SS Deemed filing eligibility

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hoops777
Posts: 1921
Joined: Sun Apr 10, 2011 12:23 pm

SS Deemed filing eligibility

Post by hoops777 » Wed Sep 13, 2017 10:00 pm

I was not going to post but I am honestly confused.Trying to figure out if we can use this strategy or not.
I turn 66 in January
Wife turns 68 in January
My projected benefits at 66...2465
My wife's at 68 ....1685
We are both retired.
Up until today we were both waiting until 70,but I was told to check this option out.Appreciate any help.
K.I.S.S........so easy to say so difficult to do.

Ace1
Posts: 115
Joined: Sun Dec 26, 2010 7:29 pm
Location: Twinsburg Ohio

Re: SS Deemed filing eligibility

Post by Ace1 » Wed Sep 13, 2017 11:05 pm

I believe you may be interested in the option of filing a restricted application.
To be eligible, the filer needed to be 62 by Dec 31, 2015, which appears to qualify you.
Your wife files for her benefit (anytime) and once you reach age 66, you file a restricted application
as her spouse. She collects her current amount( 1685 +/-) and you collect 50% of the amount she was eligible for
at her FRA, age 66, which based on the age 68 amount would be about 1410, so you would get a spousal of 705.
Then when you turn 70, file for your own much higher benefit (2465 x 1.32%).
Since your wifes own benefit is higher than 50% of your FRA amount, she will continue to collect that amount.
You should wait until you are 66 to file as her spouse and there is no additional benefit waiting past age 66 as her spouse.
She must file however for you to be able to file as a spouse.

The Wizard
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Location: Reading, MA

Re: SS Deemed filing eligibility

Post by The Wizard » Thu Sep 14, 2017 3:43 am

Alternately, let spouse get to age 70 before filing and then you file restricted for spousal for two years until you reach 70.
Depends a bit on your need for money along with the size of your tax sheltered accounts that could be spent down further to lessen RMDs...
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The Wizard
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Re: SS Deemed filing eligibility

Post by The Wizard » Thu Sep 14, 2017 3:51 am

...and the thread title is a misnomer.
All younger people will be deemed to be filing for their larger SS benefit, spousal or personal.
It's we older folks, born before the cutoff date, who can file a restricted application for spousal only and bypass the deemed filing rule...

https://www.ssa.gov/planners/retire/deemedfaq.html
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TravelforFun
Posts: 820
Joined: Tue Dec 04, 2012 11:05 pm

Re: SS Deemed filing eligibility

Post by TravelforFun » Thu Sep 14, 2017 10:00 am

hoops777 wrote:
Wed Sep 13, 2017 10:00 pm
I was not going to post but I am honestly confused.Trying to figure out if we can use this strategy or not.
I turn 66 in January
Wife turns 68 in January
My projected benefits at 66...2465
My wife's at 68 ....1685
We are both retired.
Up until today we were both waiting until 70,but I was told to check this option out.Appreciate any help.
Option 1:
Oct 2017, wife files and receives $1,650
Jan 2018, you file for spousal and receive $705. Family total: $1,650+$705= $2,355
Jan 2022, you file for your own benefit and receive $3,253. Total: $1,650+$3,253= $4,903

Option 2: Same as Option 1 but wife waits until Jan 2018 to file to receive $1,685

Option 3:
Oct 2017, wife files and receives $1,650
Jan 2018, you file for your own benefit and receive $2,465. Family total: $1,650+$2,465= $4,115

Option 4: Same as 3 but wife waits until Jan 2018 to file

Option 5:
Jan 2020, wife files for own benefit and receives $1,915, you file for spousal and receive $705. Total: $2,620
Jan 2022, you file for your own and receive $3,253. Total: $5,168.

The longer you wait the more money you get but the best option is always dependant on your own financial situation and longevity.

vested1
Posts: 1018
Joined: Wed Jan 04, 2012 4:20 pm

Re: SS Deemed filing eligibility

Post by vested1 » Thu Sep 14, 2017 10:14 am

Normally I am for delaying, but in your case I would consider doing the math to determine what you would be missing out on by continuing to delay until you both reach age 70. I don't believe that "break even" arguments have much validity, but in your case the argument is compelling. Please excuse me in advance if my math is a little off. I'm sure one of the site's mathematicians will set me straight in that case. I will use the $705 previously mentioned as the restricted application amount and $1,410 as your wife's PIA.

Using the numbers you've given, and the restricted application amount provided by Ace1, I would expect your age 70 benefit to be $3,254, which is the variable that won't change. Your wife would be getting $1,861 a month if she waited until age 70 ($1,410 x 132%).

The difference between your wife filing at 68 as compared to 70 is approx $176/mo or $2,112/yr. However, if your wife filed at 68 and you filed a restricted application at 66 the combined difference in dollars would add up to $74,280 by your age 70, which you would be foregoing by both waiting until age 70. That would be 2 years of your wife's lowered benefit that she wouldn't get if she waited until age 70 ($40,440) and 4 years of the restricted application benefit ($33,840).

$74,280 divided by $2,112 = 35 years breakeven, making your wife 105 and you 104 (from January 2020). To achieve that number you would both have to live until those ages, assuming you stuck to your original plan and both filed at age 70. If one of you died earlier the breakeven is even longer.

As Wizard correctly pointed out, you could wait until your wife turns 70 to file the restricted application, but the breakeven in that case would change. There is also the factor of "hold harmless" on Medicare premiums, which negates premium increases which lower overall SS benefits if the premiums are taken directly from SS payments.

It's all based on needed income however, as SS is not a lump sum, which partially invalidates the breakeven argument in my opinion. If you need the income to meet expenses now by all means file at 68/66. If $2,112 more a year ($176 an month) will make a big difference, continue to wait.

hoops777
Posts: 1921
Joined: Sun Apr 10, 2011 12:23 pm

Re: SS Deemed filing eligibility

Post by hoops777 » Thu Sep 14, 2017 3:41 pm

Thanks so much for all of the great replies.I made one mistake on my original post.My wife's benefit right now is 1685 and in January it will increase.The SS site estimates her payout at 2042 a month at 70.I am doing Roth conversions to the max starting in 2018 for 4 years,but I do not think doing this filing will change the conversion amount much, if at all,maxing out to the top of the 15 pct bracket.Our income will be almost nothing.I believe our AGI will be less than 8000...2400 in a cd and about 5500 in tax free muni bonds.
I guess my mistake which actually raises my wife's amounts actually makes our situation even better.
I really appreciate the detailed figures and scenarios because they really helped.My wife is having a difficult time believing this so I have more work to do :D
Last edited by hoops777 on Thu Sep 14, 2017 10:11 pm, edited 2 times in total.
K.I.S.S........so easy to say so difficult to do.

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David Jay
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Location: Michigan

Re: SS Deemed filing eligibility

Post by David Jay » Thu Sep 14, 2017 7:43 pm

hoops777 wrote:
Thu Sep 14, 2017 3:41 pm
My wife's benefit right now is 1685 and in January it will increase.
I do not know how often the SS website updates the benefit information, but the amount of your wife's benefit increases 8/12 of 1% EVERY MONTH that she delays taking her benefit. I suspect that the SS website is estimating in longer increments which is why it shows no increase until January. But the actual benefit amount goes up every month that she delays.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

hoops777
Posts: 1921
Joined: Sun Apr 10, 2011 12:23 pm

Re: SS Deemed filing eligibility

Post by hoops777 » Thu Sep 14, 2017 10:13 pm

David Jay wrote:
Thu Sep 14, 2017 7:43 pm
hoops777 wrote:
Thu Sep 14, 2017 3:41 pm
My wife's benefit right now is 1685 and in January it will increase.
I do not know how often the SS website updates the benefit information, but the amount of your wife's benefit increases 8/12 of 1% EVERY MONTH that she delays taking her benefit. I suspect that the SS website is estimating in longer increments which is why it shows no increase until January. But the actual benefit amount goes up every month that she delays.
I was assuming the figure was for when she turned 67 and when she turns 68 it will be almost 1800.I remember her full retirement age at 66 was about 1560 or so.
K.I.S.S........so easy to say so difficult to do.

Zott
Posts: 207
Joined: Fri Jul 31, 2015 10:21 pm

Re: SS Deemed filing eligibility

Post by Zott » Thu Sep 14, 2017 10:34 pm

Using reasonable assumptions as to expected mortality, the calculator at Bedrock Capital indicates that spouse should file for her benefit at age 68, you should then file a restricted application for a spousal benefit at age 66, then collect your increased benefit at age 70. This is "optimal" in terms of the present value of your combined benefits.

http://www.bedrockcapital.com/ssanalyze/

hoops777
Posts: 1921
Joined: Sun Apr 10, 2011 12:23 pm

Re: SS Deemed filing eligibility

Post by hoops777 » Fri Sep 15, 2017 2:21 pm

Zott wrote:
Thu Sep 14, 2017 10:34 pm
Using reasonable assumptions as to expected mortality, the calculator at Bedrock Capital indicates that spouse should file for her benefit at age 68, you should then file a restricted application for a spousal benefit at age 66, then collect your increased benefit at age 70. This is "optimal" in terms of the present value of your combined benefits.

http://www.bedrockcapital.com/ssanalyze/
Thank you.This is a great calculator.

I was not aware of the deemed filing or restricted application option so this has been a godsend.Thanks again to all of you for your help.I just researched some older threads about how to actually apply that were also very helpful.
K.I.S.S........so easy to say so difficult to do.

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