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Old 07-20-2011, 11:48 AM
 
744 posts, read 509,066 times
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I know about waiting to collect till age 70 letting benefits increase after FRA, and I know about file and suspend so a spouse can start collecting spousal benefits while other spouse keeps working and letting their benefit increase.

The thing is is it really better to wait allowing the benefit to grow, assuming the working spouse is still working, OR is it better to start collecting full benefit at FRA, and bank that money, even paying taxes on it until one stops working, say here age 70. you would still be getting any COLA that might be given during those years, so benefit could in fact increase, perhaps not 8% a year but still probably something.

and since no one knows how long they will live, if you work till 70 then die in a few months for instance, at least you have banked that money which is there for the spouse or family etc.

Now it is true that the non working spouse, in this case would then only get what the FRA benefit + COLA was but they would have saved or invested the other money in the mean time too.

So what are the general thoughts on this method vs. the first ones mentioned?

As I say we are assuming a non working, never worked, spouse and a highly paid working spouse.
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Old 07-20-2011, 02:14 PM
 
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I guess my thoughts are that most people will not save monthly checks, but spend proceeds. The 8% return is much more than any "safe" investment at the current time. A lot depends upon the life history of parents and grandparents of worker. If they have long life spans it seems than waiting till securing the max payout might be the best choice.
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Old 07-20-2011, 07:59 PM
 
744 posts, read 509,066 times
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The thing is the 8% is more than you can get for most safe investments currently as you say however you are also getting the principle each month too. and as you say saving or investing the money is imperitive to the plan, not spending it.
worker is not that healthy either. Neither is non working spouse.

Also, If the worker was not collecting at the time of death and was older than FRA would the surviving spouse receive the FRA of the worker as if he had been collecting since FRA or would they receive more if the deceased spouse had never filed?
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Old 07-20-2011, 08:51 PM
 
Location: Greensboro, NC
8 posts, read 22,023 times
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Many of the questions you're asking can be answered by calling social security. I've done that and they've been very helpful.Just don't call during the first or last of the month when they are the busiest. I also wouldn't count on an 8% COLA each year. There wasn't a COLA this past year and who knows when the next one will be the way things are going in Congress. I took my SS at age 62 because 1) I needed it, and 2) I figure I make it up at the end because I'll be receiving it for a longer period of time. Both my parents died in their early 80's and I didn't want to wait until FRA of 65. Good luck with whatever you decide.
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Old 07-21-2011, 05:42 AM
 
186 posts, read 260,911 times
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Foleyda: The 8% is not a COLA, but a benefit increase each year one waits from FRA age to age 70. No increase after age 70.
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