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When can a person begin getting the spousal benefit? When they reach FRA? What if the one getting SS is for disability, and is younger(she will be 63 when I reach FRA).
I was considering working for a few years after starting to get my SS at FRA, but her benefit is only a little smaller than mine. Half her benefit would allow my eventual SS to grow another 8%/yr. That would provide a better survivor benefit for her if I pass first.
But, if I can start taking spousal SS based on hers(I'm 64, she's 61) right now, would that have any negative impact later on?
Being married makes a big difference if you value the quality of life for the surviving spouse.
the reality is few think of the ramifications of taking ss early on their spouse .
many have to file early for lack of savings to make things work and have no choice to delay or they cannot afford to retire.
most of these folks really cannot afford to retire early and are not in shape to do it.
but they do it regardless and generally it is the surviving spouse that pays the price.
not only does the surviving spouse start out with a reduced benefit if their own is less but they lose one of the checks and they themselves can see that already reduced benefit slashed again if they have to take survivor benefits before their own fra..
for a 60 year old widow filing against a benefit their spouse claimed at 62 can see as much as a 48% cut in income from what their full fra check would have been had they and their spouse been able to file at fra.
that is a whopping pay cut on a budget that required 2 checks prior with no second cut.
usually it is the surviving spouse that takes the hit for filing early when the couple really can't affort to retire that early for lack of savings..
We are actually hashing through this decision right now. Hubby is considering postponing SS another year (he will be 63 the end of this month, but FRA isn't until 66), but I have my concerns about that. I will be applying for SS to start in January 2015.....I was 62 in July. His job has gotten down to only being 2 weeks a month due to lack of work and since he has to drive 8 hours and stay over for 2 weeks a month to get that he wants to only do a little consulting work. His thought is to use my SS and a 401K of about $18K that he has through that job. We do have IRAs and Roth IRAs other than that, so that's not our only savings. We will have some extra expenses next year, but they will be a one time deal.
Now, my concerns are as follows. Our longevity profiles aren't the best. Both my parents died at 83 and his father who he tends to take after, died at 74 but his mother lasted until 92. We both have some health issues as well. I know he is thinking to do this for more money for me should he go first, but my thought is once the savings are gone, they are gone. And then my SS will go away, which lowers the income coming in, but the savings are gone as well. In my mind it would take a long time to make up the difference of the lost savings with the "higher" SS widow's benefits. But if he takes early SS, then once mine goes away in either case of who goes first, the savings are still there. We don't live an expensive lifestyle and feel that SS, even at the lower amounts, would take care of probably 65-70% of our monthly needs. And there might be months that it would take care of all of them.
Another concern I have is that should they change the SS benefit rules in the near future, if for some reason we aren't grandfathered in because we aren't taking it yet, we may end up getting no more that what we would get if we took it early, and again the savings are gone. I realize that one of the things that financial people say is that since we don't know what the tax brackets will be in the future, it might affect RMDs and how much is taxed, but honestly I can't see that they would be changed that much for retirees in our income range.
Honestly, it really bothers me to think about using up savings to delay SS only to have some of the SS then taken away and have the savings gone as well. I realize that the stock market fluctuates, but we have tried to diversify enough so we won't have another meltdown. I personally think it's a "crap shoot" no matter what we do but I guess we just have to do some calculations on things.
Deciding whether to wait or not certainly depends on your current health status as well as where you live, because some states even tax retirement income, so it might not be a bad idea to move to another state once you've done your research and crunched the numbers.
Does this mean, once I reach FRA I can start using spousal benefits from my wife's SS disability?
Is there means testing such that if I try to keep working it will be reduced or maybe even eliminated as a possibility?
it is already means tested as the more income you have the more it is taxed. you can work after fra and it will not be reduced for working . but it will be taxed if you exceed certain total modified income levels.
rules for spousal benefit when on ssdi
"Eligibility for Spousal Benefit
If you begin to receive SSDI benefits, your spouse may also be eligible for benefits on your earnings in the following situations.
Your spouse is 62 years or older. If your spouse is 62 years or older when you start receiving disability benefits, he or she can also get a monthly benefit based on your earnings record unless he or she can get a higher benefit amount on his or her own record. But if your spouse collects a spousal benefit before full retirement age, the early retirement penalty will permanently lower his or her benefit. This does not apply to those caring for a child under 16 who is eligible for a child's benefit.
Last edited by mathjak107; 10-04-2014 at 03:46 AM..
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