Social Security questions, please help!

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JBaumgart
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Social Security questions, please help!

Post by JBaumgart » Thu Nov 22, 2018 1:47 am

Looking for guidance on when I should claim full benefits, any assistance would be most appreciated.

Me: Age 69, will turn 70 next June (a little over 6 months from now)
Spouse: Age 67, will turn 68 in April '09 (2 + years from now)

History: We've both been retired for 8+ years. My earnings record is considerably higher than my spouse's

Currently - Me: As I am approximately 7 months from earning my maximum attainable benefit, based on waiting up until 'till now, I've continued to delay filing up until this point
Currently - Spouse: Has been taking spousal benefits based on my earnings record since 5/17, as her own benefit since then (based on her own earnings history) has continued to grow)

Concern: My own health situation has unexpectedly worsened in the past year - nothing imminent or life threatening in the short term, but still worrisome enough in the intermediate term - to make me question whether or not it would be prudent for me to change course and file for my own benefit ahead on my original plan.

Questions:
(a) Should I proceed with filing for my benefit right away? (taking into account my spouse's life expectancy, which is well into her 90's)
(b) If I do file right away, how much, if any, in approximately percentage terms, would my monthly benefit be reduced?
(c) And if I do file right away, how much, if any, would that add to or reduce her benefit until she reaches her maximum benefit at age 70?

Thank you so much for any advice you retirement experts here can offer.
Last edited by JBaumgart on Thu Nov 22, 2018 8:04 pm, edited 1 time in total.

mhalley
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Re: Social Security questions, please help!

Post by mhalley » Thu Nov 22, 2018 2:39 am

Sorry about your health problem.
I believe your benefit would be reduced by 4% over delaying for 6 months. Her benefit is based in your pia, so delaying won’t affect anything until you die and she collects your benefit. Starting now vs 6 months depends on whether the health problem is expected to reduce your life expectancy.
. As a spouse, you can claim a Social Security benefit based on your own earnings record, or you can collect a spousal benefit that will provide you 50 percent of the amount of your spouse’s Social Security benefit as calculated at their full retirement age (FRA).
https://www.thebalance.com/how-the-the- ... ks-2388924

You might try running your numbers at the social security calculator here

https://opensocialsecurity.com/
You can put in different life expectancy tables or death date if you click the advanced option button.

(You might want to edit your post and remove your actual birthdays due to identity theft concerns)

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Lancelot
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Re: Social Security questions, please help!

Post by Lancelot » Thu Nov 22, 2018 9:34 pm

Sorry for your health issues.

With respect to Survivor's Benefits, my understanding is that your spouse will receive the amount of your benefit, including accrued Delayed Benefits

In other words:


1 Spousal Benefits while you are living will not exceed 50% of your FRA benefit

2 Survivors Benefits will be your benefit at the time of passing (Different rules for deceased aged less than FRA)


By delaying benefits for 3.5 years, you have already done your spouse a HUGE service. Don't feel bad about starting benefits now. Hoping your health improves!
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JBaumgart
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Re: Social Security questions, please help!

Post by JBaumgart » Fri Nov 23, 2018 1:52 am

Thank you SO MUCH, mhalley and Lancelot, for your very helpful replies, as well as voicing concern about my health. After doing a little more research I've decided to begin the application process now, rather than waiting for the very maximum possible benefit at age 70. I understand that there is an approximate 3 month delay from when you file to when you start to receive benefits, which would but me in the February-March timeframe, just three to four months before reaching 70. If that's the case I would only be giving up two-to-three percentage points, which I think is a small price to pay given the certainty of actually receiving those three or four additional monthly checks...

Again, thank you for weighing in on my situation; it's very much appreciated.

The Wizard
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Re: Social Security questions, please help!

Post by The Wizard » Fri Nov 23, 2018 4:13 am

JBaumgart wrote:
Fri Nov 23, 2018 1:52 am
Thank you SO MUCH, mhalley and Lancelot, for your very helpful replies, as well as voicing concern about my health. After doing a little more research I've decided to begin the application process now, rather than waiting for the very maximum possible benefit at age 70. I understand that there is an approximate 3 month delay from when you file to when you start to receive benefits, which would but me in the February-March timeframe, just three to four months before reaching 70. If that's the case I would only be giving up two-to-three percentage points, which I think is a small price to pay given the certainty of actually receiving those three or four additional monthly checks...
Not quite right.
They can make your filing retroactive to a degree, up to six months, I think.
So you could get a modest lump sum as if you filed in July this year.
You'll have to be clear in telling them what you want...
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JoeRetire
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Re: Social Security questions, please help!

Post by JoeRetire » Fri Nov 23, 2018 6:26 am

JBaumgart wrote:
Thu Nov 22, 2018 1:47 am
Should I proceed with filing for my benefit right away? (taking into account my spouse's life expectancy, which is well into her 90's)
No.

You should continue with your plan to wait until you are 70, in order to maximize your spouses eventual survivor benefit.

Play around with https://opensocialsecurity.com/
Make sure to check the Advanced Options checkbox, select "Assumed age of death" for the Mortality Table, and try various ages of death for each of you.
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vtMaps
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Re: Social Security questions, please help!

Post by vtMaps » Fri Nov 23, 2018 6:38 am

JBaumgart wrote:
Fri Nov 23, 2018 1:52 am
If that's the case I would only be giving up two-to-three percentage points, which I think is a small price to pay given the certainty of actually receiving those three or four additional monthly checks...
It is not just three or four additional monthly checks... Those checks will continue until BOTH of you have passed. I agree with JoeRetire.

--vtMaps
The optimist proclaims that we live in the best of all possible worlds; and the pessimist fears this is true. --James Branch Cabell

JW-Retired
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Re: Social Security questions, please help!

Post by JW-Retired » Fri Nov 23, 2018 8:28 am

JBaumgart wrote:
Fri Nov 23, 2018 1:52 am
If that's the case I would only be giving up two-to-three percentage points, which I think is a small price to pay given the certainty of actually receiving those three or four additional monthly checks...
It's a huge price for your spouse to pay. When you do pass your survivor will get a 3% (or probably 4%) lower SS survivor benefit for the rest of their life.

Lets see, if you would get $40k/year by delaying SS all the way to 70, 3% less than that is $1.2k/yr. If you die soon and she does live well into her 90's, say 95, her survivor payments will total 25x$1.2k = $30,000 less. That is considerably more than a few additional monthly checks. :oops:

Agree with JoeRetire, don't do that to her.
JW
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JBaumgart
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Re: Social Security questions, please help!

Post by JBaumgart » Fri Nov 23, 2018 10:08 am

Thanks to all who have chimed in! It seems like I lost site of the "big picture" which is (or should be) driven by my wife's likely longevity (her mom, now 95, is still doing well, and her grandma lived to 96).

So I've reversed back to my original plan and will wait until I'm 70, seven months hence.

Thanks again!

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dwickenh
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Re: Social Security questions, please help!

Post by dwickenh » Fri Nov 23, 2018 10:44 am

JBaumgart wrote:
Fri Nov 23, 2018 10:08 am
Thanks to all who have chimed in! It seems like I lost site of the "big picture" which is (or should be) driven by my wife's likely longevity (her mom, now 95, is still doing well, and her grandma lived to 96).

So I've reversed back to my original plan and will wait until I'm 70, seven months hence.

Thanks again!
Congrats, you made a great decision.

Best to you,

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

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JoeRetire
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Re: Social Security questions, please help!

Post by JoeRetire » Fri Nov 23, 2018 1:07 pm

JBaumgart wrote:
Fri Nov 23, 2018 10:08 am
Thanks to all who have chimed in! It seems like I lost site of the "big picture" which is (or should be) driven by my wife's likely longevity (her mom, now 95, is still doing well, and her grandma lived to 96).

So I've reversed back to my original plan and will wait until I'm 70, seven months hence.

Thanks again!
You are welcome.

The Social Security benefits decision is a big one. As you have seen, lifetime benefits could be drastically different depending on the details of the individual situations and the choices made.

It always pays to take some time to think things through carefully, understand the details, get help when needed, and only then make a choice.

And one of the best parts about delaying is that you can revisit your decision at any time, and if the details change you can choose differently.
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JBaumgart
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Re: Social Security questions, please help!

Post by JBaumgart » Fri Nov 23, 2018 3:57 pm

JoeRetire wrote:
Fri Nov 23, 2018 1:07 pm
The Social Security benefits decision is a big one. As you have seen, lifetime benefits could be drastically different depending on the details of the individual situations and the choices made.

It always pays to take some time to think things through carefully, understand the details, get help when needed, and only then make a choice.

And one of the best parts about delaying is that you can revisit your decision at any time, and if the details change you can choose differently.
About 10 years ago I had a financial planner draw up a plan, and for the SS portion he recommended as follows:

April 2017: I file and suspend so that (spouse) may apply for spousal benefits (NOTE - Done)
April 2017: Spouse files, restricts application to spousal benefits, receiving approximately $xx,xxx per year (NOTE - Done)
June 2019: I file for own benefits, at age 70, receiving approximately $xx,xxx per year
April 2021: Spouse files for own benefits, at age 70, receiving approximately $xx,xxx per year

This is the plan I've been following ever since, and based on the very helpful, reinforcing feedback I've received here, is the plan I'll stick with.

P.S. As it turned out, the financial planner was mainly interested in selling me a huge annuity, so I didn't think twice about bolting for the door. I've always been a do-it-yourself-er, sticking with the Boglehead principles, which over the years has served us very well! I don't post here often, but I've been a regular attendee at our local chapter meetings for a long time! :)

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JoeRetire
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Re: Social Security questions, please help!

Post by JoeRetire » Fri Nov 23, 2018 8:14 pm

JBaumgart wrote:
Fri Nov 23, 2018 3:57 pm
JoeRetire wrote:
Fri Nov 23, 2018 1:07 pm
The Social Security benefits decision is a big one. As you have seen, lifetime benefits could be drastically different depending on the details of the individual situations and the choices made.

It always pays to take some time to think things through carefully, understand the details, get help when needed, and only then make a choice.

And one of the best parts about delaying is that you can revisit your decision at any time, and if the details change you can choose differently.
About 10 years ago I had a financial planner draw up a plan, and for the SS portion he recommended as follows:

April 2017: I file and suspend so that (spouse) may apply for spousal benefits (NOTE - Done)
April 2017: Spouse files, restricts application to spousal benefits, receiving approximately $xx,xxx per year (NOTE - Done)
June 2019: I file for own benefits, at age 70, receiving approximately $xx,xxx per year
April 2021: Spouse files for own benefits, at age 70, receiving approximately $xx,xxx per year

This is the plan I've been following ever since, and based on the very helpful, reinforcing feedback I've received here, is the plan I'll stick with.
Sounds like a reasonable plan to me.

I'm assuming your health situation changed in the last 10 years (ie, since your adviser came up with the plan). It might make sense to recheck your plan with your new health issues and potentially changed longevity in mind. It probably won't make a huge difference either way and my guess is that your adviser's plan is still optimal, but you never know.
P.S. As it turned out, the financial planner was mainly interested in selling me a huge annuity, so I didn't think twice about bolting for the door.
Makes sense to me.
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JBaumgart
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Re: Social Security questions, please help!

Post by JBaumgart » Sat Nov 24, 2018 12:00 am

JoeRetire wrote:
Fri Nov 23, 2018 8:14 pm
I'm assuming your health situation changed in the last 10 years (ie, since your adviser came up with the plan). It might make sense to recheck your plan with your new health issues and potentially changed longevity in mind. It probably won't make a huge difference either way and my guess is that your adviser's plan is still optimal, but you never know.
That's the thing, it's very difficult to ascertain one's longevity, because circumstances are constantly changing. Right now I'm doing quite well, play golf regularly three seasons a year, and get exercise at a health club in winter. But yes, since meeting with the adviser my health has most certainly changed. I'll just say that it's a heart condition that required surgery - so far so good, but long term who knows? Right now I do feel plenty well enough to remain confident that I'll reach that magical 70th birthday. :wink:

Given these inevitable uncertainties I've concluded that I should follow my original plan, which is clearly in my wife's best interest over the long term (i.e. decades, probably). That clearly outweighs the marginal benefit received if I were to start taking my own benefits a few months early.

MathWizard
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Re: Social Security questions, please help!

Post by MathWizard » Sat Nov 24, 2018 12:42 am

Waiting would almost certainly be better.

If you feel like you are depriving yourself, take out the extra you would have gotten had you taken SS now
from your portfolio.

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Lancelot
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Re: Social Security questions, please help!

Post by Lancelot » Sat Nov 24, 2018 1:37 am

JW-Retired wrote:
Fri Nov 23, 2018 8:28 am
JBaumgart wrote:
Fri Nov 23, 2018 1:52 am
If that's the case I would only be giving up two-to-three percentage points, which I think is a small price to pay given the certainty of actually receiving those three or four additional monthly checks...
It's a huge price for your spouse to pay. When you do pass your survivor will get a 3% (or probably 4%) lower SS survivor benefit for the rest of their life.

Lets see, if you would get $40k/year by delaying SS all the way to 70, 3% less than that is $1.2k/yr. If you die soon and she does live well into her 90's, say 95, her survivor payments will total 25x$1.2k = $30,000 less. That is considerably more than a few additional monthly checks. :oops:

Agree with JoeRetire, don't do that to her.
JW
Only the OP knows the nominal amounts and I think he has been very prudent to delay as long as he has. None of us knows with certainty how long we or a spouse will live so I don't see how we can know that the OP is subjecting his spouse to a huge reduction in benefits. the OP has made his decision and I respect it. By deferring benefits this long I can see the merits of claiming beniefits now or deffering the additional few months.
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JBaumgart
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Re: Social Security questions, please help!

Post by JBaumgart » Sat Nov 24, 2018 1:54 pm

Lancelot wrote:
Sat Nov 24, 2018 1:37 am
By deferring benefits this long I can see the merits of claiming benefits now or deferring the additional few months.
When I step back and look at the big picture it's really not that big of a deal. My wife and I have always lived well below our means, and starting in the 80's were aggressive savers (and mostly Vanguard index funds investors) until retiring 8 years ago. So she will be fine financially...

My biggest concern is how interested (and capable) she'll be managing all things financial, because that's something I've always taken care of. It's a goal of mine to start shifting some of those duties over to her, so she'll be better prepared when I'm gone. But thanks to the input here I am going to wait until turning 70 next June before claiming my benefit, as the extra 4% or so she'll receive until she passes certainly won't hurt.

JGoneRiding
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Re: Social Security questions, please help!

Post by JGoneRiding » Sat Nov 24, 2018 2:07 pm

You could start the application process now telling them you want to start benefits at max benefit in July of next year. One reason to do this is if you were to become notable worse and wanted to you could get a lump sum. Though that would reduce your wife survival benefit.

Without the dollar amounts it's hard to tell. How much more is yours then hers?

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JBaumgart
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Re: Social Security questions, please help!

Post by JBaumgart » Sat Nov 24, 2018 3:41 pm

JGoneRiding wrote:
Sat Nov 24, 2018 2:07 pm
You could start the application process now telling them you want to start benefits at max benefit in July of next year. One reason to do this is if you were to become notable worse and wanted to you could get a lump sum. Though that would reduce your wife survival benefit.
Pretty sure I read on one of the linked websites above that you cannot file more than 3 months before you want your benefit to begin.
JGoneRiding wrote:
Sat Nov 24, 2018 2:07 pm
Without the dollar amounts it's hard to tell. How much more is yours then hers?
$800 more at age 70.

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Re: Social Security questions, please help!

Post by JGoneRiding » Sat Nov 24, 2018 6:57 pm

JBaumgart wrote:
Sat Nov 24, 2018 3:41 pm
JGoneRiding wrote:
Sat Nov 24, 2018 2:07 pm
You could start the application process now telling them you want to start benefits at max benefit in July of next year. One reason to do this is if you were to become notable worse and wanted to you could get a lump sum. Though that would reduce your wife survival benefit.
Pretty sure I read on one of the linked websites above that you cannot file more than 3 months before you want your benefit to begin.
JGoneRiding wrote:
Sat Nov 24, 2018 2:07 pm
Without the dollar amounts it's hard to tell. How much more is yours then hers?
$800 more at age 70.
Your wife is actually already collecting on your benefit correct? So doesn't that mean your are already filed just suspended and could start at any time? I would think you are one of the last few with that benefit and if your health changed and your wife is otherwise caried for shouldn't you be able to start right away when ever you want plus collect 6 mos previous benefits?

I would think the goal would be to maximize the likely total life time benefit for you as a couple and the calculators can help with that.

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JBaumgart
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Re: Social Security questions, please help!

Post by JBaumgart » Sun Nov 25, 2018 6:40 pm

JGoneRiding wrote:
Sat Nov 24, 2018 6:57 pm
Your wife is actually already collecting on your benefit correct?
Yes, she is collecting spousal benefits since April 2007.
JGoneRiding wrote:
Sat Nov 24, 2018 6:57 pm
So doesn't that mean your are already filed just suspended and could start at any time?
Yes, I believe that's correct, and if so you make a good point. Nevertheless I've decided to wait until I turn 70, as noted above.
JGoneRiding wrote:
Sat Nov 24, 2018 6:57 pm
I would think you are one of the last few with that benefit and if your health changed and your wife is otherwise caried for shouldn't you be able to start right away when ever you want plus collect 6 mos previous benefits?
Not aware of the ability to retroactively "collect 6 months previous benefits". Regardless, I've concluded that it's in our combined best interest for me to wait until next June.
JGoneRiding wrote:
Sat Nov 24, 2018 6:57 pm
I would think the goal would be to maximize the likely total life time benefit for you as a couple and the calculators can help with that.
Agreed, and thank you for your input.

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Lancelot
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Re: Social Security questions, please help!

Post by Lancelot » Sun Nov 25, 2018 10:03 pm

JBaumgart wrote:
Sat Nov 24, 2018 1:54 pm
Lancelot wrote:
Sat Nov 24, 2018 1:37 am
By deferring benefits this long I can see the merits of claiming benefits now or deferring the additional few months.
When I step back and look at the big picture it's really not that big of a deal.
I agree. You are at a sweet spot that either decision is probably OK.

About the six months retroactive lump sum, you are wise to forego that, as it would, in my view, negate the benefit of waiting the additional six months and collecting another 4% for you and your wife's combined lifetimes.
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