Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
If you wait until January 2021 (4 months past your FRA of September, 2020), your $2400.00 is increased by $64.00 to $2464.00. But, let's first talk about your options at your 66th birthday, knowing your wife is already over 66 and already collecting her own retirement since age 65 of $531.00.
You have a number of options at 66. You can file and suspend, so your wife can get her additional $630.00 based on your FRA of $2400.00 and so you can wait until 70 to collect an additional 32% on your $2400.00. Yours at 70 becomes $3168.00. You can also file for husband's benefits at 66 and get 1/2 of your wife's $570.00, which is 235.00 per month.
So, if you did this scenario- (option A) this is what your SS would be when you are 66- your wife would be getting $531.00 (I picked her own age 65 amount), plus $630.00 from your record and you would get $235.00 from her record. That is a total of $1396.00.
Or, SS at 66, it could be thisoption B) your wife would be getting $531.00, plus $630.00 and you get $2400.00. That is a total of $3561.00.
If you pick option A- you get to have Option C - at 70: your wife is getting $531.00, plus $630.00 and you get $3168. At 70 that is a total of $4329.00.
So, let's see how this shakes out: If you take option B, you never get option C and when you die your wife goes to $2400.00. If you take option A, and then option C, when you die your wife goes to $3168.00.
Now. let's compare the gain/loss with option A vs option B. In doing the gain/loss I don't include your wife's own $531.00. So at 66 you have benefits of $865.00 (630 + 235) vs. $3030.00 (2400 + 630).
$865 x 48 = $41,520.00.
$3030 x 48 = $145,440.00.
Your initial loss is $103,920.00. At 70 you gain the difference of $768.00. (The difference between $3168 and $2400.00.) Divide the loss by the gain to see how long it takes you to make up that loss- you eat it up beginning at 70, by getting the extra $768.00 every month. It takes 135 months or 11.2 years from 70 to make it up. Then each month you live past 81.2, you are ahead by $768.00.
You said you had longevity in your family. It might be worth it. It is also what makes it hard. It also assumes you guys can live on the option A amount once you stop working. If you were going to work until 70, option A is a real possibility. Otherwise, the numbers in Option B make a lot more sense.
But, you could do Option A just for 4 months, until January, 2021, which you asked about.
Here is the gain/loss for that scenario: 865 x4 = $3460.00. $3030 x 4 =$12120.00. Initial loss of $8660.00, Gain of $64.00 (difference between 2400 and 2464.) Divide 8660 by 64 = 135 months which is 11.2 years from 66+4 to make it up. At 77.6 you have made up the loss. At your death, your wife goes to $2464.00.
I think that is enough info for this post. If you have questions, let me know. One more point to reiterate: a wife, or husband, does not get the benefit of delayed retirement credits while the worker is still alive. They do get the benefit of delayed retirement credits at the time of the worker's death. So, that is why, no matter what you decide to do, your wife's benefit is her own reduced retirement, and an additional $630.00.
Ivan, ever since I posted this long answer to you, it has been weighing on me. I had this feeling that my Option A was not correct. It was not. In my original answer, I had your wife getting her $531.00 plus the excess spousal of $630.00. That was fine. But, I also had you filing on her record and getting husband's benefits of $235.00, while your own retirement was suspended. That is not correct. You both can't get spousal, unless divorced. So, we have to take the $235 x 48 out of the gain column, which is $11280.00 from the $41520.00 for a gain of $30240.00. It leaves a loss of $115200.00. We still divide the gain $768 into the loss but it takes 150 months or 12.5 years from age 70 to make it up. Age 82.5.
Then I also have to correct waiting until January, 2021. Gain is $630.00 x 4 = $2520. Initial loss is $3030.00 x 4 = $12,120.00. Leaves loss of $9600.00 Gain of $64.00. Divide $9600.00 by $64.00 to see how long it takes you to make up the loss. Takes 150 months or 12.5 years from January, 2021 to make it up.
I truly apologize. I was wondering, that now that I fully understand Kotlikoff's scenario, is there a way you might consider taking early retirement, and have your wife start her spousal, not now but at FRA? Would you also, if you did that, consider suspending yours at your FRA and then pick it up again at 70? She would apply for her own retirement for the first time at 70. If so, write me and we can do the figures, like I did for DaveinMtAiry.
I know most of the file and suspend information in this thread is now invalid for anyone younger than 66 in May 2016, but there is a side question I have based on some of this info.
Assume a lifetime SAHM, has no SS credits, never was employed, aged 66 in May of 2016. Husband is 62, and a few months, in May 2016. Husband has had a great salary all his life, and he does not intend to stop working until 64 (May 2018) and not file for SS until 68, ie Jan 2022. (He wants to increase his SS for the future, incase the wife is widowed, and will live off a pension and drawn down on his IRA until he collects his SS). His FRA amount will be $2600. Can the wife file for spousal benefits (1/2 of his FRA) in May of 2016, her FRA date? The SS site says the husband only has to be eligible to file for SS, not have filed for it. Most of the posts on this thread state he must have filed, in order for her to collect spousal.
I know most of the file and suspend information in this thread is now invalid for anyone younger than 66 in May 2016, but there is a side question I have based on some of this info.
Assume a lifetime SAHM, has no SS credits, never was employed, aged 66 in May of 2016. Husband is 62, and a few months, in May 2016. Husband has had a great salary all his life, and he does not intend to stop working until 64 (May 2018) and not file for SS until 68, ie Jan 2022. (He wants to increase his SS for the future, incase the wife is widowed, and will live off a pension and drawn down on his IRA until he collects his SS). His FRA amount will be $2600. Can the wife file for spousal benefits (1/2 of his FRA) in May of 2016, her FRA date? The SS site says the husband only has to be eligible to file for SS, not have filed for it. Most of the posts on this thread state he must have filed, in order for her to collect spousal.
No, she cannot.
If you can, give us a link to the SS site that "says the husband only has to be eligible to file for SS, not having filed for it."
I suspect you're confusing divorced spouses with those spouses who are still married.
The first line clearly says the spouse may be able to get benefits if their spouse is eligible for retirement benefits (ie, age 62). But none of th links expound on it. I question if the spouse has to have filed because lets take an extreme example...assume a wife is 20 years older than her husband, and has never worked, and they have been married over 20 years. Even if the husband were to file at 62, it doesn't make sense (to me) that the wife is not entitled to any spousal benefit until she is 82, unless she gets divorced??? Normally at FRA, you are eligible for something, hence the question. The first example is actually for a friend.
actually they do expand on it . right below they go on to talk about what the next step is to getting spousal benefits when you have no work record and you are eligible to collect one .. they tell you the next step to get the spousal benefit is both of you have to file as long as you both ARE ELIGIBLE .
they then tell you if the person who's record is being used is already collecting then the system will automatically check when they get her application for any spousal she can get .
if both of you are not collecting yet and want to file together on line or phone , they will enter you first and then it will check for your wife's when her application is entered and automatically link the two .
--------------------------------------------------------------r--------------------------------------------------------------------------------------------------------------------------------------
The Next Step
If your spouse is not already receiving benefits, he or she can apply online for benefits based on age.
If you and your spouse apply online for retirement benefits at the same time, or if your spouse applies online after you start receiving benefits, we will check his or her eligibility for benefits as a spouse. If he or she is qualified, the online application will automatically include a request for spousal benefits on your record.
The first line clearly says the spouse may be able to get benefits if their spouse is eligible for retirement benefits (ie, age 62). But none of th links expound on it. I question if the spouse has to have filed because lets take an extreme example...assume a wife is 20 years older than her husband, and has never worked, and they have been married over 20 years. Even if the husband were to file at 62, it doesn't make sense (to me) that the wife is not entitled to any spousal benefit until she is 82, unless she gets divorced??? Normally at FRA, you are eligible for something, hence the question. The first example is actually for a friend.
the wife would have to wait until 82 , that is why there were options at full retirement age like file and suspend and restricted application at one time .
Need some help please,my husband passed a few yrs ago . I am 64 I only worked 10 yrs. I didn't start to collect yet .I will receive my late husbands when I hit 66 should I start talking mine now, or just pass on it . I'm not up on this I was a homemaker for 25 yrs . Also I will be affected by the windfall does anyone know what is the best thing for me to do .thanks in advance .I am loss on this
Ok, that helps. I remember that loophole, and then the closing of it. It was that if on the last day of employment, you had SS tax taken out, you were not subject to the GPO. I guess it was a hot item if you lived in a state that allowed you to switch to have SS deducted. That whole situation was also one of the things about my job I hated- you were never done learning, no matter the years. If you cared, that is...
Yes, it is good you have the proof. The more time goes on, the less experienced the staff is about things like that- especially since you are not in TX, where they would be more inclined to have experience with it.
Just a follow-up to mine and my husband's filings--
He filed online last week and in the NOTATION box toward the end of the application entered that he wanted to suspend his benefit...completed the rest and filed/sent the form...
waited a couple of days and checked his SS account but no progress on the application...
Tuesday got an email and a phone call from a SS agent in Birmingham AL regional office asking to discuss his application with him...we were in car when call came in and of course didn't recognize the number so let go to voice mail...
once we heard it, we called back and asked her (sounded like young woman) to call us back after 2 or the next day...nothing Tuesday...called Wed and got her...
She finished with his file and suspend then asked to talk to me about my benefits--since obviously that was the reason Rick was doing a file and suspend...but point is that SHE really initiated that follow up interview--she mentioned my benefits before my husband did/asked...
I came to the phone--answered few questions to identify myself--told her I wanted to file a restricted application for spousal benefits only...explained that I had teacher's pension and knew about the penalty to my SS benefit and spousal but I had retired while there was a work-around/loophole option which I had taken.
Told her I had already filed the form the SSA required to document that years ago on my electronic history and she found it...the man at my local SSA who gave me that advice was really helpful and knowledgeable.
I have the documents still but it was just so easy for her to locate it in the database w/o having to make an e-file and send in...
She was very nice, polite, and certainly more clued in than the SS person I spoke to at the 800# in September when I tried to just made an appointment at my local office=even before Congress changed the rules==
So I was able to complete my restricted application and get full spousal benefits w/o any waiting in line or hassling w/someone who maybe didn't know policies...She also volunteered the fact that she could backdate my application 6 months since my husband was more than 6 mo past his FRA--so I could get the prior months' benefits...nice to have her volunteer--I knew to ask but didn't have to...
When I asked if she had seen many people applying for spousal with that type of documentation for the spousal loophole, she said her regional office in Birmingham had been "given" Texas recently because of increase in applications and there were more people applying with that request...
Altogether very pleasant experience...
I am still of two minds about whether it is really better for my husband to wait until he is 70---another 3 yrs--to actually receive his checks...he would give up over 90K--30+ each year--to get the 8% increment yearly and have the larger amount going forward...
seems like it would take a long time to make up 90K...more than 10 yrs if my math is close...
it's not like he would be taking it early at 62 and get penalized for as long as he might draw...
Last edited by loves2read; 12-11-2015 at 09:13 PM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I'd like a do over
option B) your wife would be getting $531.00, plus $630.00 and you get $2400.00. That is a total of $3561.00. 
