Social Security Strategies

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I plan to employ the strategy of waiting to collect SS until 70, but claiming on my wife's account when she turn 62 1/2. Then, when I reach age 70 and collect the maximum, she can collect either hers or a sum equal to half of mine, depending on which is greater. When I reach full retirement age, 66.3 it think, then I may file and suspend if the sum of half of mine is greater than what we would be collecting on her account (her SS plus 1/2 again). I know, it sounds a bit complicated, but this is information that doesn't seem to be getting attention. I came across it by serendipity, and have found that most people do not seem to be so aware of it.

Good luck...
 
My social security strategy: it will be gone by the time I retire, so I must have maximum return in my TSP/ROTH accounts. I'm also debating whether to retire when I'm eligible, or wait until I'm mandatory (law enforcement). Hopefully then I won't have to decide whether to eat cat food or real food.:sick: As long as it isn't soylent green!:D
 
SkyPilot said:
I plan to employ the strategy of waiting to collect SS until 70, but claiming on my wife's account when she turn 62 1/2. Then, when I reach age 70 and collect the maximum, she can collect either hers or a sum equal to half of mine, depending on which is greater. When I reach full retirement age, 66.3 it think, then I may file and suspend if the sum of half of mine is greater than what we would be collecting on her account (her SS plus 1/2 again). I know, it sounds a bit complicated, but this is information that doesn't seem to be getting attention. I came across it by serendipity, and have found that most people do not seem to be so aware of it.

Good luck...
Click to expand...

It would be a gamble. What if you don't reach 70? You gave up some money. I think I'll start taking mine when first eligible for two reasons,

1. I might not make it to 70,

and 2. Social Security might not make it until I am 70. I'll take the money when I can.
 
I am new to the forum and have not studied Social Security benefits in detail. All of those stategies seem fairly complicated and a very detailed spreadsheet would be needed right before you turn 62 to determine the best path if you still wanted to make it complicated. I always seem to do my planning long term and keep it simple. At first glance, I fail to understand why anyone that is responsible with their own finances would wait to take benefits at 70. Perhaps my numbers are way off compared to everyone else because I married an older woman. It seems to me I can manage my money better than the government can. If I plug in a modest return, I seem to be thousands ahead to take at 62 than 70 - only if you consider all social security benefits received between 62 and 70 to be invested as you would not have anything if you waited till 70 anyways. Tell me what I am doing wrong.

View attachment Social Security Strategy.xls
 
Last edited:
Clarified response that makes more sense. Use the same spreadsheet.

I have not studied Social Security benefits in detail. I approach this from the viewpoint that you have a choice either to take benefits at 62 or 70 and do not need the money to survive. I realize benefits may change year to year, but just pretend the numbers are for starting retirement next year rather than 20 years from now so there are no distraction arguments if the program will be operating and this is all just a big waste of time to look at.

All of those stategies seem fairly complicated and a very detailed spreadsheet would be needed right before you turn 62 to determine the best path if you still wanted to make it complicated. I always seem to do my planning long term and keep it simple. At first glance, I see the standard table everyone has viewed that shows if you take at 70 rather than 62 you have $200,000.00 more money and you would be silly to take benefits at 62 and everyone seems to be told to hold out as long as you can before you start to take benefits. So I am under the assumption that my numbers seem to agree with the traditional tables and have not made a huge mistake so far.

I am an odd duck and I look at things differently than most and I fail to understand why anyone that is responsible with their own finances would wait to take benefits at 70. Perhaps my numbers are way off compared to everyone else because I married an older woman. It seems to me I can manage my money better than the government can. If I plug in a modest return of 5.5%, I seem to be $63,000.00 ahead in total to take at 62 than 70 - if you consider all social security benefits received between 62 and 70 to be invested as you would not have any checks if you waited till 70 anyways. I zoomed in on how in the 8 years you are waiting for 70, I took the money at 62 and now have $256,000.00 more to play with and live off the interest right about the time when you get your first check. It seems I have the money now rather than later if I wanted to spend it - always a good option if your health starts to decline earlier than you expected. Or I could consider it found money and let it just build and build to ensure I am taken well care of in my final days or my wife will be allowed to live past 95 and not run out of money.

Tell me what I am doing wrong. I was using estimates from the Social Security website based on my earnings. Thank you for your patience with a new forum member!
 
Max, many of the questions you ask are already covered in the articles and and are specific.

Here an article discussing "break even" scenarios for you. http://www.newretirement.com/Answers/Bud-Hebeler/Social-Security-Breakeven.aspx

Overall, it really depends on how you view SS in the context of your circumstance. Is it needed income only, or is it additional income of a disposable variety? Is it insurance, or are you better of to spend it now and forgo the increased rates that come with waiting? Will your spouse need the added benefits of waiting should you expire first, thus leaving a greater income after you have departed? So, it is not just the numbers themselves, but what the numbers mean in your particular situation. If it is just a matter of "break even", and you have a shorter than longer life expectancy, then you should probably take the money and run!

And no matter how responsible you are, life happens. That is what insurance is for, and for many SS is just that insurance. That being the case, SS is not dependant upon market forces (directly anyway) and provides a stable base of income for your spouse if you depart ahead of schedule. It also cannot be swindled away from her (not easily) by those interested in pirating available assets.

Your logic is sound in my opinion, but there may be other issues to take into consideration. That's what this thread is about; inform and strategize.
 
Here is a practical scenario from one of my co-workers.

His Hi-3 FLEO pension calculation at 55 is 89,000k which will give him roughly 30k per year.

His SS supplemental until 62 will be roughly 12k per year.

The SS calculation put his payments at appx: 25k at 62 but a bit over 40k at age 70

When he is age 66 he will file on his wife's SS, and receive a sum that is half of hers, unless they together would receive a greater sum by she filing on his if he was to file and suspend.

Then at the age of 70, he will file and receive the maximum available, and she will receive the greater of either hers or half of his as the case may be.

There are several moving parts here, and exact calculations cannot be made years ahead of time. However, this scenario makes sense for them as it allows for substantial income with the strongest permanent income potential apart from her delaying benefits as well.

As some life circumstances are beyond our control, we make the best educated and informed decisions based upon need and aversion that we can.

In this scenario, peace of mind is a factor beyond the "break even" factor. In the case that his spouse finds that she is a widow (50/50 chance), then she will have a strong income for her remaining years (probably 50+k per year going forward after age 68).
 
Great Cliff Notes version post for FLEO positions. You would get rep from me but I gotta spread it around.

I got much longer to go than your friend. So, I still need some of them cool retirement windows with your numbers on it... can't find them in any stores around here. :D
 
Can anyone tell me if I retire in FERS now at age 58, start collecting my SS supplement until age 62, would this effect my choice of suspending my SS until age 70 to collect the maximum?.
 
tom1tom1 said:
Can anyone tell me if I retire in FERS now at age 58, start collecting my SS supplement until age 62, would this effect my choice of suspending my SS until age 70 to collect the maximum?.
Click to expand...

Your SS is not affected by collecting the FERS SS Supplement. The FERS SS supplement mimics SS (based upon your years of FERS service) but are not connected with SS itself.

You have to file separately with SS to begin collecting at age 62, as there is no automatic rollover from FERS to SS.

Therefore, you would not be in a "suspend" situation, as you are not collecting actual SS until you file for it.
 
tom1tom1 said:
Thanks SkyPilot, Does the earning restriction come to play before I reach 62?
Click to expand...

This may be helpful... the simple answer is yes, but a bit more complex for FLEO, ATC and Firefighters as we can earn without restriction until we reach our MRA.

[FONT=&quot]From: http://www.opm.gov/retire/pre/election/benefits/srs.htm[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]4. I am a 46-year-old law enforcement officer with 23 years of law enforcement service. If I transfer to FERS now and retire in 2 years when I have 25 years of service, will I be eligible for the Special Retirement Supplement as soon as I retire?[/FONT][FONT=&quot] [/FONT]
[FONT=&quot]Yes. You will have met the age and service requirements for immediate unreduced retirement as a law enforcement officer. You will also have 1 calendar year of service under FERS. Since you qualify for benefits under the special provisions for law enforcement officers, it is not necessary for you to meet the minimum retirement age applicable to other types of immediate retirement in order to be eligible for the Supplement. In addition, the Supplement will not be reduced by any outside earnings until you reach the minimum retirement age. [/FONT]
 
[h=1]Maximum Social Security retirement benefit[/h] Updated 03/09/2012 12:48 PM | ID# 5
What is the maximum monthly Social Security retirement benefit?

The maximum benefit depends on the age a worker chooses to retire. For example, for a worker retiring at age 66 in 2012, the amount is $2,513. This figure is based on earnings at the maximum taxable amount for every year after age 21.

Maximum Social Security retirement benefit
 
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