat now at 63.. ~3 years to FRA and 7 years to maximum benefits... if our investment results stall to a point where we are uncomfortable we just start SS... otherwise let it grow.

Winner winner chicken dinner!

 

[ivinsfan]

Which part is not correct? I can explain further if needed.

Where you say she gets paid more if you wait to FRA...do you mean her spousal benefits or her survivor benefit.

 

[VanWinkle]

Where you say she gets paid more if you wait to FRA...do you mean her spousal benefits or her survivor benefit.

She will receive more if he waits until her FRA to claim his benefits. That will give her an 100% of spousal benefit(50% of his benefit) less the original amount she had her own benefit reduced by claiming early. She is not determined to have claimed spousal benefit until he applies for his benefit. This does seem confusing, but it is the way benefits are claimed. If he claims his benefit before she reaches FRA, she will be deemed to have applied for spousal at that time. It(the 50% of his benefit) will be reduced by about 6% for each year before her FRA.

VW

 

[MissMolly]

No, not correct. She will not be deemed to be filing for benefits until she files. And if she waits until she is FRA to file, she will receive 50% of his FRA benefits regardless of when he files.

 

[ivinsfan]

No, not correct. She will not be deemed to be filing for benefits until she files. And if she waits until she is FRA to file, she will receive 50% of his FRA benefits regardless of when he files.

That's the way I understand it too.

 

[joeea]

No, not correct. She will not be deemed to be filing for benefits until she files. And if she waits until she is FRA to file, she will receive 50% of his FRA benefits regardless of when he files.

... as long as he has already filed.

And of course this only applies to spousal benefits, not survivor benefits.

 

[VanWinkle]

That's the way I understand it too.

https://www.ssa.gov/planners/retire/claiming.html



Under the new law deemed filing is extended to apply to those at full retirement age and beyond. In addition, deemed filing may occur in any month after becoming entitled to retirement benefits. For example, if you begin receiving your retirement benefit and only later become eligible for a spousal benefit (or vice versa), you will be “deemed” to have applied for the second benefit as soon as you are eligible for it. Your monthly payment will be the higher of the two benefit amounts.

This is why I would think she will be deemed as filing for spousal as soon as eligible(when he files for his benefit)

 

[VanWinkle]

No, not correct. She will not be deemed to be filing for benefits until she files. And if she waits until she is FRA to file, she will receive 50% of his FRA benefits regardless of when he files.

See post 45 and let me know if that makes sense.

VW

 

[MissMolly]

See post 45 and let me know if that makes sense.

VW

Yes, it does. I think my confusion stems from not understanding that you meant she had already filed and would then (possibly) be eligible for a bump up once her spouse filed if her spousal amount was greater than her own. That's not usually how I hear "deemed" being referred to in these types of discussions, but I think I now have a clearer understanding of the point you were making. My apologies for being so obtuse

Edited to add: However, the timing of when her husband files has absolutely nothing to do with what her spousal amount will be. That amount begins with 50% of the husband's amount and then is reduced based on when she originally filed (if before FRA), not when he files. So even if she is 66 when he files, it doesn't change the fact that she filed early and therefore her spousal amount will be forever reduced.

 

[VanWinkle]

Yes, it does. I think my confusion stems from not understanding that you meant she had already filed and would then (possibly) be eligible for a bump up once her spouse filed if her spousal amount was greater than her own. That's not usually how I hear "deemed" being referred to in these types of discussions, but I think I now have a clearer understanding of the point you were making. My apologies for being so obtuse

Likely my fault for not being clear enough.

Best to you,

VW

 

[ivinsfan]

Likely my fault for not being clear enough.

Best to you,

VW

Indeed the fault lies with the multitude of rules and regulations one must wade through to understand the intent of the law. Throw in the fact that due to age not all of us are operating under the same rules and it's a S#%tshow.

What applies to me may not apply to you and hence the confusion. We can both be right and confused at the same time.

 

[MissMolly]

Indeed the fault lies with the multitude of rules and regulations one must wade through to understand the intent of the law. Throw in the fact that due to age not all of us are operating under the same rules and it's a S#%tshow.

What applies to me may not apply to you and hence the confusion. We can both be right and confused at the same time.

Indeed, it is