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It’s well into the future, but I also plan to stop working (retire) at 65 -- two years shy of my FRA of 67. And wondered would the monthly benefit go up the same 8 percent whether I worked or not. (up to the time of claiming benefit)
Thank you Reed for answering the question….it will.
And according to Firein2016…working another year won’t bump up the benefit that much more. ….ALSO good to know.
Your benefit will increase the longer you delay collecting. But the 8% increase is only from your FRA to 70. I think this might be dropping to maybe 6% for younger workers.
rdflk: I'm not sure that that's true. Note this post.
Quote:
Another thing to keep in mind is that today's projections of what your SS payment will be at various ages may change after she stops working. The projections are made based on the assumption that a person will continue earning the same salary. After I retired a year and a half ago (at age 60), my income dropped, and my next SS statement showed that my payment at full retirement age (66) would be about $200 less than what they told me on my previous statement.
What I am reading here is that if you stop working, and then wait a while for SS to start, then it can in fact drop your payment.
Her benefit would be increased by 6.67% due to not taking it at 65. That increase is the reduction factor she would have gotten, if she started at 65 instead of 66. A person turning 65 in 2016 gets 93.33% of their full amount.
You guys need to weigh the loss of 12 checks to get the 6.67%. However, she does have the family longevity, so would probably live past the breakeven point.
If her check at 66 was $1500.00 a month, at 65 it would be $1399.00. She loses $1399 x 12 or $16788.00 to gain $101.00. Divide the loss by the gain to see how long it takes her to make back her $16788.00. It takes her 166 months or 13.8 years from age 66 to break even. Then every month she lives past 79.8 years of age, she is ahead by $101.00.
rdflk: I'm not sure that that's true. Note this post.
What I am reading here is that if you stop working, and then wait a while for SS to start, then it can in fact drop your payment.
The change for the person you quoted is much more dramatic than someone who did not work from age 65 to 66.
That is due to a number of factors. The person you quoted got an estimate at age 60, probably using his earnings through age 59. The earlier estimate thought he would keep working for a number of years and kept putting those earnings into the estimates. Once he no longer had earnings in the next year, they took out all the subsequent years and it was a fairly dramatic difference. That person also might not have had 35 years under SS and since SS always divides by 35 in retirement cases, zeros were in there and the earnings were replacing "zero" years.
A lot depends on whether your wife has her 35 years already. If she does, then the drop won't be as dramatic. But, if she doesn't, and say she earned $50000.00 or more last year, and then goes to zero, she will get a decrease. But, if she has 35 years, not having the $50000.00 won't produce much of a change due to the way SS computes benefits. Benefits up to age 60 are indexed and beyond age 60, you get credit for the face value of your earnings. So, an indexed year, could be higher than a non indexed year, and when SS "picks and chooses" a person's highest 35, they often don't include a non-indexed year.
What I am reading here is that if you stop working, and then wait a while for SS to start, then it can in fact drop your payment.
I'm not the OP, my case is different, but if I (or anyone else) retired at 65 and and my SS benefit at 65 WOULD be 2,000.
BUT, even if I DO NOT work....from 65 to my FRA of 67...when I get to 67.....my benefit will still be higher because I waited. (No it won't be as high as if I were still "putting into the system," and working until 67 at my highest salary level)....BUT it will be higher than 2,000, JUST because I waited, even though I wasn't working.
I believe I read somewhere the "increase" is about 6% a year....delaying from 62 until your FRA. I saw that somewhere.
And as rjm says...the increase from FRA to 70 is 8%.
What I am reading here is that if you stop working, and then wait a while for SS to start, then it can in fact drop your payment.
I can't think of any scenario that would cause your wife's SS payment to drop. In your original post you stated that she would not be working in either case (i.e., take payments right away, or wait).
Well of course not. The estimated amount clearly states SS assumed you make the same in all future years that you made in the last previous. If the previous year was zero, then al subsequent estimates would be the same. Your estimate would only drop for one year for each year you make significantly less. It CAN rise quickly if you replace 5 yearsnof zeros with 5 years of your highest earnings (last 5 years you work).
The point was made that once you already have 35 high years, (high meaning amount compared to the max that could be paid in) all changes are small. The max paid in based on income, in 1980, (like around $25k) is indexed, and worth roughly the same as the amount paid based on an income of $117k paid in 2014.
Most shocking to me is the percentage collecting at age 62. Looks to be 44% and if you add those collecting at 63 it's over half the population.
My employer and I have been talking about my eventual retirement starting next June 1st (I will be approaching 68) the plan is for me to work two days a week and for that I will take a 60% cut in pay. While it's a steep cut my wife will be collecting her full ss benefit (I will file and suspend so she gets 50% of my FRA benefit) and together we should be ok until I am 70 even if we do have to take a thousand or two once in a while out of savings.
Why didn't you File and Suspend at your FRA of 66? That makes no sense not to do so. There is never a reason not to. You can collect ALL your back SS to your FRA date if you File & Suspended then, if some emergency comes up. Your wife would still get her full spousal benefit whenever she became eligible. By not filing, you have limited yourself to only 6 months back SS should something unforeseen happen! Whenever you file, it takes 3 months for anything to happen. If you were already filed, it takes one month to re-activate!
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