Social Security at 70

[Out of Steam]

Seems like having one take early and the other take late would be the equivalent of dollar cost averaging, both waiting more like market timing.

My waiting and my wife taking early is our plan. As I have fewer years of Social Security earnings than her, the amount I would get before 65 is quite small.

 

[Sunset]

My waiting and my wife taking early is our plan. As I have fewer years of Social Security earnings than her, the amount I would get before 65 is quite small.

So the higher income earner (SS higher) is taking it early. This is the opposite of most folks where the higher income earner delays to max the SS for whoever is the survivor in a couple.

If the amounts are close, then it doesn't matter.

 

[latexman]

My waiting and my wife taking early is our plan. As I have fewer years of Social Security earnings than her, the amount I would get before 65 is quite small.

The usual advice is, low earner claims at FRA and high earner claims at 70, then low earner claims spousal. Or, does spousal happen automagically?

 

[imnontrad]

My breakeven age if I wait until 70 is about 82 but like the OP said I want to enjoy my SS while I am still in decent shape. Planning to collect starting next year in conjunction with Medicare.

Medicare starts at 65 and this is BEFORE the Full Retirement Age for Social Security. If you apply then, your SS will be reduced.

Most people look at the longevity tables and figure out how much they could get by the time they die. However, the (recently revised) longevity tables are based on the average life expectancy for everyone born in a certain year - including all those who died as children.

So if you have made it until 60 and are in decent health, chances are you will live a lot longer than the "drop dead" date for your year group. I read somewhere that there is a 50% chance that at least one spouse of a married couple will live past 90.

In addition, if married with a spouse the same age or younger, chances are she will outlive you by many years. If her SS benefit is less than yours than if you wait until 70, not only will you have a MUCH larger SS check but your wife will have the largest possible benefit for the rest of her life.

 

[Out of Steam]

So the higher income earner (SS higher) is taking it early. This is the opposite of most folks where the higher income earner delays to max the SS for whoever is the survivor in a couple.

If the amounts are close, then it doesn't matter.

I can't receive a survivor benefit higher than my earned benefit due to the PPO. Because of this, the Open Social Security program shows that, as long as I wait until 65, our total benefits are minimally affected by when my wife files. It's not an obvious result, but I've checked it carefully.

In any case, our benefit amounts are fairly close.

 

[Rianne]

I just got off the phone with SS to sign up and receive SS on Sept. 1. I won't get the direct deposit until mid-October. Since I'm turning 65 on Sept. 1, Medicare will be taken out from SS in October (2 payments-one for Sept. and one for Oct.) My question is will the October SS payment be a double payment? I forgot to ask. I should get SS for Sept. and October or the total amount for the year will be incorrect.

 

[Out of Steam]

A Roth conversion can be tempting. You can convert the same number of shares and pay less taxes. But, if it will negatively impact your quality of life, then perhaps it's not a great idea. You don't have to convert all of it. Just convert up to the point that the taxes won't impact you quality of life.

Mainly because my wife is working more than expected, my entire Roth conversion (monthly) will be in the 22% bracket. While I've raised my tax withholding to deal with that, it looks a lot less attractive with the full amount at that tax rate.

 

[Involuntary Retiree]

The widow(er)'s limit (also referenced by the acronym RIB-LIM) is actually the 82.5% rule, not the 81% rule, and it is surviving spouse-gender agnostic. As I understand it, the survivor benefit of a spouse whose deceased spouse claimed SS early is limited to THE GREATER OF the amount that the deceased spouse was drawing or 82.5% of the deceased spouse's FRA benefit.


I noticed this additional amount when I ran my and my DH's numbers through opensocialsecurity.com. We will be drawing similar amounts of social security at FRA. As usual, the recommendation for us to maximize our benefits was that one take SS early at 62, and the other take at 70. But I also ran our numbers through the "Alternative Claiming Strategies," with both claiming at 62. At the bottom of the "Year-by-Year Benefit Amounts" chart, when the chart assumes one of us were to die, the chart shows the surviving spouse would draw his/her own amount but an additional amount labeled "Your Annual Survivor Benefit." It took me a while and a lot of clicking to figure out what this additional amount was, but I think it's the application of the widow(er)'s limit to our survivor benefits.


I could also be totally wrong.

 

[pb4uski]

The widow(er)'s limit (also referenced by the acronym RIB-LIM) is actually the 82.5% rule, not the 81% rule, and it is surviving spouse-gender agnostic. As I understand it, the survivor benefit of a spouse whose deceased spouse claimed SS early is limited to THE GREATER OF the amount that the deceased spouse was drawing or 82.5% of the deceased spouse's FRA benefit.


I noticed this additional amount when I ran my and my DH's numbers through opensocialsecurity.com. We will be drawing similar amounts of social security at FRA. As usual, the recommendation for us to maximize our benefits was that one take SS early at 62, and the other take at 70. But I also ran our numbers through the "Alternative Claiming Strategies," with both claiming at 62. At the bottom of the "Year-by-Year Benefit Amounts" chart, when the chart assumes one of us were to die, the chart shows the surviving spouse would draw his/her own amount but an additional amount labeled "Your Annual Survivor Benefit." It took me a while and a lot of clicking to figure out what this additional amount was, but I think it's the application of the widow(er)'s limit to our survivor benefits.


I could also be totally wrong.

Well, that's a new one on me. So if the deceased spouse started SS at 62 and received 70% of their PIA and then dies at 65, the surviving spouse would get bumped up to 82.5% of the deceased spouse's PIA? Interesting.

 

[harllee]

I just got off the phone with SS to sign up and receive SS on Sept. 1. I won't get the direct deposit until mid-October. Since I'm turning 65 on Sept. 1, Medicare will be taken out from SS in October (2 payments-one for Sept. and one for Oct.) My question is will the October SS payment be a double payment? I forgot to ask. I should get SS for Sept. and October or the total amount for the year will be incorrect.

I don't think your October payment will be a double payment. I think SS pays in arrears so that the amount you receive in October is for September.

 

[CardsFan]

I don't think your October payment will be a double payment. I think SS pays in arrears so that the amount you receive in October is for September.

^^^^ This

 

[volfan]

The widow(er)'s limit (also referenced by the acronym RIB-LIM) is actually the 82.5% rule, not the 81% rule, and it is surviving spouse-gender agnostic. As I understand it, the survivor benefit of a spouse whose deceased spouse claimed SS early is limited to THE GREATER OF the amount that the deceased spouse was drawing or 82.5% of the deceased spouse's FRA benefit.


I noticed this additional amount when I ran my and my DH's numbers through opensocialsecurity.com. We will be drawing similar amounts of social security at FRA. As usual, the recommendation for us to maximize our benefits was that one take SS early at 62, and the other take at 70. But I also ran our numbers through the "Alternative Claiming Strategies," with both claiming at 62. At the bottom of the "Year-by-Year Benefit Amounts" chart, when the chart assumes one of us were to die, the chart shows the surviving spouse would draw his/her own amount but an additional amount labeled "Your Annual Survivor Benefit." It took me a while and a lot of clicking to figure out what this additional amount was, but I think it's the application of the widow(er)'s limit to our survivor benefits.


I could also be totally wrong.

Yes this is what I was talking about. Saw it when running numbers in open socialsecurity.com! I just got the % wrong.
I had always thought the survivor only got the higher of the two Social Security amounts when spouses were concerned, but this bumps it up if your spouse takes it early.

 

[camfused]

I get confused sometimes about this. My spreadsheet (checked a bunch of times, but I suppose could have errors), says we do best by both DW and I taking SS at 70. openss always says we would do best about FRA for her and 70 for me. I am not sure why the difference, but I know my spreadsheet accounts for RMDs, taxes, etc...everything I could think of. Maybe openss is too simple (or mine too complex)?

Edit: I will add this...the goal of my spreadsheet is to maximize the amount of money we have at age 90. I think the goal of openss is to maximize the amount you get from SS. These are perhaps not going to be the same answers for SS withdrawal ages?

 

[Dash man]

I saw this on YouTube today and thought it might be of some use to folks on this thread. It includes discussion on whether to take early or not.

https://youtu.be/w9uVLuncs5E

 

[ERD50]

I get confused sometimes about this. My spreadsheet (checked a bunch of times, but I suppose could have errors), says we do best by both DW and I taking SS at 70. openss always says we would do best about FRA for her and 70 for me. I am not sure why the difference, but I know my spreadsheet accounts for RMDs, taxes, etc...everything I could think of. Maybe openss is too simple (or mine too complex)?

It's been a while since I ran any of the scenarios, but IIRC, the online apps said it was best for DW to take it at FRA and for me to wait (her SS is a little more than 1/2 of mine). And she's ~ 1 year younger than me. IIRC again, it wasn't a big difference between that and having her delay.

I decided to delay hers as well, so that I could do more RMDs. I'm not convinced that is really optimal, but I figure it's close, so I went with what I think is best, knowing I might be wrong (but any of us could be 'wrong' with any decision with so many unknowns).

-ERD50

 

[HarryHawk]

It's been a while since I ran any of the scenarios, but IIRC, the online apps said it was best for DW to take it at FRA and for me to wait (her SS is a little more than 1/2 of mine). And she's ~ 1 year younger than me. IIRC again, it wasn't a big difference between that and having her delay.

I decided to delay hers as well, so that I could do more RMDs. I'm not convinced that is really optimal, but I figure it's close, so I went with what I think is best, knowing I might be wrong (but any of us could be 'wrong' with any decision with so many unknowns).

-ERD50

My scenario was exactly the same as yours, only different. My wife who is a year younger took at FRA, I waited until 70. The difference being I was able to draw half my wife's benefit while waiting until I hit 70. It was a no brainer for us, but of course, the rules have since changed.

 

[jebmke]

My scenario was exactly the same as yours, only different. My wife who is a year younger took at FRA, I waited until 70. The difference being I was able to draw half my wife's benefit while waiting until I hit 70. It was a no brainer for us, but of course, the rules have since changed.

same here; I just beat the cutoff for this. Start mine in 2023.

 

[Rianne]

I don't think your October payment will be a double payment. I think SS pays in arrears so that the amount you receive in October is for September.

Ok, then Opensocialsecurity.com is incorrect. When I enter the date starting SS in Sept. it gives me a 4-month amount for the year, instead of a 3-month.

 

[pb4uski]

Ok, then Opensocialsecurity.com is incorrect. When I enter the date starting SS in Sept. it gives me a 4-month amount for the year, instead of a 3-month.

I doubt that openss is wrong, but you might email Mike Piper and ask him. But even if openss is a month off it won't make a difference in the right decision.

 

[Out-to-Lunch]

Ok, then Opensocialsecurity.com is incorrect. When I enter the date starting SS in Sept. it gives me a 4-month amount for the year, instead of a 3-month.

I am not Mike Piper (!), but it could be that OpenSS is reporting the amount you get FOR that year, rather than IN that year.

 

[Koolau]

Not surprising at all. On another board, someone reported that their Edward Jones rep was telling them to take it early because the dollar difference in waiting was "negligible". For that person, it was $900/month, which I don't consider negligible especially with COLA- but it also means money left longer in their EJ accounts since they have other income.

Coincidence? I think not.

Heh, heh, no one accused Fast Eddie of being stupid.

 

[Rianne]

I am not Mike Piper (!), but it could be that OpenSS is reporting the amount you get FOR that year, rather than IN that year.

Why does that not make sense?

 

[TheWizard]

But does this take into effect the limited Roth conversions I could make because of the extra income from SS, causing me to have larger RMDs and thus be in a higher income tax bracket? Assuming I make it to 72. And if I don't the much larger RMDs my surviving wife would have and the still higher tax bracket? More of a rhetorical question, as it can get very complicated.

I've also mentioned the Roth conversion issue in these threads.
But realistically, this is mainly an issue for higher income, wealthier retirees.
I'm guessing that at least half of people in their 60s do not have large enough tax-deferred accounts to make eventual RMDs a problem...

 

[harllee]

This is what happened when I started SS last year. My birth date is in October. I did not get a SS deposit for October. I got one SS deposit in November and one SS deposit in December. When I asked SS about it they said the SS payments are in arrears so the payments are always one month behind.

 

[W2R]

I'm 74, and years ago after much deliberation I decided that the best time for someone in my particular situation to claim SS was age 70. It's a hard decision! So I put a lot of work into reading about it and running scenarios. As my brother always told me, "Nobody cares about your money as much as you do, so make those decisions yourself and do the best job humanly possible!"

I just wanted to tell you all that the seemingly endless computations and analyses about when to take SS, are absolutely worth it because you know for sure that you didn't mess up and you are getting everything owed to you by SSA.

Once those monthly SS deposits start showing up in your checking account, all that's left is the fun part (spending it!). No more decisions, no more waking up in the middle of the night wondering if you considered this or that.

And now, nothing quite as glorious as the sight of that deposit into my bank account every single month like clockwork.