SS and retirement question

[square1]

Nice work Loren49! FTR, I'm still a few years away but right now I think your draw at the younger age strategy is a sound one for my situation.

 

[Ken45101]

my wife is 4 years older than me. As I recall, when I turned 62 and started collecting SS, she got an increase by collecting as my spouse rather than on her own account.

The people at the local SS were very helpful. In fact they suggested the change.

 

[Citydude]

If you collect the reduced benefit from 62 to 67 (5 years) and your benefit is $15,000 per year you are at that point $75,000 ahead.

At 67 the full benefit is 30% higher. So now you make an extra $4500 per year and it will take over 17 years to be ahead of the game. If the decreased value of the money (inflation) and possible interest on the early money is factored in it would likely add at least another year. You will be at least 84 before you are ahead of the game.

Thanks Loren! I know each person has their reasons on when to collect but I agree with your strategy.

 

[MacLawn]

Loren, this is close to an answer:

"You can apply for a benefit based on your
work record and, when your spouse retires, qualify for
a spousal benefit, if higher, at that time. Or, your spouse
can apply for benefits at his or her full retirement age and
then withdraw the application. This will allow you to
receive a spousal benefit.

My guess is spouse can change to 50% of yours after you start collecting."

But, I've already found this in my research, and it's still not clear to me. Oh well, I'll check with me office.

 

[smstonypoint]

If you collect the reduced benefit from 62 to 67 (5 years) and your benefit is $15,000 per year you are at that point $75,000 ahead.

At 67 the full benefit is 30% higher. So now you make an extra $4500 per year and it will take over 17 years to be ahead of the game. If the decreased value of the money (inflation) and possible interest on the early money is factored in it would likely add at least another year. You will be at least 84 before you are ahead of the game.

Retirement at age 62 would reduce full retirement benefits by 30%. Thus, every $1 in SS at full retirement at 67 equates to $0.70 in SS if retiring at 62. SS at full retirement would then be $15K/.7 = $21,429 -- a difference of $6,429/year. Dividing $75,000 by $6,429/year gives 12 years (rounded). Thus the break even age would be 79 (rounded).

SS benefits are adjusted for inflation (by the annual COLA).

Steve

 

[MacLawn]

やっぱり、(just as I thought) nobody knows the answer to me question, eh? If, if mind ye, I do find it, I'll post back to let us all know! This could help some people.

 

[Loren49]

Retirement at age 62 would reduce full retirement benefits by 30%. Thus, every $1 in SS at full retirement at 67 equates to $0.70 in SS if retiring at 62. SS at full retirement would then be $15K/.7 = $21,429 -- a difference of $6,429/year. Dividing $75,000 by $6,429/year gives 12 years (rounded). Thus the break even age would be 79 (rounded).

SS benefits are adjusted for inflation (by the annual COLA).


Steve

Steve, Thanks for correcting my error. I should have looked at it again when I came up with 84 as I thought that late 70s was what I'd heard. If the 75000 was invested for the duration (13 -17) (same as taking first SS at 67) the break even would likely be a little later. Also the 75000 would likely be a bit more with the COLA.

Sorry for the mistake. :confused2:

Loren

 

[brin]

Is this any help?

http://easysite.commonwealth.com/Ea...oads/FAQSocialSecurityRetirementBenefits2.pdf

q: What are spousal benefits?
A: While you are living, your spouse can receive a
dependent benefit of up to 50 percent of your full
retirement amount. Benefits paid to your spouse will
not decrease your retirement benefit

q: can i apply for spousal benefits if my spouse
hasn稚 yet filed for social security?
A: No. You cannot get spousal benefits until your
spouse has applied for social security retirement
benefits. You can apply for a benefit based on your
work record and, when your spouse retires, qualify for
a spousal benefit, if higher, at that time. Or, your spouse
can apply for benefits at his or her full retirement age and
then withdraw the application. This will allow you to
receive a spousal benefit.

My guess is spouse can change to 50% of yours after you start collecting.

This issue of when to take benefits has some gray areas when deciding.

If you collect the reduced benefit from 62 to 67 (5 years) and your benefit is $15,000 per year you are at that point $75,000 ahead.

At 67 the full benefit is 30% higher. So now you make an extra $4500 per year and it will take over 17 years to be ahead of the game. If the decreased value of the money (inflation) and possible interest on the early money is factored in it would likely add at least another year. You will be at least 84 before you are ahead of the game.

I started collecting at 62 as I feel that if I make it to 84, my desire to do some of the things we now enjoy will likely be diminished. Most people I know in that age group are not big spenders.

What seemed right for us may not be the best for others. I'm now 65 and am satisfied with our choice. Until I make it to beyond 84 I won't know how it looks from that end.

My philosophy for finances in retirement....If we stay healthy we'll do just fine....and if the health goes the money doesn't really help. (I do have medical insurance)

Loren

:thumbsup: I agree..I took mine starting at 62 and so did my Mrs....no one knows how long they'll live...I have seen too many folks wait to take or spend money to allow for a longer life only to die and leave their savings to someone else....I agree Loren.

 

[turnkey4099]

Thanks for this thread. I MUST hie me to the SS office ASAP. Me and wife are 79 and she is drawing on her record - very poor one. 50% of mine would at least double what she is drawing.

Harry K

 

[Depmandog]

I have a ways to go before I hit the age to collect SS, but I was reading last night that in order for the spouse to collect the 50% spousal benefit, the husband has to apply for benefits. Here's the kicker. The husband (or visa versa if the wife was the primary wage earner) can apply and THEN suspend receipt of benefits this allowing the spouse to collect spousal (50%) benefits all while allowing his future benefits to accrue at 8%.

Maximize Benefits with File and Suspend | Social Security Choices

I also heard a few months back, there are approximately 10,000 options or benefit combinations. One SHOULD NOT assume they know what's best. One SHOULD discuss their specific situation with a qualified retirement planner. As I recall, once you make the initial choice, the door closes on the most opportunities to make changes.