I am 72, Wife is 10 years 3 mos. younger.
I claimed at age 70 for the usual reasons and to ensure she would receive max survivor benefit at her FRA. So that is a done deal.
My current plan is to have her claim max spousal at age 67 (2029) which is her FRA.
I was reading an article about something or other to do with finance and had a bit of an epiphany regarding my plan.
My PIA is $3444 ... actual delayed benefit is $4546.
It occurred to me if she claimed spousal at 62 she would receive $1126/mo X 60 mos (My PIA* .3272) = $67,500 in payments with future value of $76,500 at her FRA using a 5% rate. If she claims at FRA her benefit would be $1722/mo (my PIA *.5) and break even would occur in a little more than four years (again using 5% rate) at which point I will be 81 YO. Humm.
Deciding to delay SS to age 70 was fairly straight forward given my good health...knock on wood, however the decision to claim her spousal early is not so straightforward given I will be 81 when she reaches break even on the early vs FRA filing according to my calculations.
My life expectancy today is 84 using SS period life table. It is 93 using a health/lifestyle adjusted calculator (hoping the latter is right![:)]( "Smile")
).
If I actually reach 81 the SS expectancy goes to 88. I obviously can't do the adjusted life expectancy calculation because I have no idea what shape I'll be in at that point.
So why do I care?
Well, at this stage of our retirement we could use the extra dollars to juice up our lives a little bit. We do not NEED the money but it would pay for some nice travel and etc. which may become less practical for us in 10 years. If I kick the bucket before age 78 then she will be eligible for survivors so the issue of spousal is moot. If I live to age 93 (yay!) then we will be leaving a good chunk of cash on the table.
Tax wise it will not cause us bracket creep on state (SS not taxed) or Fed. We have to take RMDs but these are unlikely to push our fed bracket higher either. This introduces another risk to waiting... I worry income tax increases may be inevitable for obvious reasons. One could argue the early claim break even could be more beneficial if fed taxes, for example, return to pre 2017 levels or worse at some point in future.
I may well be missing some fundamental here and I realize this is a slightly different flavor of the unsolvable life expectancy conundrum, but I would appreciate any comments which might help me with my decision making.
I claimed at age 70 for the usual reasons and to ensure she would receive max survivor benefit at her FRA. So that is a done deal.
My current plan is to have her claim max spousal at age 67 (2029) which is her FRA.
I was reading an article about something or other to do with finance and had a bit of an epiphany regarding my plan.
My PIA is $3444 ... actual delayed benefit is $4546.
It occurred to me if she claimed spousal at 62 she would receive $1126/mo X 60 mos (My PIA* .3272) = $67,500 in payments with future value of $76,500 at her FRA using a 5% rate. If she claims at FRA her benefit would be $1722/mo (my PIA *.5) and break even would occur in a little more than four years (again using 5% rate) at which point I will be 81 YO. Humm.
Deciding to delay SS to age 70 was fairly straight forward given my good health...knock on wood, however the decision to claim her spousal early is not so straightforward given I will be 81 when she reaches break even on the early vs FRA filing according to my calculations.
My life expectancy today is 84 using SS period life table. It is 93 using a health/lifestyle adjusted calculator (hoping the latter is right
). If I actually reach 81 the SS expectancy goes to 88. I obviously can't do the adjusted life expectancy calculation because I have no idea what shape I'll be in at that point.
So why do I care?
Well, at this stage of our retirement we could use the extra dollars to juice up our lives a little bit. We do not NEED the money but it would pay for some nice travel and etc. which may become less practical for us in 10 years. If I kick the bucket before age 78 then she will be eligible for survivors so the issue of spousal is moot. If I live to age 93 (yay!) then we will be leaving a good chunk of cash on the table.
Tax wise it will not cause us bracket creep on state (SS not taxed) or Fed. We have to take RMDs but these are unlikely to push our fed bracket higher either. This introduces another risk to waiting... I worry income tax increases may be inevitable for obvious reasons. One could argue the early claim break even could be more beneficial if fed taxes, for example, return to pre 2017 levels or worse at some point in future.
I may well be missing some fundamental here and I realize this is a slightly different flavor of the unsolvable life expectancy conundrum, but I would appreciate any comments which might help me with my decision making.
Statistics: Posted by seychellois_lib — Sun Apr 14, 2024 3:11 pm — Replies 0 — Views 63