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As for the amount it all depends on when she files and what age you filed before you died.
If she claims before full retirement age at 60 and you filed at 62 and died she gets 71.5% of what her full would be at fra based on your early benefit.
she would get something like 71% of your early benefit if she took it at 60. remember your early benefit is already reduced by about 28% so she gets another reduction down to 71% of your already reduced 28% benefit.. its a big drop..
There is a formula that is used to increase her payment the longer she waits above 60.
Last edited by mathjak107; 10-21-2012 at 05:43 PM..
“Rat holes,” the ages at which a single retiree shouldnever, ever, ever claim Social Security. Or at least not claim Social Security if they want to maximize the present value of their Social Security benefits.
Single retirees whose full retirement age (FRA) is 66 and who aren't affected by the earnings test shouldnotclaim Social Security in any month near FRA northreeyearspriortoFRA, according to Bill Meyer, who is the co-author of “Social Security Strategies: How to Optimize Retirement Benefits,” and CEO of Social Security Solutions, Inc.
And the reason, according to Meyer, has to do with the pattern of reductions in benefits for beginning benefits before FRA and delayed retirement credits for delaying benefits until after FRA.
“If the single retiree begins benefits at FRA, she (or he) receives his Primary Insurance Amount or (PIA),” Meyer wrote in a recent paper. “If she begins benefits before FRA then her benefits are decreased by 5/9 percent of PIA per month for the first 36 months plus 5/12 percent of PIA for each additional month. Delayed retirement credits are 2/3 percent per month for each month benefits are delayed from FRA to 70.”
And, without going too deep into the weeds, that math causes what Meyer refers to as the “rat holes,” those ages at which single retirees should not claim Social Security. In essence, what happens is this: The total value of your stream of Social Security benefits - the present value - would be greater if you didn’t claim at FRA or three years prior to FRA.
Social Security benefits are calculated by months not years. So, I THINK this is what he is talking about:
Unlike the equal monthly percentages used to calculate delayed credits, the monthly percentages used to calculate preFRA are not equal. The linked chart shows a significant difference between percentages applied in the first 12-13 months (age 62 to 63) and the percentages applied after one hits age 63.
"Meyer warned advisors of so-called “rat holes,” or periods of time during which people should neverclaimbenefits. Individuals born between 1943 and 1954 shouldneverclaimbenefits between the ages of 62 and one month through 63 and 11 months, norshouldtheyclaimbenefits between 65 and five months through 67 and seven months."
"Meyer worked through an example of a single person who claimed benefits at 62, just before the beginning of the rat hole, versus claiming benefits on “the other side of the rat hole”. Claiming benefits outside the rat hole gave the individual 20% more in monthly income."
"Meyer warned advisors of so-called “rat holes,” or periods of time during which people should neverclaimbenefits. Individuals born between 1943 and 1954 shouldneverclaimbenefits between the ages of 62 and one month through 63 and 11 months, norshouldtheyclaimbenefits between 65 and five months through 67 and seven months."
"Meyer worked through an example of a single person who claimed benefits at 62, just before the beginning of the rat hole, versus claiming benefits on “the other side of the rat hole”. Claiming benefits outside the rat hole gave the individual 20% more in monthly income."
guess that says it all. im not following the reasoning here .
I did a little checking. The quoted author owns a software company that sells software on maximizing SS. I have a hunch this is similar to your post on using software to make SS decisions. He was trying to market it to financial advisors. As you had noted in those post there are many ways to maximize benefits and this is per the authors opinion one of the variables. Probably made more complex so you would need the software to apply it.
I don't think you screwed up at all. That business about rat holes is totally incomprehensible to me.
Most of this discussion is incomprehensible to me. It seems that my brain has a very difficult time with this sort of thing. I wish there were actual, true, financial advisiors who could look at my entire financial situation and make valid recommendations. Isn't it odd how our brains are? We may be very good at one thing and a complete disaster at another thing. I'm only a few months away from being eligible for SS and yet, haven't a clue what I should do. Sure the extra income would be nice - but yes, I could do without it. But what if I die and don't get to collect any of it? That would be depressing. Unlike an annuity one has paid into, the family doesn't get that money back if you are single.
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guess that says it all. im not following the reasoning here .
