Your last paragraph nailed it. I have a somewhat shortened life expectancy, but earn much more than my spouse. For her sake, I’m delaying SS until I die or, preferably, reach the age of 70. That will guarantee her a substantial, inflation-adjusted annuity for life. And women in both primary branches of her family tree commonly exceed the age of 95.
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I’ve been playing with opensocialsecurity.com and checking the checkbox which is “if benefits are cut by 23% in 2033” really changes my claiming strategy. In my wife’s and my particular situation, if there are no benefit cuts, OSS says to claim at 70. If there are benefit cuts as projected by the Social Security Trustees if Congress takes no action then it suggests 68. I’m not super confident about Congress these days, are you?
I think it’s doing is it’s calculating the Present Value of the additional money that both she and I are going to collect… and because her lifespan is impaired by a serious illlness, we get the most value by taking higher payments early because she won’t be around to collect a long tail of later payments.
It’s a case in point about everyone’s situation is different, really no one can advise you, you have to run the numbers for your unique situation. Fortunately, OSS is free.
I get a different number if I run the OSS as a single person, the best age to take benefits drops from 70 to 69.5 for me due to benefit cuts.
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Hallelujah now they’re projecting 2032 for the Social Security haircut, not 2033… due to the OBBB. Why doesn’t someone making $1 billion a year not pay anything into Social Security / Medicare? I believe they should enjoy the fruits of their labor, but there is a huge spectrum between NO TAX and EXCESSIVE TAX. The fact that there is essentially 0% tax on a billionaire shows that The Golden Rule is in force:
“He who has the gold rules”
It’s called regulatory capture. $20,000 in payroll tax divided by $1 billion = 0.002% payroll tax paid by someone earning $1 billion per year.
$1 billion represents 16,135 people making the median American salary. An entire small town of workers.
Now that I am retired in early 50s, I do not pay anything into SS either…….and I enjoy a nice retirement consisting of dividend and interest income combined with passive real estate income. As a matter of fact, with the depreciation from real estate, I am in a pretty low Federal bracket.
The problem is the tax code…….so lets fix it. But considering many members of congress don’t know the difference between a biological man and a woman…..its not likely.
The SS shortfall will be addressed in the year of the cut, not before, so that congress can use that as cover for increasing taxes and FRA while cutting benefits.
Do you have a crystal ball that gives you the date that you will die? No? Well, neither do I. Always, always, always take your social security benefit as soon as humanly possible. I took mine at 62, no regrets. My wife the same, no regrets. She died at 66, so, she clearly did not get much of her benefit, but if we had waited until she turned 70, well, you figure it out. She would have received zero benefit. Bottom line, you do not know when you will die, so take the ss while you are alive and can spend it.
No one really knows when they will die, but you can look at your family history and that of your spouse to help make your decisions. If most of your family die early, or late, anticipate that that could be likely for you. Also consider your spouse (if you have one), and the same question, and take into account any age difference. Your choice will also impact your spouse’s benefits.
If you are still working, and not full retirement age, taking social security early reduces the amount you receive.
A lot of people seem to take pride in “not needing” social security. So those folks might want to consider taking it early, especially if they “don’t need “ it. The average “break even” time for taking it early is 10 years. If your reduced check is $2500 and that monthly check was put into an account paying 4% interest compounded annually, at the end f that 10 years, you would have $360,000 more to pass on to your heirs, since when you die your heirs get $0 of your social security. It would be a shame to wait until you were 70 to start..
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As mentioned, everyone’s situation is different. At age 50-some my cushy IT job was slated to be eliminated. My plan was to make a large change in my job and relocate and buy a Farm. I was getting a great deal however I needed funds to start farming. My SS was taken almost as soon as I could. In the intrim I took a 72T and set up a solo 401K. I took a mortgage on the farm but had placed 33% down to eliminate extra mortgage costs. The business also allowed business writeoffs which helped and I received a Government conservation grant which helped the community and added a bit to the cost-basis of the farm.
The mortgage was paid off and since I am in a rural area, my taxes and leasehold fees are very low. Water price is low and electricity will be almost free soon as it pays for itself.
For the most part I am living of monthly SS and my Required Minimum Distribution. I have reasonable investment amounts which could cover anything except a major, major health issue which Medicare would not cover.
I was not the best at saving money until my final years of work but was able to use the stock market to increase that fairly well.
So at 74 I am still working but can afford to hire people if I want to sit back and quite farming. By the way, farming is not the easy life you might imagine 
The dollar amount should be the same for two individuals who live an average lifespan with one individual starting on Social Security at age 62 and the other at age 70. Using those parameters, both pathways result in essentially equal amount at money when the two women pass away. This statement should be true since Social Security actuaries derive the monthly SS benefits based on average life expectancy.
Assumptions for calculations: two women born the same day are reaching age 62: their life expectancy is 22.5 years based on SS tables: their full retirement age SS is $2000; one of the women starts her SS at age 62 and receiving 70% of her full retirement age SS while the other women starts her SS at age 70 receiving 124% of full retirement age SS; the annual cost of living increase in SS will be 3% (this figure is slightly higher than the past 10 years), both women save all of their SS for their heirs and both women die the same day 22.5 years from now at age 84.5.
When I do a future value calculation, the amount the two women will have at the end is essentially the same.
I think I coverd everything. Comments are appreciated.
I post on a more political board where many posters hate social security. They call it a ponzi scheme and they proudly boast that they don’t need social security because they planned well and saved, as any fiscally responsible person should do. Yet they also don’t plan on taking social security until 70 because “they don’t need it”, Then they use another argument that with SS, when you die, so does your benefit..but your personal savings can be passed on to their heirs. So if that is the case, if they took social security (again, that they don’t need) at 62 and put it somewhere to earn 5%, when they pass they would have almost half million MORE dollars to pass on to their kids.
They a wrong. The individual who receives SS at age 62 receives 70% of full retirement age SS and by waiting to age 70 the individual will receive 124% of full retirement age SS. Waiting till age 70 gives a guaranteed return from ages 62 to 70 of well above 5%.
Assuming that the individual who receives SS at age 62 get returns from investing between ages 62 and 70 similar to the SS guaranteed return, the amount that they can pass on to heirs will be greater only if they die before their average life expectancy.
Note also that the above refers to a single individual. The decision of when to obtain SS is particularly complicated for spouses- the lower earner may benefit from filing earlier.
Everyone can benefit by using the SS calculators opensocialsecurity or maximizemysocialsecurity for their individual situation.
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I think that a married couple is usually most interested in providing for the financial security of first themselves as a couple, and then their surviving spouse over their children or other heirs. Not that those are not a concern, but less of a priority. Running the numbers through different scenarios is helpful, as are the rules for claiming. The rules for a surviving spouse are generally far less understood than are those for married couples.
My mom waiting to collect to age 68 really helped her as a surviving spouse as she received credits on a $2,100 check as opposed to her $1,200 check
Her Section 8 housing payment is $700/month as a result of her $2,350/mo SS
I’m not understanding. Credits do not accumulate past the deceased’s death. To receive their full amount, you must wait until full retirement age to collect survivor benefits. However, you can collect your own benefits as early as age 62, although they will be reduced. Or you can wait until age 70, letting credits accumulate on your own benefit.
Typically the best plan is to take the lower benefit as soon as possible, then switch to the higher one when it attains it maximum.
FWIW, full retirement age for survivors is slightly earlier than full retirement age on one’s retirement benefits.
I was originally going to take at 65 but my company downsized and I am retired now but only 62. In my case its a need so I will be taking it at 62. Not too upset about it though. Its there to be used when needed so its ok. All the talk about when is “Best” is so funny to me because it depends on a person’s situation to decide when is “best” for them
You know what Clark would suggest, right? He would say find another job to tide you over 3 +years.
Yes he would. But after more than 40 years in the work force its time to do some things I want to do. I will probably do some part time work but now I can focus on my volunteer work, home projects and other things I want to do. Taking SS now will allow me to do that while I still have the strength and vitality to enjoy it.
Do you have any other retirement saving options like 401ks or IRAs ?
Yes. Have an IRA and savings. No credit cards or car payments. All bills paid off except house. Cost of living as increased dramatically since COVID though.
One other item that is a pain is because I am 3 years away from Medicare I have to buy Healthcare in the Market or use COBRA. Either way I am looking at an additional 1500 to 2000 a month for that.