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Started By
Message
My miscalculation of Social Security Benefits for my wife
Posted on 6/4/19 at 9:28 am
Posted on 6/4/19 at 9:28 am
I know most of you young pups hate Social Security. But, there may be one or two of you that are old enough to be getting close to collecting. This is for those that might be in a similar position as me.
As you may know your Social Security benefit increases by about 8% a year for every year that you put off collecting. So from age 66 to 70 that works out to about a 32% higher payment.
I turned 70 years old earlier this year and started collecting Social Security Benefits. I had mistakenly thought that my wife could collect a spousal payment equal to 50% of my payment. She can indeed collect a spousal benefit but it is based on the amount of money I would have received at my Full Retirement Age (FRA), which for me was 66 years old, not on how much I receive at 70. In my situation she is collecting about $5,000 a year less than I had anticipated. However, the good news is that in less than 4 years she turns 70 and will switch to collecting on her own earnings history which will higher than the spousal benefit that I originally believed she would get.
Of course, the key is living long enough to get as much as you can out of the system and for the system to stay solvent.
As you may know your Social Security benefit increases by about 8% a year for every year that you put off collecting. So from age 66 to 70 that works out to about a 32% higher payment.
I turned 70 years old earlier this year and started collecting Social Security Benefits. I had mistakenly thought that my wife could collect a spousal payment equal to 50% of my payment. She can indeed collect a spousal benefit but it is based on the amount of money I would have received at my Full Retirement Age (FRA), which for me was 66 years old, not on how much I receive at 70. In my situation she is collecting about $5,000 a year less than I had anticipated. However, the good news is that in less than 4 years she turns 70 and will switch to collecting on her own earnings history which will higher than the spousal benefit that I originally believed she would get.
Of course, the key is living long enough to get as much as you can out of the system and for the system to stay solvent.
6
Posted on 6/4/19 at 9:41 am to PlanoPrivateer
Is true that I won't regret spending more time with family instead of chasing money/promotions? Serious question. I ask all old people this.
Posted on 6/4/19 at 9:56 am to TheRustyShackleford
Straight to the point calling him old lol. I’d use a more friendly term when asking a question
Posted on 6/4/19 at 10:00 am to Upperdecker
It's ridiculous you have to hope to live to 70 before you can begin getting some of your money back.
Posted on 6/4/19 at 10:02 am to bogart
quote:
It's ridiculous you have to hope to live to 70 before you can begin getting some of your money back.
You might want to read up on social security and how it works baw
You can start collecting at 62 if you like, you can disable yourself and start collecting SSDI immediately for you and your children, or you can die and have your young children collect
Posted on 6/4/19 at 10:21 am to bogart
quote:
It's ridiculous you have to hope to live to 70 before you can begin getting some of your money back.
FWIW, what a lot of people recommend is to start collecting it asap but put it into an investment account and not touch it for as long as possible. I can't remember the break even age if you get something like a 4-6% return on this, but its pretty late like 78.
Posted on 6/4/19 at 10:58 am to PlanoPrivateer
quote:36% fwiw.
So from age 66 to 70 that works out to about a 32% higher payment.
Posted on 6/4/19 at 12:09 pm to baldona
It's garbage how adults can't collect what their parents put into SS once they're deceased.
Money they worked for is just gone for someone else to use
Money they worked for is just gone for someone else to use
Posted on 6/4/19 at 12:26 pm to Lawyered
quote:
Money they worked for is just gone for someone else to use
Isn't that the point? A social security system, it's right there in the name. So a 25 year old who's worked since he was 18 but is paralyzed in a life altering accident doesn't have to spend the rest of his days in abject poverty, living off of the kindness of friends or family. He will, over his lifetime, receive much more than he paid in....that's the whole damn point of a shared social security system. SSDI isn't always about abuse: it is often a vital support for people who have been unlucky enough to experience major medical disasters that effectively end their work lives.
If a few dollars of what I've earned keeps disabled people from begging on the streets like in Guatemala or Senegal, I'm fine with it.
Posted on 6/4/19 at 12:55 pm to Lawyered
quote:
Money they worked for is just gone for someone else to use
I’m about as Republican as you can get, but this statement is silly. What if your parent is disabled at 24 and collects for the next 60 years? Should you as their child be forced to pay in extra to cover that?
If you want to leave stuff to your children, there are plenty of opportunities to do so
Posted on 6/4/19 at 3:23 pm to TheRustyShackleford
Agree with your subliminal premise.
My dad waited until he was 70 and regrets it big time.
His minimum distributions from 401k dwarf the SS payment increase so he just has to reinvest it. Good for me I suppose, as his sole heir, he is just reinvesting it.
I suppose if you don't really have much saved besides SS, I could see the want to work until 70.
My dad waited until he was 70 and regrets it big time.
His minimum distributions from 401k dwarf the SS payment increase so he just has to reinvest it. Good for me I suppose, as his sole heir, he is just reinvesting it.
I suppose if you don't really have much saved besides SS, I could see the want to work until 70.
Posted on 6/4/19 at 4:27 pm to deeprig9
quote:
My dad waited until he was 70 and regrets it big time.
Most people shouldn’t wait until 70, but it’s up to the individual to make the decision that is best for them
Posted on 6/4/19 at 6:05 pm to deeprig9
I know you weren’t replying to me but… I stopped working full time at 65 years old. Not all people continue to work because they need the income. One of my closest friends who is a little older than me just started a new small business. I just didn’t need the social security money. I continued to work as a part-time self employed subcontractor because I enjoyed what I was doing.
Another reason to wait to begin collecting until age 70 is that if my wife survives me she’ll be able to continue to collect at the higher rate.
I understand the reasoning some of you have stated about beginning earlier. As a matter of fact most of my friends and relatives around my age have said they aren’t waiting until 70 either. I am blessed that I was in a position to be able to wait.
The impact of Required Minimum Distributions on my income tax situation is also a concern. Especially in 4 years when my wife will have to begin taking her RMDs. Part of that will depend on the value of our Traditional IRAs.
For me it is a good position to be in.
Another reason to wait to begin collecting until age 70 is that if my wife survives me she’ll be able to continue to collect at the higher rate.
I understand the reasoning some of you have stated about beginning earlier. As a matter of fact most of my friends and relatives around my age have said they aren’t waiting until 70 either. I am blessed that I was in a position to be able to wait.
The impact of Required Minimum Distributions on my income tax situation is also a concern. Especially in 4 years when my wife will have to begin taking her RMDs. Part of that will depend on the value of our Traditional IRAs.
For me it is a good position to be in.
Posted on 6/5/19 at 7:54 am to PlanoPrivateer
There are some gotchas in collecting SS benefits. I started at age 67 because of this rule but mostly my health. You have to figure that anything you don't draw from SS will come from other sources. My own brother was waiting for age 70 but he died at 68. Just my thoughts. Oh, and a visit to the local SS office waiting room will show that there are lots of younger people likely getting benefits.
Posted on 6/5/19 at 9:03 am to AthensTiger
Honest question, what percentage of people age 65 pass away? Your SS goes up 8%, but I feel like is gotta be damn close to that chance of passing right? 4-6% at least?
Posted on 6/5/19 at 9:14 am to baldona
quote:
Honest question, what percentage of people age 65 pass away? Your SS goes up 8%, but I feel like is gotta be damn close to that chance of passing right? 4-6% at least?
I'd think you'd be better served to look at your family history, rather than averages. We all know families who seem to die young, vs those with lots of long-lived elders. Do lots of your people make it into their late 80s? Or do you come from stock that keels over around 65?
Posted on 6/5/19 at 9:26 am to hungryone
quote:
I'd think you'd be better served to look at your family history, rather than averages. We all know families who seem to die young, vs those with lots of long-lived elders. Do lots of your people make it into their late 80s? Or do you come from stock that keels over around 65?
Certainly a very good and valid point. I was simply talking about averages though. The argument is that your SS goes up 8% every year until you are 70, I'm saying on average you probably have about 8% chance of death at those ages.
Posted on 6/6/19 at 8:18 am to hungryone
quote:
I'd think you'd be better served to look at your family history, rather than averages.
What if it is sharply mixed? Few of my mother's folks get into their 70s (cancer).
Most of my father's people made it to mid/late 80s or beyond. He and his mother didn't go quite as far, but they also did everything wrong from a lifestyle perspective (averaged 70).
But my father's father, for example, made 90. He had an uncle and a sister who were (relatively) healthy into their 90s and scads of aunts who were mid-80s.
Posted on 6/6/19 at 11:03 am to Ace Midnight
Hasn’t been a man in my family hit 70 in four generations... I will most definitely collect as soon as I can.
Posted on 6/9/19 at 11:36 am to PlanoPrivateer
I think your wife can only switch now if she is born before 1954. Otherwise, she has to choose which one and go with it.
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