Dear Larry,
I am age 67 and months and my wife just turned age 65. Both of us have worked our entire lives and have earned enough credits to qualify for Social Security benefits. I have already reached my FRA and my wife will reach her FRA at 66 and 4 months (i.e.in September, 2022). She is currently retired. I recently learned I am facing a “forced” retirement in December,2022. We are fortunate to have saved approximately $1.3 million in combined tax-advantaged retirement assets (both traditional and Roth IRAs). We own our home free and clear,and have approximately $100K in other liquid assets. I had always planned to apply for my benefits at age 70 in order to achieve the maximum amount of credits. It seems that plan is now out the window. We need to decide how to maximize our Social Security benefits in light of my forced retirement later this year. While my wife can apply for Social Security benefits now, we would prefer to delay receiving her benefits at least until she reaches her FRA in sixteen (16) months. Does it make sense to use our other assets now to live on beginning in January, 2022 so we can defer applying or her benefits until after she reaches her FRA. If she applies for benefits in January, 2022, her monthly benefit is expected to be $1,590/month. If she defers applying for her benefits until she reaches her FRA her benefit will be $1,750/month, a difference of $160.00/month for the remainder of her lifetime (or until I die and she applies for spousal benefits which are much higher than hers). We would like to maximize our our benefits but we’re uncertain if spending down our current other assets is a viable strategy for us. Concerned and confused!
Hi. I can only answer questions about Social Security benefits, but it sounds like you should strongly consider our Maxifi software (https://maxifiplanner.com/) to help you make the best possible financial decisions.
What I can tell you about your Social Security options is that regardless of when your wife starts drawing her own benefits, if she's at least full retirement age (FRA) when you die then she could be paid the higher of her own benefit rate or your benefit rate. So, if you wait until age 70 to start drawing your benefits and if your benefit rate is higher than your wife's benefit rate, she'll get your full age 70 if you die before her and after you reach age 70. Just to be clear, though, your wife couldn't be paid both her own benefit rate and your full rate, just the higher of the 2 amounts.
You and your wife will need to decide for yourself what filing strategy you feel would be best for you, but our software should certainly be able to help you make a wise decision.
Best, Jerry
