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Lane
Lane, JD,CFP, MBA, CRPS
Category: Social Security
Satisfied Customers: 11344
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial, Social Security & Tax advice since 1986
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Ref maximizing my Social Security benefits. My birthday is

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Ref maximizing my Social Security benefits. My birthday is ***** My wife's birthday is ***** We have not filed for SS benefits yet. As of today, I have reached my full retirement age (66). My wife will reach FRA in 12/2019. We went to visit the SS office last month and they gave my wife and I a schedule of benefits. My wife's PIA is $2,365 whereas my PIA is $2,083. Assuming we live to be 90 yrs old, what is your recommended course of action? What would be the expected lifetime benefits for us if we your recommended strategy?

Hi. Great Question and Planning!

I would have your wife wait until she is at least 66 - if she or you wait until your 70 - your monthly benefit increases to about 8% per year from full retirement age until you reach 70 years old.

Customer: replied 3 months ago.
Disappointed in your response. We already know that fact. Refund please

Hi. My name is*****'m a different expert.

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I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986

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If you want a refund you'll have to contact Customer Service. We expert users are users just as you (albeit with credentials verified and having tested out in our sibject areas).

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If your question is simply how to Maximize, the biggest factor (as you seem to understand) is longevity.

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SO, given your assumption of age 90, if current cash flow isn't a concert and you are simply trying to maximize benefits received to age 90 the answer should be intuitively obvious; Both wait until age 70 to get the DRC's (Delayed Retirement Credits) making your benefit 2082 x 1.32 = 2748.24 and your wife's 2365 x 1.32 = 3121

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That's 20 years at the increased benefit (2748.24 + 3121.80) x 12 x 20 = 1,408,809.60

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If each take the PIA amount starting at age 66 that's 24 years, so (2082 + 2365) 12 x 24 = 1,280,736

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an extra 1,408,809.60 - 1,280,736 = $128,073.60 ... IF ... you both live to age 90.

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Now, factoring in your cash flow needs, the opportunity cost of having additional dollars and being able to save non-needed dollars for those first four years if you DO take at FRA, how your other assets and income affect those two issues, and the combination and permutations of other factors, are beyond the scope of this venue.

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My firm uses a complicated piece of software (for which we pay several thousands of dollars per year for the data, statistical, and legal updates) and can show you show you several scenarios.

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It's not a simple as one might think. ... and again, as you seem to understand, longevity is the most important variable.

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By the numbers above should give you a place to start weighing the various trade-offs.

The example MUST, again, in THIS venue, simply look at the difference in taking PIA at FRA and delaying as long as possible without leaving money on the table (age 70).

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COLA's are an unknown, our other resources are unknown, how you might(or your ability to) invest any dollars received BETWEEN 66 and 70 is an unknown.

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How long your others asset may last at various return assumptions are an unknown.

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But your BASIC question has been answered, you maximize the benefit (all other things being equal) by delaying to age 70.

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(I'm assuming you understand the issue of reductions for filing before FRA for your wife, etc.)

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Please let me know if you have ANY questions at all, before rating me

But if this has helped, and you don’t have other questions, I would appreciate a positive rating (using those stars on your screen – and clicking submit)

That’s the only way JustAnswer will compensate me for the work here.

Thanks,

Lane

Customer: replied 3 months ago.
Hi Lane,I am happy that they referred my question to you as you certainly seem to be better qualified to analyze what works best for my wife and I. Would you please analyze the strategy of me filing for SS earned benefits now (age 66) and my wife filing when she turns 66 (Dec 2020) as opposed to another strategy of me filing for earned benefits at age 68 (Jan 2019) and my wife filing for spousal benefits at age 66 (restricted application to exclude earned benefits). My wife then files for SS earned benefits at age 70. What would be the difference in SS benefits between strategy 1 and 2? Thank you
Customer: replied 3 months ago.
Oops - correction above: my wife will reach FRA in 12/2019.

I'll need your earnings record in order to run the numbers for you.

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I can do a very close approximation if you give me your average earnings.

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The amount you make (your gross salary) is one of the basic building blocks for many of the estimates in the tool I use, (including your PIA, which you've provided). The estimated calculations work only if you are still earning a salary and input an amount that is generally reflective of your earnings history.

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If you are temporarily out of work, enter your most recent salary or what you could realistically be earning today. If your earnings have gone up and down over the years, enter an average salary, even if it's different from your current salary.

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Customer: replied 3 months ago.
I don't quite understand "average salary". Do you mean our most recent earned income? Or perhaps the average of our highest 3 yrs of earned income? Or do you mean average earned income over the past 45 yrs of working?Anyway, reviewing the benefits schedule provided by the SS Office for my wife and I, this is what I can share:I would get a PIA of $2,083 if I start my benefits in Jan 2017 since I have reached my FRA (age 66). If I delay it until Jan 2018, my delayed retirement MBA increases to $2,250. If I delay it until Jan 2019, my delayed retirement MBA increases to $2,417.My wife reaches FRA in Dec 2019. Her PIA would be $2,365. If she delays her SS to Jan 2021, her retirement MBA increases to $2,570.
If she waits until Jan 2022, her delayed retirement MBA increases to $2,759. I'm are you are aware that the benefit amount increases 8 percent per year. Hopefilly you can provide my answers on the recommended strategy as well as the differences between the two strategies I mentioned I am considering. Thank you.

I would rather have the AIME (Average Indexed Monthly Earnings ( https://www.ssa.gov/oact/cola/Benefits.html )

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Social Security uses the 35 years' highest earnings and indexes them to current dollars (actually age 60 is the indexing year)

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Given that you understand the DRC (8% Delayed retirement Credit) and already have the numbers, and I'm guessing that you understand that the spousal benefit if she takes spousal and suspends, any time after FRA is an unreduced 50%, there's nothing left to do here except the basic math.

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Given that we can't make an an assumption about COLA Life expectancy is the only variable. Given your assumption of age 90, the answer is here.

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I have family obligations today, but this evening can throw this into a spreadsheet for you.

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But to use the software I mentioned I'd need to charge my minimum for planning services ($500) to recoup the cost of using the software (which looks at the full range of start dates and longevity).

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But again, I'll throw the two fixed scenarios into a spreadsheet for you to that you can see the numbers, this evening. (The math for the age 90 for yourself has already been done, above)

Customer: replied 3 months ago.
Sorry Lane, I'm not interested in a $500 planning services fee.

Again, as I said... simply comparing the two scenarios with a given life expectancy is easy ... I'll do that for you but won't be back to the computer where I have excel until this evening.

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As I said, I'v already done 1/2 of it above.

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the only other piece is to look at the 50% spousal for your wife

Lane, JD,CFP, MBA, CRPS
Category: Social Security
Satisfied Customers: 11344
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial, Social Security & Tax advice since 1986
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