Another reason to claim Social Security at 62

[Exchme]

My point was that the only way to get his deferred filed-at-age 70 benefit at his death was to have qualified initially for SS under my own earnings, not his. Had I made less $ in my career, I would have had to file for spousal benefits instead of my own earned benefits, which would have then limited me to his FRA benefit at his death, not the larger benefit he's receiving by waiting to file until age 70.

This is not how it works.

Whether you claimed on your record or not and regardless of who passes first, the total of the benefits for the survivor is the larger benefit. When you are both alive, the two of you may receive the lower earner's benefit, a spousal benefit and the higher earner's benefit.

If the lower earner passes, their benefit & spousal benefit disappear and the higher earner's benefit continues.

If the higher earner passes, the spousal benefit stops, the lower earner's benefit continues and a survivor benefit kicks in. But the size of the survivor benefit is always calculated to be exactly what's needed to get the total benefit back to the larger earner's benefit.

[Edit: A good resource is to go to Opensocialsecurity.com, it will show you how the benefits work when a spouse passes]

 

[TheWizard]

This is not how it works.

Whether you claimed on your record or not and regardless of who passes first, the total of the benefits for the survivor is the larger benefit. When you are both alive, the two of you may receive the lower earner's benefit, a spousal benefit and the higher earner's benefit.

If the lower earner passes, their benefit & spousal benefit disappear and the higher earner's benefit continues.

If the higher earner passes, the spousal benefit stops, the lower earner's benefit continues and a survivor benefit kicks in. But the size of the survivor benefit is always calculated to be exactly what's needed to get the total benefit back to the larger earner's benefit.

Correct; she was misinformed about how it works...

 

[ElizabethT]

This is not how it works.

Whether you claimed on your record or not and regardless of who passes first, the total of the benefits for the survivor is the larger benefit. When you are both alive, the two of you may receive the lower earner's benefit, a spousal benefit and the higher earner's benefit.

If the lower earner passes, their benefit & spousal benefit disappear and the higher earner's benefit continues.

If the higher earner passes, the spousal benefit stops, the lower earner's benefit continues and a survivor benefit kicks in. But the size of the survivor benefit is always calculated to be exactly what's needed to get the total benefit back to the larger earner's benefit.

That is not what we were told, twice, by SS admins, once over the phone and once in person. We were told exactly as I detailed above. Spousal benefit begun at age 62 never moves up to higher than spouse's FRA amount upon their death. The only way to move it to the.larger deferred age 70 amount is to have filed based on my own earnings at age 62.

If we were given wrong info two times directly from SS, then I would suggest we may all be misinformed.

 

[Sunset]

That is not what we were told, twice, by SS admins, once over the phone and once in person. We were told exactly as I detailed above. Spousal benefit begun at age 62 never moves up to higher than spouse's FRA amount upon their death. The only way to move it to the.larger deferred age 70 amount is to have filed based on my own earnings at age 62.

Maybe this could possibly make a difference, ie if now taking spousal is more than your SS, and you still get the deferred age 70 benefit upon spouse death.

I realize you were told twice, but maybe they were wrong, and you could get a bump up. Does SS give decision letters like the IRS does for the rules, where the letter is them agreeing in a situation something applies so a person can do it knowing the decision won't be changed later.

How aggravating.

 

[Exchme]

That is not what we were told, twice, by SS admins, once over the phone and once in person. We were told exactly as I detailed above. Spousal benefit begun at age 62 never moves up to higher than spouse's FRA amount upon their death. The only way to move it to the.larger deferred age 70 amount is to have filed based on my own earnings at age 62.

This is what happens when specialists like the SS staff try to talk to us non-experts, they use terminology like "Your benefit", "Your husband's benefit", "spousal benefit" and "survivor benefit", but the terms often don't mean exactly what they sound like they should mean, so you're just not achieving communication with them.

Play around with opensocialsecurity.com and see how it all fits together. The short version is that once one of you passes, the total the survivor gets is simply equal to the higher earner's benefit. But that total is technically made up of several benefits - if you worked, it would be your benefit and a survivor benefit. If you did not work, then there is only a (different size) survivor benefit. In both cases, the size of the survivor benefit is set so that the total received equals the higher earner's benefit.

 

[Texas Proud]

Yes, everything is based on his pre-deceasing me. I will remain on my own filed-at-age-62 benefit until then.

My point was that the only way to get his deferred filed-at-age 70 benefit at his death was to have qualified initially for SS under my own earnings, not his. Had I made less $ in my career, I would have had to file for spousal benefits instead of my own earned benefits, which would have then limited me to his FRA benefit at his death, not the larger benefit he's receiving by waiting to file until age 70.

Interesting post...

So what age can you file where you would get his age 70 survivor benefits?

 

[audreyh1]

Honestly, I think that for survivor benefit you get the difference between yours and your spouse’s if theirs was larger. It ends up that you get the same amount as your spouses benefit when they died or could claim if they hadn’t yet done so.

 

[RetiredHappy]

Interesting post...

So what age can you file where you would get his age 70 survivor benefits?

You need to file at FRA for survivor benefits. If the spouse passes away before your FRA, and you file for survivor benefits, then you get a haircut. There is no condition of whether the surviving spouse had previously filed against their own benefits or spousal benefits.

 

[pb4uski]

As I posted, most males aren't going to be able to do 'go-go' activities if they wait until age 70.

SS might be actuarily neutral but that matters little if waiting until then means they're now unable to have the experiences they desired in retirement.

Were you assuming there is some other source of funds to do the above instead of claiming early?

Of course I was. If you don't have any retirement savings you don't have choices other than to take SS early or continue working. Assuming that you are not working then your living expenses have to come from somewhere.

But most people posting here have enough wealth to delay SS. All you really need saved is 5.6x your PIA (FRA benefit) so if your FRA is 67 and your PIA is $40k a year your age 62 benefit would be $28k so you only need $224k to provide the age 62 benefit while you delay SS. Most people here have many multiples of that so the can afford to delay and would have the same cash flow as if the claimed at 62.

 

[pb4uski]

Perhaps. But I'll have that larger nest egg during my active years available. What good is money when I'm old and feeble (minded or physically).

But if you have money, you can prudently spend more by delaying so you'll be more financially secure if you end up living long. Feeble is a whole different thing.

 

[pb4uski]

This is the approach we are initiating soon- I'm going now at 62 and DH will file soon at age 70. However, it was very important that I qualified on my own earnings, and that my age 62 payment was more than 50% of my DH's FRA payment would be, or I would have been forced to file for a spousal benefit, which would then have precluded my ability to switch to DH's full filed-at-age-70 payment.

If I were forced to file under the spousal benefit instead of my own earned-on-the-job SS benefit, I would have been limited to his FRA payment at his death. I would not have been eligible for his filed-at-age-70 larger benefit.

This stuff is so insanely complicated.

Perhaps it seems insanely complicated because you are totally wrong. You can file for your own benefits based on your work record at anytime after you turn 62. IF your PIA is less than 50% for your spouse's PIA you'll get more once you spouse files but if you file before your FRA the spousal additional benefit will be permanently reduced. If your spouse dies, you get the higher of your two benefits.

 

[audreyh1]

You need to file at FRA for survivor benefits. If the spouse passes away before your FRA, and you file for survivor benefits, then you get a haircut. There is no condition of whether the surviving spouse had previously filed against their own benefits or spousal benefits.

Yeah, I think the critical point to understand is that filing for survivor benefits is a separate process from filing for your own benefits (or spousal benefits if the amount is higher).

 

[USGrant1962]

Yea, in this thread multiple people have pointed out that SPOUSAL and SURVIVOR are different. Yet people still mix them up regularly.

 

[homestead]

My benefit is larger than my spouse so I thought she would just get my benefit if I died first but
the last time I ran a SS calculator it said her survivor benefit would be a little larger than my benefit
but I have no idea why.

 

[Retired Expat]

Stuck!

Our issue is more emotional than financial so not sure anybody can help me but here’s hoping….

My benefit is much larger than my wife’s so she filed on hers. I still have a year to FRA. Trying to determine if I take it now which is early, at FRA or at 70 but our criteria is less longevity or breakeven but ability to spend “income” but not spend “savings”.

For example we sold a property and got 1/2 down (That went into savings) then the rest was to be paid out over 10 years, principal with interest. We treated that monthly payment as income and spent it each month. Buyer had the right to pay off the balance after 3 years which they elected to do. So in my mind that money is “Savings”. I can’t seem to treat it as money to spend!

We don’t need the SS now but if it was coming in monthly we would spend it and live better…. We could wait and spend the same out of savings and get it back in 4 years at 70 in higher SS payments and maybe even do a bit better but emotionally as being frugal or careful we don’t like touching the principal or savings. Even though without a serious change in our lives we can’t possibly spend it all since we have other passive income. But that SS would pay for 6 additional cruises a year that I just can’t bring myself to btd on.

My brain says wait for FRA to max out wife’s spousal benefits but….

Is all probably in my head. But I live in my head don’t I?

Any thoughts?

 

[Chuckanut]

Skipro33, I’ll tell you what good money is. When you are older and find that lifting and bending are harder than ever to do, and you get sorer longer than ever doing many things, it’s nice to have the money to pay esomebody else to do them for you.

While the plumber is contorting himself under your sink installing your new kitchen sink faucet you can be out walking in the park, dancing at the seniors center or harvesting goodies from your garden.

 

[latexman]

Any thoughts?

Just like a lot of us in a similar situation, we don’t know our expiration date, so there is no explicit answer. You gotta go with your gut!

I retired at 67 in July. I plan to claim SS at 70. I carved out the 3 years of cash I’ll need from my AA and put it in MM (4.25% now). I’ve been using that cash to bridge me to 70 for 4 months now. So far so good. Hopefully, the S don’t HTF and I make it to 70. Time will tell. Good luck to us all!

 

[RetiredHappy]

Stuck!

Our issue is more emotional than financial so not sure anybody can help me but here’s hoping….

My brain says wait for FRA to max out wife’s spousal benefits but….

Any thoughts?

First of all... it's survivor benefits that you are talking about and not spousal benefits.

You need to change your mindset. But more importantly, do you have enough savings to last, including spending on several cruises a year? If you do, just spend the money and don't worry about whether you are going to get it from SS or savings.

My husband and I spend like there is no tomorrow (maybe more him than me). We have always been that way because we made alot of money when we were working. We have never had "LBYM" mindset but our savings continue to grow no matter how we spend our money. Of course we don't go off and buy multi-million dollar yachts or private jets as we are in a different income bracket. But we enjoy life and not worry about the financial aspect of it.

 

[pb4uski]

Stuck!

Our issue is more emotional than financial so not sure anybody can help me but here’s hoping….

My benefit is much larger than my wife’s so she filed on hers. I still have a year to FRA. Trying to determine if I take it now which is early, at FRA or at 70 but our criteria is less longevity or breakeven but ability to spend “income” but not spend “savings”.

For example we sold a property and got 1/2 down (That went into savings) then the rest was to be paid out over 10 years, principal with interest. We treated that monthly payment as income and spent it each month. Buyer had the right to pay off the balance after 3 years which they elected to do. So in my mind that money is “Savings”. I can’t seem to treat it as money to spend!

We don’t need the SS now but if it was coming in monthly we would spend it and live better…. We could wait and spend the same out of savings and get it back in 4 years at 70 in higher SS payments and maybe even do a bit better but emotionally as being frugal or careful we don’t like touching the principal or savings. Even though without a serious change in our lives we can’t possibly spend it all since we have other passive income. But that SS would pay for 6 additional cruises a year that I just can’t bring myself to btd on.

My brain says wait for FRA to max out wife’s spousal benefits but….

Is all probably in my head. But I live in my head don’t I?

Any thoughts?

Frame the decision differently. You say you have a year to your FRA. Let's assume that your FRA is 67 and your PIA is $4,000/mo. You benefit a year early would be 93-1/3% or $3,733 and your benefit at 70 would be 124% or $4,960... a difference of $1,227/month or $14,724/year. So you forgo $3,733/month for 4 years or $179,184 for $14,724 a year as long as your or your wife are living.

I don't know about you, but $14,724 a year as long as you or your wife are living seems like a pretty big deal compared to $179,184.

Or take $179,184 of your stash, put it off to the side and set up a monthly automatic wthdrawal of $3,733/month from that account to the checking account that you use to pay your bills... you'll have a faux age-66 SS beneft so you can spend that "income" with impunity.

Or another way to think of it is did you save this money for your retirement or to hoard it?

 

[Retired Expat]

I worked hard and saved money because that is what we were supposed to do. I never really thought about the spending part! We lived well off of my earnings but always watched the bottom line was also incredibly fortunate with some investments. Father beat into us (okay not literally) spend your income not your savings and that sticks with me to this day.

Had tried an automatic transfer from investments to checking but knew I was just fooling myself so canceled it. But will reinstate it Worst that happens is I find my self with extra cash in the bank at the end of the year and move it back to investments.

Also I seem to be one of those very lucky people. Was told last year that I would be needing surgery and it would be expensive even after insurances as my international insurance kind of sucks….But doctor wanted to enroll me in a new surgical trial for a much less invasive method using a tried and true device but in a new way. And I could do it near me in SA and not need to fly to the US. One night in the hospital instead of a week, trial paid everything and my anticipated OOP and deductible went from $15k to zero. Doing phenomenal thanks!

Must learn to stop worrying I guess is the answer!

 

[audreyh1]

There are many of us here living off of investments/savings. We have no earnings, SS or pensions. We take an amount from our investments every year to live on.

That’s the whole point of models like FIREcalc - to determine how much you can draw every year from your nest egg and not completely deplete it over the long run.

 

[Chuckanut]

Just another reminder of something we have discussed before: IF you have the funds to finance your early retirement years without SS, and IF you don't plan on leaving an estate to your heirs, taking SS at 70 gives you more money to spend every year starting at 62.

Granted the two IFs above are big ones for many people.

The math is the math and I can post that if you want to see it.

 

[TheWizard]

Just another reminder of something we have discussed before: IF you have the funds to finance your early retirement years without SS, and IF you don't plan on leaving an estate to your heirs, taking SS at 70 gives you more money to spend every year starting at 62.

Granted the two IFs above are big ones for many people.

The math is the math and I can post that if you want to see it.

Leaving an estate to heirs is a non-factor. I delayed SS to 70 and spent considerably.
And yet I have a mid 7-figure estate that's still growing...

 

[audreyh1]

Leaving an estate to heirs is a non-factor. I delayed SS to 70 and spent considerably.
And yet I have a mid 7-figure estate that's still growing...

Mid 7-figure estates - when to start SS is usually a non-factor anyway. You’re usually already in the category of don’t need SS to retire or to spend more early.

 

[FlaGator]

Leaving an estate to heirs is a non-factor. I delayed SS to 70 and spent considerably.
And yet I have a mid 7-figure estate that's still growing...

Not sure that's a universal truth, like all things about the SS claiming age.

We had two kids in our early 40's, mom died over 10 years ago. Last kid will graduate from college when I'm 67. Not married, still supporting the oldest due to health reasons, and medical expenses have been high. I'm not mid-7 figures but comfortable enough. No big travel or other classic retirement splurges and it's close to stay under the first Medicare tier and cover hard-wired expenses with those circumstances.

No pension, and taking SS at 65 cuts my draw from assets by an equal amount. Can't know today how things will work out for either kid, so want to leave as much as possible while I make the best of my next few decades.

After 27 pages of this discussion, I'm surprised at the dogmatic responses and how few think their correct/defensible decision based on their situation may not be optimum for someone else.

Like all things SS, "it depends"