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Social Security timing strategies

Recently, I've run some numbers regarding the value of delaying taking Social Security.

It's really quite amazing, and pretty easy to see when you're talking about a single person putting off taking it for a year. But when you get a couple, particularly when both of them have earnings, it can get very complicated.

This article I saw today explains a couple of the issues pretty well:

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The author, Scott McLeod, a NAPFA-Registered Financial Advisor, answers a specific question regarding a spouse taking benefits, but in the process, he adds some great information about a couple of strategies:

Claim and Suspend. If you are FRA, you can file for benefits and then > suspend them until a later date. At age 62, your spouse can then start > receiving spousal Social Security checks based on your work history, > while the value of your future payments continues to increase. This > plan works best for couples with very different earnings histories, > where the higher-earning spouse would like to keep working and the > lower-earning spouse wants to retire and would be better off with the > spousal benefit than his or her own. > Claim now, claim more later. If you and your spouse are ready to > retire, and have reached FRA, you may be able to achieve a long-term > gain in payments by initially claiming spousal benefits, allowing your > own benefits to grow, and then switching to your own benefits later. > You will receive lower monthly checks in the early stages of retirement > in exchange for higher payments later. This strategy works if your > benefit at FRA is higher than your spouse's but not so much higher that > your spouse would be better off with the spousal benefit. That's an > important difference between the "claim and suspend" strategy. This is > also a good strategy if your spouse is in good health, and you expect > him or her to live a long life.

Some good stuff there.

Also, Larry Kotlikoff has a regular column on pgs.org now about Social Security and related issues. Always worth reading:

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Reply to
David S Meyers CFP
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An unusual method for high income people is to file for Social Security more than a year before they need it, when they already have enough other income to live on. They invest the Social Security funds received for a little less than a year. As the one year anniversary aproaches, they "reboot" their Social Security by withdrawing their original application, and paying back all the Social Security funds received, but not the interest gained by investing the funds. At some point in the future, they submit another Social Security application, and start receiving their "real" Social Security payments.

This gives them a bit more flexibility in deciding when to actually go on Social Security. They can only use this technique one time, by submitting this form less than a year after they started on Social Security:

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Reply to
bo peep

Speaking of timing gov't retirement "benefits", a yahoo article on medicare made things sound simple enough to sound worrisome. If things don't change (for better or worse) there are pitfalls about signing up for or changing one plan, then failing to enroll in time for another:

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Reply to
dumbstruck

The spousal benefit works.

In addition there is an advantage of delaying SS until the age of 70.

Bad health such as CVD, diabetes, cancer, et cetera are good reasons for taking SS early.

Reply to
Ron Peterson

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