Social Security Decision

R

Retiredmajor

Recycles dryer sheets
Joined
May 23, 2017
Messages
70
Location
Dubuque
I've been using various SS Optimization tools and have decided that the strategy we will use for me and my wife is for her (lower lifetime earnings) to claim at age 62 and for me to claim at FRA (66 & 4 mos). The tools showed me that the highest lifetime income strategy is for her to claim at age 65 and for me to wait until age 70, but the difference over approx. 28 years (longevity estimate) is $48,000. Given the vagaries of time, health and Government idiocy, I can't see waiting that long.


Am I crazy?
 
And they’re off!!!

Just kidding major, sounds like you’ve researched adequately and made a decision. About all any of us can do.
 
Retiredmajor said:
I've been using various SS Optimization tools and have decided that the strategy we will use for me and my wife is for her (lower lifetime earnings) to claim at age 62 and for me to claim at FRA (66 & 4 mos). The tools showed me that the highest lifetime income strategy is for her to claim at age 65 and for me to wait until age 70, but the difference over approx. 28 years (longevity estimate) is $48,000. Given the vagaries of time, health and Government idiocy, I can't see waiting that long.

Am I crazy?
Click to expand...

Nope. Optimal or best claiming strategy is dependent on lots of variables, including your opinions on life expectancy, rates of return, government cutbacks, etc.

You've thought about it, done some math, and made a call. I think you're ahead of 80% of the population.
 
OP - you may be ahead of 80% of the population, but you are wrong....

....Just kidding, you won't know you are wrong until 28 years from now, then you will say, Wish I had waited, where's the marshmallow. ??

Seriously, what you have done is what I need to do, time to figure this thing out. I might start a thread :popcorn:
 
I used the OP's strategy. My late wife claimed at 62, and I claimed at FRA.

She passed away at 68, so we got 6 years of her SS.
 
OP- DO you have Long term insurance or can you self insure if one of you is in a nursing home for a number of years? If not, you may want to consider waiting until 70 to maximize income for the survivor.
 
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Retiredmajor said:
the difference over approx. 28 years (longevity estimate) is $48,000. Given the vagaries of time, health and Government idiocy, I can't see waiting that long.


Am I crazy?
Click to expand...
As long as you understand you are leaving an estimated $48,000 on the table and are fine with that, then No - you aren't crazy.

We all get to make our own informed decisions. They don't have to all be optimal.
 
Just for grins, did you put both scenarios into FIRECalc and look at the difference?
 
48K over 28 years is nothing to me. . . YMMV. You really never know what is the right thing since you can't predict the future.
 
Hey folks....thanks for weighing in. I'll try to address the questions asked: I didn't pay for a tool. I used 2 free tools OPENSOCIALSECURITY and the one from FINANCIAL ENGINES. I'm aware there are some tools I can pay for and I might try one, just because I over think most things!.

We do not have Long Term Care Insurance but I'm looking into it. I do have substantial Life Insurance on me, the higher earner. Given our financial situation, my wife would be in great shape should I pass on before her.

I have used Firecalc with MANY variations, including taking SS at every point from age 62 -70. Every output has us at 100% with variations in how large our estate would be at the end. But every variation has us solid at 100%. I love Firecalc!

And here's the other thing, I can choose to wait past my FRA if I want when that time comes. My plan isn't etched in stone. Obviously, she'll have started her SS, but I can wait if I want.

Eventually, our combined SS plus my pension will cover 100% of our expenses, leaving our nest egg for travel, fun and helping our kids.

Major
 
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"Eventually, our combined SS plus my pension will cover 100% of our expenses, leaving our nest egg for travel, fun and helping our kids."

Work out a plan for LTC, not that you have to buy any, just ensure that there will be money available, if needed.

When you've "won the game", is there really any need to worry about playing another inning?
 
Retiredmajor said:
Hey folks....thanks for weighing in. I'll try to address the questions asked: I didn't pay for a tool. I used 2 free tools OPENSOCIALSECURITY and the one from FINANCIAL ENGINES. I'm aware there are some tools I can pay for and I might try one, just because I over think most things!.

We do not have Long Term Care Insurance but I'm looking into it. I do have substantial Life Insurance on me, the higher earner. Given our financial situation, my wife would be in great shape should I pass on before her.

I have used Firecalc with MANY variations, including taking SS at every point from age 62 -70. Every output has us at 100% with variations in how large our estate would be at the end. But every variation has us solid at 100%. I love Firecalc!

And here's the other thing, I can choose to wait past my FRA if I want when that time comes. My plan isn't etched in stone. Obviously, she'll have started her SS, but I can wait if I want.

Eventually, our combined SS plus my pension will cover 100% of our expenses, leaving our nest egg for travel, fun and helping our kids.

Major
Click to expand...


I've used both of those and found the Financial Engines version to be a bit flaky. First time the numbers were just flat wrong and I left feedback to the FE end-of-session survey saying the same, which earned me an invite to a conversation with an FE rep. Latest attempt at it is "better", numbers are closer but their simple rounding throws numbers way off over 20+ years of compounding (which would make your 48K difference even smaller).
Opensocialsecurity gets a little fancy with applying a statistical probability of death at each iteration based on which life expectancy table you chose, but its numbers make more sense (and show more detail) than FE does.
I see creating a when-to-take SS spreadsheet is in my future... ;)
 
I ran the numbers also and the wife is starting to collect this month, age 62, and I'll wait until at least FRA. I had the larger income so it makes sense for me to wait. Longevity doesn't run in her family but you never know.
 
We are doing something similar. Wife claimed at 62, her earnings are a bit more than half of mine. I plan on claiming at 70. This gives me a few more years for doing ROTH conversions. If I decide to claim earlier, that is still available. The crossover point for her claiming breakeven, is around 83(?) which happens to be the average mortality age for men aged 62. (If I remember correctly) So, my delaying is longevity insurance for her, as she will receive the larger benefit that I have when I pass. If we both live past 83, I am OK with that!


There are very few wrong answers with SS claiming strategies, but there are also some very strong opinions.
 
It appears the most common SS strategy employed is the lower earning spouse taking it at 62 and the higher one at 70.
Everything else is up for grabs.
 
Since you seem to have the facts and considered the possibilities then do what helps you sleep well at night. If one or both of you lives longer than expected, you think of all the extra things you were able to do when you were both younger. If not.... does it matter?

Me? One of several reasons for taking SS at 70 is that I took my pension about 3 years early so I could bail out while I was still sane and reasonably healthy. But, that is me. You sound like you know what you are doing and you are blessed with several good choices. Enjoy life.
 
I have also run various calculators. I plan to take mine at 62 and DW at 70. That "makes the most sense" dollar-wise. But also, I am better with money and could live on less then she could if something happens to one of us.
 
Retiredmajor said:
Hey folks....thanks for weighing in. I'll try to address the questions asked: I didn't pay for a tool. I used 2 free tools OPENSOCIALSECURITY and the one from FINANCIAL ENGINES. I'm aware there are some tools I can pay for and I might try one, just because I over think most things!.

We do not have Long Term Care Insurance but I'm looking into it. I do have substantial Life Insurance on me, the higher earner. Given our financial situation, my wife would be in great shape should I pass on before her.

I have used Firecalc with MANY variations, including taking SS at every point from age 62 -70. Every output has us at 100% with variations in how large our estate would be at the end. But every variation has us solid at 100%. I love Firecalc!

And here's the other thing, I can choose to wait past my FRA if I want when that time comes. My plan isn't etched in stone. Obviously, she'll have started her SS, but I can wait if I want.

Eventually, our combined SS plus my pension will cover 100% of our expenses, leaving our nest egg for travel, fun and helping our kids.

Major
Click to expand...

I think opensocialsecurity.com is the best of the tools that I have used. I even looked at some of the reports for the for-pay tools and was not impressed at all.

What I did is with OSS is too compare the EPVs for their optimal solution vs alternatives of DW now/me FRA, both 65, both FRA and DW FRA/me 70... and with SS reductions on and off... with same mortality and discount rate assumptions.... the differences between the EPVs were insignificant enough that I concluded that it doesn't realy matter much.

So for now, we plan to wait for FRA for DW and 70 for me unless the stock market tumbles to a point of discomfort.
 
Retiredmajor said:
I've been using various SS Optimization tools and have decided that the strategy we will use for me and my wife is for her (lower lifetime earnings) to claim at age 62 and for me to claim at FRA (66 & 4 mos). The tools showed me that the highest lifetime income strategy is for her to claim at age 65 and for me to wait until age 70, but the difference over approx. 28 years (longevity estimate) is $48,000. Given the vagaries of time, health and Government idiocy, I can't see waiting that long.


Am I crazy?
Click to expand...

No, I don't think you are, but I don't count for much either. :LOL: DH is 4 years older than I, and was born before 1/1/54. I will take at 62, he'll reach FRA this summer and will take 1/2 FRA benefit as a spousal benefit, and then when he reaches 70, my spousal benefit will stop and his bigger, fatter check will begin.

Our fee only planner recommended this through her paid SS calculator (sorry, don't know the name), but I've also used Open Social Security, ssincomeplanner.com, FlexibleRetirementPlanner.com, Financial Engines, AARP and the Pope who all concur with her suggestion, so that's what we're doing.

As you can tell, this is an often discussed topic. But hey, it's a big decision, right? Good luck!
 
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For many here, $48k is like leaving chips on the table. For some it's not that critical of a decision. As far as having "longevity" insurance if there is a sufficient asset base and your spending is in line, who really cares. But it will be the single most discussed topic on this forum well after I'm dead (assuming there are moderators to replace the old farts).
 
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