There is another argument for taking Social Security early. If you pass away at say 70 and have taken Social Security since 62 your family has gotten the benefit of the $ for 8 years and presumably you have not touched the equivalent amount in IRA / 401k. That money you have not touched goes to your beneficiary.
Reverse the scenario. The IRA / 401k $ are spent and the Social Security $ vanish when you die. So your heirs get less $.
Obviously it all depends on if you even have 401k / IRA / Cash you avoid spending by taking Social Security early and how long you think you might live. But itās a scenario worth considering IMO.
We are taking Medicare and stopping our jobs at that time, age 65. H waits the 4 months to stop working when I turn 65. I will go over the SS with our financial guy - as our āfull SSā is at age 66 and 7 monthsā¦the Motley Fool article speaks a bit about the deduct amount for taking āearlyā. Will see if it makes financial sense for us one way or the other.
^^In general, the higher earner should wait until 70 (absent health conditions). And then the lower earner files early, and the higher earner files for a spousal when s/he reaches FRA. The lower earner files for spousal when higher earner files at 70.
Run the numbers on OpenSocialSecurity, Advanced tab, where you can adjust the mortality tables.
āThe lower earner files for spousal when higher earner files at 70.ā
Under the new SS rules passed a few years ago, If the lower earner files for SS early , they CANāT file for spousal benefits later on.
That is no longer is allowed.
Yes, @menloparkmom is correct, the act of filing will get you the higher of the available benefits. The exception is survivor benefits which can be claimed while delaying filing for your own.
Have you discussed Medicare part D?
I am helping my older brother who turns 65 in April. He takes a few meds with the most expensive being Xarelto (blood thinner). There is a plan (WellCare value script) that has 3 stars, all the meds are on their formulary and the total cost is cheaper. Is there a reason to go with anything else?
Thx
It isnāt compulsory but his current plan will expire (from the employer-he just retired). There is a penalty if you sign up late. He will have Parts A, B &D
You may run into the donut hole with the Xarelto ( or any name brand drug.) You may be paying a reasonable copay but the full list price goes toward the $3850 (or whatever the number is) that puts you in the donut hole and then Part D covers nothing until you hit like $4400 additional out of pocket. I ran into this with my asthma controller (Advair) and now I get it from Canada and not through Part D because itās way cheaper.
Thanks for the comments. He was in a construction union for 20 years and had great insurance. Had to retire because of his health. However he had enough time that the union will pay the monthly premium up to 40, the deductible up to 400 and the doughnut. So it seems the lower cost plan makes sense. Iām just afraid Iām over looking something.
" Fortunately, itās SUPPOSED to be scheduled to close unless things change. " @HImom
where / when did you read this? If its true that will be a big relief for lots of folks.
My understanding is that if I file for SS benefits at 62 on my record, I can do that, and when DH works til 70 and then takes his FRA benefit, I can then get 50% of his benefit? (50% of his is greater than 100% of mine.) Makes no sense for me to defer due to my medical history. OTOH, I donāt want to mess up my potential survivor benefits if something else happens.
@CountingDown , nope. you are too young to be able to do that .
If you file for SS on your own record, then you wont be able to later on file for spousal benefits, AND receive your own SS payments when your DH retires at age 70. That was the double dipping that was disallowed in 2015 for younger applicants. If you file for your own SS benefits at age 62, that is all the SS benefits that you will receive while your DH is alive.
What you CAN do is first file for spousal benefits, and then for your own SS benefits when you become 67. But be aware-
āYou MAY claim Social Security spousal benefits as early as 62, BUT the amount of your benefit is permanently reduced according to the number of months left until you reach full retirement age. For example, if your full retirement age is 67 and you choose to claim spousal benefits at 62, the maximum benefit you are eligible to receive is equal to 32.5% of your spouseās full benefit amount. This amount increases with each year, up to the maximum 50% benefit at age 67.ā
āIf you have reached your own full retirement age, you MAY be eligible to claim the maximum spousal benefit. Full retirement age varies from 65 to 67, depending on your year of birth. For those born after 1960, full retirement age is 67.ā
"If you do decide to retire before full retirement age, track any earnings you have and make sure that they donāt exceed the allowed limit, which changes each year. If they do, you may end up having a portion of future benefits withheld until you do reach full retirement. "
Since the ACA has been under attack, Iām not sure whether this projected closing of the donut hole may also get derailed.
I have difficulty keeping up with all that is going on in health coverage. CMS didnāt sign contracts in 2019 with companies providing Durable Medical Equipment (DME), including supplemental oxygen. This has left many patients and companies feeling pretty unsettled and one of our DMEs has closed leaving us with only 2 in our entire state of over 1 million people.
@deb922 Iām not thrilled with the offset and windfall provisions mostly because I worked having SS taken out of my earnings. My actual benefit is reduced by 2/3.
I am not complaining about my retirement earningsā¦but it seems not right that I canāt collect my full SS amount since I DID make those contributions.