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PDtax
PDtax, CPA firm owner
Category: Social Security
Satisfied Customers: 2033
Experience:  32 years tax and professional advice in all matters money
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I am 61 and my husband is 59. My health is excellent, and my

Customer Question

I am 61 and my husband is 59. My health is excellent, and my family has high longevity. My husband's health is fair-poor, with the usual smoking, no exercise, obesity as additional factors. His benefit is the maximum. Mine is relatively high (not exactly sure $$) but not the max. In learning about FAASF, I am wondering what might be the best strategy for collecting our SS benefit? In particular, is there one path that would start mine at age 62? Thank you.
Submitted: 1 year ago.
Category: Social Security
Expert:  PDtax replied 1 year ago.

PDtax :

Welcome to the site. I'm PDtax, and will be helping you today. Thanks for asking for me.

PDtax :

I'll be back online shortly, and will address your question then.

Customer :

Note: A 2003 statement has my eligibility at $1825 age 70 and $1043 at age 62. I also worked from 2006-2010 and accumulated more credits during that time.

PDtax :

As you know, claiming a benefit at 62 normally hurts. It especially hurts when your husband is younger, and in trying to maximize your total benefits, could claim on your earnings (filing as a spouse first). If your benefit at full retirement was, say $1,600 per month, your monthly benefit at 62 would approximate $1,200 per month (you lose 25%, from http://www.ssa.gov/oact/quickcalc/earlyretire.html) and I assume you were born in 1952.

PDtax :

He can't file for benefits, even under your earnings, until he reaches age 62. At that point, his monthly benefit might be $400 per month (estimated).

PDtax :

Reverse it, and let's say you want to claim early on his earnings. At age 62, let's say his benefit would be the max of $2,533. Your spousal benefit would be half of that, or $1,262, less the timeliness discount of 30% or $379, leaving your Faasf benefit as $883 per month. He, of course, can't claim until he reaches 62. His early benefit on his own earnings would be $2,533 * .7 = $1,773 per month starting at age 62.

PDtax :

Then, at age 70, you could collect your benefit from your own earnings, and perhaps your benefit would grow to $2,000 or so per month. It also means your better health and longer life expectancy means you can draw on his benefits now, and save yours to grow when it's likely you will need it.

PDtax :

Please review this, and get back to me with any follow up questions you may have.

Customer :

I attended a social security administration senior presentation recently, and they mentioned that the FAASF benefit can be maximized by $150K by starting early. The exact parameters were not spelled out sufficiently, which is why I was asking the question. Is there a planning site that helps plug in complicated what-if's? that seems to be the best way to really know if your situation would be helped, or hurt. I am especially unclear about HOW my husband's health and thus likelihood of his not living long might affect our decisions. I did request HIGH level of detail--so anything additional you can point me to would be appreciated. In general, I realize that both waiting until 70 produces the maximum output--assuming that you live to n-number of years. Zeroing in on complexity of payouts while guessing unknowns is what I am after. In our case, we are looking at purchasing rental properties with the early distribution. This can of course itself generate income--possibly long after social security is depleted.

PDtax :

The FAASF benefit is maximized by allowing the monied spouse benefit to grow until age 70. The chart is pretty readily available on the Web, an example is posted here:

Expert:  PDtax replied 1 year ago.
http://www.hwminc.com/2013/08/22/be-smart-avoid-costly-social-security-mistakes/ is the web page that has the $150,000 FAASF chart. In it, the monied spouse is older, and collects on the wife's earnings to allow for growth in his account value.

The detailed answer you seek will require more specifics than you have provided, so I can at least give you the tools to do the what-if analyses.

http://www.ssa.gov/oact/anypia/anypia.html is the link to SSA's retirement benefit calculator, which accesses your actual earnings records to calculate very accurately what your benefit will be under various scenarios.

The FAASF plan works for monied spouses who are likely to live past their 70th year. Your initial information implied that your health was superior to his, and such is a determining factor in your decisions. Taking assets now, and establishing a supplemental income in addition to your benefits, might allow you to forego the FAASF plan and take his benefit at full retirement age, and you can convert your benefit to 50% of his, at his full retirement age.

Thank you for asking at Just Answer. I know you asked for detailed analysis, so the additional information and tools, hopefully, meet your needs. It would not be a bad idea to meet with a financial professional, like a CPA or CFP, after you have a sense of your options for another opinion before making your decisions. The idea that you can generate additional income now might make it easier to consider options.

The only way I could advise more completely is with a complete review of your finances, including debt service and other commitments, to plan for retirement spending. The CPA or CFP will provide valuable insight.

Thanks again from Just Answer. I'm PDtax.

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