social security maximize plan

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rosemary11
Posts: 29
Joined: Fri Nov 05, 2010 8:21 am

social security maximize plan

Post by rosemary11 » Thu Oct 25, 2018 10:41 am

Data from social security admin.

Husband
Current age 64
PIA $ 2,713
Age 70 $ 3,605

Spouse
Current age 58
PIA $ 1,834
Age 70 $ 2,541

Strategy:
1. all SS calculators agreed on husband to delay filing till age 70
2. the age for the spouse filing for retirement benefit was as low as 62 to 67 depending on the calculator.

Please advise regarding the best age for the spouse filing.
The husband and the spouse are of average health/life expectancy and do not need the money right away.

Thanks.

Austintatious
Posts: 802
Joined: Thu Sep 13, 2012 7:01 pm

Re: social security maximize plan

Post by Austintatious » Thu Oct 25, 2018 11:24 am

Here's a link to Mike Piper's free and very helpful calculator intended to help folks maximize their Social Security benefits. If you haven't already tried it out, be sure to do so. Also, be aware that Mike has written a number of helpful and very reasonably priced books intended to help folks deal with important financial issues like Social Security. See his "Oblivious Investor" website at the link provided below.

https://opensocialsecurity.com/

https://obliviousinvestor.com/

JW-Retired
Posts: 7000
Joined: Sun Dec 16, 2007 12:25 pm

Re: social security maximize plan

Post by JW-Retired » Thu Oct 25, 2018 11:50 am

rosemary11 wrote:
Thu Oct 25, 2018 10:41 am
Husband
Current age 64
PIA $ 2,713
Age 70 $ 3,605

Spouse
Current age 58
PIA $ 1,834
Age 70 $ 2,541

Strategy:
1. all SS calculators agreed on husband to delay filing till age 70
2. the age for the spouse filing for retirement benefit was as low as 62 to 67 depending on the calculator.

Please advise regarding the best age for the spouse filing.
The husband and the spouse are of average health/life expectancy and do not need the money right away.
If they don't need the money delaying until they do isn't a bad idea. A SS dollar nets you more spendable money after taxes, and has a cola.
SS is taxed at a somewhat lower to way lower rate than other types of income like pensions and RMDs.

Depends on what their Federal and state tax situation is? My own is such that our SS is taxed a third less than my other income.
JW
Retired at Last

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David Jay
Posts: 5811
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: social security maximize plan

Post by David Jay » Thu Oct 25, 2018 12:00 pm

Austintatious wrote:
Thu Oct 25, 2018 11:24 am
Here's a link to Mike Piper's free and very helpful calculator intended to help folks maximize their Social Security benefits. If you haven't already tried it out, be sure to do so.

https://opensocialsecurity.com/
One of the nice features of Mike's calculator is the alternate scenario. He gives you a mathematical "best" solution, but then you can plug in alternate dates to see what happens.

In our case, the calculator said that the (lower earning) spouse file @62 and I file @70. If I file at 68, the difference in the two outcomes is just a few thousand dollars. So it makes very little difference in total dollars. In my case it depends more on attitude than on math - do I want more cash sooner or a higher "annuity" income for the survivor.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

TBillT
Posts: 457
Joined: Sat Sep 17, 2011 1:43 pm

Re: social security maximize plan

Post by TBillT » Thu Oct 25, 2018 12:39 pm

I just used Open Social Security and found it extremely helpful for those of us 65+.
Those younger than 65 in 2018 lose most of the creative "double dipping" features that are being eliminated at the end of the year.

Right now our plan is higher PIA person (me) waits to age 70, and before that we are going to double dip on the lesser PIA and take that one sooner probably Age 65. We are almost equal ages though.

But Virginia has tax free social security, so I wonder if we should grab all of that?...since Va. does tax IRA withdrawals, converting IRA to Roth is hindered to some extent, whereas taking social security is favored. So this is why one person above mentioned that state tax policy can impact your decision.

>>Key rule point is your Age 65 birthyear which you did not mention (2018 or 2019?). But due to the Age differences in your case, that could be a less important point.
Last edited by TBillT on Thu Oct 25, 2018 12:48 pm, edited 5 times in total.

smitcat
Posts: 2126
Joined: Mon Nov 07, 2016 10:51 am

Re: social security maximize plan

Post by smitcat » Thu Oct 25, 2018 12:39 pm

rosemary11 wrote:
Thu Oct 25, 2018 10:41 am
Data from social security admin.

Husband
Current age 64
PIA $ 2,713
Age 70 $ 3,605

Spouse
Current age 58
PIA $ 1,834
Age 70 $ 2,541

Strategy:
1. all SS calculators agreed on husband to delay filing till age 70
2. the age for the spouse filing for retirement benefit was as low as 62 to 67 depending on the calculator.

Please advise regarding the best age for the spouse filing.
The husband and the spouse are of average health/life expectancy and do not need the money right away.

Thanks.
I would suggest you also figure out what your best SS approach is when combined with your total portfolio and goals.
Maximizing SS may not necessarily be your best solution based upon your goals and tax situation..

rosemary11
Posts: 29
Joined: Fri Nov 05, 2010 8:21 am

Re: social security maximize plan

Post by rosemary11 » Thu Oct 25, 2018 2:13 pm

Thank you.

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SeeMoe
Posts: 1026
Joined: Sat Jul 18, 2015 11:30 am
Location: Near Philly..

Re: social security maximize plan

Post by SeeMoe » Thu Oct 25, 2018 4:41 pm

There are about 63 million SS recipients who are receiving monthly SS checks. The average payout is about $1,300.00 per month. That scares us, so we took SS as soon as allowed , treating it like a “ bird in hand” opportunity before there’s a sudden change in policy by the government that negatively affects new recipients! Don’t need the money, so we invest it and let the pot grow with “our” money...

SeeMoe.. :shock:
"By gnawing through a dike, even a Rat can destroy a nation ." {Edmund Burke}

JoeRetire
Posts: 1702
Joined: Tue Jan 16, 2018 2:44 pm

Re: social security maximize plan

Post by JoeRetire » Thu Oct 25, 2018 5:33 pm

rosemary11 wrote:
Thu Oct 25, 2018 10:41 am
Data from social security admin.

Husband
Current age 64
PIA $ 2,713
Age 70 $ 3,605

Spouse
Current age 58
PIA $ 1,834
Age 70 $ 2,541

Strategy:
1. all SS calculators agreed on husband to delay filing till age 70
2. the age for the spouse filing for retirement benefit was as low as 62 to 67 depending on the calculator.

Please advise regarding the best age for the spouse filing.
The husband and the spouse are of average health/life expectancy and do not need the money right away.
Your longevity will be a critical factor here.

For example, if we assume you both will live until 95, the optimal strategy is for both of you to delay until 70.

The Advanced Options in the https://opensocialsecurity.com/ tool allow you to play with different ages and see how it affects your strategy.

sawdust60
Posts: 74
Joined: Tue Jul 17, 2018 12:06 pm

Re: social security maximize plan

Post by sawdust60 » Thu Oct 25, 2018 11:18 pm

If you want to start taking SS early, such as when there is a 10% penalty at age 64 1/2 ---

It looks like you would receive $161,152 by age 70. That is money in the bank, or money you have used in place of IRA funds (which you might have rolled into a Roth). It is a nice sum. Perhaps it provides some added flexibility.

Another question you might consider: would you use the $161k + compounded interest to purchase an annuity at age 70 ?

And these simple calculations ignore compounding, the interactions with spousal benefits, your other accounts, tax implications, etc.

2713 x 90% = 2441.70 x 66 months = 161,152

3605 - 2441.70 = 1163.30 ... 138.5 months; age 83+

Caution statement: I have not attempted to use the referenced calculators. Please don't consider this a recommendation. Just a simple way to help explain your decision, if you choose not to wait until age 70. I think it also helps to demonstrate that the higher benefit at age 70 is not a giveaway, but has an actuarial basis.

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