Don’t need social security

[Andre1969]

I've run the various scenarios in FireCalc, of starting SS at every year from 62 to 70. Regardless of what year I pick, my chance of success is around the same, so I never really paid too much attention to it. My plan had been to wait until I'm getting close to 62, see where I stand at the time, and then decide what I think is best.

However, in running those FireCalc scenarios, I only looked at the chance of success, which just meant, not running out of money before I die. I never paid attention to which year would be the best for taking it, if I wanted to end up with more money.

 

[MarieIG]

The SS calculators have me taking SS at 62 and DH at 70 for greatest income as a couple.

If I get run over by a bus the day after I claim, DH would be in good shape. He could take my benefit and let his grow till age 70. If I triggered at 62 or anywhere along the spectrum before he turns 70, he could collect his widower's income and let his grow.

But - if DH shuffles off this mortal coil prior to his FRA, I would be locked in at my lower rate, and never get the opportunity of either my maximum or DH's maximum either.

I see SS as longevity insurance/ a bit of diversification. It's a COLA guaranteed income that is hard to alienate, even if one becomes unable to handle their own finances.

Also, postponing does allow that much more room for Roth conversions.

And, I don't have a crystal ball. Even billionaires, for a variety of reasons, can loose it all.

 

[Major Tom]

I don't really need it. However, in order to be able to stop working at age 45, I traded a lower material standard of living for all that extra time. It has not been a struggle, as I am fairly content not being a homeowner, and don't do many things that require much money, such as regular travel.


For that reason, I should be able to afford to delay SS for as long as I like. On the other hand, if I get the urge to splurge a bit more in the future, it's good to know that I can claim SS, and spread my wings a bit. More money gives more options. I have been comfortable with my fairly limited options for the last 14 years, but you never know...........

 

[NW-Bound]

The SS calculators have me taking SS at 62 and DH at 70 for greatest income as a couple.

If I get run over by a bus the day after I claim, DH would be in good shape. He could take my benefit and let his grow till age 70. If I triggered at 62 or anywhere along the spectrum before he turns 70, he could collect his widower's income and let his grow.

But - if DH shuffles off this mortal coil prior to his FRA, I would be locked in at my lower rate, and never get the opportunity of either my maximum or DH's maximum either...

Wow, I did not think of this scenario.

Pray tell, what would be your options in that case?

Or do you just get whatever SS computes, meaning you have no options? In that case, what would it be?

PS. You said "prior to his FRA". What if an SS-deferring spouse is deceased between FRA and 70?

 

[Lewis Clark]

I've run the various scenarios in FireCalc, of starting SS at every year from 62 to 70. Regardless of what year I pick, my chance of success is around the same, so I never really paid too much attention to it. My plan had been to wait until I'm getting close to 62, see where I stand at the time, and then decide what I think is best.

Remember that when to take SS is not an either/or decision. Once you reach 62, you can decide at any time between then and age 70.

 

[MarieIG]

Wow, I did not think of this scenario.

Pray tell, what would be your options in that case?

Or do you just get whatever SS computes, meaning you have no options? In that case, what would it be?

PS. You said "prior to his FRA". What if an SS-deferring spouse is deceased between FRA and 70?

I found this quote:

How does taking Social Security early affect survivor benefit?
Under this provision, known as the “widow(er)'s limit,” the surviving spouse of a Social Security recipient who retired early is entitled to either the late spouse's (reduced) monthly benefit at the time of death or 82.5 percent of the deceased's full benefit, whichever is higher.

Re: It is my understanding that even if I did not claim, if DH passed before his full retirement age, my entitlement to his benefit would max out at his full retirement age - not age 70.

So, lets say DH passed at age 65. If I had not claimed, I would look at his payment as of his DOD. I would compare that to his payment at his full retirement age (the max I could get on his account) and then compare it to my own benefit at age 70 before deciding which payment option would be most beneficial.

Re the PS: I would be entitled to the amount to which DH would be entitled as of his DOD (which would be more than his full retirement benefit; but less than the benefit at age 70).

 

[rkser]

Will DW get spousal benefits at her full retirement age

I am 66 1/2 yrs old & DW is 5 yrs younger.

Our plan is to follow Opensocialsecurity.com, which has me drawing SSA at 70 & DW at age 62.

I have got different opinions about this, but wonder if DW can add the spousal benefits of $200 when I file for mine

My PIA is $2948 at age 66yr 6 mo, (I will file at age 70 for $3416)

DW, the lower earner will file at age 62 for $1209,

Can she switch to her Spousal benefit of 1/2 of 2948 = $ 1474 at her age of 67, which is higher than her own $1209.

 

[NW-Bound]

I found this quote:

How does taking Social Security early affect survivor benefit?
Under this provision, known as the “widow(er)'s limit,” the surviving spouse of a Social Security recipient who retired early is entitled to either the late spouse's (reduced) monthly benefit at the time of death or 82.5 percent of the deceased's full benefit, whichever is higher.

Re: It is my understanding that even if I did not claim, if DH passed before his full retirement age, my entitlement to his benefit would max out at his full retirement age - not age 70.

So, lets say DH passed at age 65. If I had not claimed, I would look at his payment as of his DOD. I would compare that to his payment at his full retirement age (the max I could get on his account) and then compare it to my own benefit at age 70 before deciding which payment option would be most beneficial.

Re the PS: I would be entitled to the amount to which DH would be entitled as of his DOD (which would be more than his full retirement benefit; but less than the benefit at age 70).

Thanks for providing the answers.

There are so many clauses that one would have to be a lawyer to think of all scenarios and ask all the corresponding questions. Nothing trivial about this SS benefit business.

 

[Spock]

My PIA is $2948 at age 66yr 6 mo, (I will file at age 70 for $3416)

DW, the lower earner will file at age 62 for $1209,

Can she switch to her Spousal benefit of 1/2 of 2948 = $ 1474 at her age of 67, which is higher than her own $1209.

Spouse can not start spousal benefits based on your PIA until you file for your benefit.
The 50% of your PIA number applies when spouse doesn't start their benefits until their FRA. Before that there is a formula that reduces their spousal benefit
https://www.ssa.gov/OACT/quickcalc/spouse.html

The spousal benefit can be as much as half of the worker's "primary insurance amount," depending on the spouse's age at retirement. If the spouse begins receiving benefits before "normal (or full) retirement age," the spouse will receive a reduced benefit.
....
A spouse can choose to retire as early as age 62, but doing so may result in a benefit as little as 32.5 percent of the worker's primary insurance amount. A spousal benefit is reduced 25/36 of one percent for each month before normal retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of one percent per month.

Now having said that, there are calculators and members here that claim different, but never point to SSA info to explain that difference. I just get "you're wrong" and I'm sure they'll be along shortly to say so.
So I just use the lower number from the ssa.gov tool and hope for a pleasant surprise if it's more.

 

[pb4uski]

My PIA is $2948 at age 66yr 6 mo, (I will file at age 70 for $3416)

DW, the lower earner will file at age 62 for $1209,

Can she switch to her Spousal benefit of 1/2 of 2948 = $ 1474 at her age of 67, which is higher than her own $1209.

Since she filed at age 62 and not her FRA she will not ever get 1/2 of your $2,948 PIA. Given that she is getting $1,209 at 62, I'm guessing that her PIA was ~$1,727.

She would not get a spousal benefit because her PIA of $1,727 is more that 50% of your $2,948 PIA. She'll get $1,209 for as long as you live, then she'll get your benefit when you die.

Now let's say that her PIA was $1,250 and she started at 62 and was receiving $875. Then, when you start your benefits she would get $224 spousal benefit added to the $875 that she collects based on her own work record, increasing her benefit to $1,099.

PS. If you file at 70 wouldn't your age 70 benefit be $3,773 (128% of your $2,948 PIA) rather than $3,416?

If you start receiving benefits at age 66 and 6 months you get 100 percent of your monthly benefit. If you delay receiving retirement benefits until after your full retirement age, your monthly benefit continues to increase.

The chart below explains how delayed retirement affects your benefit. The increase is based on your date of birth and the number of months you delay the start of your retirement benefits. If you start receiving retirement benefits at age:

• 67, you'll get 104 percent of the monthly benefit because you delayed getting benefits for 6 months.
• 70, you'll get 128 percent of the monthly benefit because you delayed getting benefits for 42 months.

https://www.ssa.gov/benefits/retirement/planner/1957-delay.html

 

[rkser]

Thankyou for the answers, yes her FRA is $1717, my benefit of $3416 at age 70 is from my SSA account.

I think as she was born later than the cutoff of 1954, she cannot claim her spousal only at 62 (after I file) & file for her own SSA at FRA, is my understanding correct ??

 

[jollystomper]

A fair number of members here move money from 1 institution to another to earn an additional 0.5% interest.
Careful tax bracket management earns me a one time 10%-12% return (no compounding unless tax free Roth withdrawals are part of the math) in the 0% bracket and a 22% one-time return vs. just letting the chips fall where they may.

I am talking about this specific case, if you see my quote, not a general thing . It just seems much of the agonizing over "when to take SS" tends to turn to be a wash or not make much difference from a tax perspective, and should not be the main driver for the decision.

 

[MissMolly]

Thankyou for the answers, yes her FRA is $1717, my benefit of $3416 at age 70 is from my SSA account.

I think as she was born later than the cutoff of 1954, she cannot claim her spousal only at 62 (after I file) & file for her own SSA at FRA, is my understanding correct ??

She cannot file for spousal until you file. Then, if at the time she files, her own benefits are greater than the spousal amount she will get her own benefits and not spousal regardless of her age. If she files for spousal before her full retirement age, she will not be entitled to 50% of your PIA. She will get a reduced amount for her lifetime. There will be no switching" to her own benefits at any future date. Once she files she is "deemed" to be filing for the largest benefit she is eligible for at that time.

 

[UnrealizedPotential]

I have no idea when the best time for others or myself is to take Social Security. I have a simple philosophy for when to to take SS. When I turn 62, in 9 years, if I need it , I will take it. If not, I will evaluate it it each year past 62 and then decide.

 

[TheWizard]

Some people collect early anticipating RMD tax torpedos when RMDs kick in...

That logic seems backwards.
If you have a lot of tax-deferred money and good health, then live off tax-deferred and do some Roth conversions from age 62 to 70, thus reducing eventual RMDs by a fair amount...

 

[pb4uski]

+1 One of the major benefits to us of delaying my SS to 70 is more headroom for Roth conversions, which reduces the tIRA which in turn reduces RMD and the tax torpedo.

 

[Time2]

I had totally forgotten about that being one of my reasons for taking it early. That may start to pay off now. It's going to be close this year but regardless I'll be in the bottom tier now rather than the top. But I think I'm going to be able to squeak by. I'm actually working my taxes today so I'll know pretty soon.

As I have wrote several times, I'm waiting until 70 to increase my wife's check after I'm gone, and also to give me a lower income while I maximize my Roth conversions. I have just over 2 years to wait until I'm 70.

 

[CRLLS]

I recently made it to 70 and somehow, managed to follow our plan for me to delay SS until now. To be completely honest, I was collecting spousal over the last 4 years. We have no regrets in doing this at all. One of us will go first leaving the other with the higher monthly deposit. All calculations aside, there is a feeling of running a marathon. Honestly, I have no idea of what it feels like to run a marathon, but it certainly feels good.

 

[COcheesehead]

I found a fancy, but free social security optimizer where you input all kinds of data and…
Wife takes hers at 65, then me at 70 and she switches over to spousal benefits at that time.
We don’t need it, don’t want to pay taxes on it and we are both in good health. Maybe we live to 100. Or we die this afternoon.

 

[eytonxav]

I took mine at 68.5, DW five years younger than me took her's at full retirement age. If we were more frugal, could easily live on SS alone.

 

[Rianne]

I found a fancy, but free social security optimizer where you input all kinds of data and…
Wife takes hers at 65, then me at 70 and she switches over to spousal benefits at that time.
We don’t need it, don’t want to pay taxes on it and we are both in good health. Maybe we live to 100. Or we die this afternoon.

Exactly what we're doing. I took mine at 65, and DH will at 70. We will Roth convert between 65-70. I think you can only do what you think is the best today and not worry about tomorrow. I don't mean spend like a drunken sailor, but as far as reasonable strategy. We can look back with a 20/20 vision and say I should have done this or that. Somehow the more opinions I read on this forum, the better I feel about our decisions.

 

[COcheesehead]

Exactly what we're doing. I took mine at 65, and DH will at 70. We will Roth convert between 65-70. I think you can only do what you think is the best today and not worry about tomorrow. I don't mean spend like a drunken sailor, but as far as reasonable strategy. We can look back with a 20/20 vision and say I should have done this or that. Somehow the more opinions I read on this forum, the better I feel about our decisions.

Very sound reasoning.

 

[nobody]

I'm single, never married, no kids and retired at 47. My one time fee only FA said SS doesn't matter to me and said I could draw it whenever. I will take it as soon as I can get it. I only had about 15 years of making good money. When you look over the 35 years its calculated at, I have a lot of 0's and many years of school wages.

 

[rkser]

Well, no point in pity partying.
Yes, stocks VTI & VXUS are down & BND is down too.
I don’t want to sell anything right now at these low prices, it took a long many years of regular saving to build this, while I was working.
The VTI dividends take care of a major part of our expenses & we have cash savings to supplement the spend.
First, I am not that knowledgeable to decide where to invest into if I sell IRA BND at a steep loss.
Better is to keep my head in the sand, do not disturb the 5 ETF diversified portfolio we have.
I think it will all come around to make it whole in a few years.
That is my story & am sticking to it.

 

[Major Tom]

I have no idea when the best time for others or myself is to take Social Security. I have a simple philosophy for when to to take SS. When I turn 62, in 9 years, if I need it , I will take it. If not, I will evaluate it it each year past 62 and then decide.

For those who don't have a spouse, and who don't have a specific goal, such as preserving a portfolio for heirs, or maximizing fun spending in the earlier retirement years, this is not such a bad approach. It might seem a bit light on the mathematical analysis to some but, seeing that SS is calculated to be actuarially a wash, for people with straightforward situations, it probably doesn't matter too much when they take it.

Your situation seems to be particularly straightforward - you'll take it you need it. That's an easy equation to solve.