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Old 02-27-2015, 05:06 AM
 
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i didn't work your exact numbers off your chart but it sounds like now you got it.

a wife filing on her husbands record because she has none is penalized just the same as any other worker filing early .

the difference is her base amount is not her own work record but 1/2 the husbands full retirement benefit. that base stays the same regardless of the age the husband files.

survivor benefit are based on what the husband actually got as a base amont and then are reduced again for every year under her own fra she files. no 1/2 involved there .

very different base amounts used between regular ss and survivor benefits.
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Old 02-27-2015, 05:11 AM
 
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Okay so it's good to get some feedback that the info I am working off of is basically correct or close to it. ;-D
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Old 02-27-2015, 07:20 AM
 
Location: Baltimore, MD
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You're missing something important.

The wife was born too late to qualify for the 25% penalty. Because her full retirement age not 66, there is a greater reduction for claiming preFRA.

Based on the chart, your wife's full retirement age is 67. Therefore, if your spouse claims an early benefit at age 62 and 1 year, she will receive 32.7% of your PIA (Assume your PIA is $1576) $1576 x 0.327= $515.35. Close enough.

http://www.socialsecurity.gov/retirement/1960.html

Last edited by lenora; 02-27-2015 at 07:21 AM.. Reason: Added link
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Old 02-28-2015, 11:23 PM
 
71 posts, read 64,627 times
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Quote:
Originally Posted by lenora View Post
You're missing something important.

The wife was born too late to qualify for the 25% penalty. Because her full retirement age not 66, there is a greater reduction for claiming preFRA.

Based on the chart, your wife's full retirement age is 67. Therefore, if your spouse claims an early benefit at age 62 and 1 year, she will receive 32.7% of your PIA (Assume your PIA is $1576) $1576 x 0.327= $515.35. Close enough.

Full Retirement Age: If You Were Born In 1960 Or Later
Hi I'm not sure what 25% penalty you are speaking of nor why it's important...?
Accordiing to the calculator at social security solutions if my wife takes her spousal benefit at 62y1m vs 63y1m there would be a $39/month increase by waiting a year.

But assuming an "average life span" (I forget what age they use for that calculation) there is only a $2000 less benefit over lifetime for both of us.

Anyway, I was told this this is how the widow benefit is calculated based on our situation:
If the husband file early, the wife gets the higher of: what husband was receiving, OR 82.5% of what he would have received if he'd filed at age 66.

She does not get of husband's benefit unless she takes a spousal only at her age 66. If she is < FRA, she must file on her own record, then spousal add on benefits are added. Both her benefit and her spousal benefits are reduced for taking them early.

$1228 - what I would get if I waited and filed at 66years, x 82.5% = $1300.20 for wife, which is more than what I was getting which is $1228.
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Old 03-01-2015, 01:44 AM
 
71,831 posts, read 71,919,037 times
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there is no such thing as average life span in retirement calculations , we all have to figure we will be the ones to live. . average lifespan is only the 50% point where 1/2 live and 1/2 die.

which group are you? in fact since 2000 we have been adding 1 more year of life every 4 years now.

one year isn't going to matter much for her. . the big difference is you.

my 62 benefit is 22k , my fra is 30k and my 70 is 40k plus colas .

the longer i wait not only the bigger the payment but the less dependent i am on drawing money from my portfolio , markets and ,interests rates .

best of all the withdrawals fall by alot as far as pulling money out of my portfolio to live allowing it to grow.

couple the almost 80% bigger payment at 70 with the natural spending cuts as we age and withdrawals from savings are a trickle for the rest of your life.

that lifetime cut in spending down your growing portfolio has to be part of the equation the same as if you invested the early ss money.

it isn't just a check amount in both cases it is opportunity costs as well.

the big question though is your wifes survivor benbefits if you file early and she has to file early .

you better have lots of dough for her to live on.

life is not about what if i die , it is all about what if i live.


in our case i am delaying ss but we will spend much more early on as a budget waiting to collect . we can do this and enjoy more money now because we can over spend from savings and refill later on if we both live with much higfher ss checks.

you hear folks say i want the money to spend now whiole we can do things . the reality is you have more than that since you can refill down the road what you over spend.

my own opinion is if you can't lay out 4-8 yrars of income from savings you may want to think about the fact you may be underfunded and can't afford an early retirement.

especially if what you are doing slashes survivor benefits and your savings is that tight on funds.

Last edited by mathjak107; 03-01-2015 at 02:48 AM..
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Old 03-01-2015, 02:27 AM
 
71,831 posts, read 71,919,037 times
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here is an interesting chart dr pfau did. but remember it does not include opportunity costs of spending down a portfolio for alot more years than 8 years at the begining since at the end it can go on for decades.

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Old 03-03-2015, 07:17 PM
 
Location: Baltimore, MD
3,746 posts, read 4,224,664 times
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Quote:
Originally Posted by pdsnickels View Post
Hi I'm not sure what 25% penalty you are speaking of nor why it's important...?
Accordiing to the calculator at social security solutions if my wife takes her spousal benefit at 62y1m vs 63y1m there would be a $39/month increase by waiting a year.

But assuming an "average life span" (I forget what age they use for that calculation) there is only a $2000 less benefit over lifetime for both of us.

Anyway, I was told this this is how the widow benefit is calculated based on our situation:
If the husband file early, the wife gets the higher of: what husband was receiving, OR 82.5% of what he would have received if he'd filed at age 66.

She does not get of husband's benefit unless she takes a spousal only at her age 66. If she is < FRA, she must file on her own record, then spousal add on benefits are added. Both her benefit and her spousal benefits are reduced for taking them early.

$1228 - what I would get if I waited and filed at 66years, x 82.5% = $1300.20 for wife, which is more than what I was getting which is $1228.
Your full retirement age is 66. Your wife's full retirement age is 67. If your wife retires at 62, she will receive an additional year of early retirement benefits than those of us with a full retirement age of 66. Therefore, Social Security reduces her monthly benefit even more than ours to make up for that extra year of early retirement.

I haven't looked over the survivor component but I did notice this arithmetic error:
82.5% of $1228 is $1,013.10, not $1300. $1228 x .825 = $1,013.10.
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Old 03-14-2015, 09:27 PM
 
Location: Cape Elizabeth
425 posts, read 388,607 times
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A lot has been written here, but I am going to try to clear up some things for pdsnickels.

A person who has never worked and earned their 40 quarters of coverage is not due any benefits on their own record. So, they need a spouse's work record upon which to apply- in pdsnickels case, his record. Now, when he applies at age 62 and 7 months, she is only 51, and unless you guys have children (under 16 for her to get "child in care" or under 18 or disabled for the child to get benefits), his wife is not due anything until she reaches 62, under today's laws. By that time you would have been collecting your own SS for 11 years, already. (that is just an aside because you made a comment about her receiving more than you, even though she never worked - you have an 11 year head start).

At 62, if pdsnickles, is still alive and well, and depending on which country they will live in (and maybe she worked in another country where we have an agreement - if I remember correctly (I retired from SSA a few years ago) we have agreements with 23 countries- you can combine credits--check that out also, and what her status is- US citizen, LAPR, etc. (that part gets complicated- but just so you know- you must contact SSA before you guys leave the US and fill out a form about moving to a foreign country)-but, at 62 she applies for benefits on your work record.
Now, the way the spouse's benefit amount is determined is based on your Primary Insurance Amount (PIA), which is your full amt. at 66, even though you retired at 62,7 months.
An aside--Why do you guys all call it a penalty? It is a reduction factor, for receiving benefits at an earlier date, and for a longer period of time. A person who is not working, not collecting and due $1500.00 a month, say from age 62 to 66 is giving up and letting the government keep- by their own volition, $1500.00 of their hard earned dollars month after month for 48 months. You let the government keep $1500 x48 =$72000.00. When at 66 you begin to collect your higher amount, $2000.00, your first month of collecting you have only earned back $500.00 of your $72000.00 loss (because you could have had $1500, you really are only gaining $500.00. So, you divide $72000.00 by 500.00 to see how many months it takes your $500.00 gain just to break even with your $72000.00 initial loss. It takes you 144 months. So, finally at age 78- you broke even, and then, you are ahead, for each month you live after age 78 by $500.00.

But, getting back to pdsnickels and his wife- her reduction factor is more than his- because this spouse did not work and pay in , they get a greater reduction factor. Per the SSA website, his wife's reduction is 67.29% of his full amount, again not your amt at age 62 and 7 months. That includes the 50% initial reduction and then further reduction because she is 59 months younger than her full retirement age.

Now, when pdsnickles dies, (and unfortunately, we all do) his wife is due a widow's benefit. If she is over age 60 at that time, let's say she is 75 and he died at 86, she receives either 100% of what he was actually receiving, or at a minimum 71.5% of his benefit amount.
Hope this is helpful.
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Old 03-15-2015, 06:42 PM
 
71 posts, read 64,627 times
Reputation: 80
Quote:
Originally Posted by mathjak107 View Post
there is no such thing as average life span in retirement calculations , we all have to figure we will be the ones to live. . average lifespan is only the 50% point where 1/2 live and 1/2 die.

which group are you? in fact since 2000 we have been adding 1 more year of life every 4 years now.

one year isn't going to matter much for her. . the big difference is you.

my 62 benefit is 22k , my fra is 30k and my 70 is 40k plus colas .

the longer i wait not only the bigger the payment but the less dependent i am on drawing money from my portfolio , markets and ,interests rates .

best of all the withdrawals fall by alot as far as pulling money out of my portfolio to live allowing it to grow.

couple the almost 80% bigger payment at 70 with the natural spending cuts as we age and withdrawals from savings are a trickle for the rest of your life.

that lifetime cut in spending down your growing portfolio has to be part of the equation the same as if you invested the early ss money.

it isn't just a check amount in both cases it is opportunity costs as well.

the big question though is your wifes survivor benbefits if you file early and she has to file early .

you better have lots of dough for her to live on.

life is not about what if i die , it is all about what if i live.


in our case i am delaying ss but we will spend much more early on as a budget waiting to collect . we can do this and enjoy more money now because we can over spend from savings and refill later on if we both live with much higfher ss checks.

you hear folks say i want the money to spend now whiole we can do things . the reality is you have more than that since you can refill down the road what you over spend.

my own opinion is if you can't lay out 4-8 yrars of income from savings you may want to think about the fact you may be underfunded and can't afford an early retirement.

especially if what you are doing slashes survivor benefits and your savings is that tight on funds.
WHAT portfolio? LOL.

I have discussed this previously I think in this thread.
Not everyone has the same values regarding retirement and "how much it takes to live happily" and whether or not retiring early on little is better or worse than retiring later on more.

My wife and I want OUT of life in the USofA and are willing to go live in a country where things are cheaper, where we can live without working, on our small social security and whatever income we may receive from the sale of property over the next year or two or three (or not).

For us, social security is going to allow us to get out of the crap we don't like: a long commute to work at a job that isn't great, working under a supervisor my wife can't stand, living in a city we don't like, etc etc. Yes there are other possible remedies but this is the one we're choosing - early retirement on my social security. We are looking forward to a different lifestyle and living in a different country (that I've lived in before and loved living there).
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Old 03-15-2015, 09:48 PM
 
10,819 posts, read 8,079,355 times
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Quote:
Originally Posted by pdsnickels View Post

My wife and I want OUT of life in the USofA and are willing to go live in a country where things are cheaper, where we can live without working, on our small social security and whatever income we may receive from the sale of property over the next year or two or three (or not).

For us, social security is going to allow us to get out of the crap we don't like: a long commute to work at a job that isn't great, working under a supervisor my wife can't stand, living in a city we don't like, etc etc. Yes there are other possible remedies but this is the one we're choosing - early retirement on my social security. We are looking forward to a different lifestyle and living in a different country (that I've lived in before and loved living there).
Let us know where you land and how it works out for you.
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