Have I been misunderstanding SS early retirement benefits??

[mcsangel2]

I'm 50, and for ten years, I have been saying that I intend to retire as soon as I can collect SS, when I am 62. I am aware that full retirement age is 67, when I would collect the full amount; and that collecting early means a reduced amount depending on how many months earlier than full retirement it is.

Okay, so someone on another forum just said something that made me go "huh?" and I looked at a link from SS that she provided. This link www.ssa.gov/benefits/retirement/planner/agereduction.html makes it sound as though, yes, at 62 my benefit would be reduced....but that at 67 I can begin collecting my full benefit?

Is that right?? All this time, I had thought that you were locked into collecting the amount of benefit that you qualified for when you first began collecting.

[tallguy]

Mar 28, 2023 14:39:57 GMT -5 mcsangel2 said:

I'm 50, and for ten years, I have been saying that I intend to retire as soon as I can collect SS, when I am 62. I am aware that full retirement age is 67, when I would collect the full amount; and that collecting early means a reduced amount depending on how many months earlier than full retirement it is.

Okay, so someone on another forum just said something that made me go "huh?" and I looked at a link from SS that she provided. This link www.ssa.gov/benefits/retirement/planner/agereduction.html makes it sound as though, yes, at 62 my benefit would be reduced....but that at 67 I can begin collecting my full benefit?

Is that right?? All this time, I had thought that you were locked into collecting the amount of benefit that you qualified for when you first began collecting.

No.  If you claim early your benefit will be reduced for life.  You will receive COLAs, of course, but your basic benefit will not "jump" to what it should be when you hit FRA.  Whatever you think you are seeing is assuredly not in fact there.  If you could please quote the exact passage which you think backs up that claim I would love to see it.  You receive your full PIA only if you wait until FRA to claim.

[Empire the P.A.]

mcsangel2,
From the link it sure sounds like it. I’m only a couple of years older than you and I would gladly take it at 62 if I would get the 100% when I reach 67. I always thought it was the reduced amount forever til I kicked the bucket. 

[Empire the P.A.]

My reading comprehension sucks. I hate govt websites. That is all I have to say. 

[Empire the P.A.]

AARP has a good article explaining it. 
AARP retirement

[tallguy]

The only thing I can guess is that you are reading the first paragraph without the second.  

You can start receiving your Social Security retirement benefits as early as age 62. However, you are entitled to full benefits when you reach your full retirement age. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.

If you start receiving benefits early, your benefits are reduced a small percent for each month before your full retirement age.

You really cannot do that. They go together. If you claim early your benefit will be reduced from your PIA. If you delay past full retirement age your benefit will be increased from your PIA. That is very simple, and there is nothing in that website that indicates anything different.

[Empire the P.A.]

They should have added “forever” after that last sentence (If you start receiving benefits early, your benefits are reduced a small percent for each month before your full retirement age.) for people like me who get confused easily. 

[minnesotapaintlady]

You were correct.  You are locked into the lower amount if you draw early. (unless you are drawing on a spouses SS and then switching to yours after letting it grow)

[Tennesseer]

I once read somewhere whether you begin collecting at 62 or wait until 67 or 70, in the end you really collect the same amout of total money. It's just that it is lower when you begin collecting at 62 as one has been collecing benefits longer.

[NastyWoman]

Mar 28, 2023 15:50:59 GMT -5 minnesotapaintlady said:

You were correct.  You are locked into the lower amount if you draw early. (unless you are drawing on a spouses SS and then switching to yours after letting it grow)

For the spouses thingy to work you have to been born prior to 1/1/54. That is not true for most people here.


ETA: I used the word "thingy" on purpose as I have so few occasions to use it since I retired. It was my favorite word to rile up some extremely pompous and condescending engineers during meetings. Worked every time   and they knew they had been had too since I rarely could keep a straight face. Even though I did not understand the science behind their work, I knew more about satellites and the terminology than I will ever know about my car...

[minnesotapaintlady]

Mar 28, 2023 16:03:20 GMT -5 NastyWoman said:

Mar 28, 2023 15:50:59 GMT -5 minnesotapaintlady said:

You were correct.  You are locked into the lower amount if you draw early. (unless you are drawing on a spouses SS and then switching to yours after letting it grow)

For the spouses thingie to work you have to been born prior to 1/1/54. That is not true for most people here.

Really?  Athena was doing that and I didn't think she was already 69, but maybe.

[NastyWoman]

Mar 28, 2023 16:06:35 GMT -5 minnesotapaintlady said:

Mar 28, 2023 16:03:20 GMT -5 NastyWoman said:

For the spouses thingie to work you have to been born prior to 1/1/54. That is not true for most people here.

Really?  Athena was doing that and I didn't think she was already 69, but maybe.

I believe she actually is 69 now, but she was using the survivor/widow benefit SS which is different from the file and suspend I was talking about

[pulmonarymd]

Mar 28, 2023 15:58:27 GMT -5 Tennesseer said:

I once read somewhere whether you begin collecting at 62 or wait until 67 or 70, in the end you really collect the same amout of total money. It's just that it is lower when you begin collecting at 62 as one has been collecing benefits longer.

There is a break even point. I think it is in your late 70s. Once you reach that age, you will collect more if you wait. If you die before that age, you get more if you start early. Depends on how long you live as to which strategy wins.

[tallguy]

Mar 28, 2023 15:58:27 GMT -5 Tennesseer said:

I once read somewhere whether you begin collecting at 62 or wait until 67 or 70, in the end you really collect the same amout of total money. It's just that it is lower when you begin collecting at 62 as one has been collecing benefits longer.

It is designed that way (to be actuarially neutral based on life expectancy.)  In truth, there are a lot of variables involved which make the idea of when to claim a very individual calculation and decision.  As pulmonary said, the break-even point is generally said to be around 78-79 or so.  Even that, though, should not rule one's decision since there are so many things that affect the outcome.

[tallguy]

Mar 28, 2023 16:06:35 GMT -5 minnesotapaintlady said:

Mar 28, 2023 16:03:20 GMT -5 NastyWoman said:

For the spouses thingie to work you have to been born prior to 1/1/54. That is not true for most people here.

Really?  Athena was doing that and I didn't think she was already 69, but maybe.

They did eliminate the option to take a restricted spousal benefit for anyone born after January 1, 1954.  You now have a deemed filing requirement where you are required to file for all benefits to which you are entitled.  That does NOT apply to survivor's benefits, however.  There is no deemed filing requirement for those, meaning you can take either your own benefit or the survivor's benefit and switch to the other when you choose.  Interestingly, the eligibility age for a survivor's benefit is 60 instead of 62, or at 50 if you are disabled.  The survivor's benefits max out at FRA though.  While you can earn DRCs (delayed retirement credits) on your own record, you cannot earn them on a survivor's benefit.  

[pulmonarymd]

Mar 28, 2023 16:17:31 GMT -5 tallguy said:

Mar 28, 2023 15:58:27 GMT -5 Tennesseer said:

I once read somewhere whether you begin collecting at 62 or wait until 67 or 70, in the end you really collect the same amout of total money. It's just that it is lower when you begin collecting at 62 as one has been collecing benefits longer.

It is designed that way (to be actuarially neutral based on life expectancy.)  In truth, there are a lot of variables involved which make the idea of when to claim a very individual calculation and decision.  As pulmonary said, the break-even point is generally said to be around 78-79 or so.  Even that, though, should not rule one's decision since there are so many things that affect the outcome.

True. The one thing I would caution is that most people underestimate their life expectancy. When to take SS should be a well thought out decision-not the I want my money now and I am tired of working. Life expectancy, tax implications, when to retire all factor in. In addition, since SS is a guaranteed 8%/year ROI, in our current environment, it is the best investment around.

Open Social Security has an interesting chart. It gives you the difference in expected payouts based on you timing of claiming benefits. Unfortunately, it doesn't help with the tax consequences. For example, we max out if my wife claims at 65. However, I plan to still work, so much of the extra we would get will be eaten up by taxes. Everyone's situation is different.

[TheOtherMe]

Since I was subject to the WEP, I didn't think I would get a dime so I never filed.  After I turned 70, I received a letter from Social Security telling me my benefit would not be going up unless I worked more and to file.

I filed.  I expected to be told I would not receive a dime.  

This year I am drawing enough to pay for my Medicare and actually receive $111.  

Obviously, that is not my main source of income but every little bit helps.

[NoNamePerson]

Mar 28, 2023 17:22:25 GMT -5 TheOtherMe said:

Since I was subject to the WEP, I didn't think I would get a dime so I never filed.  After I turned 70, I received a letter from Social Security telling me my benefit would not be going up unless I worked more and to file.

I filed.  I expected to be told I would not receive a dime.  

This year I am drawing enough to pay for my Medicare and actually receive $111.  

Obviously, that is not my main source of income but every little bit helps.

Yep, money is money whether it is $5.00 or $50.00.  

[grumpyhermit]

The language on that page could have been phrased much more clearly. Even knowing the answer, I had to re-read it a few times. 

This page - www.ssa.gov/benefits/retirement/planner/ageincrease.html coupled with entering your birth year and clicking on the "Your full retirement age is" button make it a bit more clear? Though it still stops short of saying that the reduced benefit is locked in. 

However the prorated basis may be helpful for those trying to find a sweet spot between retiring at 62 vs full-retirement age. 

[susana1954]

Mar 28, 2023 16:06:35 GMT -5 minnesotapaintlady said:

Mar 28, 2023 16:03:20 GMT -5 NastyWoman said:

For the spouses thingie to work you have to been born prior to 1/1/54. That is not true for most people here.

Really?  Athena was doing that and I didn't think she was already 69, but maybe.

Yes, she was just a little older than I am.  She switched to her own benefits at 69.

I was born on 1/27/54 so not eligible.

[ners]

Mar 28, 2023 16:06:35 GMT -5 minnesotapaintlady said:

Mar 28, 2023 16:03:20 GMT -5 NastyWoman said:

For the spouses thingie to work you have to been born prior to 1/1/54. That is not true for most people here.

Really?  Athena was doing that and I didn't think she was already 69, but maybe.

Not sure when the law was changed to prevent people from employing this strategy. 

[NastyWoman]

Mar 28, 2023 19:12:35 GMT -5 ners said:

Mar 28, 2023 16:06:35 GMT -5 minnesotapaintlady said:

Really?  Athena was doing that and I didn't think she was already 69, but maybe.

Not sure when the law was changed to prevent people from employing this strategy. 

implemented 2016 as part of the 2015 Bipartisan Budget Act

[teen persuasion]

Open Social Security that pulmonarymd mentioned, for anyone who wants to compare different SS claiming strategies. You need to know your PIA at FRA.

[minnesotapaintlady]

Mar 28, 2023 21:50:24 GMT -5 teen persuasion said:

Open Social Security that pulmonarymd mentioned, for anyone who wants to compare different SS claiming strategies. You need to know your PIA at FRA.

So, I'm guessing this calculator is only meaningful for married people with different incomes?  No matter what I put for PIA or changing my age 10 years either direction, it cranks out the same recommendation, draw at 69 years 4 months. 

[teen persuasion]

Mar 28, 2023 22:13:06 GMT -5 minnesotapaintlady said:

Mar 28, 2023 21:50:24 GMT -5 teen persuasion said:

Open Social Security that pulmonarymd mentioned, for anyone who wants to compare different SS claiming strategies. You need to know your PIA at FRA.

So, I'm guessing this calculator is only meaningful for married people with different incomes?  No matter what I put for PIA or changing my age 10 years either direction, it cranks out the same recommendation, draw at 69 years 4 months. 

You can test out  an alternative claiming strategy by clicking on the color coded bar to claim earlier - it quantifies the difference between choices.  But, yeah, there's more options when you have 2 people claiming at different times and spousal amounts in play - that colored bar becomes a full graph so you can change claiming times for each one (2 dimensions).

There's also a checkbox at the beginning to try advanced variables, like different mortality tables, different discount rates, future SS rate cut, etc.

[TheOtherMe]

Mar 28, 2023 18:24:51 GMT -5 NoNamePerson said:

Mar 28, 2023 17:22:25 GMT -5 TheOtherMe said:

Since I was subject to the WEP, I didn't think I would get a dime so I never filed.  After I turned 70, I received a letter from Social Security telling me my benefit would not be going up unless I worked more and to file.

I filed.  I expected to be told I would not receive a dime.  

This year I am drawing enough to pay for my Medicare and actually receive $111.  

Obviously, that is not my main source of income but every little bit helps.

Yep, money is money whether it is $5.00 or $50.00.  

And I no longer pay the Medicare premiums out of pocket.  So that helps, too.

[countrygirl2]

I took them at age 62 regret it, mine is lowered 20%, aggravating. I had to quit several years before because of illness of mom and DD, killed me.

Then I was ok for health care as hubs was working and supplied it. Otherwise you cannot get medicare till age 65, so you need some type of insurance for those 3 years unless you have a spouse working. Hubs worked till age 69 and increased his amount approx 8% a year, that really helps. And be careful take part A at 65 no matter what. I had to prove I had other insurance for the rest or for each year I delayed it was a 10% added to the premiums of each type of coverage for the rest of your life. They do not emphasize this stuff enough. I knew about that so was ok. It's proof of credible coverage is what it's called.

I'm not sure if I can draw hubs amount if he dies before me, but I also have DD so maybe.
I was born in 1946.She gets half of his as she is disabled and has her part B paid. She now draws more than me! She will get 3/4's of his benefit when he is deceased.

I need to check how much I will get if he is deceased, haven't done it of late. I had several conflicting reports back then, and I'm sorry I took it early now. But I wanted some income of my own after working so many years, some I could spend as I wanted so that was why I took it. Really cost me.

[mcsangel2]

Mar 28, 2023 21:50:24 GMT -5 teen persuasion said:

Open Social Security that pulmonarymd mentioned, for anyone who wants to compare different SS claiming strategies. You need to know your PIA at FRA.

Hey, thanks for this link!! All these years of being on YM and I was still totally confused about how benefits worked if you outlive your spouse, but I understand now after playing around with this. Also there's a link to a book called "Soc Sec made simple",  that looks like it addresses other things I still don't understand. 

One of these days I'll start a thread here asking how screwed we are taxwise since we only have our 2 401ks and no IRAs or Roths. 

[haapai]

Mar 28, 2023 21:50:24 GMT -5 teen persuasion said:

Open Social Security that pulmonarymd mentioned, for anyone who wants to compare different SS claiming strategies. You need to know your PIA at FRA.

Danger! Danger, Will Robinson! 

If you spent a good portion of your working years not working, or not earning much, you really should examine how the Social Security Administration estimates your PIA. 

I'm 54, but I really dinked around earning-wise in my twenties and thirties.  In order to actually get the PIA that is calculated by Social Security, I will have to continue working until my FRA of 67 and continue earning what I am earning now (adjusted for inflation).  If I do not replace those low-earning years (again, adjusted for inflation) with what I am earning now (adjusted for inflation), it will really hurt. 

Simply plugging in my projected PIA at FRA might give me some extremely poor guidance. 

[Deleted]

Thanks to everyone posting info and links.  The surviving spouse thing is a bit confusing but it appears I would be able to get a larger amount based on DH's record if he predeceases me, even though I am drawing on my own record now.  As his pension would only pay a 50% survivor benefit, that would be helpful.