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Old 05-10-2017, 11:34 PM   #1
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Social Security Scenerios

I am so confused by spousal filing, even after reading up on the latest changes. One thing I'm unsure about is if I plan on taking my SS at age 66 1/2 PIA (current age is 60) what options does my DH (who is six years younger and lower earner) have?

My PIA is $2730
His PIA approx $1500

I think the option of him taking spousal, then switching to his own has been eliminated. (We were under the cut off age.) So really, he either takes his own at 62 or 67 or he could get a reduced spousal at age 62? I don't think it makes since for him to take later than 62, due to age difference, health and being the lower earner. So, instead of half of my $2730, his spousal if filing at age 62 would be discounted how much?

Am I looking at this correctly? Any suggestions. It would be helpful to know approximate numbers for planning purposes.


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Old 05-11-2017, 12:10 AM   #2
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I think it is hard to figure out how to maximize Social Security.

The book "Get What's Yours" by Kotlikoff et al. seems to be a good book to read. I'm reading it right now and it seems that it might be a good resource for you also. The latest edition has been revised to take into account the recent changes that were signed into law in, I believe 2015, and that I believe you are referencing.

The book is very clearly written and strikes me as accurate. It does seem moderately repetitive, but you can combat that by skipping the parts that don't apply.

You can get approximate numbers from the book also.

Good luck!
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Old 05-11-2017, 07:28 AM   #3
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This worked for me. SSAnalyze - Bedrock Capital Management. SSAnalyze - Bedrock Capital Management

It was consistent with the Kotlikoff suggestion for me.
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Old 05-11-2017, 12:53 PM   #4
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This worked for me. SSAnalyze - Bedrock Capital Management. SSAnalyze - Bedrock Capital Management

It was consistent with the Kotlikoff suggestion for me.
It's slightly different for me (divorced and not grandfathered in under the 2015 rules). Bedrock Capital's web site recommends I file for my benefit at age 69 because it thinks I will die at 83. Kotlikoff's book recommends that I wait to age 70. Although the difference in NPV between 69 and 70 is only a few thousand bucks. Maybe I'll see how sick I feel in the summer of 2038 and then decide.
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Old 05-11-2017, 02:43 PM   #5
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It's slightly different for me (divorced and not grandfathered in under the 2015 rules). Bedrock Capital's web site recommends I file for my benefit at age 69 because it thinks I will die at 83. Kotlikoff's book recommends that I wait to age 70. Although the difference in NPV between 69 and 70 is only a few thousand bucks. Maybe I'll see how sick I feel in the summer of 2038 and then decide.
I would refer to 69 or 70 for SS as being "consistent" especially with a 20 year window. As you point out, your life expectancy estimation is making the difference. Hopefully, the summary provided the direction you were looking for.
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Old 05-11-2017, 02:51 PM   #6
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I would refer to 69 or 70 for SS as being "consistent" especially with a 20 year window. As you point out, your life expectancy estimation is making the difference. Hopefully, the summary provided the direction you were looking for.
I'd already planned to take it at 70 so I ran the website calculator just out of curiosity. Note I'm not the OP, who has a more complicated situation than mine, trying to balance spousal benefits, two earnings records, and age and health differences.
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Old 05-12-2017, 04:23 PM   #7
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I am so confused by spousal filing, even after reading up on the latest changes. One thing I'm unsure about is if I plan on taking my SS at age 66 1/2 PIA (current age is 60) what options does my DH (who is six years younger and lower earner) have?

My PIA is $2730
His PIA approx $1500

I think the option of him taking spousal, then switching to his own has been eliminated. (We were under the cut off age.) So really, he either takes his own at 62 or 67 or he could get a reduced spousal at age 62? I don't think it makes since for him to take later than 62, due to age difference, health and being the lower earner. So, instead of half of my $2730, his spousal if filing at age 62 would be discounted how much?

Am I looking at this correctly? Any suggestions. It would be helpful to know approximate numbers for planning purposes.
Doesn't this say it?

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If your birthday is January 2, 1954 or later, the option to take only one benefit at full retirement age no longer exists. If you file for one benefit, you will be effectively filing for all retirement or spousal benefits.
He can start any time after age 62. When he applies, he will get his own benefit. If if the appropriate fraction of yours is higher, he will get an additional amount.

See table here: https://www.ssa.gov/oact/quickcalc/earlyretire.html

If he was born in 1954,
His own benefit at 62 is (1-.25) x $1,500 = $1,125
His spousal benefit at 62 is .50 x (1-.30) x $2,730 = $955.

So he only gets his own benefit.

My guess, since his PIA is more than 50% of your PIA, is that he will never get a spousal benefit.
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Old 05-12-2017, 05:40 PM   #8
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My understanding is that at his age he will be 'deemed' to be filing for all allowable benefits and SS will give him the largest one. Since he is such a young thing he won't be able to file and 'restrict' the application to only a spousal SS benefit while his increases for several more years.
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Old 05-12-2017, 06:37 PM   #9
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I read the entire Kotlikoff book and still find it very confusing. But I'm thinking that if you wait until 70 to file it will be the best option for two reasons:

1) You are older than your spouse
2) You make more money

If you pass first, he will get your benefit for the rest of his life, so maximizing your benefit is important to him. Of course, women on average live longer than men, so that doesn't quite fit in with this logic. I guess you have to guess whether you think he might outlive you. If he does, the higher benefit from waiting until 70 could be very valuable to him.
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Old 05-12-2017, 10:06 PM   #10
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Thanks for the responses! Our goal is for me to file at 66.5 years of age at the earliest. Likely will wait until 70, as I understand that it is better for him to have the larger amount if I pass.





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Old 05-13-2017, 07:58 AM   #11
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Originally Posted by Debinnov a View Post
I am so confused by spousal filing, even after reading up on the latest changes. One thing I'm unsure about is if I plan on taking my SS at age 66 1/2 PIA (current age is 60) what options does my DH (who is six years younger and lower earner) have?

My PIA is $2730
His PIA approx $1500

I think the option of him taking spousal, then switching to his own has been eliminated. (We were under the cut off age.) So really, he either takes his own at 62 or 67 or he could get a reduced spousal at age 62? I don't think it makes since for him to take later than 62, due to age difference, health and being the lower earner. So, instead of half of my $2730, his spousal if filing at age 62 would be discounted how much?

Am I looking at this correctly? Any suggestions. It would be helpful to know approximate numbers for planning purposes.


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he only gets his own reduced benefit . he has no option not to take his .

so he gets his early benefit at 62. when you file he gets the difference between 1/2 your pia (1365.00) less his primary benefit of 1k , even if he filed early , so 1365 less 1000 is 365 .00 .

so he would get 365 added to his early benefit . he is penalized for filing early so he never sees 1/2 yours . if he waited until his fra he would get the 365 added to his regular benefit , but if it is more than 1/2 yours it will get reduced down to 1/2 .
\
only stipulation is in order not to get spousal cut he has to be at least fra or additional cuts apply
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Old 05-13-2017, 08:42 AM   #12
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he only gets his own reduced benefit . he has no option not to take his .

so he gets his early benefit at 62. when you file he gets the difference between 1/2 your pia (1365.00) less his primary benefit of 1k , even if he filed early , so 1365 less 1000 is 365 .00 .

so he would get 365 added to his early benefit . he is penalized for filing early so he never sees 1/2 yours . if he waited until his fra he would get the 365 added to his regular benefit , but if it is more than 1/2 yours it will get reduced down to 1/2 .
I don't think that's consistent with these two pages from the SSA website:
https://www.ssa.gov/oact/quickcalc/spouse.html
https://www.ssa.gov/oact/quickcalc/earlyretire.html

If he retires early, he will not get 1/2 of her PIA.
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Old 05-13-2017, 08:45 AM   #13
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the spousal benefit is only cut a 2nd time if the lower benefit receiver is less than fra when switching to spousal .

lets take my wife , she filed at 62 on her own record , she gets her early reduced benefit. at her fra when i file , she switches to spousal , she gets the difference of 1/2 my primary less her primary added to her early benefit . you never give up that early benefit it haunts you forever , the spousal adder goes on top .

she is fra so no other cuts take place

if she was less than fra when she switches from hers to spousal additional cuts take place . but if she takes her own early benefit until fra and then i file and she claims spousal when i file she gets her early benefit plus the full adder . it will always be less than half my full since it is on top of her early benefit . but again the no cuts on the spousal assume the switch over takes place at fra . she was already cut once for taking her own at 62 .

http://www.kiplinger.com/article/ret...l-benefit.html
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Old 05-13-2017, 01:24 PM   #14
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the spousal benefit is only cut a 2nd time if the lower benefit receiver is less than fra when switching to spousal .

lets take my wife , she filed at 62 on her own record , she gets her early reduced benefit. at her fra when i file , she switches to spousal , she gets the difference of 1/2 my primary less her primary added to her early benefit . you never give up that early benefit it haunts you forever , the spousal adder goes on top .

she is fra so no other cuts take place

if she was less than fra when she switches from hers to spousal additional cuts take place . but if she takes her own early benefit until fra and then i file and she claims spousal when i file she gets her early benefit plus the full adder . it will always be less than half my full since it is on top of her early benefit . but again the no cuts on the spousal assume the switch over takes place at fra . she was already cut once for taking her own at 62 .

Maximize the Social Security Spousal Benefit
The Kiplinger article suggests that she can "switch to spousal benefit" whenever she likes.

But, the OP situation was that she would file at 66 1/2 and her husband is six years younger. He is eligible for spousal benefits when he first files at age 62.

I read this to say that he will be deemed to have filed for the spousal benefit as soon as he starts benefits. https://www.ssa.gov/planners/retire/claiming.html

Maybe you meant that the real decision here is when she should start benefits. If she starts before her age 68, he will start spousal benefits at 62. If she defers till 70, he can do two years on just his record, then will have to start his spousal as soon as she files.

That could be a better strategy for certain benefit combinations, but I don't see it for this situation where his PIA is $1,500 and hers is $2,730.

Maybe you can do some numbers to show how it works?
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Old 05-13-2017, 01:29 PM   #15
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if the higher benefit spouse files first at 66-1/2 then there is a little problem .

when her husband files at 62 he automatically gets spousal since it is higher than his own . but that spousal now gets reduced for each month he is under fra . it is reduced more than his own would be although on a higher amount . not sure how it works out balance wise .

The percentage reduction is 25/36 of 1% per month for the first 36 months and 5/12 of 1% for each additional month on spousal . it is only a reduction of 5/9 of 1% per month for the first 36 months and 5/12 of 1% for each additional month on his own for taking it early .. .

he should file first at 62 for his benefit only . after he files then she files when she likes as long as it is after him . .

he then can then put in a spousal claim at his fra and get the full spousal adder on top of his early benefit . it will never be equal to 1/2 the higher benefit because it goes on his early benefit and that was reduced but he gets no further spousal cuts for being under fra .
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Old 05-13-2017, 02:15 PM   #16
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he should file first at 62 for his benefit only .
Is that a restricted application? At his age he would not be eligible due to the 2015 budget deal.

Scuttled a lot of plans.
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Old 05-13-2017, 02:17 PM   #17
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no , not restricted . he files for his own benefit on his own record . with restricted he wouldn't be filing for his benefit .he would be filing for hers leaving his to grow . but they missed the boat on that option and it is better done in the reverse with the higher benefit left to0 grow and that person filing restricted for 1/2 the lower benefit .

but in any case that is gone for them .

he has to file for his own before she files . once she files first he gets a spousal benefit by default since it is higher than his own , but it is reduced since he is under fra .

in order to have a choice of his own or spousal he has to file first . then he can collect his until fra and then file for the spousal adder to be added to his early benefit he already gets down the road . that way it is not reduced , although it will be less than 1/2 since it goes on an early reduced benefit , but at least the spousal portion is not reduced down ..
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Old 05-13-2017, 03:27 PM   #18
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if the higher benefit spouse files first at 66-1/2 then there is a little problem .

when her husband files at 62 he automatically gets spousal since it is higher than his own.
I think his own benefit in that situation is (1-.30) x $1,500 = $1,050. We ought to be able to agree on that.

What do you think his spousal benefit would be?

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but that spousal now gets reduced for each month he is under fra . it is reduced more than his own would be although on a higher amount . not sure how it works out balance wise .

The percentage reduction is 25/36 of 1% per month for the first 36 months and 5/12 of 1% for each additional month on spousal . it is only a reduction of 5/9 of 1% per month for the first 36 months and 5/12 of 1% for each additional month on his own for taking it early .. .
I think that if he files at 62, and his wife is already receiving benefits, then his benefit is level (adjust for CPI) until she dies. I don't know of any situation where SS benefits go down after they start.

You're quoting the factors for the initial benefit.
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Old 05-13-2017, 03:32 PM   #19
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in order to have a choice of his own or spousal he has to file first . then he can collect his until fra and then file for the spousal adder to be added to his early benefit he already gets down the road . that way it is not reduced , although it will be less than 1/2 since it goes on an early reduced benefit , but at least the spousal portion is not reduced down ..
She can't defer her start date past age 70. When she starts at 70, he will be 64.

The way I read the SSA explanation I linked, at that point, he is eligible for a spousal benefit and he has to start. He can't wait till 67.
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Old 05-13-2017, 06:33 PM   #20
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She can't defer her start date past age 70. When she starts at 70, he will be 64.

The way I read the SSA explanation I linked, at that point, he is eligible for a spousal benefit and he has to start. He can't wait till 67.

He does not have to start at 67. SSA never requires anybody to start. You are not even "required" to start at 70, but it's pointless to wait past 70 since benefits no longer grow. He can wait until 68, 69 or 70. His choice.
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