Social Security - Maximizing a couples benefits
Social Security - Maximizing a couples benefits
Getting close to the age of getting paid.
I have significantly greater income history that my wife.
I also expect she will outlive me.
My current plan is to take benefits starting at 62.5.
My Break even calc (versus waiting till 66.3 +-) is around 80 years of age.
I reckon I'll be dead by then.
She may be also.
Have not determined when/if she should start.
I don't really want to argue/discuss the difference between 62.5 and 66. I have done the math.
If it has a real implication before age 80 or even 85 perhaps, but lets not derail the thread on philosophical difference.
The focus is maximizing benefits for both of us to lets say age 82.
I guess I do not fully understand survivor benefits yet.
Wondering what strategy gets us the most $$$.
Thanks in advance for helping me start this decision making process
I have significantly greater income history that my wife.
I also expect she will outlive me.
My current plan is to take benefits starting at 62.5.
My Break even calc (versus waiting till 66.3 +-) is around 80 years of age.
I reckon I'll be dead by then.
She may be also.
Have not determined when/if she should start.
I don't really want to argue/discuss the difference between 62.5 and 66. I have done the math.
If it has a real implication before age 80 or even 85 perhaps, but lets not derail the thread on philosophical difference.
The focus is maximizing benefits for both of us to lets say age 82.
I guess I do not fully understand survivor benefits yet.
Wondering what strategy gets us the most $$$.
Thanks in advance for helping me start this decision making process
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Re: Social Security - Maximizing a couples benefits
"I have significantly greater income history that my wife.mrgeeze wrote: ↑Sun Oct 15, 2017 8:46 am Getting close to the age of getting paid.
I have significantly greater income history that my wife.
I also expect she will outlive me.
My current plan is to take benefits starting at 62.5.
My Break even calc (versus waiting till 66.3 +-) is around 80 years of age.
I reckon I'll be dead by then.
She may be also.
Have not determined when/if she should start.
I don't really want to argue/discuss the difference between 62.5 and 66. I have done the math.
If it has a real implication before age 80 or even 85 perhaps, but lets not derail the thread on philosophical difference.
The focus is maximizing benefits for both of us to lets say age 82.
I guess I do not fully understand survivor benefits yet.
Wondering what strategy gets us the most $$$.
Thanks in advance for helping me start this decision making process
I also expect she will outlive me."
Me too. My wife is 11 years younger and will probably outlive me by 14-15 years.
I'm not concerned with maximizing the total dollars from SS in case we don't live long lives. Instead, I'm concerned with maximizing the benefit in case one or both of us live to a very old age while our investment portfolio does poorly. Therefore, I expect to start SS benefits at 70, and my wife will plan to collect spousal benefits at her full retirement age.
I purchased Maximize My Social Security and was very satisfied with the product: https://maximizemysocialsecurity.com/.
You can enter your salary history and ages at death in the program, and it will tell you what strategy will maximize your benefits. When I used the program I had a couple of questions which the company answered promptly by email. I think it was $140 for a one-year subscription. Money well-spent in my opinion.
Re: Social Security - Maximizing a couples benefits
Not really an expert, but I believe the higher earner should wait until at least FRA to maximize the survivor benefit for the lower earning spouse.
https://www.cnbc.com/2017/06/02/how-mar ... efits.html
"Here are the basics of spousal benefits: Those who were married for at least 10 consecutive years can claim either their own benefits based on their earnings — or half of the former spouse's benefits, whichever is higher, once they reach full retirement age.
That means that a higher earner in the couple may wait to file at 70 while the lower earner can claim at full retirement age to maximize their total benefits as a couple.
"A higher earner should not base his or her strategy on their own life expectancy, but rather base it on the joint life expectancy of the couple," Kron said. He noted that actuarially, there is a 50 percent chance that one member of a healthy 65-year-old couple will live to age 93."
https://www.cnbc.com/2017/06/02/how-mar ... efits.html
"Here are the basics of spousal benefits: Those who were married for at least 10 consecutive years can claim either their own benefits based on their earnings — or half of the former spouse's benefits, whichever is higher, once they reach full retirement age.
That means that a higher earner in the couple may wait to file at 70 while the lower earner can claim at full retirement age to maximize their total benefits as a couple.
"A higher earner should not base his or her strategy on their own life expectancy, but rather base it on the joint life expectancy of the couple," Kron said. He noted that actuarially, there is a 50 percent chance that one member of a healthy 65-year-old couple will live to age 93."
"Confusion has its cost" - Crosby, Stills and Nash
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Re: Social Security - Maximizing a couples benefits
Op,
I suggest you look into survivors benefits closely before making a decision. This can often be a strong decision criteria for planning.
SSAnalyzer by Bedrock has been a really useful tool for me to compare approaches.
I would pay careful attention to:
- cash flow requirements
- your age and expected longevity
- her age and expected longevity
- impact of your death on cash flow, taxes etc.
Sometimes the SS decision comes down to a Longevity Insurance play to insure adequate cash flow in your later years. For others it’s a cash flow decision. We don’t have enough info on your circumstances to provide deep insight.
I hope the tools and approach provided in this thread are of some help.
Good luck
I suggest you look into survivors benefits closely before making a decision. This can often be a strong decision criteria for planning.
SSAnalyzer by Bedrock has been a really useful tool for me to compare approaches.
I would pay careful attention to:
- cash flow requirements
- your age and expected longevity
- her age and expected longevity
- impact of your death on cash flow, taxes etc.
Sometimes the SS decision comes down to a Longevity Insurance play to insure adequate cash flow in your later years. For others it’s a cash flow decision. We don’t have enough info on your circumstances to provide deep insight.
I hope the tools and approach provided in this thread are of some help.
Good luck
Last edited by WoodSpinner on Mon Oct 16, 2017 10:38 am, edited 1 time in total.
WoodSpinner
Re: Social Security - Maximizing a couples benefits
Yes, a person should probably try out one or two of the SS planning programs out there.
It will often turn out that security of having maximum benefit at extended ages will come back to the one spouse at 70, spousal benefit at FRA formula.
It will often turn out that security of having maximum benefit at extended ages will come back to the one spouse at 70, spousal benefit at FRA formula.
Re: Social Security - Maximizing a couples benefits
More information is needed in order to provide advice on maximizing SS. However, when to take SS is not particularly a philosophy, but rather an exercise in economics. If you provide your ages, and your estimated PIA's at your respective FRA's you will get more helpful responses.
1. How do you know you will be dead at age 80, and that your wife may be also?
2. You seem to have made up your mind on not delaying, so why ask how to maximize benefits?
3. Many use break even as a determining factor on when to file, but SS is purely income, not a pot of gold that can be accessed all at once. It is an annuity, or acts like one, only far better than can be purchased for a comparable cost.
1. How do you know you will be dead at age 80, and that your wife may be also?
2. You seem to have made up your mind on not delaying, so why ask how to maximize benefits?
3. Many use break even as a determining factor on when to file, but SS is purely income, not a pot of gold that can be accessed all at once. It is an annuity, or acts like one, only far better than can be purchased for a comparable cost.
Re: Social Security - Maximizing a couples benefits
See Tools_and_calculators#Social_Security and links therein for several programs that will calculate a strategy for maximize benefits - depending on your inputs for life expectancy, etc.
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Re: Social Security - Maximizing a couples benefits
There are free alternatives but I concur with the recommendation. The cost is $40/yr, not $140/yr.TheNightsToCome wrote: ↑Sun Oct 15, 2017 9:28 am... I purchased Maximize My Social Security and was very satisfied with the product: https://maximizemysocialsecurity.com/. ... I think it was $140 for a one-year subscription.
Purchase page, MaximizeMySocialSecurity.com.
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Re: Social Security - Maximizing a couples benefits
Assuming OP lives at least to FRA, the widow benefit will be the high earner's benefit amount at the time he dies. Maximizing the survivor benefit for the lower earning spouse requires the high earner to wait until 70. Every year earlier than that will reduce that benefit by 8%.
JW
disclosure: My wife and I were in that position so it was a no-brainer.
Last edited by JW-Retired on Sun Oct 15, 2017 12:37 pm, edited 1 time in total.
Retired at Last
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Re: Social Security - Maximizing a couples benefits
My understanding is that my wife's spousal benefit is maximized as long as I wait until my FRA to claim benefits. My benefits increase another 8%/year if I then wait until 70, but my wife's spousal benefit will not increase beyond what it is at my FRA (i.e., 1/2 of my FRA benefit).JW-Retired wrote: ↑Sun Oct 15, 2017 12:24 pmAssuming OP lives at least to FRA, the widow benefit will be the high earner's benefit amount at the time he dies. Maximizing the survivor benefit for the lower earning spouse requires the high earner to wait until 70. Every year earlier than that will reduce that benefit by 8%.
JW
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Re: Social Security - Maximizing a couples benefits
That is spousal benefit, survivor benefit is completely different. Google it. (and I will look for the SS link too)TheNightsToCome wrote: ↑Sun Oct 15, 2017 12:36 pmMy understanding is that my wife's spousal benefit is maximized as long as I wait until my FRA to claim benefits. My benefits increase another 8%/year if I then wait until 70, but my wife's spousal benefit will not increase beyond what it is at my FRA (i.e., 1/2 of my FRA benefit).JW-Retired wrote: ↑Sun Oct 15, 2017 12:24 pmAssuming OP lives at least to FRA, the widow benefit will be the high earner's benefit amount at the time he dies. Maximizing the survivor benefit for the lower earning spouse requires the high earner to wait until 70. Every year earlier than that will reduce that benefit by 8%.
JW
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Re: Social Security - Maximizing a couples benefits
See https://www.ssa.gov/pubs/EN-05-10084.pdf
JWSS wrote: Social Security uses the deceased worker’s basic benefit
amount to calculate the percentage survivors can get.
The percentage depends on the survivor’s age and
relationship to the worker. If the worker who died was
getting reduced benefits, we’ll base your survivor’s benefit
on that amount. In most typical claims for benefits:
• A widow or widower, at full retirement age or older,
generally gets 100 percent of the worker’s basic
benefit amount;
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Re: Social Security - Maximizing a couples benefits
Got it.JW-Retired wrote: ↑Sun Oct 15, 2017 12:39 pmThat is spousal benefit, survivor benefit is completely different. Google it. (and I will look for the SS link too)TheNightsToCome wrote: ↑Sun Oct 15, 2017 12:36 pmMy understanding is that my wife's spousal benefit is maximized as long as I wait until my FRA to claim benefits. My benefits increase another 8%/year if I then wait until 70, but my wife's spousal benefit will not increase beyond what it is at my FRA (i.e., 1/2 of my FRA benefit).JW-Retired wrote: ↑Sun Oct 15, 2017 12:24 pmAssuming OP lives at least to FRA, the widow benefit will be the high earner's benefit amount at the time he dies. Maximizing the survivor benefit for the lower earning spouse requires the high earner to wait until 70. Every year earlier than that will reduce that benefit by 8%.
JW
Re: Social Security - Maximizing a couples benefits
I think your focus is wrong:
"The focus is maximizing benefits for both of us to lets say age 82."
In your position -- and in your wife's -- I'd be focused on making sure my wife had adequate income once I died, given that I expect her to outlive me.
Her survivor benefit will equal the Social Security benefit that you have while you are alive. That probably means that you should maximize your benefit to give her a solid "floor" of income regardless of what happens to the markets.
Of course, the same is true if you survive her. Her SS benefit goes away, and your benefit is your floor.
"The focus is maximizing benefits for both of us to lets say age 82."
In your position -- and in your wife's -- I'd be focused on making sure my wife had adequate income once I died, given that I expect her to outlive me.
Her survivor benefit will equal the Social Security benefit that you have while you are alive. That probably means that you should maximize your benefit to give her a solid "floor" of income regardless of what happens to the markets.
Of course, the same is true if you survive her. Her SS benefit goes away, and your benefit is your floor.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
Re: Social Security - Maximizing a couples benefits
I don't know exactly what we expect, but our SS strategy includes consideration of what happens when one of us is gone. That has also been our focus.
Re: Social Security - Maximizing a couples benefits
Thanks to some of you.
SS tools out there that allow you to work through some scenarios should help.
I find that useful advice & appreciate that information.
'nuff said.
SS tools out there that allow you to work through some scenarios should help.
I find that useful advice & appreciate that information.
'nuff said.
Re: Social Security - Maximizing a couples benefits
Yes, planning needs to be done based on one spouse outliving the other because that is the most likely scenario -- whether it turns out to be by 20 days or 20 years.
I believe the planning should start with determining how much each spouse will need to cover basic expenses if s/he is the survivor and the best way to provide that income. Then looking at maximizing SS is fine. But that strategy is dependent on estimating ages of death which no one knows.
Both of my grandmothers outlived their husbands by at least 25 years. Yet, oddly enough, among my parents and their siblings -- or 7 married couples -- in only 2 cases did the wife outlive her husband.
My point is that you never know.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
Re: Social Security - Maximizing a couples benefits
Yep, you never know. In both the case of me and my wife (our 2 sets of parents), the husbands are currently outliving the wife by 10 years+ and counting, and not from accidents or anything unexpected at latter ages. They both did some planning expecting the reverse to happen. So it's hard to plan.
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Re: Social Security - Maximizing a couples benefits
Agreed -- but given the devastating impact of a surviving spouse being left with very little income, even an unlikely outcome has to be considered in planning.spammagnet wrote: ↑Sun Oct 15, 2017 4:49 pmWe don't know what will happen but we have a pretty good idea about the likelihood of what will happen.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
Re: Social Security - Maximizing a couples benefits
If you already decided to take your benefit at 62.5 then there is very little to discuss about strategy to get you the most $$$$. You have already disabled any of the levers that would have any substantial impact. Some people don't have a choice and need to start collecting SS immediately but that doesn't sound like the case here.mrgeeze wrote: ↑Sun Oct 15, 2017 8:46 am Getting close to the age of getting paid.
I have significantly greater income history that my wife.
I also expect she will outlive me.
My current plan is to take benefits starting at 62.5.
My Break even calc (versus waiting till 66.3 +-) is around 80 years of age.
I reckon I'll be dead by then.
She may be also.
Have not determined when/if she should start.
I don't really want to argue/discuss the difference between 62.5 and 66. I have done the math.
If it has a real implication before age 80 or even 85 perhaps, but lets not derail the thread on philosophical difference.
The focus is maximizing benefits for both of us to lets say age 82.
I guess I do not fully understand survivor benefits yet.
Wondering what strategy gets us the most $$$.
Thanks in advance for helping me start this decision making process
IMO breakeven calculations for SS are questionable even for single people and really shortsighted for married couples. You are placing the same value on having extra money now ("Getting close to the age of getting paid") and the possibility that your widow could run out of money in her old age because you locked in a substantially lower SS benefit for both of your life spans. That may seem harsh, but that is the reality of the way you are approaching this decision.
A key component in making the best decision is the difference in age between you and your wife. "I expect she will outlive me" covers a lot of ground. On an actuarial basis that covers her being a whole lot younger than you to a few years older since women on average live longer than men. In general, a couple in your circumstances (i.e., male having substantially higher earnings) favors the male waiting to collect benefits in order to give his wife longevity insurance. This is even more of a favored approach for an older husband/younger wife. I didn't see that you mentioned your wife's age in your post.
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Re: Social Security - Maximizing a couples benefits
That is the likelihood I referred to. Our plans for SS benefits are to optimize the income of the surviving spouse by deferring my benefits to 70. We may or may not defer DWs.delamer wrote: ↑Sun Oct 15, 2017 5:52 pmAgreed -- but given the devastating impact of a surviving spouse being left with very little income, even an unlikely outcome has to be considered in planning.spammagnet wrote: ↑Sun Oct 15, 2017 4:49 pmWe don't know what will happen but we have a pretty good idea about the likelihood of what will happen.
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Re: Social Security - Maximizing a couples benefits
TheNightsToCome wrote: ↑Sun Oct 15, 2017 12:36 pmMy understanding is that my wife's spousal benefit is maximized as long as I wait until my FRA to claim benefits. My benefits increase another 8%/year if I then wait until 70, but my wife's spousal benefit will not increase beyond what it is at my FRA (i.e., 1/2 of my FRA benefit).JW-Retired wrote: ↑Sun Oct 15, 2017 12:24 pmAssuming OP lives at least to FRA, the widow benefit will be the high earner's benefit amount at the time he dies. Maximizing the survivor benefit for the lower earning spouse requires the high earner to wait until 70. Every year earlier than that will reduce that benefit by 8%.
JW
Does the wife's spousal benefit increase by COLA's if she takes it at her FRA and husband waits until age 70 to earn DRC? If husband already is 66 and suspended his benefit and it is earning COLA + 8% per year, when wife takes spousal benefit in 3 years is hers 1/2 of the amount that her husband has earned with COLA's and DRC"S?
Re: Social Security - Maximizing a couples benefits
I don't believe one can get a spousal benefit until the other spouse has filed for his own benefits. (See the Aug 2016 thread, Social Security - Spousal Benefits - Basics.) So for example assume the worker and the spouse are the same age, the worker claims at age 70, and the spouse claims at Normal Retirement Age (NRA or FRA). She will not get spousal benefits until age 70. Between NRA and 70 she will collect based only on her own work record. If that is less than 50% of the worker's Primary Insurance Amount (PIA), at age 70 she will begin collecting that higher amount. Is this correct?
I would also appreciate comments as to whether the following analysis is correct. Since the original poster provided little information, I'm assuming the following:
- Both husband and wife born in 1956 (in the same month) and hence have a NRA of 66-1/3. (See Effect of Early or Delayed retirement.)
- Husband does not work after age 62 or if he does, it doesn't increase his average wages upon which his PIA is calculated.
- Wife is entitled to no SS benefit on her own work record.
- Husband and wife both claim at the same time.
- Claiming after NRA increases benefits for the husband by 8% per year (2/300 per month).
- Claiming before NRA reduces benefits according to the following. (See Early or Late Retirement and Benefits for Spouses.)
Code: Select all
1-36 mo > 36 mo -------------- ------------- Worker 5/ 900 per mo 5/1200 per mo Spouse 25/3600 per mo 5/1200 per mo
Code: Select all
Husband Wife
---------------------- ----------------------
Months Benefit Months Benefit Total
Row Age vs NRA % PIA Age vs NRA % PIA % PIA
Code: Select all
8 62 (52) 73.333% 62 (52) 34.167% 107.500%
9 62.5 (46) 75.833% 62.5 (46) 35.417% 111.250%
10 63 (40) 78.333% 63 (40) 36.667% 115.000%
11 64 (28) 84.444% 64 (28) 40.278% 124.722%
12 65 (16) 91.111% 65 (16) 44.444% 135.556%
13 66 (4) 97.778% 66 (4) 48.611% 146.389%
14 66.333 0 100.000% 66.333 0 50.000% 150.000%
15 67 8 105.333% 67 8 50.000% 155.333%
16 68 20 113.333% 68 20 50.000% 163.333%
17 69 32 121.333% 69 32 50.000% 171.333%
18 70 44 129.333% 70 44 50.000% 179.333%
Which claiming age is best depends of many things. It helps the decision to estimate the yearly benefits weighted by the probability of one or both spouses surviving to all possible ages. To illustrate this, the next to the right column shows the sum of the survival weighted cash flows per $1,000 of monthly PIA assuming both spouses have mortality probabilities as given by the SSA 1960 Cohort Life Table.
Code: Select all
Mo Benefit At Age 62
Age Years while Alive Surv-Wtd Discounted
Man Wife Delay Both Only 1 Cash Flow at 2%
--- ---- ----- ----- ------ --------- ----------
62 62 0 1,075 733 309,000 239,000
63 63 1 1,150 783 317,000 242,000
64 64 2 1,247 844 328,000 247,000
65 65 3 1,356 911 339,000 253,000
66 66 4 1,464 978 348,000 256,000 <--
67 67 5 1,553 1,053 354,000 257,000 <--
68 68 6 1,633 1,133 357,000 256,000 <--
69 69 7 1,713 1,213 358,000 253,000
70 70 8 1,793 1,293 357,000 249,000
One can dispense with mortality tables and survival-weighting and just compute the present value (PV) of the cash flows with specific assumptions for longevity. For example, the following table is based on the age 62 $1,075 and $733 monthly benefits for various combinations of the age when the first spouse dies and the years the other spouse survives after that. For example, if the first spouse dies at age 80 and the other one lives 8 more years, the PV is $240,200. The next table shows that for the same longevity the PV is $258,400 when based on the age 66 $1,464 and $978 monthly benefits . [*]
PV discounted @ 2% when both spouses claim at age 62
Code: Select all
1st / 2nd -> 0 2 4 6 8 10 12
--- ------- ------- ------- ------- ------- ------- -------
74 137,500 151,100 164,100 176,600 188,600 200,200 211,300
76 157,400 170,400 182,900 195,000 206,500 217,600 228,300
78 176,500 189,000 201,000 212,600 223,700 234,400 244,600
80 194,900 206,900 218,400 229,500 [240,200] 250,500 260,300 [*]
82 212,500 224,100 235,200 245,800 256,100 265,900 275,400
84 229,400 240,500 251,200 261,500 271,300 280,800 289,900
86 245,700 256,400 266,600 276,500 285,900 295,000 303,800
88 261,400 271,600 281,500 290,900 300,000 308,700 317,100
90 276,400 286,200 295,700 304,800 313,500 321,900 330,000
92 290,800 300,300 309,400 318,100 326,500 334,600 342,300
94 304,700 313,800 322,500 330,900 339,000 346,700 354,200
Code: Select all
1st / 2nd -> 0 2 4 6 8 10 12
--- ------- ------- ------- ------- ------- ------- -------
74 119,800 137,900 155,300 172,000 188,000 203,400 218,200
76 146,900 164,300 181,000 197,000 212,400 227,200 241,500
78 172,900 189,600 205,600 221,100 235,900 250,100 263,800
80 197,900 213,900 229,400 244,200 [258,400] 272,100 285,200 [*]
82 221,900 237,300 252,100 266,400 280,000 293,200 305,800
84 245,000 259,800 274,000 287,700 300,800 313,500 325,600
86 267,200 281,400 295,100 308,200 320,800 333,000 344,600
88 288,500 302,100 315,300 327,900 340,000 351,700 362,900
90 308,900 322,100 334,700 346,800 358,500 369,700 380,400
92 328,600 341,200 353,400 365,000 376,200 387,000 397,300
94 347,500 359,600 371,300 382,500 393,200 403,600 413,500
Code: Select all
240,200 = PV(2%/12, 12*18, -1075, 0, 0) + PV(2%/12, 12*8, -733, 0, 0) / (1+2%/12)^(12*18)
258,400 = PV(2%/12, 12*14, -1464, 0, 0) / (1+2%/12)^(12*4) + PV(2%/12, 12*8, -978, 0, 0) / (1+2%/12)^(12*18)
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Re: Social Security - Maximizing a couples benefits
I initially assumed that if I waited until 70, then my wife's spousal benefit would increase to 1/2 of my increased benefit. I learned that isn't the case. The spousal benefit will not increase beyond half of my benefit at my full retirement age (even if I wait til 70 to claim my benefits).dollarsaver wrote: ↑Sun Oct 15, 2017 7:00 pmTheNightsToCome wrote: ↑Sun Oct 15, 2017 12:36 pmMy understanding is that my wife's spousal benefit is maximized as long as I wait until my FRA to claim benefits. My benefits increase another 8%/year if I then wait until 70, but my wife's spousal benefit will not increase beyond what it is at my FRA (i.e., 1/2 of my FRA benefit).JW-Retired wrote: ↑Sun Oct 15, 2017 12:24 pmAssuming OP lives at least to FRA, the widow benefit will be the high earner's benefit amount at the time he dies. Maximizing the survivor benefit for the lower earning spouse requires the high earner to wait until 70. Every year earlier than that will reduce that benefit by 8%.
JW
Does the wife's spousal benefit increase by COLA's if she takes it at her FRA and husband waits until age 70 to earn DRC? If husband already is 66 and suspended his benefit and it is earning COLA + 8% per year, when wife takes spousal benefit in 3 years is hers 1/2 of the amount that her husband has earned with COLA's and DRC"S?
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Re: Social Security - Maximizing a couples benefits
That is correct for spousal benefits.TheNightsToCome wrote: ↑Mon Oct 16, 2017 10:18 pmI initially assumed that if I waited until 70, then my wife's spousal benefit would increase to 1/2 of my increased benefit. I learned that isn't the case. The spousal benefit will not increase beyond half of my benefit at my full retirement age (even if I wait til 70 to claim my benefits).dollarsaver wrote: ↑Sun Oct 15, 2017 7:00 pmTheNightsToCome wrote: ↑Sun Oct 15, 2017 12:36 pmMy understanding is that my wife's spousal benefit is maximized as long as I wait until my FRA to claim benefits. My benefits increase another 8%/year if I then wait until 70, but my wife's spousal benefit will not increase beyond what it is at my FRA (i.e., 1/2 of my FRA benefit).JW-Retired wrote: ↑Sun Oct 15, 2017 12:24 pmAssuming OP lives at least to FRA, the widow benefit will be the high earner's benefit amount at the time he dies. Maximizing the survivor benefit for the lower earning spouse requires the high earner to wait until 70. Every year earlier than that will reduce that benefit by 8%.
JW
Does the wife's spousal benefit increase by COLA's if she takes it at her FRA and husband waits until age 70 to earn DRC? If husband already is 66 and suspended his benefit and it is earning COLA + 8% per year, when wife takes spousal benefit in 3 years is hers 1/2 of the amount that her husband has earned with COLA's and DRC"S?
However, don't forget that waiting until age 70 will provide the highest *survivor* benefits, as the survivor gets the higher of the two benefits, and for life.
RM
This signature is a placebo. You are in the control group.
Re: Social Security - Maximizing a couples benefits
WoodSpinner wrote: ↑Sun Oct 15, 2017 9:58 am Op,
I suggest you look into survivors benefits closely before making a decision. This can often be a strong decision criteria for planning.
SSAnalyzer by Bedrock has been a really useful tool for me to compare approaches.
I would pay careful attention to:
- cash flow requirements
- your age and expected longevity
- her age and expected longevity
- impact of your death on cash flow, taxes etc.
Sometimes the SS decision comes down to a Longevity Insurance play to insure adequate cash flow in your later years. For others it’s a cash flow decision. We don’t have enough info on your circumstances to provide deep insight.
I hope the tools and approach provided in this thread are of some help.
Good luck
I also like this calculator. For something fairly simple and easy to use you can answer many different questions by adjusting the entries from the standard. For example if you plan to (or simply want to know what happens if you) die at 82, you can put that in. It seems to get the correct answers for the SS rules that change based on birth dates as well.
Re: Social Security - Maximizing a couples benefits
I also like that calculator. Besides putting in age 82, try entering an age 1 year more than the default age used by the calculator. Made a significant difference in the results for us.onthecusp wrote: ↑Tue Oct 17, 2017 9:30 amWoodSpinner wrote: ↑Sun Oct 15, 2017 9:58 am Op,
I suggest you look into survivors benefits closely before making a decision. This can often be a strong decision criteria for planning.
SSAnalyzer by Bedrock has been a really useful tool for me to compare approaches.
I would pay careful attention to:
- cash flow requirements
- your age and expected longevity
- her age and expected longevity
- impact of your death on cash flow, taxes etc.
Sometimes the SS decision comes down to a Longevity Insurance play to insure adequate cash flow in your later years. For others it’s a cash flow decision. We don’t have enough info on your circumstances to provide deep insight.
I hope the tools and approach provided in this thread are of some help.
Good luck
I also like this calculator. For something fairly simple and easy to use you can answer many different questions by adjusting the entries from the standard. For example if you plan to (or simply want to know what happens if you) die at 82, you can put that in. It seems to get the correct answers for the SS rules that change based on birth dates as well.
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Re: Social Security - Maximizing a couples benefits
Yes, this is key for us. My wife is significantly younger and is likely to have a long life after I'm gone.ResearchMed wrote: ↑Mon Oct 16, 2017 10:25 pmThat is correct for spousal benefits.TheNightsToCome wrote: ↑Mon Oct 16, 2017 10:18 pmI initially assumed that if I waited until 70, then my wife's spousal benefit would increase to 1/2 of my increased benefit. I learned that isn't the case. The spousal benefit will not increase beyond half of my benefit at my full retirement age (even if I wait til 70 to claim my benefits).dollarsaver wrote: ↑Sun Oct 15, 2017 7:00 pmTheNightsToCome wrote: ↑Sun Oct 15, 2017 12:36 pmMy understanding is that my wife's spousal benefit is maximized as long as I wait until my FRA to claim benefits. My benefits increase another 8%/year if I then wait until 70, but my wife's spousal benefit will not increase beyond what it is at my FRA (i.e., 1/2 of my FRA benefit).JW-Retired wrote: ↑Sun Oct 15, 2017 12:24 pm
Assuming OP lives at least to FRA, the widow benefit will be the high earner's benefit amount at the time he dies. Maximizing the survivor benefit for the lower earning spouse requires the high earner to wait until 70. Every year earlier than that will reduce that benefit by 8%.
JW
Does the wife's spousal benefit increase by COLA's if she takes it at her FRA and husband waits until age 70 to earn DRC? If husband already is 66 and suspended his benefit and it is earning COLA + 8% per year, when wife takes spousal benefit in 3 years is hers 1/2 of the amount that her husband has earned with COLA's and DRC"S?
However, don't forget that waiting until age 70 will provide the highest *survivor* benefits, as the survivor gets the higher of the two benefits, and for life.
RM
Re: Social Security - Maximizing a couples benefits
I too like the calculator - but pay close attention to what you place in the variables "COLA" and "Discount rate" as they change the outputs/choices quite a bit.racy wrote: ↑Tue Oct 17, 2017 9:38 amI also like that calculator. Besides putting in age 82, try entering an age 1 year more than the default age used by the calculator. Made a significant difference in the results for us.onthecusp wrote: ↑Tue Oct 17, 2017 9:30 amWoodSpinner wrote: ↑Sun Oct 15, 2017 9:58 am Op,
I suggest you look into survivors benefits closely before making a decision. This can often be a strong decision criteria for planning.
SSAnalyzer by Bedrock has been a really useful tool for me to compare approaches.
I would pay careful attention to:
- cash flow requirements
- your age and expected longevity
- her age and expected longevity
- impact of your death on cash flow, taxes etc.
Sometimes the SS decision comes down to a Longevity Insurance play to insure adequate cash flow in your later years. For others it’s a cash flow decision. We don’t have enough info on your circumstances to provide deep insight.
I hope the tools and approach provided in this thread are of some help.
Good luck
I also like this calculator. For something fairly simple and easy to use you can answer many different questions by adjusting the entries from the standard. For example if you plan to (or simply want to know what happens if you) die at 82, you can put that in. It seems to get the correct answers for the SS rules that change based on birth dates as well.
Re: Social Security - Maximizing a couples benefits
Yes, that comment made me laugh also.
I know this isn't what mrgeeze wants to hear, but I'll agree with the others (who are not being thanked) that he should wait as long as possible to claim, to maximize the benefit for the survivor. My husband is 7 years older than I, and his earnings have been much higher. We are going to claim for both of us when he's 70 and I'm 63. That way he gets the maximum benefit which one of us gets to keep no matter who dies first. My benefit won't be maximized because I'll claim it early...but the chances are decent that one of will die before the other, making the smaller second benefit irrelevant.
Re: Social Security - Maximizing a couples benefits
Agreed and similar for us as well - that move will also likely enhance the amounts of money you see after tax as well.boglegirl wrote: ↑Tue Oct 17, 2017 11:03 amYes, that comment made me laugh also.
I know this isn't what mrgeeze wants to hear, but I'll agree with the others (who are not being thanked) that he should wait as long as possible to claim, to maximize the benefit for the survivor. My husband is 7 years older than I, and his earnings have been much higher. We are going to claim for both of us when he's 70 and I'm 63. That way he gets the maximum benefit which one of us gets to keep no matter who dies first. My benefit won't be maximized because I'll claim it early...but the chances are decent that one of will die before the other, making the smaller second benefit irrelevant.
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Re: Social Security - Maximizing a couples benefits
mrgeeze said in the first post that he didn't "fully understand survivor benefits yet." I too expected some kind of ah-ha that he might be going about this backwards. (Or maybe the above was it?)boglegirl wrote: ↑Tue Oct 17, 2017 11:03 amYes, that comment made me laugh also.
I know this isn't what mrgeeze wants to hear, but I'll agree with the others (who are not being thanked) that he should wait as long as possible to claim, to maximize the benefit for the survivor. My husband is 7 years older than I, and his earnings have been much higher. We are going to claim for both of us when he's 70 and I'm 63.
Retired at Last
Re: Social Security - Maximizing a couples benefits
Agreed. It just doesn't make sense to predetermine certain choices when you admit to not understanding the whole picture.JW-Retired wrote: ↑Tue Oct 17, 2017 12:26 pmmrgeeze said in the first post that he didn't "fully understand survivor benefits yet." I too expected some kind of ah-ha that he might be going about this backwards. (Or maybe the above was it?)boglegirl wrote: ↑Tue Oct 17, 2017 11:03 amYes, that comment made me laugh also.
I know this isn't what mrgeeze wants to hear, but I'll agree with the others (who are not being thanked) that he should wait as long as possible to claim, to maximize the benefit for the survivor. My husband is 7 years older than I, and his earnings have been much higher. We are going to claim for both of us when he's 70 and I'm 63.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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Re: Social Security - Maximizing a couples benefits
And graceless. Everyone posting above has taken time from their own personal lives to help the OP, a total stranger; and everyone has given perspective and advice in good faith; and no one has been rude or snarky to the OP. Therefore, "thanks to all," even to those who made recommendations the OP didn't necessarily wish to hear, would have been the well-mannered and tactful acknowledgement.
Beyond that point, I agree with those here who suggest that the OP delay Social Security, for reasons they've already stated.