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Author Topic: Reapplying for Social Security
Irish
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If you, like me, opted to begin receiving SSA benefits at age 62, have you ever considered this option?

Reapplying for Social Security may be a good idea
By Scott Burns
February 17, 2008

If you're retired and are interested in having a higher income for as long as you live, you have two main options.

You can buy a life annuity. This will provide you with an income, with or without inflation adjustments, for as long as you live.

But it will leave nothing for your heirs.

Or you can buy a variable annuity with a variety of living-benefit provisions. These will guarantee a lifetime income. The income will be less than a lifetime annuity, but you'll have a modest chance of future increases and you may leave something for your heirs.

Whatever you choose, the only thing certain is a lot of fine print.

Fortunately, there is a simple alternative. It will work nicely for retirees in their late 60s or early 70s who opted, years ago, to take Social Security benefits at a relatively young age. That's millions of people.

If you did this, you know your benefits were reduced because taking benefits early meant Social Security would have to pay benefits for more years.

But you easily can reapply from scratch. Visit the local Social Security office. Make use of a little-known and seldom-exercised provision - request a "Withdrawal of Application." By filing an SSA Form 521, Social Security will treat you as if you had never applied for benefits. It will let you immediately reapply for benefits - at your current age.

Yes, there is a catch. And it's a big one. You must repay every dime you've received in past benefits. But because Social Security charges no interest, reapplying turns out to be a really good deal. It represents a way to buy an inflation-adjusted annuity for a price that beats anything offered by the financial services industry.

If you apply for Social Security benefits before your full retirement age, your benefit is reduced for each month you take it early.

If you delay taking benefits beyond your full retirement age, your benefits are increased for each month of delay.

For example, if you were born between 1943 and 1954, your full retirement age is 66. If you retire at age 62, your benefit will be 75 percent of what you would receive if you waited until age 66. In addition, those born in this period will receive an increase in benefits for each month of delay beyond their full retirement age. The increase is two-thirds of 1 percent a month, or 8 percent a year. At age 70 (when increases in benefits stop), your benefit would be 132 percent of your full retirement benefit.

Now let's put that together. If your benefit at 62 is 75 percent of your full retirement benefit and your benefit at 70 is 132 percent, your monthly check could increase by as much as 76 percent. (The benefit will also be adjusted for inflation.)

If your benefit was $1,000 a month at age 62, you'd have to return $96,000 at age 70 in order to receive a benefit increase of $760 a month. That's $9,120 more a year. (I'm ignoring inflation adjustments.) In effect, you are buying an inflation-adjusted life annuity with an annual payout starting at a stunning 9.5 percent of your initial "investment" - the return of money you'd received earlier in benefits.

Now ask yourself a simple question. Where can you find a financial product that will deliver an initial payout of 9.5 percent and adjust it every year, for the rest of your life, at the rate of inflation?

Answer: Nowhere.

You won't get a 9.5 percent initial payout with guaranteed inflation rate increase from any of the living-benefits variable annuities. You won't get it from any of the new mutual funds geared to producing lifetime income. And you won't get it from a commercially available life annuity.

It gets better.

By reducing investment income and increasing Social Security benefits, many retirees will be able to reduce their income taxes and, quite possibly, avoid the taxation of Social Security benefits.

I've been writing about the Torpedo Tax - the taxation of Social Security benefits - for at least five years. You get more certain income from deferring Social Security benefits than you can get from virtually any financial product. Deferral is particularly beneficial for married men.

Posts: 1634 | From: Hampton, NH  |  IP: Logged
L1011Ret
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Fascinating. I'm still working so my SS just keeps increasing beyond the annual cost of living raises.
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Bob Ritchie
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Irish,

No way. At age 70 hand SS a check for $96,000.00 and start over again; even at a $9,100.00 per year increase?! Heck it would take 11 years just to get even again....years longer when the potential interest earnings on tht 96 grand are taken into account!

A healthy 60 year old has a life expectancy of 21 more years....that is age 81. The author's suggestion would have one break even just as they are expected to die. Does this guy think we are going to live forever?

I know nothing about finance....but I do know that SS payments are actuarial based. If one has an average life expectancy....a SS recipient breaks even. Die early and you lose! Live long and you win.

I'll be taking mine in 15 more months at age 62. If I live an "average" lifespan I break even at about age 77 whether I take the reduced amount at age 62, the full benefit at 66 or the increased benefit at age 70. Should I live well beyond age 77 then my total SS benefit will be less having begun drawing it at age 62.

Hoping to beat the average life expectancy. Maybe someday "money" will cease to be the driving force in our society.


Live,laugh and love, [Smile]

Bob Ritchie

[ 02-18-2008, 08:48: Message edited by: Bob Ritchie ]

Posts: 1936 | From: Warren County, Missouri  |  IP: Logged
Retav8r
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This is a reprinting of an earlier posting:

For those of you that have retired and nearing the age (62) where you can elect to receive social security early, consider the following...Your spouse, assuming that she's also entitled to benefits from her past work experience, is entitled to either her projected benefit or half of yours, whichever is greater. Also, this greater amount does not affect what you receive. While this isn't exactly a secret, I've heard that many SS agents, while discussing your benefits, will forget to mention this. You need to do the math to see how much more both you and your spouse will receive if you wait until the normal 65+ before collecting; more often than not you're better off not taking it at age 62. (Check with your SSA rep for confirmation of this)Also keep in mind the fact that your wife will receive the higher amount of your SS after you 'fly west!'

Don

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Irish
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I'm going to try to get accurate figures from the SSA tomorrow, but I think these are close.

I would have to repay no more than $180000 based on 2007's 1099-R times 10, which doesn't take into account the COLA increases over the ten years, which will reduce that amount.

My benefit should increase from $1500 to about $2500 monthly (age 68), or $30,000 annually. So, I should break even in 6 years or age 74, not including the investment return from the repayment that I lose.

Yes I may die during that period but I'm banking on the fact that my dad passed away at 94 and my mom at 89.

A big consideration is that should I die, Pauline, who is nine years younger than me, will collect 50% of the new benefit at her age 66 and when I die 100% of the new benefit. I think this makes it fairly reasonable that my family will more than recoup the payback amount plus lost investment income.

Well, we'll see.

Paul

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Jim Elkan
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Irish,
Another variable in the equation: What if after one has refunded the SS payments, has reapplied and his wife dies first? Now where's the breakeven?
Regards,
Jim

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Bob Ritchie
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Irish,

Not trying to debate just wishing to understand that which I may have misunderstood.

You said that you would have to repay $180,000.00 and that your benefit would increase from $1,500 to $2,500.00 per month for an annual increase of $12,000.00. You further state that you would then break even on the $180,000.00 in 6 years.

By my math...a $12,000.00 annual increase over what you would otherwise recieve anyhow would take 15 years to get even again. That would make you 83 at the break even point. What am I missing?

Live long and prosper.

Bob

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Irish
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Bob,

The reason why I was never seen without my E-6B in hand was that my math is rotten. [Big Grin] You and Jim have valid points. There must be a reason why SSA form 521 is little known and seldom used and you all have seemed to have hit on them.

As compensation, how 'bout you guys sending me ten large each for a Hawaiian vacation and we'll call it quits?


Paul

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Bob Ritchie
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Irish,

Good sense of humor. Must be in the genes and help account for your families longevity. With your upbeat and positve attitude you may "outlive" the social security program!!

Wish I could contribute to your island fantasy....but I am just a poor ole boy; barely getting bye. [Wink]

Bob

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Irish
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I just got my figures from SSA. When I was throwing out figures earlier I was doing the calculations based on 10 years of collecting benefits. Wrong. I retired ten years ago but didn't reach age 62 until 5/2001 and received my first benefit check in 6/2001.

For the ease of the following calculations allow me to ignore any interest and/or dividends I might have earned on the amount of the payback. OK, here we go...

My current benefit amount is $1,534 and my payback amount is $78,129. My new benefit amount would be $1,946 monthly, a difference of $412.

When I file the form I'm out $78,129. In 40 months I will have received $77840 in benefits at the $1,946 rate. Now I'm whole and from that point on my wife and I will receive benefits based on the $1,946 benefit instead of $1,534. I will be 72 and she will be 63, presently in good health. That deal looks good.

But now to Bob's point that I would have been receiving $1,534 monthly doing nothing so I have to figure in the break even time based on the $412 monthly increase amount. That will increase the break even time to 15+ years. Now the deal doesn't look so good. Sigh... What say you all?

Paul

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Tom Girtman
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Hi Irish,

I retired 04/2001 and took my SSN at 62. I did this after factoring in my family's longevity. If I live beyond 79 I will begin to loose the earlier election,but will be happy if my health is good enough to enjoy the extra years. Thanks for your post which quy's with longevity of more than 80 should heed. Tom

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DC9
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Irish,
A bird in the hand is worth two in the bush.Almost sounds like you are trying to time or outguess the market.
Jim [Big Grin]

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Bob Ritchie
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Boy...

Remember when our conversations were about the "Three S's" Sex, Seniority and Salary?

Well...I guess that were are still sorta talking about salary anyway. [Smile]

Seems like we have settled on the fact that taking SS at age 62 is a no-brainer unless one lives beyong age 78 or 79.. After that we all agree that the recipient now begins to lose a bit of total dollars for every additional year of life. Our wives, especially if they are younger, are expected to survive us by several years. That adds an additional calculation; depending upon their age and personal earnings history.

It is a judgement call as to when to begin accepting the payments, perhaps waiting longer is an acceptable idea, depending upon ones circumstance. However, I can't see the benefit of handing over $80,000,00 which should earn at least $3,500.00 per year, even at today's lousy C.D. rates.....in order to increase one's SS income by lesss than $500.00 a month and have to wait 15 years just to break even.

Like I said earlier the SS administration has calculated all of this on an actuarial basis. You will recieve the same total dollars "IF" you live to the average life expectancy. Only you can guess and only God knows if anyone of us will beat the averages.

I still think that I will start the payments at age 62 but I have a little over one year to think about it.

Good luck guys.

Bob

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jeff shrewsbury
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Geez............

I'll be 62 in November and was planning on starting SS benefits. My wife is 44, now what do I do? [Roll Eyes]

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Jim Elkan
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One other factor to consider in taking SS at 62 or later is the DAP..The DAP has always been a great investment vehicle for me..I decided to start drawing SS at 62 which would allow me to not only reduce the amount of money I was taking out of the DAP starting at age 60, but also it would not be necessary to increase my future draws because of cost of living increases in the near term..I figured with the average return I was getting from the DAP, it was better to let the investment grow, tax deferred until I was 70 1/2..This was really more of a factor in my decision to start SS early than life expectancy factors..

Also reading Irish's statement about his parents long lives reminds what Dr.Marinelli told me once when I asked him the secret to living long..His reply was "choose your parents well."

[ 02-20-2008, 08:54: Message edited by: Jim Elkan ]

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Retav8r
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A little confused now...Irish said that he's receiving $1534 a month (age 62 in May of '01) I also started my benefits at age 62, although one year later. However, I'm getting $1473 a month even though I paid the max up until my normal retirement at age 60. Can anyone explain the difference of $61? What are the rest of you getting in benefits? Thanks.

Don

[ 02-20-2008, 12:19: Message edited by: Retav8r ]

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DC9
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Maximum taxable earnings for 2001 were $80,400,for 2000 they were $76,200.The tax rate was the same for both years.Paul paid 5.3% on an extra $4,200.This could possibly account for the $61.Maximum taxable earnings are now $102,000. [Eek!]

[ 02-20-2008, 12:00: Message edited by: DC9 ]

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Retav8r
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Jim,
I edited my post to show that I started to collect SS one year later than Paul. Your premise might have been true if in fact he retired after me but that's not the case. So, somehow the numbers just don't make sense to me. Considering that I paid into it longer than he did and also paid the max on earnings, one would think that my benefit would be higher! [Confused]

Don

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Irish
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Jim and Don,

To further muddy the waters, I retired 1.5 years early, on 12/01/97 at age 58.6, and had no taxable earnings after that date. Wanted to be sure I had Christmas off. [Big Grin]

Paul

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jeff shrewsbury
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Don,

I won't start benefits until November,age 62, however, I received a SS statement several days ago. Last year worked 2006. Benefit at 62, $1626.
Not a big difference!

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Bob Willcutts
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quote:
Originally posted by Retav8r:
A little confused now...Irish said that he's receiving $1534 a month (age 62 in May of '01) I also started my benefits at age 62, although one year later. However, I'm getting $1473 a month even though I paid the max up until my normal retirement at age 60. Can anyone explain the difference of $61? What are the rest of you getting in benefits? Thanks.

Don

Don, could it be that the $1534 figure is gross amount? Subtract Medicare Part B Premium $96.40 and a Prescription Plan $26.10 (in my case) and the Net comes to $1412.90. Perhaps??

Bob

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Retav8r
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Bob,
Yep, that thought crossed my mind, It's possible I guess that Irish is on Tricare and not medicare and also VA meds. Whatever; I'm not going to belabor the point!

Don

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Irish
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I am on Medicare A & B and VA drugs. My current $1,534 is the gross benefit amount.

I got an e-mail from Scott Burns today and he allows that my "new" benefit amount should be around $2,300, not $1,946.

So, I called SSA again and was told that $1,946 was my normal retirement (age 65+4 mos.) benefit, not my "new" (68+9 mos.) benefit. Tomorrow I plan to sit down with an SSA benefit counselor and see if I can get some info in which I can have confidence.

Scott's figure seems to make sense in that, in round numbers, my 62 amount is $1,534, my normal amount may be $1,946 and the "new" amount $2,300+.

That's a new ballgame since the increase in my monthly benefit may be around $800, meaning I would break even in roughly eight years. When Pauline starts receiving her 50% benefit in six years she will receive about $1,150 instead of $767. That added $400- a month will bring the eight years down to seven.

Sorry this is so convoluted but it is hard to pin down.

Paul

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Irish
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I just found an SSA online calculator that worked out nicely.

http://www.ssa.gov/OACT/quickcalc/early_late.html#calculator

Assuming my normal, age 65+4mos (Sep 2004) benefit is $1.946, that benefit would be reduced to 78.75 of that amount, or $1,533 at age 62, close enough although that includes 6+ years of COLA increases.

If I begin benefits at 68+9mos (March 2008) the $1,946 benefit would be increased by 124.5% or to $2,423.

I'll get back to this next week when I hopefully have some firm figures.

Paul

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Skyking
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I think we are all in the ball park here on Social Security benefits. My gross, based on age 62 retirement (I am now 68), is currently $1588.40 less $96.40 for insurance. Those retiring after me get more ... ie Shrewsbury. Some retiring before me get more as well, but they are older and perhaps paid more into the system.

As to selling back my age 62 benefit. Consider the amount you have to pay back. Then consider investing that same amount in an annuity. My minimal research says that there is not much difference in return. But I am not hard to convince that I may be wrong!

This is not a simple decision and I am glad Paul brought it up.

Ward Miles

[ 02-21-2008, 18:31: Message edited by: Skyking ]

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extwacaptain
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Well,

Discussing finances is not one of my favorite pleasures in life..........however, making others feel better is worth joining in. [Smile]

The following information should bring GREAT joy to those concerned with their social security figures. Everyone of you have received about a $500 a month raise in your benefit checks.

After many annual adjustments, the check for Jan, this year is for $1,081.00. (Medicare was probably deducted) Retired early at age 59 1/2....Started S.S. at age 62 and now, almost 22 years later those checks keep rolling in......I bet if I'd of had one of those fancy chronograph watches that real pilots wore (instead of a discounted Timex from the O'Hare airport drugstore) it would have been possible to figure out how to "Play the system" a bit better. But no complaints.

Drink-up, gentlemen. Life is good. We're "the lucky ones".


An old B-24 pilot

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Irish
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If you haven't been to a South Florida SSA office recently count yourself lucky. I checked in at 1028 and was called at 1314! I spent about 20 minutes with an agent who then switched me to a benefits specialist.

The first thing I found out was that in order to get an accurate payback figure I have to file the form 521 to get the figure from the payment center. But I'd like to know what the exact payback is before filing. Catch-22. However you do have 90 days from the filing date to rescind the 521 if desired.

In my case it seems that the $78,129 figure I got over the phone is suspect as the lady gave me copies of my 1099's from 2001 and said I have to pay back "all of it". So that means checks deposited as well as amounts withheld for taxes and part B. Now I'm up to exactly $124,158 through 12/31/07.

My new monthly benefit amount would be $2267 for the remainder of 2008 and go to $2,347 on 1/1/09.

The interesting thing regards Pauline. According to the specialist, if I do nothing and Pauline waits to her normal retirement age (66) she will collect 50% of my normal benefit, not the reduced age 62 benefit I now get. If I do the termination and refiling she will still get 50% of my normal benefit. When she becomes a widow she would get 100% of my new benefit. Go figure???

Well, I think I'll have a Mississippi Mud beer and wait for the stock market to turn around as my cash won't cover the payback.

I hope the discussion was stimulating and helps someone make the fortuitous decision.

Randy - you sure are right about us being the lucky ones in the TWA-AA thing. If this termination and refiling turns out to be beneficial (and the key seems to be longevity, a crap shoot) I see no harm in taking advantage of a government largess.

Dave - Disregard the 180,000 figure. That was way out of the ballpark.

Paul

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extwacaptain
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Capt'n Paul,

I agree completely concerning accepting "gifts" our government feels we are entitled to. To not do so would be ungrateful on our part. [Wink]

About being "The Lucky Ones".........I think for many of us, that "Luck" started before we were ever employed by TWA..... or as some would say "Came on the property".

Ex Lt. R.S. Kramer

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Retav8r
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The following is an excellent article from the Wall Street Journal. This, along with the provided references, may help some of you with your decision regarding SS...
Don
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Confused about Social Security and what spouses can get? You aren't alone. Here are some answers.

Our cover article in the November issue of Encore, "The Baby Boomer's Guide to Social Security," generated hundreds of emails and questions from readers. The bulk of those questions involved "spousal benefits," an important -- and bewildering -- subject for many people approaching retirement.

In a nutshell: When you begin receiving Social Security, your wife or husband may also qualify to receive a check based on your earnings. That's a spousal benefit. Confusion arises when couples discover that a slew of variables -- including "full retirement ages" and earnings records -- affect the benefit's size and availability.

More from The Wall Street Journal Online:

• Ruling Allows Workers to Sue on 401(k) Losses

• How to Value the Buyout Offer

• Profiles in Retirement

What follows are answers to some of the most common spousal-benefit questions received by us and by Social Security.

One note: Several of the questions involve a wife who is younger than her husband and whose lifetime earnings are lower. The answers would be the same if the roles were reversed; all Social Security rules apply equally to women and men.

Q: Can I get benefits based on my spouse's earnings if my spouse hasn't yet filed for Social Security?

A: No. You can't get spousal benefits until your spouse has claimed Social Security. Starting at age 62, though, you can always apply for benefits based on your own earnings.

(Speaking of filing early for benefits, Social Security calculates your benefit so that, whether you file early or late, you will -- at least in theory, based on life expectancy -- receive about the same total payout over your lifetime. That said, there can be advantages and disadvantages to taking benefits before full retirement age. See a good discussion of this on the Social Security Administration's Web site: ssa.gov/retire2/otherthings.htm.)

Q: My husband, whose earnings exceed mine, is already collecting Social Security. Can I get a reduced benefit, based solely on my earnings, at age 62 -- and then switch to a full spouse's benefit at my full retirement age?

A: No. When a wife files for a reduced benefit based on her earnings, Social Security checks to see if she is also eligible for a spousal benefit. If she is -- and if her husband is already collecting benefits -- the wife, in Social Security's eyes, is "deemed to have filed" for both her benefit and the spousal benefit, says Dorothy Clark, a spokeswoman for the Social Security Administration.

In short, if you are under your full retirement age, and if your spouse is already collecting benefits, you can't cherry pick the benefit you want. The good news: You generally will receive the higher of the two.

Q: Can I claim spousal benefits at age 62 based on my husband's earnings -- assuming he is already collecting Social Security -- and then claim benefits at my full retirement age based on my earnings?

A: No. This is a variation of the preceding question. Again, when you first file for benefits, Social Security will check to see if you are eligible for your benefit -- and a possible spousal benefit. And again, you generally get the higher of the two.

Q: My husband, whose earnings exceed mine, hasn't yet filed for Social Security. Can I claim reduced benefits at age 62 based on my earnings -- and then step up to a spousal benefit when my husband retires?

A: Yes, you certainly can do this. But many people think -- because of a rule we'll discuss in a moment -- that the lower-earning spouse, when he or she "steps up," will end up with half of the higher-earning spouse's Social Security benefits. And that's not always the case.

Here's the rule (which appears in various forms in several Social Security publications and on the agency's Web site): "Even if he or she has never worked under Social Security, your spouse at full retirement age can receive a benefit equal to one-half of your full retirement amount." The key phrase is "at full retirement age." Those words tend to get overlooked or misunderstood.

The agency goes on to state: "Your spouse can begin collecting...benefits as early as 62, but the amount will be permanently reduced."

Let's see how this might play out.

Bob, based on his earnings record, is scheduled to receive $1,800 a month from Social Security at his full retirement age. His wife, Carol, based on her earnings record, is scheduled to receive $800 a month at her full retirement age. (You can find a chart with your full retirement age at ssa.gov/retire2/retirechart.htm. Formerly pegged to age 65, the threshold increases gradually until it hits 67 for workers born in or after 1960.)

If Carol waits until her full retirement age to claim Social Security -- and assuming that Bob has claimed Social Security -- she will get a "combined benefit." That means she will get her own $800 benefit, plus a spousal benefit. That spousal benefit amounts to whatever is needed to get Carol to half of Bob's benefit. In this case, she would receive an additional $100, which would leave her with a $900 payout -- or half of Bob's.

The key: Carol filed for Social Security at her full retirement age. Now, let's return to the original question, where Carol wants to jump in the pool early (at age 62), and Bob hasn't claimed benefits.

If Carol applies for Social Security, based on her earnings, before her full retirement age, she will receive a reduced benefit. (You can find reductions in benefits for claiming Social Security before full retirement age at ssa.gov/retire2/agereduction.htm.) In this case, Carol will receive $600 a month. This becomes her "base" benefit.

Bob, at some point, will file for his benefits. When he does, Carol becomes eligible for a spousal benefit and, thus, an increase in her monthly check. The size of that increase, however, will depend on Carol's age at the time that Bob claims benefits.

Here are two scenarios; in both, Carol has already filed for benefits based on her earnings, before full retirement age.

Scenario No. 1: If Bob claims his benefits after Carol reaches her full retirement age, Carol will get the same $100 spousal benefit mentioned above. (Social Security will calculate this number based on Bob's expected benefit at his full retirement age.) And the $100, in this case, will be combined with the reduced benefit of $600 that Carol has been receiving -- for a total of $700.

Scenario No. 2: If Bob claims his benefits before Carol reaches her full retirement age, Social Security will reduce her spousal benefit (set initially at $100) by an amount depending on the number of months before she reaches her full retirement age. (To calculate the reduction, go to ssa.gov/retire2/near.htm and click on "Effect of early retirement (spouse).") That figure will be added to the $600 base Carol is already receiving.

The point: In both scenarios, Carol doesn't reach the $900 benefit that she would have received if she had waited until her full retirement age to begin collecting Social Security.

Q: How can a wife and husband maximize their Social Security benefits over their lifetimes?

A: Recent studies indicate that a couple can maximize their payouts over time if the lower-earning spouse begins collecting Social Security as early as possible (age 62) and the higher-earning spouse waits until age 68 or beyond to start benefits. (You get your largest possible benefit by waiting until 70.)

Indeed, a peculiarity in Social Security's rules allows for some creative strategies in this area. Consider the following example, provided by Steve Potter, a retired public-affairs specialist at Social Security:

Let's say Ted and Alice are the same age. He's eligible for a $2,000 benefit at his full retirement age; she's eligible for $1,000 at hers. Alice claims benefits based on her earnings at age 62 and gets $750; Ted, meanwhile, is considering waiting until age 70, to try to maximize their benefits. The problem is that 70 is a long time to wait to start receiving benefits.

At full retirement age, though, Social Security gives a person two choices: You can take your own benefit, or -- if eligible -- you can collect just a spousal benefit, and then claim your own benefit at a later date. Thus, if Ted (at full retirement age) takes his spousal benefit based on Alice's earnings, Social Security would award him $500, or half of Alice's projected benefit at her full retirement age. Then, at some future date, Ted can ask Social Security for benefits based on his earnings. (At age 70, Ted would qualify for about $2,640 a month.)

That option -- of taking just a spousal benefit at full retirement age -- takes some of the sting out of Ted's desire to get the largest benefit possible at age 70. Rather than going three or four years without any money from Social Security, Ted can claim a spousal benefit -- and get $500 a month, in this example -- and still be able to claim his own benefit at age 70.

Q: Is there a maximum benefit, or ceiling, for a married couple? If a husband and wife each qualify for a maximum benefit, will each receive the maximum benefit?

A: In 2008, a person who has hit the maximum taxable amount of earnings for every year after age 21 and is now applying for benefits at full retirement age would receive $2,185 a month, according to the Social Security Administration. If a wife and husband each met the criteria, each would receive $2,185. There is no "marriage penalty" when spouses are entitled to benefits on their individual earnings records.

--Mr. Ruffenach is a reporter and editor for The Wall Street Journal in Atlanta and the editor of Encore. He can be reached at encore@wsj.com.

NAVIGATING SPOUSAL BENEFITS


The Social Security Administration has a number of resources that can help people understand benefits available to spouses, ex-spouses and surviving spouses

• Near Retirement?
This page, on the Social Security Web site, guides users through retirement benefits. In particular, click on "Family benefits" and the calculator "Effect of early retirement (Spouse)."

• "Retirement Benefits" Publication No. 01-10035*
Provides a good overview of Social Security benefits, including family benefits, spousal benefits and benefits for a divorced spouse.

• "Survivors Benefits" Publication No. 05-10084*
Discusses benefits for surviving spouses and surviving divorced spouses.

• "What Every Woman Should Know" Publication No. 05-10127*
A valuable guide that explains how Social Security benefits can help protect women, whether single, married, divorced or widowed.

Posts: 206 | From: San Diego/ San Felipe,Mexico  |  IP: Logged
bayman
Junior Poster
Member # 736

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>The interesting thing regards Pauline. According to the specialist, if I do nothing and Pauline waits to her normal retirement age (66) she will collect 50% of my normal benefit, not the reduced age 62 benefit I now get. If I do the termination and refiling she will still get 50% of my normal benefit. When she becomes a widow she would get 100% of my new benefit. Go figure???<

Paul,

I spoke with a SS rep. the other day on the phone and was told my wife's benefits at her normal retirement age would be based on my reduced benefits. It seems there is just as much confusion in the SS offices when giving interpertations of the law as within the IRS. I would like to find the correct rule in writing.
OJ

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Ret TWA 727 Capt
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A little late to join this discussion BUT!!

Paul, what did you decide to do..

Also, here are two sites to check. The first is a Forbes article about this topic.

The second is some professor working on this subject.

www.forbes.com/forbes/2007/1112/092.html

www.esplanner.com/Case%20Studies/double_dip/double_dip.htm

Sorry but you'll have to cut/paste the addresses. I couldn't get then to come up where you could just click on them to go to the web site.

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Ret TWA 727 Capt
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This site is smarter than I am. It allows you to just click on the addresses above.

Greg Lee

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