“A little consideration, a little thought for others, makes all the difference.” – Eeyore, in the Winnie the Pooh
My brother-in-law is an excellent golfer. He and my sister stayed at my house last year when I was out of town. He forgot his golf clubs and used mine. He shot 72 with my clubs. That is the only time those clubs produced a 72…sigh…
What does this have to do with Social Security?
I had a client run his Social Security claiming options on an online calculator. The tool told him that his wife should take her benefit at 62 and he should take his benefit at 70. We told her she should take her benefit at 67, not 62.
Looking at the report he ran on that online tool, his life expectancy in the early 80s. This is average. He and his wife are in excellent health and we ran our illustrations for longer than average (meaning beyond early 80’s). They wanted us to help them plan for a longer life expectancy. We address this and many other aspects in regular meetings throughout the year.
Two key points here…
First, tools can be handy if you know how to use them. Tools can be harmful if you don’t.
Second, a critical factor in choosing Social Security options is the life expectancy of each spouse.
If the wife took her own Social Security benefit at 62, she would get 70% of her full retirement age amount, or PIA, because she took it early. She CANNOT get her spousal benefit until her husband claims his. By the way, we want him to delay his benefit to max it out because he is the higher earner. This will also increase the survivor benefit. A spousal benefit is an “add-on” to her own benefit.
So, if her own benefit is reduced, her total benefit will be reduced when she eventually gets the spousal add-on benefit.
Why did we recommend waiting until she was 67 to claim her Social Security Benefit?
The answer is the longevity of her husband and how survivor benefit works. The longer her husband lives, the longer she will receive a reduced benefit if she takes hers early. Once her husband passes away, she will jump to a survivor’s benefit, which is the amount her husband was receiving. Her own benefit will cease. This is why we often recommend that the higher wage earner delay benefits.
Read more about Social Security nuances here.
I am doing a webinar for continuing education credits for CPAs in September and doing a live talk at the SC CPA convention in November on this topic.
On the lighter side, Elliott has three roommates. Being boys, there is no way they can communicate enough with their mothers. One of the mothers had the genus idea of starting a 4-way text thread with the other mothers. This is both 100% comedy and 100% therapy. The topics have been:
- How do I know when food goes bad?
- How much soap do I use for laundry? (My first time, I forgot to use soap…)
- How do you know when something is clean?
The thread 4x the information that they receive about what is going on in their son’s lives. They feel closer to their boys. They also feel closer to each other. They know they are not alone in missing their young men.
Parents’ weekend on September 22nd. We can’t wait.
I hope all is well with you and your family,
Finger Financial Five – 5 points in 5 minutes or less – is to provide you with a weekly shot of useful financial information. My intention is to share principles, so that you will have more clarity and peace, that help you make better financial decisions.
Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor. Stratos Wealth Advisors, LLC and Riverbend Wealth Management are separate entities.
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