Thanks for explaining this. I plan on waiting until my full retirement age, one of the reasons being this.
Even if the calculations say I shouldn’t as the lower earning spouse
Does this mean if they collect on their own record before FRA? Or just if they apply for Survivor’s benefit before their FRA?
My understanding is that a Survivor benefit is only reduced if you collect it prior to your own FRA. This information has a what-if, with a hypothetical example on page 2 of the pdf:
Thanks! My husband’s benefit will be slightly higher than mine so I applied to start in January (i just turned 62) and we are going to wait as long as possible before applying for his with the idea that if something happens to either of us the survivor will get the higher amount (highest possible if he waits until FRA). I began to panic that my survivor benefit would be reduced because I applied for mine at 62, but the scenario shows its only age when applied for survivor benefit.
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Federal taxes on social security go back into the SS trust fund. Eliminating those taxes would benefit retirees in the short term, but would also make the trust fund become insolvent more quickly and likely require a higher cut to benefits, if congress does not act.
My SS benefit would be more than half of my DH’s so not sure why the advice is to take it before age 70. The difference is about 8% per year I believe and the COLA was pretty higher last few years (although not for 2025). The amount earned on the investment of that money likely would not have exceeded that. I am still working so we don’t need the money to meet our expenses.
Private pensions have no impact on SS benefits.
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Deleted, redundant
I have the same situation. Although Open SS says that my optimal strategy is to take my SS before FRA, I don’t think it makes sense to give up guaranteed growth. In addition, if both H & I live beyond the average age used to determine the break even point, I will definitely appreciate having waited. I’d rather receive less if I die young than wish I had more if I live into my late 90’s.
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If you would rather receive less…then why would you wait?
My DH waited until 70. Yes, he gets the max SS but he also could have collected less for 4 years prior…and it will take at least ten years to make up for the large amount he didn’t collect earlier. But it was his SS, not mine…so his choice. But at 66, he could have collected over $30,000 a year. That’s $120,000 that could have been put in the bank.
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I am risk averse, for the most part. If I don’t need the money now, I prefer to hedge my bets & make sure that I have it when I might need it. End of life care can be extremely expensive. My dad’s situation was one of almost running out of money, and it caused him a lot of anxiety. If I need the money to pay the bills, I will take it; otherwise, I am good with waiting.
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Since DH and I work for ourselves, we set our salaries and take the rest as owners’ draws (there are limits as to how much we can take in draws, but it’s still flexible). DH has always collected more, but now I’m changing it so that I make more in order for my monthly benefits to increase. For that reason, I think I will wait a little longer to start collecting, so the amount is more.
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I followed the opensocial security recommendation,staring at age 62. (Older husband will start his next year at age 70… so there will be a jumbo SS for him and perhaps someday for me if I outlive him.) We could afford to defer, but I like idea of having the money earlier. That way we have extra funds now while we have more expenses from covering my pre-65 Medical insurance and grand travels (while still both young enough to do so). Tis nice supplement to our low-ish pensions. We are unlikely to run low on funds either way, but this decision felt best to me.
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The 10 years is a straight break even calculation. If you can save and invest the SS payments, depending on the return, the break even point can be longer. If 1 spouse has both lower benefits and a longer life expectancy, the way spousal and survivor benefits work, the lower earning/longer life spouse should take earlier.
DH was still working, and was over the age when the amount earned would reduce SS benefits. Since I can never collect on his earnings anyway (WEP and GPO), it would have been nice to have that money in savings for four years…but it was his decision.
I think this is one of those decisions each person makes…and that’s that.
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I used a Social Security break-even calculator I found online, and it said if I take SS at 62, I will break even at 79. That’s a lot more than 10 years.
Same for me.
My FRA is 67 so this chart is helpful. I included the other one to benefit those with a different FRA.
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I’m confused as to how to read this chart….
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An easy but much more robust way to compare various scenarios is to play around with the opensocialsecurity website calculator https://opensocialsecurity.com/
Note - Before we found that site, it seemed like a rule of thumb is that most retirees would get to around age 82 before being sorry they didn’t defer. But I don’t recall the compared parameters.
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The way I read it, the left hand column is the age at which you claim benefits. The top row is age if you waited to receive benefits. For example, if you claim benefits at 62 instead of working to 63, your break even age would be 77.
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I’m sorry its a bit confusing. I posted it as a quick visual just so people could get an idea.
Basically it’s just as @PacNW said. The left side is the age you pick to retire. The top then is the age you could have waited to retire. The intersection is the age your benefits payout from SS would reach a “break even” point. For example, my FRA is 67. If I retire at 62 and collect benefits, as opposed to 67, I will have drawn more benefits until about age 78 (my break even age). From that age on I would have drawn more total benefits from retiring at 67.
Again, it’s just meant to be a quick average reference to see a break even point.
Website referenced:
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