Social Security question for ya....

[Floridatennisplayer]

I'll be asking my Fidelity team tomorrow, but until then here is my question.
My wife and I both turn 62 next month. She has only worked part time throughout her life and has averaged in the past 10 years about $18,000 a year.

I am planning on taking Social Security and my pension when I turn 65. We are having so much fun with our grandkids she's decided to just quit work next month and asked me if she should just go ahead and take her Social security at 62 .....it would be about $792 a month or should she wait until 65 when I do. It's such a pittance for her anyway the difference between taking it at 62 and 65 is only $200 a month really Social Security will mean nothing to either of us in light of our other investments. So I guess my question is before I talk to my people tomorrow will this have any type of effect on my Social Security if not might as well just take it .

 

[homestead]

If you were a high earner she could wait to her full retirement age (66 or so) before claiming then she would get 50% of your full retirement age benefit which is probably more than her benefit would be.

 

[pb4uski]

Check out SSAnalyze - Bedrock Capital Management to see what they recommend and also other options that you are considering.

 

[Huston55]

I'll be asking my Fidelity team tomorrow, but until then here is my question.
My wife and I both turn 62 next month. She has only worked part time throughout her life and has averaged in the past 10 years about $18,000 a year.

I am planning on taking Social Security and my pension when I turn 65. We are having so much fun with our grandkids she's decided to just quit work next month and asked me if she should just go ahead and take her Social security at 62 .....it would be about $792 a month or should she wait until 65 when I do. It's such a pittance for her anyway the difference between taking it at 62 and 65 is only $200 a month really Social Security will mean nothing to either of us in light of our other investments. So I guess my question is before I talk to my people tomorrow will this have any type of effect on my Social Security if not might as well just take it .

Good idea to talk to Fido folks. But, in the meantime, here's my understanding:

First, some assumptions:
1. Your SS will be substantially more than (greater than double) that of your wife's.
2. When you say age "65" you actually mean FRA, which for you is 66 yrs & 2 mos.

Recommendation: You should wait until FRA, and have your wife wait until FRA to claim her spousal benefit based on your SS, due to "deeming" rules & early claiming penalties.

Rules are summarized below from this source:

Social Security Tips: Get It Right on Spousal Benefits | Money

4 Key Rules

I've got specific advice for each of them, but first, let's go through a few guiding principles. There are four basic rules that you need to understand in order to make smart decisions on spousal benefits:

Spousal benefits can't be claimed unless the "target" spouse -- the one whose earnings will be the basis for the benefit -- has already filed to claim his or her Social Security retirement benefit. Please pause to think about this for a second, because it has implications for spousal filing decisions and timing.

Claiming any benefit before full retirement age (currently between 66 and 67, depending on when you were born) will trigger Social Security's "deeming" rules. This means that if you file for a benefit before your FRA -- whether for your own retirement benefit or a spousal benefit -- you will be deemed by Social Security to also be filing for the other benefit if you are eligible to receive it. You will not collect the full amount of both deemed benefits but, rather, an amount roughly equal to the greater of the two benefits. Here's why this is problematic: Once you have been "deemed," you can never claim a spousal benefit while deferring your own retirement benefit. This prevents you from earning the maximum level of delayed retirement credits.

Social Security rules prohibit you from suspending your benefits before you've reached FRA. So until that point, you cannot use the increasingly attractive "file and suspend" option to let your spouse file for a spousal benefit (which goes back to rule No. 1).

If you do claim Social Security benefits -- whether spousal or your own -- before you reach your FRA, you will get hit with hefty early claiming reductions of up to 25% for retirement benefits and 30% for spousal benefits.

 

[Floridatennisplayer]

Yikes, I didn't know it would trigger mine. Don't want that.

 

[mathjak107]

we were one of the first people to test the new fidelity in house software for optimizing ss .

it goes for the the biggest bottom line dollars which may or may not mesh with your over all retirement plan . don't forget you may want to look at things from different tax and surcharge angles too .

selling an asset as an example and taking early ss may get you a giant jump in medicare premiums.

the fidelity software did come up with an interesting plan for ss . this tool is in house only .


my wife is 66 and i am 64 . she started collect early at 62 . so the fidelity plan was:

she stops her ss at fra and lets it resume growing until 70 . at 70 she files and i will be 66-10 months ,.

i file restricted application for 1/2 hers . we still have that ability since we were at least 62 in 2015 .

at 70 i take mine , at which point she gets a 4500.00 spousal adder to her benefit since 1/2 my full is larger than her full .

so it did come up with a pretty interesting plan .

.