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SS Strategy
Old 06-15-2021, 10:09 AM   #1
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SS Strategy

I've learned a lot about the SS rules around spousal benefit - but I'm wondering what the community here thinks about spousal filing strategies.

Our situation:

Me = born in 1965, primary earner, planning on filing at FRA or later
DW = born in 1961, qualifies for SS but much less than mine

Question:

Should DW file at 62 and collect on her record for all of the years prior to me filing before uplifting to spousal benefit? Or should she delay a year or two and still collect on her record for a few years prior to me filing and then file for spousal uplift?

Or since I'm lazy today - is this just a simple spreadsheet model (which i assume is the case and apologize in advance).
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Old 06-15-2021, 10:43 AM   #2
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A great site that will help you figure out when to file for spousal SS is opensocialsecurity.com. You can enter all kinds of possible scenarios and it'll advise you on the best possible time for both of you to file.

Good luck.
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Old 06-15-2021, 10:54 AM   #3
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A great site that will help you figure out when to file for spousal SS is opensocialsecurity.com. You can enter all kinds of possible scenarios and it'll advise you on the best possible time for both of you to file.

Good luck.
Great idea - I've been on that site before and didn't even think of it. That said, I just setup a spreadsheet for this and it's clear DW should file at 62 and collect on her earnings record until I hit FRA (or file) when she can then claim spousal...

Seems like an easy decision
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Old 06-15-2021, 12:55 PM   #4
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BY claiming on her own record she will lower the amount of spousal social security even though it may be more than her own record. Since actuarily the difference in ages will offset the differences in age income, if you can afford it, you would be increasing future income by delaying.
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Old 06-15-2021, 01:11 PM   #5
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Ahh... I get it now. Spousal isn't simply 50% of my benefit, it's her benefit @ her FRA boosted to 50% of my benefit.

I think I have that right... somewhat confusing at first.
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Old 06-15-2021, 02:59 PM   #6
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BY claiming on her own record she will lower the amount of spousal social security even though it may be more than her own record. Since actuarily the difference in ages will offset the differences in age income, if you can afford it, you would be increasing future income by delaying.
I am in a similar position as OP in that my Benefit is much larger (although we were both born in 1963). With the proration of her benefit, I am surprised that under any reasonable scenario I run, opensocialsecurity has my wife claiming early (e.g. 62).

I have bought into the idea of using Social Security as more of a longevity insurance and plan to take at 70 - I just assumed my wife would wait til 67 to maximize her benefit.
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Old 06-15-2021, 03:28 PM   #7
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BY claiming on her own record she will lower the amount of spousal social security ....
Yes, an example... let's say that her PIA is $700 and yours is $2,600. Also, let's say that you file at your FRA of 67 and she files at 62.

She'll collect 70% of her PIA or $490. Once you file she'll get a spousal benefit of the difference between 50% of your PIA ($1,300) and her PIA ($700) or $600. So once you file she'll receive $1,090 in total for the rest of her life.

OTOH, if she waits until her FRA she would get $700 on her own work record and once you file she would get the same $600 spousal benefit... for a total of $1,300.

So the $210 discount that she is assessed for filing at 62 rather than FRA is for life.
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Old 06-15-2021, 03:44 PM   #8
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Originally Posted by Yipper View Post
Ahh... I get it now. Spousal isn't simply 50% of my benefit, it's her benefit @ her FRA boosted to 50% of my benefit.

I think I have that right... somewhat confusing at first.



It is confusing because you still don't have it correct. There will be an age reduction carried through to her spousal number. You have her filing at 62 not her FRA..


Mr. PB4 has a good example
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Old 06-15-2021, 03:49 PM   #9
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Originally Posted by Yipper View Post
Great idea - I've been on that site before and didn't even think of it. That said, I just setup a spreadsheet for this and it's clear DW should file at 62 and collect on her earnings record until I hit FRA (or file) when she can then claim spousal...

Seems like an easy decision

Just be sure you understand all the numbers..
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Old 06-15-2021, 04:00 PM   #10
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A word of advice to Yipper. If you use opensocialsecurity, be sure to click on the box at the top to allow additional input. The author has a default discount rate of -0.37%. depending on how you are invested, you might want to bump that a little higher.

You can also select other mortality tables that might better reflect your lifestyle.

After running many iterations with different discount rates, the bottom line for us was things didn't vary by more than about 5%, which I guess should be expected from something that is designed to be actuarial neutral.
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Old 06-15-2021, 04:04 PM   #11
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Yes, an example... let's say that her PIA is $700 and yours is $2,600. Also, let's say that you file at your FRA of 67 and she files at 62.

She'll collect 70% of her PIA or $490. Once you file she'll get a spousal benefit of the difference between 50% of your PIA ($1,300) and her PIA ($700) or $600. So once you file she'll receive $1,090 in total for the rest of her life.

OTOH, if she waits until her FRA she would get $700 on her own work record and once you file she would get the same $600 spousal benefit... for a total of $1,300.

So the $210 discount that she is assessed for filing at 62 rather than FRA is for life.
For fun, I ran this scenario through opensocialsecurity.com assuming male born 4/15/65 with $2,600 PIA and female born 4/15/61 with $700 PIA, both using 2017 CSO Preferred Non-Smoker mortailty and a 0% discount rate.

Quote:
The strategy that maximizes the total dollars you can be expected to receive over your lifetimes is as follows:
  • Your spouse files for his/her retirement benefit to begin 4/2028, at age 67 and 0 months.
  • You file for your retirement benefit to begin 4/2035, at age 70 and 0 months.
  • Your spouse files for his/her spousal benefit to begin 4/2035, at age 74 and 0 months.
YearYour Annual Retirement BenefitYour Annual Spousal BenefitYour Annual Survivor BenefitYour Spouse's Annual Retirement BenefitYour Spouse's Annual Spousal BenefitYour Spouse's Annual Survivor BenefitTotal
2028$0$0$0$6,300$0$0$6,300
2029$0$0$0$8,400$0$0$8,400
2030$0$0$0$8,400$0$0$8,400
2031$0$0$0$8,400$0$0$8,400
2032$0$0$0$8,400$0$0$8,400
2033$0$0$0$8,400$0$0$8,400
2034$0$0$0$8,400$0$0$8,400
2035$29,016$0$0$8,400$5,400$0$42,816
2036 and beyond$38,688$0$0$8,400$7,200$0$54,288
If you outlive your spouse$38,688$0$0$0$0$0$38,688
If your spouse outlives you$0$0$0$8,400$0$30,288$38,688
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Old 06-15-2021, 04:27 PM   #12
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Originally Posted by pb4uski View Post
For fun, I ran this scenario through opensocialsecurity.com assuming male born 4/15/65 with $2,600 PIA and female born 4/15/61 with $700 PIA, both using 2017 CSO Preferred Non-Smoker mortailty and a 0% discount rate.



YearYour Annual Retirement BenefitYour Annual Spousal BenefitYour Annual Survivor BenefitYour Spouse's Annual Retirement BenefitYour Spouse's Annual Spousal BenefitYour Spouse's Annual Survivor BenefitTotal
2028$0$0$0$6,300$0$0$6,300
2029$0$0$0$8,400$0$0$8,400
2030$0$0$0$8,400$0$0$8,400
2031$0$0$0$8,400$0$0$8,400
2032$0$0$0$8,400$0$0$8,400
2033$0$0$0$8,400$0$0$8,400
2034$0$0$0$8,400$0$0$8,400
2035$29,016$0$0$8,400$5,400$0$42,816
2036 and beyond$38,688$0$0$8,400$7,200$0$54,288
If you outlive your spouse$38,688$0$0$0$0$0$38,688
If your spouse outlives you$0$0$0$8,400$0$30,288$38,688
Curious how far down the Green section went? I.E. if your spouse took it at age 62, would you still be in the 99%? Ours doesn't seem to move much at all as long as I take at age 70.
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Old 06-15-2021, 07:54 PM   #13
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Curious how far down the Green section went? I.E. if your spouse took it at age 62, would you still be in the 99%? Ours doesn't seem to move much at all as long as I take at age 70.
Luckily, I still had that tab open.
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Old 06-16-2021, 05:46 AM   #14
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So the $210 discount that she is assessed for filing at 62 rather than FRA is for life.
This helps me understand things a LOT better - thank you!
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Old 06-16-2021, 06:15 AM   #15
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A word of advice to Yipper. If you use opensocialsecurity, be sure to click on the box at the top to allow additional input. The author has a default discount rate of -0.37%. depending on how you are invested, you might want to bump that a little higher.

You can also select other mortality tables that might better reflect your lifestyle.

After running many iterations with different discount rates, the bottom line for us was things didn't vary by more than about 5%, which I guess should be expected from something that is designed to be actuarial neutral.
Thanks - I did find that actually and like you I found there wasn't a significant difference in outcomes. We're not talking life changing money.
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Old 06-16-2021, 06:17 AM   #16
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It is confusing because you still don't have it correct. There will be an age reduction carried through to her spousal number. You have her filing at 62 not her FRA..


Mr. PB4 has a good example
thanks - that's the part that was a bit confusing.
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