My spouse is 11 years older than I am and has basically served as homemaker for over 20 years.Within a year, my spouse will reach the age of eligibility to draw a small Social Security monthly check while I continue to work,and contribute towards Social Security and make monthly deposits into my TIAA-CREF Retirement Account. So the question I have is how to manage retirement income for us. Should my spouse draw draw a small SS month check upon reaching 66, wait until older, or are there other more practical options available to us? We own our home and have no pressing needs for more income at this time. Any suggestions here will be welcome.
hogar, thanks for starting a discussion thread! This is a great topic and I'm sure other other members will have a lot to share.
You ask a complex question that depends on goals and needs. For instance, if you don't need her SS, she could wait until she is 70 and get a significantly higher amount of SS and draw it until you retire and then possibly switch to your higher SS as spouse. Have you tried to Google this question? You might also try the TIAA-CREF Discuss forum over on www.morningstar.com along with a more general forum that the very intelligent, sophisticated and helpful participants on the TIAA-CREF forum might suggest.
It is a matter of how much and when you need income. The spouse who is older may begin SS at 62 and when you retire the spouse's income will be re-evaluated by SS upon request and could increase significantly bases upon your
years of SS credit without hurting your income. This is the path that I chose. Hope it helps some.
It is a complicated question and difficult to answer without specifics. But there are some general principles. The SS benefit is calculated over 35 years, for example, so even if there are a number of lower income years these may be balanced out by some high income years and the benefit is "weighted" toward lower incomes so the difference might not be as great as you think. There is also the spousal benefit to consider. If the spousal benefit based on your earnings is greater than the amount your wife will get based on her own earnings she might be better off taking her benefit at full retirement age (or even sooner) and then switching to the spousal benefit when you retire. The key is to sit down with a SS benefits counselor and do the math rather than guessing. You might be pleasantly surprised.
Your social security office can give you a chart of what the benefits would be if your spouse retires at different ages. After you have this information, you can look at the difference in benefits. If you feel that you can invest the money that s/he receives in a way that would accrue enough interest to make up for the smaller benefit, then s/he might want to take it now. You could also consider taking it early and putting it in a money market or similar account. That probably wouldn't make up for the smaller benefit, but be earning some interest while giving you an easily accessible emergency fund.
You also need to consider your spouse's health and life expectancy. It generally takes 12-14 years before you lose money by taking the smaller amount. Your social security office can also give you information about this. If s/he is in good health, you could benefit by waiting. If s/he is in poor health, it could benefit you to take it early.
The Social Security Administration may not be the best people to ask as they are not in the business of maximizing your family benefits. There are websites with calculators which might help you: Maximize Social Security Retirement and Spousal Benefits | Social Security Choices
You can get all of the information you need to do the calculations free from SS. The calculations are not that complicated once you have the basic information. It really is not necessary to pay $40 for a "customized report" which some of these sites charge. Actually SS tries to make it easy for people to calculate how to maximize their family benefits.
Yes, if you go to their website and know how to use the calculations. What I'm saying is that their 'advisers' won't be that useful because they have no interest in maximizing your benefits.
And I am not sure what you base that on. The advisers get paid to do their job regardless of how little or how much people maximize their benefits.
Have you ever heard of a Social Security adviser tell a couple that if one
spouse wants to retire and the other one does not, but has reached Full
Retirement Age, that the person who does not wish to collect can file and
then suspend payment which makes their spouse eligible to receive half
their benefits without effecting their own?
On Mon, Sep 29, 2014 at 5:52 PM, herbyreed <firstname.lastname@example.org>
Actually yes I have and in any case that information is spelled out quite clearly on the SS website. Here is the direct quote: http://www.ssa.gov/retire2/yourspouse.htm#a0=1
If your current spouse is full retirement age, he or she can apply for retirement benefits and then request to have payments suspended. That way, you can receive spouse's benefits and he or she can continue to earn delayed retirement credits until age 70.
It is quite clear that SS is not trying to keep this a secret so I am not sure why you seem to think they are.
I found the staff at the Social Security office quite helpful - I assume they were "advisors". We talked about the differences in taking benefits at different ages, the length of time to make it more beneficial to wait, the effect of working after beginning benefits, foreign work, etc. I found them both forthcoming and helpful. It's not their job to plan my retirement for me. It's their job to give my accurate information about my situation and answer the questions I ask.
I'm single so the question of spousal benefits never arose. However, a friend who is a widow got helpful information from them. Knowing the right questions to ask is important, but I found that they went out of their way to help. Of course, I'm sure the attitudes and atmosphere vary from place to place as everyone is influenced by local higher ups and local philosophy.
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