Almost any combination of SS ages makes sense… for specific situations. Since none of us knows for sure the future market, life span, health etc it becomes a bit of a guessing game.
I’m a few years out from needing to decide myself but so far (based on advise from our financial planners) we have deferred SS for my older husband and have tentative plans to do so for me. While we are in our younger/healthier years, we do want to have enough money to travel etc. Also we maybe will need to cover unexpected health expenses. So I look at our SS as a “valve to turn” if needed between now and age 70.
My Sister In Law had enough years in for full pension with her school system, and retired and also started drawing SS at age 62. Her younger H (my DH’s youngest brother) is working full time and will most likely be doing so until age 65. I imagine he will draw SS right away as they are use to his cash flow. She has grandchildren and currently one DD and Gchild living with them. She is the oldest of her siblings and her H is the youngest of his siblings. They are happy together. His work is not that taxing. As they say ‘happy wife happy life’. She also spends almost all summer in her happy spot in a very large parked motor home with king size bed and very large shower; he comes on his weekends off. Their life.
Older brother is retiring the quarter after his younger wife turns 65 and he collects his manager’s bonus. He will collect SS at that time with full SS benefit and she will get her SS checks too at that time, drawing 1/2 of his SS.
As a teacher, the WPA/GPO laws gut my social security benefit hugely, and my pension is our primary source of retirement income, so wife and I took our SS at age 63. Getting less per month, but it’s not a lot to begin with, and would rather have the extra money now to travel, even though COVID put a monkey wrench into those plans.
That’s something I’m still trying to figure out. Dh is a teacher but worked at one of the few districts in our state that pays into SS. But he seems to think that that cuts into my spousal benefit somehow. I figured that I’d cross that bridge when we get close to there.
Yes, it does affect the survivor benefit of the spouse, which is what makes WEP/GPO grossly unfair. My first 10 yrs were spent in private schools where I did pay into SS. Once I joined a public school system, I stopped paying into SS but had enough quarters to collect.
GPO/WEP really hurts those who go into teaching as a second career. I had a colleague who entered teaching in his late 30’s. He would have to teach into his late 60’s to max out his teacher pension. If he retires at a reasonable age (his wife is 5 yrs older than him), he gets a reduced SS benefit AND a smaller teacher pension. He would be OK with a smaller pension with the SS benefit he should be owed.
We missed the “file and suspend” ? option by a month! So our financial planner calculated it was best for us to divide our approach. I’m guessing he made the same calculations (or even used the same resources) as outlined in the above links.
I took mine at FRA, and DH is waiting until 70. Nice to have a little income to supplement our savings (no pensions), and also nice to see his increase at 8%.
When to take SS is a gamble. But I’m waiting to collect until 70. My family history and health play into that. We don’t need the money now and the 8% return is great.
My best friend just asked her parents how much money they have. They’ve been reluctant to say and my friend really felt like she needed to know because they are in their 90’s and though have been managing on their own quite well may need help soon because her mother physical health is declining. They live in a small clean apartment. Finally her mother agreed to tell her that “ we’ve got 5 or thereabouts left”. My friend said ‘so $500,000’. Oh my goodness No!, said her mom. 5 million, we wanted you to be surprised when we died but I guess you do need to know. She’s a bit stunned. All from her moms super savvy investing.
Wow! Please tell us your best friend’s parents do have a will and/or assigned beneficiaries. Something I tell my Dad - “I expect you to live a long time, but you’ll never be as sharp to do paperwork as you are now”.
I have no idea how much money my in laws have (probably not $5 million ) But I have to say that it can be a little frustrating.
They have always lived a very frugal life. They are still frugal. I wish they would enjoy their money. We have our own pot of money and plan on enjoying it. But they sat on this money and didn’t do much. Now it’s too late as their health isn’t what it was.
In my in-laws case, they have a financial advisor and an elder attorney to help them manage. If and when they need the help, which they don’t right now, I suspect that they will let one of their sons help.
This exactly. I’ve seen too many people lose it in old age and make serious mistakes. Grandparents who had calculator minds, tax codes in their bones, wheeler-dealers…they just lost it and the road to the end was full of financial potholes. Not discovered until the executors went through the estates.
If they do get it taken care of, don’t forget to remind them to send copies of everything and let you know if they change lawyers.
That’s not so savvy! If they need help and some sort of spend-down has to happen, or benefits are going to be affected, caregivers need to know well before people die.
You don’t spend down 5 million. That’s not even a goal. There’s plenty for private nursing care at that level of assets. My mother in law had about that much. Even 5 years of round the clock care didn’t dent it much what with rise in market. Plus there was all information in writing which her mother had told her to look at if she became unable to manage her own affairs.
Seriously, I agree with @maya54. You don’t try to spend down 5 million so the taxpayers have to take care of you. That’s plenty, especially if you’re elderly. That’s what your money is for, and trying to protect large sums of money so you can go on Medicaid is unethical, at the very least.
Yes. First order of business is to find out what their wishes are. Assuming they want to stay in their home, and most people do, figure out whether the finances allow it and if it is safe (eg stairs?). I wouldn’t assume $5 mil is enough or even the correct number.
No one should be impoverished or forced to give away their assets just for Medicaid planning, and no one should go into skilled nursing a moment sooner than necessary.
I am all for medicaid planning, as I do it professionally, but it should be always driven by what is the highest and best life possible, as the elder defines it. If a child came into my office wanting me to arrange spending down $5 mil of their parents’ money, I would show them the door.
The mom just gave her access to online account. Total 5.3 mil. And mom not slipping mentally. Today at hospital asked what market did. Told up 215 . Said “So over 35.3. Great!”
The thing that really stinks is…as a teacher subject to WEP/GPO, I can never collect on my husband’s SS record.
I also worked for a number of years in places where SS was taken out of my earnings. But the bulk of my teaching was in a state that didn’t.
My SS earnings are reduced by about about half so my actual benefit of about $450 nets me about $230 a month which covers my Medicare bill. And that’s fine really.
I’m not complaining as my pension is decent. BUT if I die first, my husband will get half of my pension for as long as he lives. If he dies first, I won’t get any SS benefit of his…oh well.
We just had to consider this when we did our retirement planning.
@Youdon_tsay Do you think your H is thinking about the 50% survivor benefit as the reduction rather than Social Security? I assume that he took the standard married benefit, which is X for him and X times 50% to you as a survivor benefit.
If he’s been paying SS all along through the school system, he’ll get his benefit, PLUS you’ll get a spousal benefit of 50% of his benefit, or your own earned benefit, whichever is greater.
As a surviving spouse, you’d get the greater of 100% of his benefit OR 100% of your own earned benefit.
@maya54 - also just making sure about the wills and their estate planning – to make sure they are taking full advantage of being able to pass on estate based on their wishes and w/o heavy tax that some states may have. IDK if $5M is under the threshold or not of a particular state’s taxation. It sounds like they have done well enough health wise to be over 90 and living on their own. Help coming in to cook and clean and do laundry is something that can be very helpful (if not being done already) – that way it takes physical burden off the elderly couple and family. Family can help oversee and also be advisory. Important to screen and have only trustworthy help coming in, and keeping financial position quite secret.
) But I have to say that it can be a little frustrating.