Social Security question for you.

[Floridatennisplayer]

Wife and I are the same age 63. Both born in March of 1955. She has only worked part time during our 40 years of marriage. So last year at 62 she started taking SS and continued working part time. I am obviously the much higher wage earner.

I am planning to start SS this coming March at age 64. My SS will be nearly triple hers. I was told that when I start, she can convert to 50% of mine which would be a nice increase. I’ve been reading up on this and called SS and this seems to be the case. Any confirmation here?

 

[MissMolly]

She won't ever be able to get the full 50% since she claimed early. Once you claim early you are forever reduced, but she may still be able to receive an increase once you start drawing your SS.

 

[pb4uski]

Suggest that you try out opensocialsecurity.com and click on the Advanced options box at the top of the page... you can then compare the expected present value of their optimal strategy with your plan (Alternative claiming strategy) towards the bottom of the page.

You can also test to see how a potential reduction of benefits in the future affects your plans.

What this tool does is to compute the cash flows of every scenario, apply the mortality tables that you specify (likelihood of your being alive to receive the cash flow) and then present it value the expected cash flows back to today using the real discount rate that you specify. The recommended strategy is the scenario with the highest expected present value.

 

[SecondCor521]

She won't ever be able to get the full 50% since she claimed early. Once you claim early you are forever reduced, but she may still be able to receive an increase once you start drawing your SS.

If this is the case (I don't know either way), then the OP may still be able to get to 50% by having his wife cancel her original application, repay all of the benefits, and basically take a mulligan.

There is a 12 month time limit on this, so OP may be out of luck or may need to act fast:

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

 

[pb4uski]

^^^ Yup. The OP could get a good idea of the impact with opensocialsecurity.com.

 

[MissMolly]

If this is the case (I don't know either way), then the OP may still be able to get to 50% by having his wife cancel her original application, repay all of the benefits, and basically take a mulligan.

There is a 12 month time limit on this, so OP may be out of luck or may need to act fast:

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

This is true, but doubtful that she still falls within the 12-month period since OP states their birthdays are in March and she filed for hers last year at 62. My guess is she is long past paying it back.

 

[joeea]

I am planning to start SS this coming March at age 64.

Why at 64? Do you need the money now?

 

[Floridatennisplayer]

Why at 64? Do you need the money now?

I’m retiring in March. No I don’t “need the money now”. Some people take it early for numerous reasons, some wait for numerous reasons.

 

[pb4uski]

.... Some people take it early for numerous reasons, some wait for numerous reasons.

And interestingly, they all think their decision is the "best".

And it is.... for them!

 

[MRG]

And interestingly, they all think their decision is the "best".

And it is.... for them!

Ding ding ding. Exactly right, perception is reality. [emoji111]

 

[Sunset]

I’m retiring in March. No I don’t “need the money now”. Some people take it early for numerous reasons, some wait for numerous reasons.

And when a person shares those reasons, it educates other folks about life, or sometimes results in a great sharing of ideas to the benefit of others or the person who shared that reason.

 

[ivinsfan]

In fact your DW can switch to a spousal benny which might be more then she is getting now. It would be one half of your benefit at FRA minus a pretty big haircut for her filing before her FRA. But a spousal benefit can't be claimed until you yourself have filed for a benefit.

Did you guys study any of this before she pulled the trigger on her check? Just curious.

 

[joeea]

I’m retiring in March. No I don’t “need the money now”. Some people take it early for numerous reasons, some wait for numerous reasons.

Right, which was why I was asking why you are taking it early.

So is it because you want to start your Social Security benefits at exactly the same time you retire for some reason? If so, why?
I'm not trying to judge - just trying to understand.

 

[Floridatennisplayer]

And when a person shares those reasons, it educates other folks about life, or sometimes results in a great sharing of ideas to the benefit of others or the person who shared that reason.

The take it early/the take it late scenario has pretty much been beaten to death here. My reasoning (same as mentioned by many here..and nothing new) will gain the acceptance and congratulations of some and draw the indignation of those against.

And for more controversy....I paid off our home 10 years ago and paid cash for our Florida condo.......oh the humanity!!!!!!

 

[SecondCor521]

This is true, but doubtful that she still falls within the 12-month period since OP states their birthdays are in March and she filed for hers last year at 62. My guess is she is long past paying it back.

I would agree with your guess. I was allowing for the possibility, not precluded by the statements in the OP, that she filed in December 2017. Since it could be a significant amount of money at stake, and for others who read this thread later, I thought it was worth mentioning.

 

[ivinsfan]

The take it early/the take it late scenario has pretty much been beaten to death here. My reasoning (same as mentioned by many here..and nothing new) will gain the acceptance and congratulations of some and draw the indignation of those against.

And for more controversy....I paid off our home 10 years ago and paid cash for our Florida condo.......oh the humanity!!!!!!

Indignation...really? You started this thread with a question about spousal benefits. Apparently you were in the dark about exactly how they work. Posters have been nothing but helpful.

 

[Floridatennisplayer]

Right, which was why I was asking why you are taking it early.

So is it because you want to start your Social Security benefits at exactly the same time you retire for some reason? If so, why?
I'm not trying to judge - just trying to understand.

It’s a multitude of things combined. Last year I read a great article on the “When to take SS” debate in the WSJ and emailed the author. A former SS Director now author and columnist. He told me you are really not going to make a major life changing mistake and it is unnecessary to stress over it. He said people over complicate it. Everyone has different situations but you really can’t hurt yourself. He said for every reason people use for waiting, you can also use the same reason for taking early.

I’m taking it in March to preserve my investments as my employment income will be over. My income in the past 15 years has always been between $140k - $235K so it’s a decent amount of SS. My SS and annuity will cover 100% of our annual expenses. So why wait I say. Enjoy it while I’m in my early years of retirement. Waiting will not change anything in my life except deplete savings. Our kids can’t inherit SS but they can our assets.

Come March I’m going to sleep, be done with stress, meetings, egotistic specialists, egotistic managers, play tennis every day, goof off with our grandkids, bob back and forth to Florida to play in a few tournaments, drink good wines, read and live the Word and have fun.

 

[Floridatennisplayer]

Indignation...really? You started this thread with a question about spousal benefits. Apparently you were in the dark about exactly how they work. Posters have been nothing but helpful.

I’ve seen lots of the posts on when to take SS and watched the two different sides develop. Never said people weren’t helpful. They are, that’s why I’m here. Just didn’t want to get into that unrelated debate which wasn’t what my thread was about.

Yes, I was in the dark about spousal benefits. A complete different question.

 

[geerman]

I turn 62 in a couple months, my understanding is that for dw who is a few years younger and I, spousal benefits are off the table as of a few years ago as part of the restructuring of future SS benefits.

 

[MissMolly]

I turn 62 in a couple months, my understanding is that for dw who is a few years younger and I, spousal benefits are off the table as of a few years ago as part of the restructuring of future SS benefits.

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.

 

[joeea]

I’m taking it in March to preserve my investments as my employment income will be over. My income in the past 15 years has always been between $140k - $235K so it’s a decent amount of SS. My SS and annuity will cover 100% of our annual expenses. So why wait I say. Enjoy it while I’m in my early years of retirement. Waiting will not change anything in my life except deplete savings. Our kids can’t inherit SS but they can our assets.

Got it.

You want to spend "their money" so that you don't have to spend "your money". And you are willing to give up some SS income and a fair chunk of potential survivor benefits to do that.

Thanks.

 

[pb4uski]

It’s a multitude of things combined. Last year I read a great article on the “When to take SS” debate in the WSJ and emailed the author. A former SS Director now author and columnist. He told me you are really not going to make a major life changing mistake and it is unnecessary to stress over it. He said people over complicate it. Everyone has different situations but you really can’t hurt yourself. He said for every reason people use for waiting, you can also use the same reason for taking early....

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.

 

[ivinsfan]

It’s a multitude of things combined. Last year I read a great article on the “When to take SS” debate in the WSJ and emailed the author. A former SS Director now author and columnist. He told me you are really not going to make a major life changing mistake and it is unnecessary to stress over it. He said people over complicate it. Everyone has different situations but you really can’t hurt yourself. He said for every reason people use for waiting, you can also use the same reason for taking early.

I’m taking it in March to preserve my investments as my employment income will be over. My income in the past 15 years has always been between $140k - $235K so it’s a decent amount of SS. My SS and annuity will cover 100% of our annual expenses. So why wait I say. Enjoy it while I’m in my early years of retirement. Waiting will not change anything in my life except deplete savings. Our kids can’t inherit SS but they can our assets.

Come March I’m going to sleep, be done with stress, meetings, egotistic specialists, egotistic managers, play tennis every day, goof off with our grandkids, bob back and forth to Florida to play in a few tournaments, drink good wines, read and live the Word and have fun.

Sounds like you have everything lined up and ready to go, enjoy every minute of your new life. It's true you rarely really hurt yourself over a decision of when to take SS, but in your case you probably cost yourself some money by not understanding how a spousal payment works. Now in your case it probably won't make a great deal of difference, but for someone else it could be very important. Even though you feel talking about when to draw SS was off topic, you never know when someone will be reading about SS for the first time and have their thinking challenged.

I've never understood why some posters get so annoyed about "inappropriate" responses to their threads. Someone besides you might get a light bulb moment from one of those answers. Lucky for me I started reading here over 10 years ago and I learned about SS from all our "repetitive" threads. My DH will turn 70 and draw a check in Jan. I'm on a spousal and will begin to draw in Jan as well. That's what worked best for the two of us.

 

[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.

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)?

 

[gerntz]

Got it.

You want to spend "their money" so that you don't have to spend "your money". And you are willing to give up some SS income and a fair chunk of potential survivor benefits to do that.

Thanks.

My take too. I mean unless your investments make you more than the SS benefits gain you achieve by waiting, including potential survivor benefits, just what are you protecting? If married with a spouse more than likely to outlive you, waiting is best imo. Outside that key situation, take it whenever.