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Social Security question

jlf58

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Correct me if I am wrong. Spouse A and Spouse B are about the same age. Spouse B takes retirement at 62 and A keeps working. B gets gets her 62 amount etc. When Spouse A retires at 67 they get their full amount and spouse B can than get 1/2 of A if it's higher than hers or is the spouse B penalized for taking hers at 62 ?
 
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bluehende

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Correct me if I am wrong. Spouse A and Spouse B are about the same age. Spouse B takes retirement at 62 and A keeps working. B gets gets her 62 amount etc. When Spouse A retires at 67 they get their full amount and spouse B can than get 1/2 of A if it's higher than hers or is the spouse B penalized for taking hers at 62 ?

We are in that category. We actually went to SS and they ran numbers. There was a slight reduction when the spouse moves to 1/2 of other spouse. I think it was about 20% or less. Our break even was like 92 mot taking into account that we could invest the received benefit and tax benefits. Our rate is lower now than when we are both receiving.
 

easyrider

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How this was explained to me is that the person taking benefit at 62 gets a reduced amount from their account forever. This person can claim half of their spouses claim whenever the spouse starts taking benefits.

Using $1000 fra benefit , the spouse that takes ss at 62 would get about $750 a month.

Using $2500 fra benefit, the spouse that takes ss at fra would get $2500 a month.

The spouse that took the ss at 62 can claim on half the benefit of the spouse that took the ss at fra which would be about $1250. The $750 is deducted from the $1250 which would equal $500.

The spouse that claimed at 62 receives the original $750 and an additional $500 from the adjusted portion of the half of the spouse that claimed at fra which would equal $1250. The $1250 equals half of the the spouse's fra benefit but isn't actually half of that spouse's fra bennifit. Its a combination of spouse a and an adjustment on spouse b that would equal half.

This is my understanding of how it would work after speaking to a few ss people at their office. I could be wrong as everyone explained it differently.

Bill
 

VacationForever

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How this was explained to me is that the person taking benefit at 62 gets a reduced amount from their account forever. This person can claim half of their spouses claim whenever the spouse starts taking benefits.

Using $1000 fra benefit , the spouse that takes ss at 62 would get about $750 a month.

Using $2500 fra benefit, the spouse that takes ss at fra would get $2500 a month.

The spouse that took the ss at 62 can claim on half the benefit of the spouse that took the ss at fra which would be about $1250. The $750 is deducted from the $1250 which would equal $500.

The spouse that claimed at 62 receives the original $750 and an additional $500 from the adjusted portion of the half of the spouse that claimed at fra which would equal $1250. The $1250 equals half of the the spouse's fra benefit but isn't actually half of that spouse's fra bennifit. Its a combination of spouse a and an adjustment on spouse b that would equal half.

This is my understanding of how it would work after speaking to a few ss people at their office. I could be wrong as everyone explained it differently.

Bill
I don't think the math above is right for B who takes at 62. Half of A would be $1250. In the above equation, you are using $750 + $500 to make up to $1250, but reality is that B won't get $1250 because B took at 62. This is only true if B takes spousal benefit at B's FRA, which would be $1000 + $250.

One exception where a spouse takes at 62 and not be reduced forever is survivor benefits. If B takes on own account at 62 and later reaches FRA or later and A dies, B takes on A's full amount as B's survivor benefits.
 

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VacationForever is correct that EasyRider got it wrong. Here is my understanding of the math --

Assuming the $1000 and $2500 PIA benefits listed above -- If B had waited until FRA to get half of A's benefits, it would be calculated as: $1000 of B's benefit, plus (1/2*$2500) - $1000 = $250 from A's benefit, which adds up to $1250, precisely half of A's benefit. But that only works if B waits until FRA.

If B takes the benefit at age 62 and gets only $750, then her spousal addition (when spouse files) remains at $250. So, in total, she'll get $750 + $250 = $1000.

So B gets a bump to $1000 when spouse starts collecting. Another way of looking at it is that the $250 reduction for filing early is permanent (until spouse dies, as VacationForever noted).

Bob
 
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Luanne

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The way I have understood all of this in my situation is that when I took Social Security at 62 I could take my benefit, or half of dh's. Since half of his was less than mine (even taking it early) I am taking my benefit. Now, if he passes away before I do I would then be entitled to his benefit since it is the larger of the two.
 

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So my scenario, wife gets $650 at 62. I get $2600 at 67. What would she get when I retire at 67 ? guesses anyone :) ?
 

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The way I have understood all of this in my situation is that when I took Social Security at 62 I could take my benefit, or half of dh's. Since half of his was less than mine (even taking it early) I am taking my benefit. Now, if he passes away before I do I would then be entitled to his benefit since it is the larger of the two.

That is my understanding. Cliff has been taking SS since he retired from Boeing at the end of 2005 at age 67. I started in January at age 63 taking my own reduced amount. We saw no reason to wait for me to hit full retirement age when he is 18 years older than I am, so when we closed my business last October it seemed like perfect timing.
 

aandmrun

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The way I have understood all of this in my situation is that when I took Social Security at 62 I could take my benefit, or half of dh's. Since half of his was less than mine (even taking it early) I am taking my benefit. Now, if he passes away before I do I would then be entitled to his benefit since it is the larger of the two.
Luanne, that is exactly the way I understand it to be also.
 

easyrider

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VacationForever is correct that EasyRider got it wrong. Here is my understanding of the math --

Assuming the $1000 and $2500 PIA benefits listed above -- If B had waited until FRA to get half of A's benefits, it would be calculated as: $1000 of B's benefit, plus (1/2*$2500) - $1000 = $250 from A's benefit, which adds up to $1250, precisely half of A's benefit. But that only works if B waits until FRA.

If B takes the benefit at age 62 and gets only $750, then her spousal addition (when spouse files) remains at $250. So, in total, she'll get $750 + $250 = $1000.

So B gets a bump to $1000 when spouse starts collecting. Another way of looking at it is that the $250 reduction for filing early is permanent (until spouse dies, as VacationForever noted).

Bob

Thanks Bob and VF. That really clears this up for me.

Bill
 

bluehende

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So my scenario, wife gets $650 at 62. I get $2600 at 67. What would she get when I retire at 67 ? guesses anyone :) ?

Your numbers are close to mine.......680 wife 2400 me at 66 7 months. Our numbers were instead of the 1200 that she would get at full it is 1040. These were run at the SS office by their supposed expert.
 

easyrider

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Your numbers are close to mine.......680 wife 2400 me at 66 7 months. Our numbers were instead of the 1200 that she would get at full it is 1040. These were run at the SS office by their supposed expert.

If she gets $1040 at fra she should get 75% of that at 62 or $780 is what I thought.

Bill
 

bluehende

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If she gets $1040 at fra she should get 75% of that at 62 or $780 is what I thought.

Bill

I didn't explain that as well as I should have. She got the 680 at 62. my number was at 66 and 7
 

jlf58

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Bill, I don't think her FRA would be $1040 if 62 was only $680. My wife is $610 and FRA is only $850. If she is $680 at 62 her FRA should be about $900. Please check what you have, you are making this more confusing :)
 

easyrider

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Bill, I don't think her FRA would be $1040 if 62 was only $680. My wife is $610 and FRA is only $850. If she is $680 at 62 her FRA should be about $900. Please check what you have, you are making this more confusing :)

I read the post as the wife's fra benefit is $1040 so 75% of that is about $780 if she took ss at 62.

So my scenario, wife gets $650 at 62. I get $2600 at 67. What would she get when I retire at 67 ? guesses anyone :)

To get the $650 at 62 her fra benefit is about $867. You wait until fra and get $2600. When you collect at fra her benefit would be $650 + $433 = $1083 is what I think.

Bill
 

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And I finally figured out was fra is......:D
 

jlf58

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I read the post as the wife's fra benefit is $1040 so 75% of that is about $780 if she took ss at 62.



To get the $650 at 62 her fra benefit is about $867. You wait until fra and get $2600. When you collect at fra her benefit would be $650 + $433 = $1083 is what I think.

Bill

Bill,

What is the math on that to get that $433 number ? BTW I recheck, she is $608 at 62 (FRA is $843)and my FRA is $2916. Let me know what you think :) Thanks in advance
 

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A FRA at $2916 is wonderful. Is that at 70 years old? We are struggling (or really no extra money for frills) to make it to my husbands FRA at 66. 13 months to go!!
 

Luanne

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I read the post as the wife's fra benefit is $1040 so 75% of that is about $780 if she took ss at 62.



To get the $650 at 62 her fra benefit is about $867. You wait until fra and get $2600. When you collect at fra her benefit would be $650 + $433 = $1083 is what I think.

Bill
I am really confused by this. If she takes the $650 at 62, why would she get more when he collects his benefit?
 

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Bill,

What is the math on that to get that $433 number ? BTW I recheck, she is $608 at 62 (FRA is $843)and my FRA is $2916. Let me know what you think :) Thanks in advance

According to the Social Security Administration (SSA), the maximum benefit paid at full retirement age (FRA) in 2019 is $2,861.

If you qualify for the maximum benefit possible, then you'll receive $2,209 per month if you retire at age 62 or $3,770 per month if you retire at age 70. The following table shows how the maximum payments are changing in 2019 from 2018 at ages 62, 65, and 70. Data source: Social Security Administration.
 

bluehende

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I am really confused by this. If she takes the $650 at 62, why would she get more when he collects his benefit?

A spouse can claim the higher of her benefit or the amount she can claim from the other spouse (typically 1/2). When one spouse claims at fra the other spouse is then entitled to the highest of those two benefit calculations. There is some reduction for her claiming early but our calculations came out to be a break even point of about 93. We start losing if she lives to 93. I hope we get beaten like a dirty rug on this bet.
 

easyrider

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Bill,

What is the math on that to get that $433 number ? BTW I recheck, she is $608 at 62 (FRA is $843)and my FRA is $2916. Let me know what you think :) Thanks in advance

I think the formula is 75% of full retirement age benefit is paid at age 62 for Social Security retirement benefits. I think your off on the $2916 for your full retirement age benefit.

When you reach your full retirement age your spouse will be able to take a portion of your benefit to add to hers. You would take half of your benefit amount and then subtract her benefit amount to obtain the additional amount for her. So if you were to get $2861 , half of this is $1430. Then subtract your spouses fra benefit amount of $843 you end up with $587. Her monthly amount increases from $433 to $433 + $587 = $1020.

Then again, it would be a good idea to check with someone who really knows for sure.:D

Bill
 

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The funny thing is I got that $2916 from the SS webpage LAST NIGHT on that form when you log in, so that's what they say so maybe I am special LOL :)
These are the 3 numbers the ss webpage is
$2,067 $2,916 $3,713, ages 62 66.7 and 70
 
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VacationForever

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The funny thing is I got that $2916 from the SS webpage LAST NIGHT on that form when you log in, so that's what they say so maybe I am special LOL :)
These are the 3 numbers the ss webpage is
$2,067 $2,916 $3,713, ages 62 66.7 and 70
The data source which I posted was from 2019. I would think you are correct for 2020, which means that you contributed close to the maximum, if not the maximum for at least 35 years. :thumbup:
 
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