Yet Another Social Security Question....

[PandaBear]

Dh just retired last month and received his first pension check a couple of days ago at age 60.5. I’m still working.

He’s said all along he’d take his pension at 62, and I’ve always gone along with it, but now I’m thinking we should at least consider it more seriously.

Dh is 3.5 years older than me. I will not get social security on my own, nor will I receive any of dh’s, because of my own pension.

I know typically everyone on this site says defer until 70, but I’m wondering if not having a spousal benefit would change your recommendation?

Thanks for your thoughts.

 

[RunningBum]

I know typically everyone on this site says defer until 70, but I’m wondering if not having a spousal benefit would change your recommendation?

One of the most debated and split topics on this site!

Depends on your health and genes, whether you want/need money now for living expenses, want longevity insurance (my personal target), think you can invest SS money better than letting the benefit grow, are worried about future SS plan reductions and want to get grandfathered in, have the notion that you want to make sure you "get yours", and many other reasons, valid or not. Numerous threads on this.

I'll probably bow out before getting dragged into yet another thread. Usually I get suckered in when someone says something ridiculous, so I can't make any promises.

For the most part, it really doesn't make that much difference unless you are an outlier for dying earlier or living longer than most people who make it to 60 in reasonable health.

 

[Z3Dreamer]

Know that from an actuarial standpoint, when you take SS makes no difference. It is all a matter of your facts and circumstances, as RunningBum has said.

First question: Do you have enough to live on without taking early? If yes, then you can explore all of the options.

Good luck.

 

[pb4uski]

Know that from an actuarial standpoint, when you take SS makes no difference. ...

That is generally true for singles, though some might argue that longevity is much better than when the discount and premia were last set due to medical advances and that shades the decision towards deferral.

But it is definitely not true for married people... especially where one spouse earned a lot more than the other spouse... because of joint mortality and spousal benefits interactions.

I think the best option for the OP is to go to opensocialsecurity.com, check the Advanced Options box and input their information... and then compare the results of the optimal strategy with Alternative Claiming Strategies.

 

[LRDave]

Dh is 3.5 years older than me. I will not get social security on my own, nor will I receive any of dh’s, because of my own pension.

I assume this is because of GPO and WEP - correct?

If so, it is very much like your husband is making the decision of a single person relative to the likely total SS payment to him. The difference is that while the benefit is equivalent to single person, he will likely want to adopt a strategy to protect you in the event of his (likely, given age and gender) early demise.

What that strategy is will depend on your (both of you) overall financial situation. It might be that taking early and protecting the nest egg or if you don't need the cash now, investing the early payments in something that will compensate later for the lack of survivor benefits.

 

[pb4uski]

I assume this is because of GPO and WEP - correct?

If so, it is very much like your husband is making the decision of a single person relative to the likely total SS payment to him. The difference is that while the benefit is equivalent to single person, he will likely want to adopt a strategy to protect you in the event of his (likely, given age and gender) early demise.

What that strategy is will depend on your (both of you) overall financial situation. It might be that taking early and protecting the nest egg or if you don't need the cash now, investing the early payments in something that will compensate later for the lack of survivor benefits.

Or using some of his benefit topay for premiums for life insurance (or a term life insurance ladder) that provides for you once he is gone.

 

[PandaBear]

I’m not sure exactly what GPO and WEP stand for but i think I understand the big picture. I didn’t pay in to SS enough (just 28 quarters total) and my pension is quite high.

If i go first (statistically not as likely, but things happen), obviously dh continues to collect. If he goes first, my pension increases. Basically with my pension, if you choose a survivor and they die, you revert back to member only pension amount. Not as much as SS, but something.

In todays dollars, our pensions plus SS at 62 give us an excess of our current spending (which still includes some support of our kids as they begin their careers).

I was hoping there might be a more cut and dried decision!

 

[N02L84ER]

Also consider health care costs if you will need to buy it on the marketplace. If your combined income exceeds $65K +/- with the SS but is below $65K +/- without the SS, he might be better off waiting until age 65 to start his SS.

 

[PERSonalTime]

I’m not sure exactly what GPO and WEP stand for but i think I understand the big picture. I didn’t pay in to SS enough (just 28 quarters total) and my pension is quite high.

If i go first (statistically not as likely, but things happen), obviously dh continues to collect. If he goes first, my pension increases. Basically with my pension, if you choose a survivor and they die, you revert back to member only pension amount. Not as much as SS, but something.

In todays dollars, our pensions plus SS at 62 give us an excess of our current spending (which still includes some support of our kids as they begin their careers).

I was hoping there might be a more cut and dried decision!

I’m in a position similar to yours.

My pension covers pretty much all of our living expenses. DW decided to take Social Security at 62. Really didn’t need the money to live on, but she uses it as her fun money/savings money. All is well with that decision and we’ve been retired for about three years.

I would suggest that you forget about all the calculations and just worry about whether or not you’d have enough money to live on without SS at 62. If you do, just go ahead and get the money early, because it will take you about 11 years to recoup the difference between taking it now and waiting until 70, and enjoy your retirement!

 

[RetireBy90]

I'm a very cautious person when it comes to my retirement $$, so please take that into account when reading.



I would consider waiting till at least Full Retirement Age (FRA) of close to 67. We have plenty of income even if I take my SS at FRA but I'll wait till I'm 70 to ensure the most for DW in case I go before she does. It just gives us both a bit of extra security in case unexpected expenses come in retirement.



YMMV

 

[street]

It is always an interesting subject. I would say a large percentage of the people here would not even need SS to live. If in that category, if you would not need it, why not take it early and blow it, save it, or give it away. Also the spouse always comes up to leave them more, but if we wouldn't need SS why worry about the spouse having enough after one passes away. Most here have way more then we will ever spend and plenty left if one dies for the spouse.
Just a thought and observation not an argument in any way.

 

[joeea]

If in that category, if you would not need it, why not take it early and blow it, save it, or give it away.

If in that category, if you would not need it, why not take it at 70 and blow it, save it, or give it away?

Also the spouse always comes up to leave them more, but if we wouldn't need SS why worry about the spouse having enough after one passes away. Most here have way more then we will ever spend and plenty left if one dies for the spouse.

If we wouldn't need it early, why not have even more left for the spouse and have a bigger legacy to pass on?

 

[LRDave]

I would consider waiting till at least Full Retirement Age (FRA) of close to 67. We have plenty of income even if I take my SS at FRA but I'll wait till I'm 70 to ensure the most for DW in case I go before she does. It just gives us both a bit of extra security in case unexpected expenses come in retirement.

There will be no SS survivor benefits for the OP. When her DH passes, all SS payments stop.

 

[RunningBum]

I was hoping there might be a more cut and dried decision!

The good news about that is there's no decision that's obviously wrong!

For me, not being needing the money anytime soon (if at all), it is a cut and dried decision--take the option that gives me the best longevity insurance.

 

[braumeister]

The good news about that is there's no decision that's obviously wrong!

The other good news is that in hindsight, everyone believes they made the best decision for them.

 

[RetireBy90]

OP PandaBear said

I will not get social security on my own, nor will I receive any of dh’s, because of my own pension.

Then LRDave

There will be no SS survivor benefits for the OP. When her DH passes, all SS payments stop.

So if married, why no survivor benefits for PandaBear ?

Thanks for clearing this up for me, I get confused easily

 

[LRDave]

OP PandaBear said


Then LRDave


So if married, why no survivor benefits for PandaBear ?

Thanks for clearing this up for me, I get confused easily

SSA GPO (Government Pension Offset). OP will recieve a government pension from an employer that did not contribute to SS. GPO whacks the SS you can receive from a spouses contributions, including survivor benefits. It is a formula to calculate the reduction in spousal benefit, but the net is: even a modest pension will wipe completely any spousal benefit one can receive.

WEP (Windfall Elimination Program) reduces the individual's own SS benefit in the case of a government pension with no SS contribution by the employee. Is is more complicated and less punitive. I encourage the OP to double-check that even with her small contributions to SS that she might still get a little something, even if just a pittance.

 

[RetireBy90]

^^^ Thanks, didn't realize that the GPO would also apply to survivor benefits. What a complex system it has become.

 

[JustCurious]

I know typically everyone on this site says defer until 70,...

I don't think that is true.

 

[PandaBear]

It is always an interesting subject. I would say a large percentage of the people here would not even need SS to live. If in that category, if you would not need it, why not take it early and blow it, save it, or give it away. Also the spouse always comes up to leave them more, but if we wouldn't need SS why worry about the spouse having enough after one passes away. Most here have way more then we will ever spend and plenty left if one dies for the spouse.
Just a thought and observation not an argument in any way.

Thank you...that's definitely a thing to consider. It's good to hear different viewpoints.

 

[PandaBear]

SSA GPO (Government Pension Offset). OP will recieve a government pension from an employer that did not contribute to SS. GPO whacks the SS you can receive from a spouses contributions, including survivor benefits. It is a formula to calculate the reduction in spousal benefit, but the net is: even a modest pension will wipe completely any spousal benefit one can receive.

WEP (Windfall Elimination Program) reduces the individual's own SS benefit in the case of a government pension with no SS contribution by the employee. Is is more complicated and less punitive. I encourage the OP to double-check that even with her small contributions to SS that she might still get a little something, even if just a pittance.

Thank you for explaining this so well. I knew the outcome for myself, but didn't understand exactly the terminology.

 

[PandaBear]

I’m in a position similar to yours.

My pension covers pretty much all of our living expenses. DW decided to take Social Security at 62. Really didn’t need the money to live on, but she uses it as her fun money/savings money. All is well with that decision and we’ve been retired for about three years.

I would suggest that you forget about all the calculations and just worry about whether or not you’d have enough money to live on without SS at 62. If you do, just go ahead and get the money early, because it will take you about 11 years to recoup the difference between taking it now and waiting until 70, and enjoy your retirement!

You're right, I may be really overthinking this! Thanks for your input.