Social Security future benefits statement question

[tvguy]

SSA should look at your account and your DH’s and pay you based on the higher of the two.

And if you have been married more than once, they may check on what......if any benefits your are entitled to from a previous marriage.
My in-laws were married 17 years when they got divorced (prior to 1970 which as I recall may have been a factor). When my MIL's third husband passed away, they checked that. She was entitled to something crazy like $80 a month if she went with her first husbands Social Security account......nothing from her second husband, about over $1,000 a month from her third husband. Social Security is obligated to make sure you get the highest benefit amount.

 

[smiths02]

I understand the idea that the break even point is 78 or delaying SS benefits, but what if you invested those benefits?

If a 62 year old today retires but has enough money to live without SS, what about taking the SS anyhow and either delaying drawing down on 401ks or investing the SS check? Doesn't that kind of change the break even point?

 

[DVCcurious]

You are right. For me, I am replacing a few high earning years (if I continued to work) with the very low earning years when I started to work. I have 40 years working and paying into the SS system. Others may not and so I thought it was worth mentioning.

But it really doesn’t matter.

The social security calculation weights earnings differently.
https://www.ssa.gov/pubs/EN-05-10070.pdf

Basically if you replace an inflation adjusted 50,000 year with an inflation adjusted 100,000 year the inpact will only be weighted at 15% and then that new impact will be adjusted again by 1/35.

So unless you’re replacing a very low year (below poverty) working longer has very little impact on your benefit.

Delaying SS has a large benefit impact, but replacing a low earning year with a high earning year has very little impact.

 

[piccolopat]

But it really doesn’t matter.

The social security calculation weights earnings differently.
https://www.ssa.gov/pubs/EN-05-10070.pdf

Basically if you replace an inflation adjusted 50,000 year with an inflation adjusted 100,000 year the inpact will only be weighted at 15% and then that new impact will be adjusted again by 1/35.

So unless you’re replacing a very low year (below poverty) working longer has very little impact on your benefit.

Delaying SS has a large benefit impact, but replacing a low earning year with a high earning year has very little impact.

Thank you so much for the link. I will use that worksheet to get a rough estimate of the impact retiring at 60 will have on my SS. I'm not planning on taking SS until my full retirement age almost 7 years from now. I hope you are right that it will have little impact but either way I'd rather know so I can plan accordingly.

 

[Nebraska_Disney]

I understand the idea that the break even point is 78 or delaying SS benefits, but what if you invested those benefits?

If a 62 year old today retires but has enough money to live without SS, what about taking the SS anyhow and either delaying drawing down on 401ks or investing the SS check? Doesn't that kind of change the break even point?

I was thinking that same thing ! The break-even point will be skewed depending on what you do with that $$$

 

[WVMomof3]

I understand the idea that the break even point is 78 or delaying SS benefits, but what if you invested those benefits?

If a 62 year old today retires but has enough money to live without SS, what about taking the SS anyhow and either delaying drawing down on 401ks or investing the SS check? Doesn't that kind of change the break even point?

I was going to say the same thing. Say you need $4000/month after retiring at 62. Choices are A. Take the whole $4K from your investments (401K etc) or B. Take $2k from investments and $2k from SS (or whatever your numbers are). Chances are that leaving that extra $2K/month in your investments your money is going to grow more than using it all now and waiting for the extra amount of SS.

 

[bluehen]

Can anyone do this? I worked for ten years before kids and after they were in high school, so I will have very little if I use my own.

We are at the 62 mark and like you my wife never made a lot. Our strategy is that she takes hers at 62 then when I hit my full retirement age I take mine. At that point half of that will be more than she will be getting so she moves up. There is no advantage for her to wait as her SS will always be less than half mine.

 

[TwoMisfits]

We are at the 62 mark and like you my wife never made a lot. Our strategy is that she takes hers at 62 then when I hit my full retirement age I take mine. At that point half of that will be more than she will be getting so she moves up. There is no advantage for her to wait as her SS will always be less than half mine.

I think that plan has been eliminated for most...https://www.ssa.gov/planners/retire/deemedfaq.html

"However, if you turn age 62 on or after January 2, 2016, you are required or “deemed” to file for both your own retirement and for any benefits you are due as a spouse, no matter what age you are."

 

[bluehen]

I think that plan has been eliminated for most...https://www.ssa.gov/planners/retire/deemedfaq.html

This is not that situation. It is basically the opposite. She takes her actual SS. When I take mine she still gets her spousal benefits which are higher. That strategy had both taking benefits. The highest suspended and took the spousal benefits allowing his benefits to increase later.

In discussing this though people need to know that if you were born before jan 2 1954 this option of suspending benefits is still a great strategy.

 

[Dakota731]

We are at the 62 mark and like you my wife never made a lot. Our strategy is that she takes hers at 62 then when I hit my full retirement age I take mine. At that point half of that will be more than she will be getting so she moves up. There is no advantage for her to wait as her SS will always be less than half mine.

I never knew any of this! Does it pertain to only people born before a certain year? Does the wife getting half only kick in at full retirement age? We are still in our fifties so we will need to see a financial advisor before retirement. It’s so complicated and confusing.

 

[bluehen]

I never knew any of this! Does it pertain to only people born before a certain year? Does the wife getting half only kick in at full retirement age? We are still in our fifties so we will need to see a financial advisor before retirement. It’s so complicated and confusing.

This is for anyone. This scenario is only good if one spouse has a much lower benefit. I know only my situation for sure. I believe the wife half only kicks in after husband has started his but could be wrong on this. In our case it would be better to wait until I file so she gets half of my larger benefit. There are websites that give you a personal plan. The usually cost about 30 bucks. SS for dummies is a good book. They had the 2018 version in my library.

 

[georgina]

This is not that situation. It is basically the opposite. She takes her actual SS. When I take mine she still gets her spousal benefits which are higher. That strategy had both taking benefits. The highest suspended and took the spousal benefits allowing his benefits to increase later.

In discussing this though people need to know that if you were born before jan 2 1954 this option of suspending benefits is still a great strategy.

It's very confusing, ours is made worse by the 8 year age difference, but according to this article if she takes a reduced benefit at 62 she will still have a reduced benefit later when you claim yours -

And, says Piper, if you claim your own retirement benefit at age 62, the dollar-value reduction that results from early entitlement will continue to apply even if your spousal benefit kicks in at a later date. “For example, if your retirement benefit is $150 less per month at age 62 than it would be at her FRA, that $150 reduction will still apply if her spousal benefit kicks in later,” he says.

Also, because of the new law (the Bipartisan Budget Act of 2015), and because she was younger than age 62 as of Jan. 1, 2016, Piper notes that after Denise files for her own retirement benefit, she'll automatically be "deemed" to have filed for her benefit as a spouse as well, as soon as she is eligible for one – which would happen as soon as her husband files for his retirement benefit.

from https://www.usatoday.com/story/mone...pousal-benefits-raise-questions-age/96446372/

 

[MillauFr]

You are looking at the difference between waiting from 62 vs 70 (wrong line)...pretty much everyone breaks even by 78 by waiting 4 years from 62 to 66...you can use the simple chart to see that...

I did the math and my breakeven age was 89.

 

[bluehen]

It's very confusing, ours is made worse by the 8 year age difference, but according to this article if she takes a reduced benefit at 62 she will still have a reduced benefit later when you claim yours -

And, says Piper, if you claim your own retirement benefit at age 62, the dollar-value reduction that results from early entitlement will continue to apply even if your spousal benefit kicks in at a later date. “For example, if your retirement benefit is $150 less per month at age 62 than it would be at her FRA, that $150 reduction will still apply if her spousal benefit kicks in later,” he says.

Also, because of the new law (the Bipartisan Budget Act of 2015), and because she was younger than age 62 as of Jan. 1, 2016, Piper notes that after Denise files for her own retirement benefit, she'll automatically be "deemed" to have filed for her benefit as a spouse as well, as soon as she is eligible for one – which would happen as soon as her husband files for his retirement benefit.

from https://www.usatoday.com/story/mone...pousal-benefits-raise-questions-age/96446372/

I don't know if it is the link or my computer, but I cannot read your link. All I get is a redirect to an add. That is the big problem. Even experts give you different answers. In fact you can get different answers to a question from SS itself.

My info comes from a financial planner that is supposedly a SS expert. The strategy is mentioned in the book SS for dummies. They do not mention the reduction later. They also do not say there is not one either. I guess when we go in to file we will ask the question and hope we get the correct answer then.

 

[TwoMisfits]

I don't know if it is the link or my computer, but I cannot read your link. All I get is a redirect to an add. That is the big problem. Even experts give you different answers. In fact you can get different answers to a question from SS itself.

My info comes from a financial planner that is supposedly a SS expert. The strategy is mentioned in the book SS for dummies. They do not mention the reduction later. They also do not say there is not one either. I guess when we go in to file we will ask the question and hope we get the correct answer then.

Don't rely on experts - read the info from SSA and the 2015 bill yourself...then bring questions about those bills and changes to the experts...(And SS for Dummies was originally published in 2012, prior to this bill...if you aren't reading an updated version, it's a useless book)...

 

[Judique]

I don't know if it is the link or my computer, but I cannot read your link. All I get is a redirect to an add. That is the big problem. Even experts give you different answers. In fact you can get different answers to a question from SS itself.

My info comes from a financial planner that is supposedly a SS expert. The strategy is mentioned in the book SS for dummies. They do not mention the reduction later. They also do not say there is not one either. I guess when we go in to file we will ask the question and hope we get the correct answer then.

You can file online now. You can set up your account and monitor what's on it as you proceed to Medicare and retirement. You can also check the numbers they have for you for any possible mistakes.

 

[manning]

That's one of the questions we've been kicking around lately, that is until the stock market fell the last few days. Both my and my husbands parents passed away between ages of 59-64, so longevity may not be in our cards. But if we do live to be 90, the extra money will be helpful.

That's what you have to take into account. Best thing to do is examine everything and take what is best for you.

One thing to consider is if you need the money now you take immediately. If you can live off of other income wait to 70.

 

[NYCDiane]

They would love for you to postpone receiving SS, but do you know how long it would take to just break even on the extra per month?? Much better to take it at 62, then work the max. you can (and not lose benefit) until Medicare can kick in.

If you take it at 62, you are only permitted to earn 12K per year. How would you live on that??

Anything over 12K they take it out of your SS benefit the following year.
Please don't tell me different. It happened to my ex and I saw it in black and white

 

[DVCcurious]

If you take it at 62, you are only permitted to earn 12K per year. How would you live on that??

Anything over 12K they take it out of your SS benefit the following year.
Please don't tell me different. It happened to my ex and I saw it in black and white

You are correct sir. I believe the deal is you lose 1 social security dollar for every 2 dollars of income above the 12k minimum.

But you don’t really “lose” the money, it just gets moved to your post-retirement age benefit. So you would see a bump at FRA.

But I stand by my advice: for most people the best plan is to take Social Security at 70. Yes the break even isn’t until 80ish but statistically if you live to 70 in average health you’re like 90% going to live to that break even age.

People don’t die in their 70s anymore. Our population is living longer and longer. My grandfather is 98! And he’s one of hundreds of thousands WW2 vets still living. A 98 year old WW2 vet isn’t even special because there are so many of them.

(Obviously people die in their 70s, my dad died at 64 of cancer, but I’m speaking of statistical probabilities for the average person. If you have a high risk of death before 80 then take SS as early as possible)

 

[BWV Dreamin]

I want to take early SS at 62. If my DH should pass before me, can I still then get 1/2 his SS instead of mine? His 1/2 will be more than my early SS amount.