I neglected to note in the post above that the “item 1” reduction above operates solely on your own earnings, and doesn’t have anything to do with your spouse.
But item 2, the taxation of benefits, looks at you filing jointly. If you file separately, they change the thresholds so that they get you anyway.
@techmom99 , our original plan was for me to file, and then suspend, at age 66, and have wife collect a spousal benefit. You are correct: That option is no longer available to us. I am 63 (wife is 64) so I can still file a “restricted” application and collect a spousal benefit while my wife collects her full benefit starting at age 66. By filing a restricted application I can collect a spousal benefit from my wife’s SS until I turn 70, and at that time when I file for my own benefit I will get my max age 70 benefit. I think that is what we will do. This strategy will also soon be eliminated for people younger than us. (I checked on the age of people who will still be able to do this and found: "New Social Security rules signed into law on Nov. 2, 2015 have changed the right to file a restricted application for those born on or after January 2, 1954. ")
@NJres -
Too bad about the file and suspend being gone. I have a friend who turned 65 about 3 days after the cutoff. He was upset. I am disappointed but there is nothing to be done about it. The restricted application is not available to me, either.
I have so much to consider, as do we all.
DH and I are lucky enough that, due to our advanced ages, we could still use the file and suspend option. I’m 68 and I filed and suspended when I was 66. H just turned 66 this past January and has claimed spousal benefits for himself. In two years, at age 70, I’ll collect my full amount. He’ll collect my spousal benefit for four years until he’s 70, and then he’ll collect his full amount.
But we are very lucky we got to sneak this in.
We were planning on using file and suspend until the rule changed. Now we’re not eligible.
We think I’ll start SS at FRA and DH will wait til 70, but we haven’t run the numbers in awhile, and who knows what changes may occur in SS before we reach those ages (I’m 61, DH is 62).
For me, estimating longevity is difficult. My father died a week before his 63rd birthday; my mother is still alive at 95 (although not in good health). DH has it a little easier - his mother died at 85 and his father at 90.
^yeah. i get that. My father died at 47, my mom’s going strong at 87. None of my grandparents saw 70 (two didn’t make it to 60), but there are possible reasons for most of them that are not genetic. So total crap shoot.
My folks are 87 and 92 and the only chronic conditions are asthma and age-related cataracts that mom had surgically removed, plus some dementia and getting wobblier as they age. My dad’s mom died at 90. My other grandparents died younger. My great uncle died around 107 or so.
I was diagnosed with serious progressive chronic condition at 42 and according to many tests have very short predicted lifespan that I’ve outlived several times already, 17 years later. Neither my docs nor I can predict my longevity. On paper, I’m disabled but my docs say I’m one of their fittest patients. Crapshot indeed!
HImom, I wish you a very long life ahead – but given the statistics, I think you are one who is probably better off taking your SS earlier rather than later, at least as between age 66 (FRA) and 70. It’s really an actuarial problem. There is a break even point that can easily be calculated - and you may need to also factor in your tax rate as I know from other posts that your are in well-off financially, so presumably in higher tax bracket.
I think it is also a different problem, financially and mathematically, depending on whether the person expects to be living off of the SS check (spending it), or is financially strong enough to be banking it, at least in early years.