Your Social Security Advisor

Should I Retire Now or Maximize? – Ask Rusty

retirement social security retireDear Rusty:  I am 66, born 5/17/51, and planning for filing for my social security benefit. My husband is 60 and will be working for the next 7-10 years. We have our own corporation; he is a clinical psychologist and I work for the corporation as office manager. I will still continue to work. I am hoping to invest half of the SS check and use the other half for house projects, mortgage, and travel. Is there anything particular I need to know to apply or how I apply to maximize the most money? Our financial planner said filing or waiting was up to me. We are behind in saving for retirement, but also want to travel while we still are healthy enough to do so.  Signed:   Wanting to know more

Dear Wanting:  Yes it is, indeed, a dilemma trying to decide when to start your Social Security benefits.  Keep in mind that for each month you wait beyond your full retirement age of 66, you are earning a 2/3rds of 1% increase in the amount of your Social Security benefit. That equates to 8% increase per year, and that can continue up until your reach age 70. At age 70, you would get 132% of the benefit you were entitled to when you turned 66. Since your birthday is in May, as of right now you’ve earned an additional 2% in “delayed retirement credits” (DRCs), and if you wait until the first of October to apply you’ll get another 2/3rd of 1% increase in your benefit. Since Social Security doesn’t compute delayed retirement credits until January of each year, if you apply now you wouldn’t actually see the higher benefit until your January payment (which you would get in February). And even though you don’t get the DRC increase until January, you won’t earn additional DRC’s for the months between when you apply and January when they recalculate your benefit. Obviously losing these DRC’s doesn’t amount to a lot of money monthly, but you’d get the increase for the rest of your life so it would add up over time. Just as obviously, it’s hard these days to earn more than 8% on any investment, but that’s clearly a judgement only you can make. When you do finally decide to apply, you can do so online by opening an online “My Social Security” account at, via telephone at 1-800-772-1213, or in person at your local Social Security office.

You said that your husband is 60 and plans to continue working.  One thing for him to keep in mind is that if he starts Social Security before his full retirement age of 66 + 6 months, his earnings from work will be subject to Social Security’s “earnings limit” ($16,920 for 2017) which, if he exceeds it , will cause his Social Security benefits to be reduced by $1 for every $2 he earns over the limit. You don’t have that worry because you’ve already reached your full retirement age of 66 so you’re not subject to the earnings test.

Choosing when to apply for Social Security is a decision only you can make. There’s a lot to be said for enjoying the money while you’re younger, but to maximize your benefits (which you asked about) a case can also be made for waiting a little longer.  I hope this gives you enough information to make an informed decision.

The information presented in this article is intended for general information purposes only. The opinions and interpretations expressed are the viewpoints of the AMAC Foundation’s Social Security Advisory staff, trained and accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). NSSA, the AMAC Foundation, and the Foundation’s Social Security Advisors are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state government. Furthermore, the AMAC Foundation and its staff do not provide legal or accounting services. The Foundation welcomes questions from readers regarding Social Security issues. To submit a request, contact the Foundation at [email protected].

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4 years ago

In the article, you state that you earn 8% & compare it to an 8% investment. I do not believe this is correct. You have to take into account the loss of 12 months benefits for the period you wait in order to get an 8% increase. I believe the difference is basically just an actuarial compensation, using a reasonable interest rate to compensate for the deferral of benefits. So, you really don’t “earn” any additional benefits. The delay does bring you net additional benefits if you outlive the “normal” life expectancy. Of course, if you die early, you actually lose money by waiting. There is a benefit of having a guaranteed larger benefit that is generally not subject to creditors and has some inflation protection.

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