A Slightly Different "When to Claim Social Security" Question

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anonenigma
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A Slightly Different "When to Claim Social Security" Question

Post by anonenigma » Sun Nov 17, 2019 12:34 pm

As things stand, after the Windfall Elimination Provision has reduced my benefit, I will likely receive about $200 per month from Social Security at full retirement age next November, 85% of which will be taxable. No complaints - I barely paid in, working as a teacher in California.

I understand the logic of not claiming Social Security until 70, but it's a shock to be paying (just started this month) Medicare Part B premiums (plus IRMAA for Part B and Part D) after not paying premiums through my years of teaching. My Social Security benefit (pre-tax) would just about cover my Medicare premiums, so I'm tempted to take it sooner than later.

My wife is younger and well-employed, so her Social Security benefit will be higher than mine and not reduced by WEP.

Does the same "defer until 70" logic apply in my case?

milktoast
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Re: A Slightly Different "When to Claim Social Security" Question

Post by milktoast » Sun Nov 17, 2019 12:43 pm

Most likely you are in the 62/70 camp. Where the lower benefit spouse claims at 62 and the higher benefit spouse waits until 70.

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Flobes
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Re: A Slightly Different "When to Claim Social Security" Question

Post by Flobes » Sun Nov 17, 2019 1:15 pm

anonenigma wrote:
Sun Nov 17, 2019 12:34 pm
As things stand, after the Windfall Elimination Provision has reduced my benefit, I will likely receive about $200 per month from Social Security at full retirement age next November, 85% of which will be taxable.

I understand the logic of not claiming Social Security until 70, but...
The WEP is applied to your Social Security benefits once you actually receive your pension.

Have you already started taking your pension?

If not, you can start Social Security without any WEP impacts.

It may be advantageous to do the calculus of delaying the pension to maximize unWEPed Social Security for a few years. Especially if your pension benefits continue to grow while delayed.

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JoeRetire
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Re: A Slightly Different "When to Claim Social Security" Question

Post by JoeRetire » Sun Nov 17, 2019 1:21 pm

anonenigma wrote:
Sun Nov 17, 2019 12:34 pm
As things stand, after the Windfall Elimination Provision has reduced my benefit, I will likely receive about $200 per month from Social Security at full retirement age next November, 85% of which will be taxable. No complaints - I barely paid in, working as a teacher in California.

I understand the logic of not claiming Social Security until 70, but it's a shock to be paying (just started this month) Medicare Part B premiums (plus IRMAA for Part B and Part D) after not paying premiums through my years of teaching. My Social Security benefit (pre-tax) would just about cover my Medicare premiums, so I'm tempted to take it sooner than later.
It's not clear why "just about covering Medicare premiums" would tempt you to claim earlier, unless you can't afford those premiums without claiming.
My wife is younger and well-employed, so her Social Security benefit will be higher than mine and not reduced by WEP.

Does the same "defer until 70" logic apply in my case?
https://maximizemysocialsecurity.com/ could give you the optimal answer.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.

neilpilot
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Re: A Slightly Different "When to Claim Social Security" Question

Post by neilpilot » Sun Nov 17, 2019 1:33 pm

JoeRetire wrote:
Sun Nov 17, 2019 1:21 pm

https://maximizemysocialsecurity.com/ could give you the optimal answer.
How much time or effort is it worth to you to "optimize" a $2400/year benefit?

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JoeRetire
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Re: A Slightly Different "When to Claim Social Security" Question

Post by JoeRetire » Sun Nov 17, 2019 1:36 pm

neilpilot wrote:
Sun Nov 17, 2019 1:33 pm
JoeRetire wrote:
Sun Nov 17, 2019 1:21 pm

https://maximizemysocialsecurity.com/ could give you the optimal answer.
How much time or effort is it worth to you to "optimize" a $2400/year benefit?
LOL!

Time or effort? That tools takes about 10 minutes.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.

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anonenigma
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Re: A Slightly Different "When to Claim Social Security" Question

Post by anonenigma » Sun Nov 17, 2019 6:44 pm

Thanks for the replies. I began my pension when I retired - there would have been no advantage to delaying it.

I'm not looking to optimize a small income stream so much as cover most of the Medicare B premium (with IRMAA for that and MC D). In my school district, employees did not have to pay health insurance premiums, and I worked long enough that the District covers, at no cost to me, what would otherwise be my Medigap and Medicare D policies. I understand how lucky I am.

I think I'll take the Social Security benefits sooner rather than later.

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JoeRetire
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Re: A Slightly Different "When to Claim Social Security" Question

Post by JoeRetire » Sun Nov 17, 2019 6:53 pm

anonenigma wrote:
Sun Nov 17, 2019 6:44 pm
I'm not looking to optimize a small income stream so much as cover most of the Medicare B premium (with IRMAA for that and MC D).

I think I'll take the Social Security benefits sooner rather than later.
Money is fungible. I don't understand the benefit of using SS money to cover the Medicare premium. It's all your money no matter how you look at it.

But if you don't care about the amount, then I suppose it doesn't really matter when you start.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.

delamer
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Re: A Slightly Different "When to Claim Social Security" Question

Post by delamer » Sun Nov 17, 2019 6:57 pm

anonenigma wrote:
Sun Nov 17, 2019 6:44 pm
Thanks for the replies. I began my pension when I retired - there would have been no advantage to delaying it.

I'm not looking to optimize a small income stream so much as cover most of the Medicare B premium (with IRMAA for that and MC D). In my school district, employees did not have to pay health insurance premiums, and I worked long enough that the District covers, at no cost to me, what would otherwise be my Medigap and Medicare D policies. I understand how lucky I am.

I think I'll take the Social Security benefits sooner rather than later.
The difference between collecting now versus at FRA is going to be a couple hundred dollars per year. Between now and at 70 is maybe $1100/year.

And that’s before taxes.

So do what feels right.

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