Time to look at SS [When should I take Social Security?]

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ObliviousInvestor
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Re: Time to look at SS [When should I take Social Security?]

Post by ObliviousInvestor » Fri Sep 07, 2018 10:03 am

Bacchus01 wrote:
Fri Sep 07, 2018 9:54 am
pennywise wrote:
Fri Sep 07, 2018 6:28 am
Zott wrote:
Wed Sep 05, 2018 9:55 pm
One fact should be kept in mind regarding the recommendation for the OP from Opensocialsecurity---that, having been born in 1953, he is eligible for a spousal benefit under a restricted application. The program recommmends that he should do that--might be different if he was born after 1953 when that benefit is no longer available.
I was very surprised to get the results of the calculator that incorporated this--we are a dual income/dual SS benefit couple whose PIAs are almost identical. Husband is 4 years older and born in 1953 so the recommendation was that I start my benefits at 62, he takes spousal of half my PIA then he starts his own benefits, with the concomitant large bump for waiting, at 70 YO. It's tempting, because if I outlive him I will have the widow's benefit amount ie his level, even with my having taken a reduced SS benefit of my own. I had no idea that strategy existed! (Thanks Mike Piper!)

As noted, social security can be a complicated decision depending on so many factors. Definitely worth taking time to really dig into the nuances and figure out what's best for your own situation.
I don't believe the larger PIA can claim on their spousal if they are eligible to draw.
If you are entitled to a retirement benefit and your PIA is at least 50% of your spouse's PIA, you can't get a spousal benefit. But that isn't applicable in the situation pennywise described. In that case, it is a restricted application (i.e., an application for spousal-only), so there is no entitlement to a retirement benefit.
Mike Piper, author/blogger

Bacchus01
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Joined: Mon Dec 24, 2012 9:35 pm

Re: Time to look at SS [When should I take Social Security?]

Post by Bacchus01 » Fri Sep 07, 2018 11:49 am

ObliviousInvestor wrote:
Fri Sep 07, 2018 10:03 am
Bacchus01 wrote:
Fri Sep 07, 2018 9:54 am
pennywise wrote:
Fri Sep 07, 2018 6:28 am
Zott wrote:
Wed Sep 05, 2018 9:55 pm
One fact should be kept in mind regarding the recommendation for the OP from Opensocialsecurity---that, having been born in 1953, he is eligible for a spousal benefit under a restricted application. The program recommmends that he should do that--might be different if he was born after 1953 when that benefit is no longer available.
I was very surprised to get the results of the calculator that incorporated this--we are a dual income/dual SS benefit couple whose PIAs are almost identical. Husband is 4 years older and born in 1953 so the recommendation was that I start my benefits at 62, he takes spousal of half my PIA then he starts his own benefits, with the concomitant large bump for waiting, at 70 YO. It's tempting, because if I outlive him I will have the widow's benefit amount ie his level, even with my having taken a reduced SS benefit of my own. I had no idea that strategy existed! (Thanks Mike Piper!)

As noted, social security can be a complicated decision depending on so many factors. Definitely worth taking time to really dig into the nuances and figure out what's best for your own situation.
I don't believe the larger PIA can claim on their spousal if they are eligible to draw.
If you are entitled to a retirement benefit and your PIA is at least 50% of your spouse's PIA, you can't get a spousal benefit. But that isn't applicable in the situation pennywise described. In that case, it is a restricted application (i.e., an application for spousal-only), so there is no entitlement to a retirement benefit.
I understand your comments. I don't believe that is true. Can you provide a reference? The IRS documents, including the examples given, would suggest that you are not able to apply for spousal-only IF you are eligible (entitled?) to draw a benefit yourself that is more than 50% of the spouse.

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One Ping
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Re: Time to look at SS [When should I take Social Security?]

Post by One Ping » Fri Sep 07, 2018 12:02 pm

Bacchus01 wrote:
Fri Sep 07, 2018 11:49 am
ObliviousInvestor wrote:
Fri Sep 07, 2018 10:03 am
Bacchus01 wrote:
Fri Sep 07, 2018 9:54 am
pennywise wrote:
Fri Sep 07, 2018 6:28 am
Zott wrote:
Wed Sep 05, 2018 9:55 pm
One fact should be kept in mind regarding the recommendation for the OP from Opensocialsecurity---that, having been born in 1953, he is eligible for a spousal benefit under a restricted application. The program recommmends that he should do that--might be different if he was born after 1953 when that benefit is no longer available.
I was very surprised to get the results of the calculator that incorporated this--we are a dual income/dual SS benefit couple whose PIAs are almost identical. Husband is 4 years older and born in 1953 so the recommendation was that I start my benefits at 62, he takes spousal of half my PIA then he starts his own benefits, with the concomitant large bump for waiting, at 70 YO. It's tempting, because if I outlive him I will have the widow's benefit amount ie his level, even with my having taken a reduced SS benefit of my own. I had no idea that strategy existed! (Thanks Mike Piper!)

As noted, social security can be a complicated decision depending on so many factors. Definitely worth taking time to really dig into the nuances and figure out what's best for your own situation.
I don't believe the larger PIA can claim on their spousal if they are eligible to draw.
If you are entitled to a retirement benefit and your PIA is at least 50% of your spouse's PIA, you can't get a spousal benefit. But that isn't applicable in the situation pennywise described. In that case, it is a restricted application (i.e., an application for spousal-only), so there is no entitlement to a retirement benefit.
I understand your comments. I don't believe that is true. Can you provide a reference? The IRS documents, including the examples given, would suggest that you are not able to apply for spousal-only IF you are eligible (entitled?) to draw a benefit yourself that is more than 50% of the spouse.
SS must have screwed up then because I filed a restricted application for spousal benefits in December 2017. I've actually been drawing spousal benefit since January and my retirement benefit is 4x my spouses retirement benefit. :happy
"Re-verify our range to target ... one ping only."

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ObliviousInvestor
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Re: Time to look at SS [When should I take Social Security?]

Post by ObliviousInvestor » Fri Sep 07, 2018 12:09 pm

Bacchus01 wrote:
Fri Sep 07, 2018 11:49 am
ObliviousInvestor wrote:
Fri Sep 07, 2018 10:03 am
Bacchus01 wrote:
Fri Sep 07, 2018 9:54 am
pennywise wrote:
Fri Sep 07, 2018 6:28 am
Zott wrote:
Wed Sep 05, 2018 9:55 pm
One fact should be kept in mind regarding the recommendation for the OP from Opensocialsecurity---that, having been born in 1953, he is eligible for a spousal benefit under a restricted application. The program recommmends that he should do that--might be different if he was born after 1953 when that benefit is no longer available.
I was very surprised to get the results of the calculator that incorporated this--we are a dual income/dual SS benefit couple whose PIAs are almost identical. Husband is 4 years older and born in 1953 so the recommendation was that I start my benefits at 62, he takes spousal of half my PIA then he starts his own benefits, with the concomitant large bump for waiting, at 70 YO. It's tempting, because if I outlive him I will have the widow's benefit amount ie his level, even with my having taken a reduced SS benefit of my own. I had no idea that strategy existed! (Thanks Mike Piper!)

As noted, social security can be a complicated decision depending on so many factors. Definitely worth taking time to really dig into the nuances and figure out what's best for your own situation.
I don't believe the larger PIA can claim on their spousal if they are eligible to draw.
If you are entitled to a retirement benefit and your PIA is at least 50% of your spouse's PIA, you can't get a spousal benefit. But that isn't applicable in the situation pennywise described. In that case, it is a restricted application (i.e., an application for spousal-only), so there is no entitlement to a retirement benefit.
I understand your comments. I don't believe that is true. Can you provide a reference?
Happy to.

Here are the requirements for entitlement to husband/wife benefits:
https://www.ssa.gov/OP_Home/cfr20/404/404-0330.htm

The one you are referring to is paragraph (d). Note that it says that you must not be "entitled to an old age benefit ..."

"Entitled" here (as opposed to "eligible") means something very specific. See here for the definition:
https://www.ssa.gov/OP_Home/cfr20/404/404-0303.htm

And see here for requirements for entitlement to an old-age benefit:
https://www.ssa.gov/OP_Home/cfr20/404/404-0310.htm

Key point being, you have to apply for an old-age benefit to be entitled to it. And if you aren't entitled to an old-age benefit, having a PIA that is greater than 50% of your spouse's PIA doesn't stop you from getting a spousal benefit (provided that you are eligible for a restricted application).
Mike Piper, author/blogger

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Artful Dodger
Posts: 497
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Re: Time to look at SS

Post by Artful Dodger » Fri Sep 07, 2018 12:37 pm

jeffyscott wrote:
Wed Sep 05, 2018 2:16 pm
JoeRetire wrote:
Wed Sep 05, 2018 1:47 pm
One Ping wrote:
Wed Sep 05, 2018 11:26 am
I generally use the default 'mortality weighting' and discount rate (see below from the opensocialsecurity "About" page). For me it's a good way to avoid the trying to guess when you die problem. The inputs I used were guesses based on what was said in the OP. They are surely wrong in detail, but probably close enough to get the general gist of who should claim what benefit in which order and roughly when. The details may change the timing, but probably not the strategy.
The age at death is one detail which could easily change the strategy.

The default mortality table is reasonable if you don't have any sense of family longevity. But it covers such a wide range of folks, that many of us here would skew to an older age at death IMHO.
At least for me, using the alternative longer life expectancy factors (non-smoker preferred or super-preferred) at https://opensocialsecurity.com/ did not change the suggested strategy of younger, lower earning spouse claiming at 62 and older, higher earning at 70.

I also tried discount rates up to 2% real with no change.

The expected benefit cut of 23% in 2034 also did not change the strategy. Had to increase the cut to 30% and use a 2% real discount rate to move the age 70 recommendation by a few months (eg. using SS life expectancy table, 2% real discount rate, and 30% cut in 2034 moved it from 70 to 69 years, 4 months).

So the recommendations, for my situation anyway, seem to be pretty insensitive to changes in assumptions.
For me, the Default said my spouse (lower earner, now age 65) should file NOW, and me delay til age 70.

But using the Preferred for me and Super Preferred for spouse - spouse is suggested to delay to age 67 and 7 months, and me still delay to age 70.

Using Assumed Age at Death - if I consider current health (both very healthy), and add two years to our parent's actual age at death - then the program suggests we both delay until age 70.

Bacchus01
Posts: 2065
Joined: Mon Dec 24, 2012 9:35 pm

Re: Time to look at SS [When should I take Social Security?]

Post by Bacchus01 » Fri Sep 07, 2018 4:56 pm

ObliviousInvestor wrote:
Fri Sep 07, 2018 12:09 pm
Bacchus01 wrote:
Fri Sep 07, 2018 11:49 am
ObliviousInvestor wrote:
Fri Sep 07, 2018 10:03 am
Bacchus01 wrote:
Fri Sep 07, 2018 9:54 am
pennywise wrote:
Fri Sep 07, 2018 6:28 am


I was very surprised to get the results of the calculator that incorporated this--we are a dual income/dual SS benefit couple whose PIAs are almost identical. Husband is 4 years older and born in 1953 so the recommendation was that I start my benefits at 62, he takes spousal of half my PIA then he starts his own benefits, with the concomitant large bump for waiting, at 70 YO. It's tempting, because if I outlive him I will have the widow's benefit amount ie his level, even with my having taken a reduced SS benefit of my own. I had no idea that strategy existed! (Thanks Mike Piper!)

As noted, social security can be a complicated decision depending on so many factors. Definitely worth taking time to really dig into the nuances and figure out what's best for your own situation.
I don't believe the larger PIA can claim on their spousal if they are eligible to draw.
If you are entitled to a retirement benefit and your PIA is at least 50% of your spouse's PIA, you can't get a spousal benefit. But that isn't applicable in the situation pennywise described. In that case, it is a restricted application (i.e., an application for spousal-only), so there is no entitlement to a retirement benefit.
I understand your comments. I don't believe that is true. Can you provide a reference?
Happy to.

Here are the requirements for entitlement to husband/wife benefits:
https://www.ssa.gov/OP_Home/cfr20/404/404-0330.htm

The one you are referring to is paragraph (d). Note that it says that you must not be "entitled to an old age benefit ..."

"Entitled" here (as opposed to "eligible") means something very specific. See here for the definition:
https://www.ssa.gov/OP_Home/cfr20/404/404-0303.htm

And see here for requirements for entitlement to an old-age benefit:
https://www.ssa.gov/OP_Home/cfr20/404/404-0310.htm

Key point being, you have to apply for an old-age benefit to be entitled to it. And if you aren't entitled to an old-age benefit, having a PIA that is greater than 50% of your spouse's PIA doesn't stop you from getting a spousal benefit (provided that you are eligible for a restricted application).
Thank you!

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