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Social Security question

TravelTime

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Now it seems that both of us electing benefits at age 62 is better intuitively esp if he needs to wait 5 more years for FRA at 67 or 8 more years for the maximum benefit at 70. That is a long time extra to work. Since we are 3 years apart, I can elect at 62 and 3 years later he can at 62. At 65 (me) and 62 (him) we could both be collecting SS and like someone else said, if we do not need it, we can put it into another retirement account for the future. Under this scenario we both get reduced benefits for retiring at 62 but we get what we are supposed to get with no impact on the other person. So hypthetcilaly I might get $1200 at age 62 and he might get $1200 at age 62 since he takes early retirement also. If he waited until 70, he might get $2000 as I assumed in the other scenario but 8 years is a long time to wait for a hypothetical $800 more.

According to the SS life span calculator, I will live until age 85 or 88. He will live until age 81-86. Woking until 70 makes little sense to me!
 
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VacationForever

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Now it seems that both of us electing benefits at age 62 is better intuitively esp if he needs to wait 5 more years for FRA at 67 or 8 more years for the maximum benefit at 70. That is a long time extra to work. Since we are 3 years apart, I can elect at 62 and 3 years later he can at 62. At 65 (me) and 62 (him) we could both be collecting SS and like someone else said, if we do not need it, we can put it into another retirement account for the future. Under this scenario we both get reduced benefits for retiring at 62 but we get what we are supposed to get with no impact on the other person. So hypthetcilaly I might get $1200 at age 62 and he might get $1200 at age 62 since he takes early retirement also. If he waited until 70, he might get $2000 as I assumed in the other scenario but 8 years is a long time to wait for a hypothetical $800 more.

According to the SS life span calculator, I will live until age 85 or 88. He will live until age 81-86. Woking until 70 makes little sense to me!
Correct. Breakeven of drawing at 62 vs. FRA is about 80 years old. When people recommend delaying collecting SS, they often forget that we have to dig into our savings/investments to pay for our living expenses by the same amount that we could have drawn from SS. The withdrawal of investments means that we have lost growth opportunities besides spending the principal.
 

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TravelTime

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Correct. Breakeven of drawing at 62 vs. FRA is about 80 years old. When people recommend delaying collecting SS, they often forget that we have to dig into our savings/investments to pay for our living expenses by the same amount that we could have drawn from SS. The withdrawal of investments means that we have lost growth opportunities besides spending the principal.

Okay now I have a clear rationale for collecting at 62 for both of us. We will be almost dead by 70.
 

Conan

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A likely change to ease the Social Social Security deficit is to extend these ages (as they did before).
Here's the current law:
Age To Receive Full Social Security Benefits
(Called "full retirement age" or "normal retirement age.")
Year of Birth * Full Retirement Age
1937 or earlier 65
1938 65 and 2 months
1939 65 and 4 months
1940 65 and 6 months
1941 65 and 8 months
1942 65 and 10 months
1943 - 1954 66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 and later 67
https://www.ssa.gov/planners/retire/retirechart.html
 
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WinniWoman

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Correct. Breakeven of drawing at 62 vs. FRA is about 80 years old. When people recommend delaying collecting SS, they often forget that we have to dig into our savings/investments to pay for our living expenses by the same amount that we could have drawn from SS. The withdrawal of investments means that we have lost growth opportunities besides spending the principal.

This is true, but people have to also take into consideration tax implications of taking SS now vs later- the tax torpedo that hits once you turn 70 1/2 and have to take mandatory RMD's from your retirement accounts.. It is not cut and dry. Also- however you get to age 70 in terms of what money you use to live on, you are going to be very happy getting those increased monthly payments (that increased by 8% (where can you get that kind of return?)) each month at age 70+. You can think of SS as an annuity as that is what it pretty much is.

If you don't live until then- well- you will be dead anyway and won't know from anything anyhow.
 

chellej

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You're doing fine on 1-3.

Death (#4) is more complicated. Now you are eligible for a survivor (widow) benefit. This is not the same as a spousal benefit.

I need to pull out my book....

In your example, you have already taken your benefit at age 62 PRIOR to his death. (My answer could be different if you have not yet elected your benefit.)

A) if you are at or older than your Survivor Full Retirement Age (FRA) at the time of his death, you would switch to his benefit if it is larger than yours.

B) if you are younger than your Survivor FRA at the time of his death, your widow benefit might be reduced if you immediately switch to his benefit. (Caveat: I'm not 100% sure if this applies if he has already elected his benefit, but I'm pretty sure it does apply if he has not yet elected his benefit.) You might decide to continue to receive your own benefit until FRA, then switch to his. That would allow your widow benefit to grow until you made the switch. But you would not delay switching beyond your FRA because your survivor benefit would not increase any further.

This information comes from the revised edition of "Get What's Yours" and is found on pages 51, 62, 99-103, 180-183, and 242. (I have the whole darn book marked up and annotated.)

Tell your husband not to die young. In addition to all the other reasons, it makes SS more complicated for you.

One more thing to muddy the waters. Your Survivor FRA may be different than your Retirement FRA!! Look at https://www.ssa.gov/planners/survivors/survivorchartred.html and also
https://www.thebalance.com/social-security-survivor-benefits-for-a-spouse-2388918

My wife was born in 1956. Her Retirement FRA was 66 and 4 months. But according to the website I just gave you, her Survivor FRA is age 66.

So, since I have not yet elected my benefit, but my wife elected at 62, my instructions to her are that if I die before she reaches age 66 (and I hope that doesn't happen), she should continue to take her own benefit but then switch to mine when she reaches 66. If I die after she reaches age 66, she can immediately switch to my benefit.

Whoa!! It's complicated! Read and study a book. I think I have given you accurate information, but look it up yourself! Don't trust jokers on the Internet who think they know what they are talking about.

I was getting this, now I am confused again. My situation is very similar to timetraveler. DH just signed up for his benefits... taking them at 62. They will start in sept. I am older, 63.5 now and will work to full retirement. His benefits at full retirement would have been slightly higher than mine but not much.

So the question is what happens if one of us dies. I assume if we both live to retirement, and then one of us dies, he would keep his as it is higher than 50% of mine and I would keep mine because it will be higher than his....Is that correct?

I also wondered about a letter I received on Friday from the SSA stating I may be entitled to benefits. I assume this is because he filed. Is that something SSA typically does?
 

Passepartout

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So the question is what happens if one of us dies. I assume if we both live to retirement, and then one of us dies, he would keep his as it is higher than 50% of mine and I would keep mine because it will be higher than his....Is that correct?

I also wondered about a letter I received on Friday from the SSA stating I may be entitled to benefits. I assume this is because he filed. Is that something SSA typically does?
After one of you dies, assuming you have been married 10+ years, the survivor gets to choose whichever spouse's SS to continue- presumably, the higher of the two. Make an appointment at the SS office to discuss the letter. I can't answer what's typical, except that people with appointments don't wait NEARLY as long to talk to a representative than those who just 'drop in'.

Jim
 

TravelTime

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My FRA is 67, I was born in 1961. My goal is to make it to 65 and use my bridge money and collect at SS at 66.

Why collect at 66 and not wait one more year to 67?
 

Conan

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DH just signed up for his benefits... taking them at 62. They will start in sept. I am older, 63.5 now and will work to full retirement. His benefits at full retirement would have been slightly higher than mine but not much.
....
I also wondered about a letter I received on Friday from the SSA stating I may be entitled to benefits. I assume this is because he filed. Is that something SSA typically does?
Judging from this Q and A, quoted below, you should consider collecting spousal benefits now against your husband's record, since he has already filed, and let your own benefits grow until you reach age 70. I've reversed genders in the quoted source to make it easier to follow. The source is "Ask Larry" at https://www.forbes.com/sites/kotlik...fit-go-up-when-my-husband-files/#a9b589d48beb . He sells a Social Security calculator for $40 that might be worth buying [I'm not familiar with his calculator; I have no connection to it; buyer beware.]

"QUESTION: [John is] 63 now and [filed for his] Social Security retirement benefit at 62. [His wife] is being told [she] can get a spousal benefit now on [his] record. Since [John] took [his] benefits early, what would [her] spousal benefit be if [she] takes [her] Social Security retirement benefit at 67 at a higher rate?

"ANSWER: When [the wife] files for benefits on [her] own record, [John's] unreduced spousal rate will be calculated by subtracting [his] Primary Insurance Amount (PIA), which is equal to [his] full retirement age (FRA) retirement benefit amount, from 50% of [his wife's] PIA. But, if [she] becomes entitled to spousal benefits before [she] reaches [her] full retirement age (FRA), [his] spousal rate will be reduced for age. Whatever [John] qualifies for as a spouse will then be added to [his] reduced retirement benefit.

"EXAMPLE: [John] has a PIA of $1,000 but starts drawing reduced retirement benefits at 62 at a rate of $750. [John's wife] files for [her own] benefits when [John] is age 67, and [her] PIA is $2,200. [John will then be] eligible for an excess spousal benefit of $100 (i.e. $2,200 / 2 – $1,000), which would be added to [his] reduced retirement benefit to give [him] a combined rate of $850.

"Based on the information listed in your question it sounds like your best strategy could be for [the wife] to draw spousal benefits on [the husband's] record [now, and continue to collect those spousal benefits] until [she] reaches age 70 and then switch to [her] own record. [John] could then file for spousal benefits when [she] switches to [her] own record. An expert Social Security benefits calculator [for sale at https://maximizemysocialsecurity.com/ ] can help make sure you choose the best possible strategy."

See also:
Can I file for my Social Security at 62 and switch to spousal benefits later?
https://www.aarp.org/retirement/social-security/questions-answers/switch-social-security-spousal/
"Only if your spouse is not yet receiving retirement benefits. In this case, you can claim your own Social Security beginning at 62 and make the switch to spousal benefits when your husband or wife files. ...You’ll get a payment equal to the higher of the two benefits.

"If your spouse is already getting Social Security when you claim benefits, you are subject to the “deemed filing” rule. Under this provision, you don’t have a choice whether to wait and switch. When you apply for your retirement benefit, you’re also automatically deemed to be applying for spousal benefits, if you're entitled to them. Again, Social Security will pay the greater of the two benefit amounts."
 
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GetawaysRus

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I was getting this, now I am confused again. My situation is very similar to timetraveler. DH just signed up for his benefits... taking them at 62. They will start in sept. I am older, 63.5 now and will work to full retirement. His benefits at full retirement would have been slightly higher than mine but not much.

So the question is what happens if one of us dies. I assume if we both live to retirement, and then one of us dies, he would keep his as it is higher than 50% of mine and I would keep mine because it will be higher than his....Is that correct?

I also wondered about a letter I received on Friday from the SSA stating I may be entitled to benefits. I assume this is because he filed. Is that something SSA typically does?

I think you are confusing spousal benefits with survivor's benefits.

Here is my understanding (and I hope I have this correct...).

So long as you are both alive, and have both claimed benefits, each spouse can choose either their own benefit or 50% of their spouse's benefit (which is called the spousal benefit).

When one spouse dies, the survivor is eligible for the survivor's benefit. This means that the survivor can receive either their own benefit or 100% of their spouse's benefit. But there is a but. If the survivor is younger than their own Survivor FRA, the survivor benefit on the spouse's SS benefit will be reduced.

You can look up your Survivor FRA using a link I provided earlier in this thread. It depends on the year of your birth. The Survivor FRA may not be the same as your Retirement FRA.

When I first purchased a timeshare (in 2004), I thought that learning the ins and outs of how to best use the timeshare was complicated. In retrospect, compared to Social Security, timeshares are a breeze!
 
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rapmarks

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Okay now I have a clear rationale for collecting at 62 for both of us. We will be almost dead by 70.

When I was 64 and had invasive multifocal cancer, I changed a lightbulb before I went in for surgery and said, will I be around to change it again. Then a few years later they discovered another primary cancer, multifocal invasive third stage.
I changed that lightbulb earlier this month, 11 years later. So I don’t know why you think you will be dead by 70 but the oncologist told me I had only fifty fifty chance off making it this long.
 

bluehende

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After speaking to a few people at the Social Security department I was finally told the only one that can answer my question is a claim specialist, lol. The reason we went to their office and waited in line was because we wanted Social Security to give us an exact number on an exact scenario. Only a claims specialist can do this, not a customer service representative. Keep this in mind if you need a claims question answered.

We finally decided we were hitting the claims at 62 and defiantly know what we will get on our own claims. I thought that my wife's benefit would go up if she took half of my benefit but the reality is it isn't that much of an increase and the only way it looks good is if it isn't taken until full retirement age.

The bottom line is when I do the math the break even point is when we are almost 79 years old. After this time we would actually be making more if we went to fra.

Bill

I am surprised there was not one there. We saw the customer service rep who said we could do what we wanted. We could see the claims specialist to get actual numbers. We were told it might take a few minutes until one was available and then they realized we were next and just handed us off. He was the one that ran the numbers. Were you not given that option?
 

Panina

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You can go online and find out your numbers online. I just did. Each spouse has to create an account and get the numbers. A calculator and you can figure out which way is best. It won’t work if you are looking to find out about widow/widower amounts as you cannot set up an account for the deceased. You will need to an SS office. If you kept your deceased spouses last projected statement that will give you some numbers too.
 

TravelTime

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I think you are confusing spousal benefits with survivor's benefits.

Here is my understanding (and I hope I have this correct...).

So long as you are both alive, and have both claimed benefits, each spouse can choose either their own benefit or 50% of their spouse's benefit (which is called the spousal benefit).

When one spouse dies, the survivor is eligible for the survivor's benefit. This means that the survivor can receive either their own benefit or 100% of their spouse's benefit. But there is a but. If the survivor is younger than their own Survivor FRA, the survivor benefit on the spouse's SS benefit will be reduced.

You can look up your Survivor FRA using a link I provided earlier in this thread. It depends on the year of your birth. The Survivor FRA may not be the same as your Retirement FRA.

When I first purchased a timeshare (in 2004), I thought that learning the ins and outs of how to best use the timeshare was complicated. In retrospect, compared to Social Security, timeshares are a breeze!

I agree that SS retirement benefits are more complex than timesharing. This thread has helped a lot. Very educational.
 

easyrider

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67 is evil! I always assumed FRA is 65. It really should be 62 IMO

I think 65 is when Medicare kicks in. Some one told me that the Medicare premium is taken out of the social security checks.

Some one else said that the Medicare Premium is about $140 for part B and $35 for part D and this is deducted from the Social Security check.

There is also a supplemental Medicare insurance that is paid out of pocket.

Can some one explain these cost ? It seems like these costs could take up a decent portion of a social security check and might be something to consider before taking a reduced amount at 62.

Thanks

Bill
 

x3 skier

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Okay now I have a clear rationale for collecting at 62 for both of us. We will be almost dead by 70.

I passed 70 seven years ago and still ski for three months in Steamboat every year, I’m building an airplane and fly another I recently bought, have a number of friends, both male and female, who I travel with after my wife passed five years ago and enjoy the h*** out of life.

IMNSHO, if one expects to be dead at 70, they probably will be. Worrying about when one will die is worth about 15 minutes, then make a decision about plans and get on with life:thumbup:.

Cheers
 

VacationForever

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I think 65 is when Medicare kicks in. Some one told me that the Medicare premium is taken out of the social security checks.

Some one else said that the Medicare Premium is about $140 for part B and $35 for part D and this is deducted from the Social Security check.

There is also a supplemental Medicare insurance that is paid out of pocket.

Can some one explain these cost ? It seems like these costs could take up a decent portion of a social security check and might be something to consider before taking a reduced amount at 62.

Thanks

Bill
If you are starting SS benefits or have already started SS, and you just turned 65 and enrolled in Medicare then the premium of $135.5, which is the 2019 Medicare premiums, is taken out of your SS check. There is not a separate $35 deduction for Part D. However if you want to add on an Advantage or Supplement plans, then you will pay additional premiums to the insurance companies.

The above premium is for a couple having income (MAGI) of under $170K or for a single having income of under $85k. If you have higher income, there is a surcharge called IRMAA for Part B and D. MAGI is derived from filed income tax from 2 years before. For instance, Medicare premiums for 2019 uses 2017 income tax returns. If you retire in 2017 and expect a drop in income, you can apply to reduce or eliminate IRMAA surcharges, with documentation to support your appeal.
 
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bluehende

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I passed 70 seven years ago and still ski for three months in Steamboat every year, I’m building an airplane and fly another I recently bought, have a number of friends, both male and female, who I travel with after my wife passed five years ago and enjoy the h*** out of life.

IMNSHO, if one expects to be dead at 70, they probably will be. Worrying about when one will die is worth about 15 minutes, then make a decision about plans and get on with life:thumbup:.

Cheers

You just became my hero!!!!!!!!
 

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If you retire before 65, make sure you figure in the cost of health insurance. The cheapest (and ONLY) plan in our geographic market this year costs over $25,000 for DH and me. That covers an annual physical and a flu shot for each of us. Coverage for anything else doesn't kick in until a $7,900 deductible per person has been met - which I just blew through with a surgery.
 
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