Social security - timing

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Social security - timing

Post by 209south »

[Topic is now in Personal Finance (Not Investing) - mod mkc]

Apologies if there are other threads on this - I could not find one.

On another thread I saw a link to I put in our data and received the surprising recommendation to file for retirement benefits for my wife and I at age 66 - I'm currently 64 and had just assumed based on prior reading that I would want to wait until age 70 before claiming, so wanted to do a sanity check here.

Quick facts:
1. I am 64 and have had max SS income for most years beginning in the late-1980s; my PIA at age 67 will be $3,815
2. My wife is 64 and has been a stay-at-home Mom for the past 36 years so I'm assuming she has a PIA of zero (I will confirm)
With those inputs the recommendation is for both of us to file in February 2026, 3 or 4 years earlier than I had planned. Happy to do so if that is right. Are there other tools to help me confirm this?
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Re: Social security - timing

Post by mhalley »

Open SS is the main free one. Their recommendation has changed a lot in the last few years due to the discount rate. There are several others that are paid, around $40 I believe.
Maximize my SS $40 ... a0QAvD_BwE
SS solutions $20 -$50
Last edited by mhalley on Tue May 14, 2024 3:47 pm, edited 1 time in total.
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Re: Social security - timing

Post by Lou354 »

The key factor is that your wife can’t claim her spousal benefit until you file for your own retirement benefit. If your wife was entitled to a retirement benefit based on her own earnings record, or if she were considerably younger than you, then it may very well make sense for her to claim early (e.g., at 62) and for you to wait until 70. Opensocialsecurity is telling you that the advantage of waiting until you’re 70 doesn’t outweigh the missed payments to both you and your wife together in the meantime.
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Re: Social security - timing

Post by celia »

OpenSS does NOT take the need to do Roth conversions into account. In my opinion, that is more important than when to start SS. Look for threads that talk about doing Roth conversions in your early retirement years. Instead of having SS using up space in your tax brackets now, you can have Roth conversions in that space while delaying SS to age 70, when the monthly benefit will be higher. You may want the higher deferred benefit for your wife if she lives many years after you are gone as SS is indexed for inflation each year !

We don't know your assets, but if you jointly have over a million in tax-deferred accounts, you should spend some time seeing what your future RMDs do to your taxes. Many of us find that it is better to level out our AGI over our remaining years to keep our yearly taxes level instead of having a few years of low AGI (and taxes) followed by many more years of higher AGI (and taxes). Doing Roth conversions is one way to level out your income.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
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