The longest thread ever

[77devil]

The best thing for anybody getting ready for collecting Social Security retirement benefits is to go to your nearest Social Security office, and ask them your questions. In my experience they are the most helpful Federal agency I have ever dealt with.

I don't know what you mean by full retirement. If you mean at age 65 then you need to know that there is another retirement option at age 70 which turns out to be pretty close to double what you would collect at age 65. If you can get by financially it is a no-brainer to wait. In either event be sure to sign up for Medicare at age 65.

Your numbers are incorrect. The age 70 option is almost double the age 62 early retirement benefit. Assuming a modest 1% annual COLA going forward, the break even age is about 82 between the age 66 and 70 benefit on a non discounted basis. Assuming a 4% reinvestment rate, the break even age is 89. Given that the current average life expectancies for an American male and female(survivor benefit) are well below the break even age, the decision to wait until 70 is anything but obvious and, in fact, requires beating the mortality odds by a significant margin to be economically advantageous.

I do agree with your advice to consult SSA, after which So Cal should crunch the numbers.

[Reilly]

... Given that the current average life expectancies for an American male and female(survivor benefit) are well below the break even age, the decision to wait until 70 is anything but obvious and, in fact, requires beating the mortality odds by a significant margin to be economically advantageous. ...

The life expectancy you are using in the above example would be the expected life expectancy of a 62 (or 66?) year old, correct -- and not overall life expectancy for males and females in general?

Given it's a decision being made by a 62-year old, the 62-year old has to guess how long he/she will live, and should base that on how long other 62-year olds live ... which could be to a higher age than the overall life expectancy, which may be lowered by the deaths of younger individuals.

[snowdenscold]

The life expectancy you are using in the above example would be the expected life expectancy of a 62 (or 66?) year old, correct -- and not overall life expectancy for males and females in general?

Given it's a decision being made by a 62-year old, the 62-year old has to guess how long he/she will live, and should base that on how long other 62-year olds live ... which could be to a higher age than the overall life expectancy, which may be lowered by the deaths of younger individuals.

You can find average life expectancies (?) for various ages here, though it's from 2007:

http://www.ssa.gov/oact/STATS/table4c6.html

For a then 62 year old, it is 81.5 for men and 84.3 for women. So 4-6 more years than when compared to "at birth". And probably a lot more than if we had looked at the "age 0" line from a table 62 years ago.

[OZZIE4DUKE]

The life expectancy you are using in the above example would be the expected life expectancy of a 62 (or 66?) year old, correct -- and not overall life expectancy for males and females in general?

Given it's a decision being made by a 62-year old, the 62-year old has to guess how long he/she will live, and should base that on how long other 62-year olds live ... which could be to a higher age than the overall life expectancy, which may be lowered by the deaths of younger individuals.

Well, my birthday is tomorrow and chronologically I'll be, well, never mind, but I'm telling people I'll be 36 . My last "0" birthday* I finally turned 30... it was time to grow up! In discussing my birthday the other day with Captmojo, I put the over/under on how much longer I'll live at 50 years, based on how long my dad lived (he died last year 2 weeks short of 98) and my mom is still going strong. And BTW, I'm expecting the "over" vote to win!

Point is, I'll be collecting SS for a lonnnnnggggg time!

* tomorrow is NOT a "0" birthday. That's next year...

[SoCalDukeFan]

The orginal question concerned what is sometimes referred to as the "free spousal benefit."
I called Social Security and confirmed what I thought. Forunately my passing is not a factor in any of this.

You can read about it here.
http://www.socialsecuritychoices.com...reespousal.php
or here
http://www.socialsecurity.gov/retire...pouse.htm#a0=1

When my spouse reaches full retirement age she can elect to take either a spousal benefit which is 50% of my benefit or her benefit.
If she delays in taking her benefit then she earns delayed retirement benefits and so her benefits grows by 8 % a year. She can then later switch to her benefit and start getting a larger benefit.

As before, consult with Social Security and with your CPA before making a decision.

SoCal

[Reilly]

... my birthday is tomorrow ...

Please quit fishing for birthday wishes ... we're busy here guessing when SoCalDukeFan will die.

[Kimist]

Learn something every day. Apparently I was misinformed about the "death" aspect.

However, this excerpt from the above cite bears some note:

If you are under full retirement age when you take a spousal benefit, you cannot abstain from taking a benefit on your own record, and thus, you will be stuck with a permanently lower benefit as a result of taking it prior to your full retirement age. In other words, you are "deemed" to have taken your own retirement benefit immediately upon taking the spousal benefit. However, if you wait until full retirement age to claim your spousal benefit, not only will you receive a full spousal benefit equal to 50% of the primary beneficiary's retirement benefit, but you can also switch over to your own retirement benefit at a later age. The advantage of taking "free spousal" benefits is that you are receiving the spousal benefit while your own retirement benefit grows at 8 percent a year.

Another thing, which may or may not be relevant to the discussion here, is that if have not yet attained full-retirement age and you have wage/self-employment income greater than $15,120 then one dollar in benefits will be withheld for every two dollars in earnings above that limit. That "penalty" alone can be a significant consideration factor for a person under full retirement age who is still employed.

Slight disclaimer: There is a very convoluted set of rules in play for earnings limits for the one year the person attains full retirement age.

Details? See http://www.ssa.gov/pressoffice/facts...afacts2013.htm

k

[SoCalDukeFan]

Learn something every day. Apparently I was misinformed about the "death" aspect.

However, this excerpt from the above cite bears some note:

If you are under full retirement age when you take a spousal benefit, you cannot abstain from taking a benefit on your own record, and thus, you will be stuck with a permanently lower benefit as a result of taking it prior to your full retirement age. In other words, you are "deemed" to have taken your own retirement benefit immediately upon taking the spousal benefit. However, if you wait until full retirement age to claim your spousal benefit, not only will you receive a full spousal benefit equal to 50% of the primary beneficiary's retirement benefit, but you can also switch over to your own retirement benefit at a later age. The advantage of taking "free spousal" benefits is that you are receiving the spousal benefit while your own retirement benefit grows at 8 percent a year.

Another thing, which may or may not be relevant to the discussion here, is that if have not yet attained full-retirement age and you have wage/self-employment income greater than $15,120 then one dollar in benefits will be withheld for every two dollars in earnings above that limit. That "penalty" alone can be a significant consideration factor for a person under full retirement age who is still employed.

Slight disclaimer: There is a very convoluted set of rules in play for earnings limits for the one year the person attains full retirement age.

Details? See http://www.ssa.gov/pressoffice/facts...afacts2013.htm

k

This so called free spousal benefit only applies if the spouse has reached full retirement age.

[DukieInKansas]

It's Friday. Enjoy your weekend.

[sue71, esq]

I certainly will enjoy my weekend. 1st year of law school is OVER!

I have law review write on but that won't be all-consuming.

[DukieInKansas]

Congratulations, Sue!

[weezie]

Yes Sue, way to rock it.
What's the summer internship going to be?

[OldPhiKap]

Congratulations!

[comdytrd]

Congratulations!

Still lookin for the off button.

[DukieInKansas]

Gray and misty day in the Minneapolis/St. Paul area today. 3 days of helping my nephew and his wife settle into their new home - heading home in the morning. Looking forward to a travel day with one of my sisters. Hoping for nice weather and a few giggles on the way south.

[weezie]

You, DinK-ster, are the best aunt ever. The best!

[DukieInKansas]

You, DinK-ster, are the best aunt ever. The best!

(insert blushing smile here)

Thanks, Weezie. I'm lucky to have a great family. It was fun to spend time with three generations. Wish we had accomplished more while there.

[Turk]

Boston 1, Penguins 0. Boston wins 4-0, Penguins score a total of two goals in the series. Eff.

Or, as Ozzie likes to say, SFD.

[AncientPsychicT]

Boston 1, Penguins 0. Boston wins 4-0, Penguins score a total of two goals in the series. Eff.

Or, as Ozzie likes to say, SFD.

Are you kidding me? This is a FANTASTIC result.

All hail Darth Quaider!!!!

[Jarhead]

Not to change the subject, but will these kinds ofm threads be available in the new SB Nation set up?