In Reason 1 of the video the much lower earning spouse claims prior to their FRA since their spousal benefit (spouse presumably claims at their age 70) will be greater than their own benefit. In this case, is the spousal benefit also reduced for claiming one's own benefit early?
This is a REALLY good question. I'm going to pin this comment. You are correct. The spousal benefit is a max of 50% of the higher earner's PIA (primary insurance amount). However, you only earn this if you are at FRA when filing. If the lower earning spouse files at age 62, it will be deemed "early", so even switching to the higher spousal benefit later will be less. The only way to get the full spousal benefit is to file spousal when at FRA.
I retired at age 55 as a Federal firefighter. I got the supplement for firefighters/law enforcement that was supposed to mimic SS. At age 62, that supplement disappeared because I could get SS. So I applied for SS at age 62.
Also, if you are under CSRS offset retirement (I am), you need to apply for benefits at age 62. I'll be applying later this year. At age 62, the CSRS annuity is offset (cut) by the amount of Social Security that you would earn at that age. Let's say you have a CSRS pension of $6000 per month and your SS benefit would be $2000 a month at age 62. If you don't apply for SS at age 62, your CSRS annuity will automatically drop to $4000 per month when you turn 62, even if you don't apply for Social Security. But, OPM is really just looking at your Social Security benefits earned under CSRS offset. If you have held other jobs in the private sector where you contributed to SS, or if you had temporary time under government service where you paid into Social Security, you will still be compensated for that work time and it is not covered under the offset. I worked as a teenager, and also had about 18 months of government temporary time, so I should get a "bump", but I really have no idea what that will be because Social Security doesn't break out that information on the annual statements.
Really good question, Paul. Lots to unpack: you are eligible for annual COLAs at 62, even if not filing. But if you're under FRA, you'd be subject to the earnings test which can create an offset to Social Security and undo the bump. Further, you'll also be receiving a reduced benefit since filing prior to your Full Retirement Age. As such, someone at 69 might wish to go ahead and file their benefit, just make sure to do the analysis. Hope this helps!
Other channels don't really like to talk about how life is not guaranteed. Its numbers on a chart, averages, etc. My thought was always take it at 62...unless I'm WELL paid in less than 40hrs per week. I can't even factor in that my mom died at 49 (1994) and my dad died at 81 (2020). You should take what you can get, while you can get it. Everyone's going to take the dirt nap. No one gets out of here alive. And no one knows when it will happen.
That's right! The uncertainty of life is what makes planning so challenging. If you're not certain you'll live for long to make up higher SS, then consider taking it when you can if you don't need the higher cashflow!
In Reason 1 of the video the much lower earning spouse claims prior to their FRA since their spousal benefit (spouse presumably claims at their age 70) will be greater than their own benefit. In this case, is the spousal benefit also reduced for claiming one's own benefit early?
This is a REALLY good question. I'm going to pin this comment. You are correct. The spousal benefit is a max of 50% of the higher earner's PIA (primary insurance amount). However, you only earn this if you are at FRA when filing. If the lower earning spouse files at age 62, it will be deemed "early", so even switching to the higher spousal benefit later will be less. The only way to get the full spousal benefit is to file spousal when at FRA.
@@TheFedCorner Thank you for valuable guidance.
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I retired at age 55 as a Federal firefighter. I got the supplement for firefighters/law enforcement that was supposed to mimic SS. At age 62, that supplement disappeared because I could get SS. So I applied for SS at age 62.
Many do that even if SS is reduced. Lots of factors that go into this decision. Thanks for tuning in and for sharing your experience!
Also, if you are under CSRS offset retirement (I am), you need to apply for benefits at age 62. I'll be applying later this year. At age 62, the CSRS annuity is offset (cut) by the amount of Social Security that you would earn at that age. Let's say you have a CSRS pension of $6000 per month and your SS benefit would be $2000 a month at age 62. If you don't apply for SS at age 62, your CSRS annuity will automatically drop to $4000 per month when you turn 62, even if you don't apply for Social Security. But, OPM is really just looking at your Social Security benefits earned under CSRS offset. If you have held other jobs in the private sector where you contributed to SS, or if you had temporary time under government service where you paid into Social Security, you will still be compensated for that work time and it is not covered under the offset. I worked as a teenager, and also had about 18 months of government temporary time, so I should get a "bump", but I really have no idea what that will be because Social Security doesn't break out that information on the annual statements.
Great addition! Thanks!
I was under the impression that you receive the COLA adjustment after age 62 regardless if you are withdrawing benefits or not.
Really good question, Paul. Lots to unpack: you are eligible for annual COLAs at 62, even if not filing. But if you're under FRA, you'd be subject to the earnings test which can create an offset to Social Security and undo the bump. Further, you'll also be receiving a reduced benefit since filing prior to your Full Retirement Age. As such, someone at 69 might wish to go ahead and file their benefit, just make sure to do the analysis. Hope this helps!
Other channels don't really like to talk about how life is not guaranteed. Its numbers on a chart, averages, etc. My thought was always take it at 62...unless I'm WELL paid in less than 40hrs per week. I can't even factor in that my mom died at 49 (1994) and my dad died at 81 (2020). You should take what you can get, while you can get it. Everyone's going to take the dirt nap. No one gets out of here alive. And no one knows when it will happen.
That's right! The uncertainty of life is what makes planning so challenging. If you're not certain you'll live for long to make up higher SS, then consider taking it when you can if you don't need the higher cashflow!