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Old 01-12-2016, 01:01 PM
 
Location: Cape Elizabeth
425 posts, read 387,495 times
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Quote:
Originally Posted by luv4horses View Post
I'm also waiting to collect until age 70, but I have already stopped working (retired) a few years back. Any special recommendations for my situation, anyone?
I've weighed in on this a few times in other posts, but my opinion is based on a person's situation. If you have another source of income, guaranteed for life (like an employer based pension) then I don't recommend "sitting at home, not working, not collecting". The reason I say that is that you have two sources of income that go until death, so why wait?

But, if you are not in that position, and really need the income SS will provide for you, and a spouse who may outlive you, then it does make sense.

However, even if that is the case, if you are sacrificing each and every month, and drawing down from savings that are not great, in order to make ends meet, well, I would reconsider not collecting.

SS is a retirement benefit. You worked 35+ years to earn that benefit. Each and every month you do not collect, you are allowing the government to keep thousands of your hard earned dollars. When else does someone do something like that?

And, my last point is, you never know what life will bring. You never know what is around the corner. As that saying goes "a bird in hand is worth two in the bush".
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Old 01-12-2016, 02:22 PM
 
Location: SoCal
13,229 posts, read 6,331,374 times
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I didn't read this thread at first but I did exactly that, get SS in January.
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Old 01-12-2016, 05:40 PM
 
Location: OH>IL>CO>CT
5,236 posts, read 8,406,103 times
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Quote:
Originally Posted by ilovemycat View Post
Let's say you turn 70 in October 2018. You should apply for your benefits before or in October 2018. There is no point in waiting until January, 2019. This is straight from www.ssa.gov:

<snip>
That's what I did when I turned 70 in Aug 2014. Started application 3 months earlier in May 2014. Got first check in Sept 2014. Got full amount right away. No waiting til January.

BTW, this "not waiting til January" apparently only works right at age 70. Any earlier and the waiting rules do apply.
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Old 01-13-2016, 09:37 AM
 
81 posts, read 67,605 times
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Default Should we hold off?

I think we may need to wait until my husband is 70 before he retires, but I want to run it by you, ILMC.

My husband turns 60 next month, on Feb. 2. His FRA will be at age 66 + 4 months.
His FRA amount is estimated at $1952/mo. He plans to work until age 70, and possibly part time thereafter. He has his own cartooning business and loves it. It's a big assumption that the plan won't be derailed by health issues, but we feel that he has a good shot, given his family history.

In addition, he has higher earnings now that are replacing lower earnings in his 20s.

I am a tad younger than he, and my FRA will be at age 67, birthdate Nov. 24. My monthly amount at FRA would be about $1314/month. I make little income currently, as my daughter, an adult born with a disability and currently on SSI, requires daily care. All of my annual income, $5000, is paid by my husband so that I am an employee of his. This allows us to have a family flex plan so we can deduct medical expenses (which are not particularly high, about $7000 annually).

If my husband retires at his FRA, instead of age 70, our daughter will be eligible. However, she will also give up her SSI, so his retirement will not have much of an impact.

Also, if he retires at FRA, he would continue working and we would lose a lot in taxes. After age 70, he's planning on working part time.

If I collect before age 70, we would also drive up our income so we could pay more taxes.

We will have some retirement, but most of it is in an IRA, and so it will be taxed. We do not have the funds to convert those savings to ROTH.

I'll start with the simple question: Will my husband have to continue paying all of his Social Security after FRA if he does not collect until age 70? Since he is self-employed, he pays the entire amount.

The more complex question, for me: Does this all make sense? If our assumptions are correct?

We're trying to maximize what my daughter and I receive after my husband passes/vice versa. We want to keep her with us until both of us pass. Her twin will care for her thereafter.

My husband's family max: $3259
My family max: $2710

What a wonderful resource you are, ilovemycat!

Last edited by jontwin4; 01-13-2016 at 10:03 AM.. Reason: Additional info
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Old 01-13-2016, 01:01 PM
 
Location: NC
6,555 posts, read 7,981,951 times
Reputation: 13460
Quote:
Originally Posted by ilovemycat View Post
I've weighed in on this a few times in other posts, but my opinion is based on a person's situation. If you have another source of income, guaranteed for life (like an employer based pension) then I don't recommend "sitting at home, not working, not collecting". The reason I say that is that you have two sources of income that go until death, so why wait?

But, if you are not in that position, and really need the income SS will provide for you, and a spouse who may outlive you, then it does make sense.

However, even if that is the case, if you are sacrificing each and every month, and drawing down from savings that are not great, in order to make ends meet, well, I would reconsider not collecting.

SS is a retirement benefit. You worked 35+ years to earn that benefit. Each and every month you do not collect, you are allowing the government to keep thousands of your hard earned dollars. When else does someone do something like that?

And, my last point is, you never know what life will bring. You never know what is around the corner. As that saying goes "a bird in hand is worth two in the bush".
I understand your point, but is it not worth the 8% increase in SS payout every year that is waited between age 66 and age 70? I think that after you hit age 79, the lifetime total that you collect increases if you have waited.
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Old 01-14-2016, 07:48 AM
 
Location: Cape Elizabeth
425 posts, read 387,495 times
Reputation: 745
Quote:
Originally Posted by jontwin4 View Post
I think we may need to wait until my husband is 70 before he retires, but I want to run it by you, ILMC.

My husband turns 60 next month, on Feb. 2. His FRA will be at age 66 + 4 months.
His FRA amount is estimated at $1952/mo. He plans to work until age 70, and possibly part time thereafter. He has his own cartooning business and loves it. It's a big assumption that the plan won't be derailed by health issues, but we feel that he has a good shot, given his family history.

In addition, he has higher earnings now that are replacing lower earnings in his 20s.

I am a tad younger than he, and my FRA will be at age 67, birthdate Nov. 24. My monthly amount at FRA would be about $1314/month. I make little income currently, as my daughter, an adult born with a disability and currently on SSI, requires daily care. All of my annual income, $5000, is paid by my husband so that I am an employee of his. This allows us to have a family flex plan so we can deduct medical expenses (which are not particularly high, about $7000 annually).

If my husband retires at his FRA, instead of age 70, our daughter will be eligible. However, she will also give up her SSI, so his retirement will not have much of an impact.

Also, if he retires at FRA, he would continue working and we would lose a lot in taxes. After age 70, he's planning on working part time.

If I collect before age 70, we would also drive up our income so we could pay more taxes.

We will have some retirement, but most of it is in an IRA, and so it will be taxed. We do not have the funds to convert those savings to ROTH.

I'll start with the simple question: Will my husband have to continue paying all of his Social Security after FRA if he does not collect until age 70? Since he is self-employed, he pays the entire amount.

The more complex question, for me: Does this all make sense? If our assumptions are correct?

We're trying to maximize what my daughter and I receive after my husband passes/vice versa. We want to keep her with us until both of us pass. Her twin will care for her thereafter.

My husband's family max: $3259
My family max: $2710

What a wonderful resource you are, ilovemycat!
Well, your last line, that hubby's family max is $3259.00 a month, nails it for me. You see, once your husband begins collecting, besides your daughter, you can collect as well. When a parent needs to provide daily care to a disabled dependent, no matter their age, you become eligible, no matter your age, as "parent with child(disabled adult child) in care." And, your income of $5000.00 is way under the amount SS cares about- you can triple your salary and still not have a problem. And, your husband, at FRA can work to his heart's content and you all can still collect your checks.

So, what do you gain? $3259.00 x 44 = $143,396.00. (number of months from 66 +4 until 70).

Your husband gets his $1952.00 per month. You and your daughter each get $653.50.

Now, she might lose her SSI with that amount, but she might be able to still have Medicaid, but in any case also would be eligible for Medicare. The Medicaid is dependent on your state's rules, and she might qualify for it under a special provision. If she is not eligible for continuing Medicaid, she would be eligible for Medicare and you could buy her a Medicare supplement (like AARP), (you would pay for it, of course) but then she would have excellent coverage covering her copays, deductibles etc.

When your husband passes, she goes to 75% of his $1952.00 or $1464.00. Now, it gets tricky then, because you are a widow and due 100% of his benefit. However, you are insured on your own, so you can claim your $1314.00 and then only get the difference from your husband, or $638.00. That leaves enough for your daughter to get her $1464.00.

I would not worry about taxes. I would plan to pay taxes, you all can have some percent withheld from your checks, especially if your husband is continuing to work. I would build that nest egg for your daughter, and her twin, who will care for her after you are gone, using the funds from your hubby's SS from age 66 + 4 until age 70.

In my opinion, letting the government keep that $143,396.00 is not an option I would consider.

One more important point I forgot to mention. If your forgo the SS benefits until your husband is 70, your amount and your daughter's amount do not change. As long as your husband is alive, you get the $653.00 and so does your daughter. Only your husband gets more.

Hope this helps.

Last edited by ilovemycat; 01-14-2016 at 08:27 AM..
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Old 01-14-2016, 08:13 AM
 
Location: Cape Elizabeth
425 posts, read 387,495 times
Reputation: 745
Quote:
Originally Posted by luv4horses View Post
I understand your point, but is it not worth the 8% increase in SS payout every year that is waited between age 66 and age 70? I think that after you hit age 79, the lifetime total that you collect increases if you have waited.
Yes, the 8% is a fabulous rate of return.

And for those who keep working, why not? Their lifestyle is not changing.

But, you are not working, so I just brought in my other points: Are you not enjoying retirement as much as you could because you don't have enough income? That is a big point for me. I believe that when people are younger, they travel more, they have more active lifestyles, they eat out more, buy more for grandkids etc.

The breakeven, with 48 delayed retirement credits is 12.5 years from age 70. So, until 82.5 years of age, you are making up your loss. Each month after 82.5 years of age that you live, you are ahead by your gain.

So, if your FRA amount is $2000.00 a month, your age 70 amount is $640.00 more per month.

$2000.00 x 48 = $96000.00. (your loss).

$96000.00 divided by $640.00 = 150 months. Number of months it takes beginning at 70 to make up the $96000.00 your could have had.

150 divided by 12= 12.5 , age 82.5. Made up your loss and now you begin to gain lifetime by $640.00 per month.
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Old 01-14-2016, 02:37 PM
 
81 posts, read 67,605 times
Reputation: 111
Oh! This is awesome! I couldn't believe it, but I checked your math and it's correct.

A followup question: If I'm collecting on my husband's SS as a parent providing care for our daughter, that activates my SS, right? So I would get the lowest amount of my own SS, not my FRA amount? Since my before-FRA amount will be close to half of my husband's FRA, then I wouldn't collect any on his.... Or is being the caregiver for our adult child in a totally different category, and then when he dies, I apply as his widow? I'm unfamiliar, but by collecting as a caregiver, would that cost me anything in terms of spousal benefits, Medicare, etc.?

Thank you!! Social Security is so complex. It seems like it isn't set up for mere mortals to figure out. But this is starting to make sense to me.

Quote:
Originally Posted by ilovemycat View Post
Well, your last line, that hubby's family max is $3259.00 a month, nails it for me. You see, once your husband begins collecting, besides your daughter, you can collect as well. When a parent needs to provide daily care to a disabled dependent, no matter their age, you become eligible, no matter your age, as "parent with child(disabled adult child) in care." And, your income of $5000.00 is way under the amount SS cares about- you can triple your salary and still not have a problem. And, your husband, at FRA can work to his heart's content and you all can still collect your checks.

So, what do you gain? $3259.00 x 44 = $143,396.00. (number of months from 66 +4 until 70).

Your husband gets his $1952.00 per month. You and your daughter each get $653.50.

Now, she might lose her SSI with that amount, but she might be able to still have Medicaid, but in any case also would be eligible for Medicare. The Medicaid is dependent on your state's rules, and she might qualify for it under a special provision. If she is not eligible for continuing Medicaid, she would be eligible for Medicare and you could buy her a Medicare supplement (like AARP), (you would pay for it, of course) but then she would have excellent coverage covering her copays, deductibles etc.

When your husband passes, she goes to 75% of his $1952.00 or $1464.00. Now, it gets tricky then, because you are a widow and due 100% of his benefit. However, you are insured on your own, so you can claim your $1314.00 and then only get the difference from your husband, or $638.00. That leaves enough for your daughter to get her $1464.00.

I would not worry about taxes. I would plan to pay taxes, you all can have some percent withheld from your checks, especially if your husband is continuing to work. I would build that nest egg for your daughter, and her twin, who will care for her after you are gone, using the funds from your hubby's SS from age 66 + 4 until age 70.

In my opinion, letting the government keep that $143,396.00 is not an option I would consider.

One more important point I forgot to mention. If your forgo the SS benefits until your husband is 70, your amount and your daughter's amount do not change. As long as your husband is alive, you get the $653.00 and so does your daughter. Only your husband gets more.

Hope this helps.
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Old 01-14-2016, 04:57 PM
 
Location: Cape Elizabeth
425 posts, read 387,495 times
Reputation: 745
Quote:
Originally Posted by jontwin4 View Post
Oh! This is awesome! I couldn't believe it, but I checked your math and it's correct.

A followup question: If I'm collecting on my husband's SS as a parent providing care for our daughter, that activates my SS, right? So I would get the lowest amount of my own SS, not my FRA amount? Since my before-FRA amount will be close to half of my husband's FRA, then I wouldn't collect any on his.... Or is being the caregiver for our adult child in a totally different category, and then when he dies, I apply as his widow? I'm unfamiliar, but by collecting as a caregiver, would that cost me anything in terms of spousal benefits, Medicare, etc.?

Thank you!! Social Security is so complex. It seems like it isn't set up for mere mortals to figure out. But this is starting to make sense to me.
No, it does not activate your SS. You are applying under his SS, not yours.

You might want to collect your own at some point because it is better than the $653.00. You are not due as his spouse because your own is greater than 1/2 of his full amount.

You would be due your own retirement as early as 62+1 and if you apply then, your daughter goes to 1/2 of her dad's $1952 or $976.00. Or you can wait to a later month/year, until FRA or even 70. You have to decide.

It is hard for me to get more specific, because I don't know the age difference of you and your hubby.

Your amount is fairly good, so the difference between $653.00 and the higher amount, multiplied over months and or years, is significant. And because if you do come off the record, your daughter goes up by $323.00, it makes it more significant.
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Old 01-14-2016, 07:22 PM
 
81 posts, read 67,605 times
Reputation: 111
I'm still confused. Before the most recent budget passed, our plan was to have my husband file at his FRA, then immediately suspend so our daughter and I would receive benefits while he continued to accrue credits until age 70. Of course, that was not an option after the SS loophole was closed. Essentially, I cannot collect spousal without him also receiving checks. I think as well, though, that I cannot collect without activating *my* own SS. There's a name for it ("deeming," I think), but you cannot collect on someone else's SS while suspending yours.... So, that means that as soon as mine could be activated, it would be locked in at the age 62 rate, right? I would rather collect mine at the FRA rate, but maybe I cannot do that and still collect on my husband's.

Or am I misunderstanding?

I'm five years younger than my husband.

Thanks again! Whew!



Quote:
Originally Posted by ilovemycat View Post
No, it does not activate your SS. You are applying under his SS, not yours.

You might want to collect your own at some point because it is better than the $653.00. You are not due as his spouse because your own is greater than 1/2 of his full amount.

You would be due your own retirement as early as 62+1 and if you apply then, your daughter goes to 1/2 of her dad's $1952 or $976.00. Or you can wait to a later month/year, until FRA or even 70. You have to decide.

It is hard for me to get more specific, because I don't know the age difference of you and your hubby.

Your amount is fairly good, so the difference between $653.00 and the higher amount, multiplied over months and or years, is significant. And because if you do come off the record, your daughter goes up by $323.00, it makes it more significant.

Last edited by jontwin4; 01-14-2016 at 07:38 PM.. Reason: additional info
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