As we talk to people in our state, we hear many frustrated people make the following comments like….okay then, we will both just wait until 70 and file for Social Security to get the best benefit we can. You would think this sounds good if you have the resources. But, actually, waiting until 70 may not be the best you can do!! This week follow this real life example and see what we are talking about.
Jack – born in 1949 – Full Retirement Age benefit at 66 is $2385
Leslie – born in 1950 – Full Retirement Age benefit at 66 is $1905
Estimated life expectancy for Jack is 85 and Leslie is 88 – good health for both.
Leslie has already retired as a school teacher and collecting her pension. Jack wants to wait until age 67 or 68, he is not sure yet. They could wait until age 70 to draw their SS to get those Delayed Retirement Credits, but want to get their options analyzed.
Option #1 – the early option is actually Options #2 because of their ages.
Option #2 – they could both draw starting at Full Retirement Age and their estimated lifetime expectancy would be $1,135,000 and their survivor benefit would be $2463.00 per month. Jack’s benefit would be $2384 per month and Leslie’s would be $1905 per month.
Option #3 – they could both wait until age 70 and their lifetime expectancy benefit would be $1,212,285 and the survivor benefit would be $3,147 per month. Jack’s benefit would be $3,147 per month and Leslie’s benefit would be $2,515 per month.
Please note the big difference in the survivor benefit between #2 and #3.
Option #4 – Jack decides to File and Suspend at age 66 and then take his benefit at age 68 drawing some of those Delayed Retirement Credits – his benefit would be $2,670. This allows Leslie to take a spousal benefit at age 66 which would be $1,192 per month. Then at age 68, Leslie draws her benefit which has been growing with Delayed Retirement Credits – her new benefit will be $2,197 per month. The survivor benefit will be $2,765.00. The lifetime expectancy benefit for this option is $1,212,540. (Note 1 : Because of the recent changes to social security laws, Jack must File and Suspend by May 2, 2016 ) NOTE 2– this option brings more to Jack and Leslie than is they had both waited to age 70
Options #5 – Jack decides to file a Restricted application for Spousal Benefits at age 66 and 7 months – his benefit amount will be $952 per month. This will allow his benefit to gain Delayed Retirement Credits. Leslie decides to take her own benefit at age 66 – benefit amount will be $1,905 per month. Jack switches to his new benefit at age 68 which is $2,670 per month. The survivor benefit for this option will be $2,765 per month. The lifetime expectancy benefit for this option is $1,185,952.00
Option #6 – Jack decides to File and Suspend his benefit at age 66 and draw his own at age 68 – this benefit amount will be $2,670. Leslie files a Restricted application and draws Spousal Benefits at age 66 – this will be $1,192 per month. At age 70 Leslie draws her own benefit which has been accumulating Delayed Retirement Credits – this amount will be $2,515 per month. Survivor benefit for this option will be $2,765 per month. Lifetime expectancy benefit is $1,240,996.00.
NOTE – this option brings more to Jack and Leslie than if they both had waited until age 70
There you go – a real life example of the benefit of having a professional review and analyze your various options. And please take note of the difference in the survivor benefit, which is an area we concentrate on for our clients.
Call Pillars, LLC at 601-954-0699 or visit our website at www.pillarsllc.com for easy access to the application process.