Wife is Older – Strategies

Because there are more re-marriages in our society today, we see more clients where the wife is quite a bit older than the husband. This creates an unusual set of circumstances when filing for your Social Security. Why? Because if the wife is younger, the usual situation created is that the wife, if the lower earner, would entertain spousal benefits and then if possible switch to her benefit later in the filing strategy. Not the case when the husband is younger – let’s look at a real-life situation.

  1. Amy will turn Full Retirement Age in February 2019, and Randy will turn Full Retirement Age in October 2023. Amy has the lower benefit amount and Randy intends to continue working past his Full Retirement Age.
  2. Amy’s Full Retirement Age Benefit is $550 and Randy’s is $2140.
  3. If they both filed early their lifetime maximum benefit, based on life expectancy of 85 for him and 88 for her would be $716,740.00. Amy could file at 64.9 months and Randy would file at age 62. With this option, they both would also be restricted on their income due to the Earnings Limitations which is $17,040 in 2018. Their Survivor Benefit amount would be $1,762.00.
  4. If they both filed at Full Retirement Age (66 for her and 66.6 for him) their lifetime maximum would be $955,200.00. They could both continue working without concern for the Earnings Limitations rule. Their Survivor Benefit would be $2,137.00 per month.
  5. If they both waited and filed at age 70, the lifetime maximum benefit would be $975,630.00 and their Survivor Benefit amount would be $2,735.00.

Options over and above what they are told (above) on SS statement:

  1. BEST CASE – Amy files on her benefit at age 66. Randy files for his benefit at age 70. Amy adds spousal benefit at age 74.2 which increases her benefit from $550 to $1068 per month. Total benefits through life expectancy are $993,202.00. NOTE: this is an increase of $17,500 over waiting until age 70. This is money that would have never been noticed, had they not gotten professional advice. Survivor benefit is maximum at $2,735.00.
  2. ALTERNATIVE 1 – Randy files for his benefit at age 68 and Amy files for benefit at age 66, then Amy files for spousal benefits at age 72.2. Total benefits would be $977,250.00 and Survivor Benefit would be $2,390.00

These are just two additional options available – we could add many, many more based on the individual requests such as when they want to retire, how long they want to work, and their desired income stream. The increase from filing early to BEST CASE is $276,462.00 through life expectancy. The point is – you have more than the three options available on your Social Security statement. With the addition of Spousal Benefits, at the appropriate time, the lifetime maximum is increased. And in other circumstances, a Spousal Boost is available. Different rules for different situations – contact a professional before filing.

Pillars LLC is in the Corinth, MS area but service all 50 states. Roy and Diane are both National Social Security Advisors and Roy is a former CPA of over 40 years. You may contact them at dthompson@pillarsllc.com, on their website at www.pillarsllc.com or call at 601-954-0699. KNOW before you GO!!

Posted on by Pillars LLC

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