Social Security planning
Social Security planning
I am using this website to figure out what I am planning to do with my SS and my wife's SS (https://opensocialsecurity.com/). Unfortunately, I don't know why my math doesn't check out. I was hoping to get a few questions answered by more knowledgeable people here:
1) PIA is the SS benefit at age of 67 (full retirement age). Once I type in my information and my wife's information when we hit 67, the website populates columns. If the "spousal benefits" columns show $0, it means that the calculator doesn't think it's worth the option, is that correct?
2) The system wants me to wait until 70 whereas my wife should take SS as soon as she is eligible (i.e. age of 62). The SSA website (and statement) indicates that my spouse's SS benefit amount is substantially lower than what's calculated on this website so I am trying to figure out where the gap is coming from.
BTW, I checked the expected benefit amount for both of our accounts today.
1) PIA is the SS benefit at age of 67 (full retirement age). Once I type in my information and my wife's information when we hit 67, the website populates columns. If the "spousal benefits" columns show $0, it means that the calculator doesn't think it's worth the option, is that correct?
2) The system wants me to wait until 70 whereas my wife should take SS as soon as she is eligible (i.e. age of 62). The SSA website (and statement) indicates that my spouse's SS benefit amount is substantially lower than what's calculated on this website so I am trying to figure out where the gap is coming from.
BTW, I checked the expected benefit amount for both of our accounts today.
-
- Posts: 8951
- Joined: Thu Feb 25, 2016 6:11 pm
Re: Social Security planning
Welcome to the forum!
The one thing I am absolutely certain of is that if you properly enter your data this tool will provide you with accurate results. Make certain to select the box to account for other situations that may apply such as still working.
The results table always shows all columns including Spousal Benefit even if that would not be applicable to you.
Depending on your benefit and ages it is very likely that a claiming strategy of 70/62 would make the most sense.
Cheers
The one thing I am absolutely certain of is that if you properly enter your data this tool will provide you with accurate results. Make certain to select the box to account for other situations that may apply such as still working.
The results table always shows all columns including Spousal Benefit even if that would not be applicable to you.
Depending on your benefit and ages it is very likely that a claiming strategy of 70/62 would make the most sense.
Cheers
Re: Social Security planning
OpenSS will give you the numbers for the claiming strategy it recommends unless you tell it to use different claiming dates, If it shows a zero dollar spousal benefit for a given year but shows an amount for a retirement benefit for that year, it simply means that the retirement benefit is more than the spousal benefit. SS only pays a spousal benefit when the spousal benefit is more than the amount earned on the recipient's own record and the amount called the spousal benefit is the excess over the regular benefit.
Re: Social Security planning
Keep in mind that the site uses cumulative amounts of SS benefits over time to determine what is the best strategy. Other factors in your own situation may lead to a different conclusion. For example, at what age do you and your wife intend to stop working? If your wife takes the advice of beginning her own benefit at age 62, but is still working, the earnings test will reduce the amount she gets, depending on how much she earns. What will be your other sources of income that may allow you, and possibly your wife to delay? What will your expenses be in retirement, and how will those expenses be paid from your projected overall income? If you can afford it, your wife may decide to delay for a time as well, which will result in a larger combined monthly benefit for the rest of your life.
No one knows when they will die, so making a decision on the amount of cumulative income gleaned from SS based on a projected age of death never made sense to me. While it's interesting to make assumptions about portfolio growth over time, it can't be predicted either. In my mind, that made "breakeven" calculations meaningless.
I always preferred to control those things I was able to, and to let chance have less of an influence on my future. In that vein, maximizing fixed income that I could count on made chance less of a factor.
My wife and I had a similar amount of income in our careers with her having a slightly lower PIA. She retired on her 62nd birthday, I retired 6 months later at 63.5. She filed for her own benefit on her 65th birthday. I turned 66 (FRA) the same day. I filed a restricted application (no longer available) for 1/2 of her PIA simultaneous with her filing for her own benefit. Opensocialsecurity.com may have suggested that our best plan would be for her to file at age 62 and for me to file the restricted application at my FRA, then delay my own benefit until age 70 based on cumulative benefit amounts assuming average life expectancy. The result of our successful strategy was a higher amount of fixed income during our delay from my age 66 to my filing at 70 for maximum benefits, and a higher combined monthly benefit because of her 3 month delay from age 62 to 65. I filed for my own age 70 benefit 11 months ago. SS is now 72% of our fixed income, and with COLA raises will continue to increase, percentage wise. Her delay of 3 years resulted in an over 20% raise in her benefit and a higher dollar amount of COLA raises.
My point is that no calculator has the capacity to consider all factors that pertain to your personal situation. SS benefits are income, not a lump sum. A higher amount of fixed income that is subject to COLA, and which has a 100% survivor benefit for the survivor in a marriage is pretty hard to beat. Sure, we took out more from the portfolio than we would have if we hadn't delayed, but now we're taking out nothing until 2025 when my RMD begins.
No one knows when they will die, so making a decision on the amount of cumulative income gleaned from SS based on a projected age of death never made sense to me. While it's interesting to make assumptions about portfolio growth over time, it can't be predicted either. In my mind, that made "breakeven" calculations meaningless.
I always preferred to control those things I was able to, and to let chance have less of an influence on my future. In that vein, maximizing fixed income that I could count on made chance less of a factor.
My wife and I had a similar amount of income in our careers with her having a slightly lower PIA. She retired on her 62nd birthday, I retired 6 months later at 63.5. She filed for her own benefit on her 65th birthday. I turned 66 (FRA) the same day. I filed a restricted application (no longer available) for 1/2 of her PIA simultaneous with her filing for her own benefit. Opensocialsecurity.com may have suggested that our best plan would be for her to file at age 62 and for me to file the restricted application at my FRA, then delay my own benefit until age 70 based on cumulative benefit amounts assuming average life expectancy. The result of our successful strategy was a higher amount of fixed income during our delay from my age 66 to my filing at 70 for maximum benefits, and a higher combined monthly benefit because of her 3 month delay from age 62 to 65. I filed for my own age 70 benefit 11 months ago. SS is now 72% of our fixed income, and with COLA raises will continue to increase, percentage wise. Her delay of 3 years resulted in an over 20% raise in her benefit and a higher dollar amount of COLA raises.
My point is that no calculator has the capacity to consider all factors that pertain to your personal situation. SS benefits are income, not a lump sum. A higher amount of fixed income that is subject to COLA, and which has a 100% survivor benefit for the survivor in a marriage is pretty hard to beat. Sure, we took out more from the portfolio than we would have if we hadn't delayed, but now we're taking out nothing until 2025 when my RMD begins.
Re: Social Security planning
If the spousal benefit column is showing zero, the most likely reason for that is that her own benefit is more than 1/2* of your benefit, so no spousal benefit would be paid.
* in general, spousal benefits are equal to a maximum of 1/2 of the primary earner’s benefit at FRA
* in general, spousal benefits are equal to a maximum of 1/2 of the primary earner’s benefit at FRA
Re: Social Security planning
Thanks! The additional "hidden" boxes at the top of the page doesn't apply to me except the "still working" option. But, I am calculating this based on the assumption that I am retiring. "Your Spouse's Annual Retirement Benefit" and "Total" columns are the only columns I see the values until I start to take benefits at age of 70.Silk McCue wrote: ↑Sat Jun 03, 2023 8:48 pm Welcome to the forum!
The one thing I am absolutely certain of is that if you properly enter your data this tool will provide you with accurate results. Make certain to select the box to account for other situations that may apply such as still working.
The results table always shows all columns including Spousal Benefit even if that would not be applicable to you.
Depending on your benefit and ages it is very likely that a claiming strategy of 70/62 would make the most sense.
Cheers
I see a few hundred differences between what I see on ssa.gov vs. what the calculator is telling me.
Last edited by dms1170 on Tue Jun 06, 2023 9:56 pm, edited 1 time in total.
Re: Social Security planning
I am on the same page and it's either one, not both. At the "full benefit" ages for myself and my wife, my wife's benefit is about 60% of my benefit so it makes sense why it doesn't populate the spousal benefit column.lstone19 wrote: ↑Sun Jun 04, 2023 12:39 am OpenSS will give you the numbers for the claiming strategy it recommends unless you tell it to use different claiming dates, If it shows a zero dollar spousal benefit for a given year but shows an amount for a retirement benefit for that year, it simply means that the retirement benefit is more than the spousal benefit. SS only pays a spousal benefit when the spousal benefit is more than the amount earned on the recipient's own record and the amount called the spousal benefit is the excess over the regular benefit.
Re: Social Security planning
The primary reason for the 70/62 recommendation is that the amount of SS survivor's benefit is the larger of the couple's two benefits. In this case, your benefit amount. Deferring your benefit provides "longevity insurance" for the longest living spouse.
So the calculation goes like this: "Her" benefit amount will be the first to end. "Your" benefit amount will continue until the second spouse passes. So let's maximize the amount of longer-lasting benefit and while we're waiting let's get some cash flow going from the benefit that will end soonest.
So the calculation goes like this: "Her" benefit amount will be the first to end. "Your" benefit amount will continue until the second spouse passes. So let's maximize the amount of longer-lasting benefit and while we're waiting let's get some cash flow going from the benefit that will end soonest.
Last edited by David Jay on Tue Jun 06, 2023 8:44 pm, edited 1 time in total.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
Re: Social Security planning
Thanks for taking the time to write this.vested1 wrote: ↑Sun Jun 04, 2023 8:37 am Keep in mind that the site uses cumulative amounts of SS benefits over time to determine what is the best strategy. Other factors in your own situation may lead to a different conclusion. For example, at what age do you and your wife intend to stop working? If your wife takes the advice of beginning her own benefit at age 62, but is still working, the earnings test will reduce the amount she gets, depending on how much she earns. What will be your other sources of income that may allow you, and possibly your wife to delay? What will your expenses be in retirement, and how will those expenses be paid from your projected overall income? If you can afford it, your wife may decide to delay for a time as well, which will result in a larger combined monthly benefit for the rest of your life.
No one knows when they will die, so making a decision on the amount of cumulative income gleaned from SS based on a projected age of death never made sense to me. While it's interesting to make assumptions about portfolio growth over time, it can't be predicted either. In my mind, that made "breakeven" calculations meaningless.
I always preferred to control those things I was able to, and to let chance have less of an influence on my future. In that vein, maximizing fixed income that I could count on made chance less of a factor.
My wife and I had a similar amount of income in our careers with her having a slightly lower PIA. She retired on her 62nd birthday, I retired 6 months later at 63.5. She filed for her own benefit on her 65th birthday. I turned 66 (FRA) the same day. I filed a restricted application (no longer available) for 1/2 of her PIA simultaneous with her filing for her own benefit. Opensocialsecurity.com may have suggested that our best plan would be for her to file at age 62 and for me to file the restricted application at my FRA, then delay my own benefit until age 70 based on cumulative benefit amounts assuming average life expectancy. The result of our successful strategy was a higher amount of fixed income during our delay from my age 66 to my filing at 70 for maximum benefits, and a higher combined monthly benefit because of her 3 month delay from age 62 to 65. I filed for my own age 70 benefit 11 months ago. SS is now 72% of our fixed income, and with COLA raises will continue to increase, percentage wise. Her delay of 3 years resulted in an over 20% raise in her benefit and a higher dollar amount of COLA raises.
My point is that no calculator has the capacity to consider all factors that pertain to your personal situation. SS benefits are income, not a lump sum. A higher amount of fixed income that is subject to COLA, and which has a 100% survivor benefit for the survivor in a marriage is pretty hard to beat. Sure, we took out more from the portfolio than we would have if we hadn't delayed, but now we're taking out nothing until 2025 when my RMD begins.
[edit] I think I am getting the point, which I didn't get earlier.
Last edited by dms1170 on Tue Jun 06, 2023 9:31 pm, edited 2 times in total.
Re: Social Security planning
Survivor's benefits work differently than you described in your post. See my post just above your post for an explanation.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
Re: Social Security planning
Yes, that's correct. Her PIA is about 60% of mine. I used "https://www.ssa.gov/OACT/quickcalc/spouse.html" to estimate what my wife should expect to get for taking the benefits early. It shows that 32.71% of the PIA value.Kenkat wrote: ↑Sun Jun 04, 2023 8:58 am If the spousal benefit column is showing zero, the most likely reason for that is that her own benefit is more than 1/2* of your benefit, so no spousal benefit would be paid.
* in general, spousal benefits are equal to a maximum of 1/2 of the primary earner’s benefit at FRA
What confuses me is that if I take the "Your Spouse's Annual Retirement Benefit" value from "https://opensocialsecurity.com/" and divide by 12 to figure out the monthly value, it doesn't match up with 32.71% of the PIA value. I am pretty certain that this is NOT how it works. Can someone help me understand this?
Re: Social Security planning
I think I am getting it. The strategy is to let the larger benefit to compound as much as it can so when I pass, my spouse can take my fully-matured social security benefits. If I take the benefit at 68, although it's beyond FRA, the survivor benefit will be lower because I took it 2 years too early. Am I on the right track? I am onboard to delaying my benefit until 70.David Jay wrote: ↑Tue Jun 06, 2023 8:43 pm The primary reason for the 70/62 recommendation is that the amount of SS survivor's benefit is the larger of the couple's two benefits. In this case, your benefit amount. Deferring your benefit provides "longevity insurance" for the longest living spouse.
So the calculation goes like this: "Her" benefit amount will be the first to end. "Your" benefit amount will continue until the second spouse passes. So let's maximize the amount of longer-lasting benefit and while we're waiting let's get some cash flow going from the benefit that will end soonest.
On the other hand, your second paragraph is confusing to me. Why is my spouse's benefit first to end?
Also, let's say I do the 70/62 while I delay my benefits until 70 but let my spouse take her benefit as soon as she can at 62. Can I take 50% of her PIA benefit while I wait for mine to mature?
Re: Social Security planning
When either spouse passes, your benefit amount will continue (because it is larger) and her benefit amount will cease. So regardless of which spouse passes first, it is her benefit amount that will end. Your benefit amount will last for the lifetime of the longest lived spouse.
This actually used to be possible, but it is not available for anyone born after 1954. For younger people, if you apply for a spousal benefit on your spouse’s record, you are “deemed” to have filed for your own benefit. Since your benefit is larger than 50% of her benefit, you will receive your benefit, not spousal from her record.
By the end of 2024 this exception will end, as everyone born in 1954 will be over age 70.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
Re: Social Security planning
I got it. It looks like 70/62 might be the way to go. The only mysterious part is the discrepancy between ssa.gov's estimated amount at 62 for my spouse vs. https://opensocialsecurity.com/'s estimate, which is a bit higher...David Jay wrote: ↑Tue Jun 06, 2023 10:10 pmWhen either spouse passes, your benefit amount will continue (because it is larger) and her benefit amount will cease. So regardless of which spouse passes first, it is her benefit amount that will end. Your benefit amount will last for the lifetime of the longest lived spouse.This actually used to be possible, but it is not available for anyone born after 1954. For younger people, if you apply for a spousal benefit on your spouse’s record, you are “deemed” to have filed for your own benefit. Since your benefit is larger than 50% of her benefit, you will receive your benefit, not spousal from her record.
By the end of 2024 this exception will end, as everyone born in 1954 will be over age 70.
Thank you for the replies!
Re: Social Security planning
While on a net cash basis that is what happens, that is not (I believe) what SSA will say is happening. If person A's benefit is $1,000 and person B's is $700, if person A dies first, while person B then receives $1,000, SSA will consider it (and probably say somewhere) that person B is receiving $700 on their own record plus is receiving $300 as a survivor benefit. Still $1,000 but I don't believe they'll ever flat out say B is now receiving A's larger benefit.David Jay wrote: ↑Tue Jun 06, 2023 10:10 pmWhen either spouse passes, your benefit amount will continue (because it is larger) and her benefit amount will cease. So regardless of which spouse passes first, it is her benefit amount that will end. Your benefit amount will last for the lifetime of the longest lived spouse.
-
- Posts: 18499
- Joined: Tue Dec 31, 2013 6:05 am
- Location: 26 miles, 385 yards west of Copley Square
Re: Social Security planning
I sort of blindly followed the recommendation of opensocialsecurity and have now had a change of heart. For us, it showed DW taking it at 62 and me at 70. While DW and I won't be working, we do plan a lot of Roth conversions. With DW taking SS at 62, either our Roth conversions need to be lower or we're going to pay more tax and I may pay more for Medicare and she may pay more for ACA. So yes, opensocialsecurity does show the optimum way to take SS between the two of us but when adding in the other considerations, it becomes just one leg of the decision.
Bogle: Smart Beta is stupid
-
- Posts: 8951
- Joined: Thu Feb 25, 2016 6:11 pm
Re: Social Security planning
I have great news for you!Jack FFR1846 wrote: ↑Wed Jun 07, 2023 6:26 am I sort of blindly followed the recommendation of opensocialsecurity and have now had a change of heart. For us, it showed DW taking it at 62 and me at 70. While DW and I won't be working, we do plan a lot of Roth conversions. With DW taking SS at 62, either our Roth conversions need to be lower or we're going to pay more tax and I may pay more for Medicare and she may pay more for ACA. So yes, opensocialsecurity does show the optimum way to take SS between the two of us but when adding in the other considerations, it becomes just one leg of the decision.
From a recent post of yours it appears that your wife just started Social Security. If so then please note that she can undo this decision now.
https://www.ssa.gov/manage-benefits/can ... pplicationCancel your benefits application
Cancel or withdraw your application up to 12 months after your benefit approval. You can only cancel your application once and can reapply later.
Cheers
Re: Social Security planning
You are correct. That is reason (see quote above) I keep using the terms “benefit amount” and not “benefit”. It allows me to say something that is correct without getting into the weeds - so many people here on BH get confused when I try to explain the same thing that you just wrote.lstone19 wrote: ↑Wed Jun 07, 2023 5:47 amWhile on a net cash basis that is what happens, that is not (I believe) what SSA will say is happening. If person A's benefit is $1,000 and person B's is $700, if person A dies first, while person B then receives $1,000, SSA will consider it (and probably say somewhere) that person B is receiving $700 on their own record plus is receiving $300 as a survivor benefit. Still $1,000 but I don't believe they'll ever flat out say B is now receiving A's larger benefit.David Jay wrote: ↑Tue Jun 06, 2023 10:10 pmWhen either spouse passes, your benefit amount will continue (because it is larger) and her benefit amount will cease. So regardless of which spouse passes first, it is her benefit amount that will end. Your benefit amount will last for the lifetime of the longest lived spouse.
[edit] For any others who may be confused by this discussion, the table in the opensocialsecurity.com benefit description shows this correctly. It shows individual benefit, spousal benefit and survivor’s benefit and how they “stack”.
Last edited by David Jay on Wed Jun 07, 2023 7:59 am, edited 1 time in total.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
Re: Social Security planning
The neat thing about deferring from full retirement age is the ability to freeze and unfreeze. I took benefit at full retirement to pay some debt and use income to refinance mortgage. After 1 year froze it. While its frozen I can start again and get past 6 months if necessary so it's part of my emergency fund.
Edit: I am wrong about the 6 month back.
Edit: I am wrong about the 6 month back.
Last edited by Raycpact on Wed Jun 07, 2023 4:24 pm, edited 1 time in total.
Re: Social Security planning
I agree that lots of people here get confused but unfortunately, some of these are that same people who will then call SSA to confirm what we're saying here only to have SSA try to explain it the way I did and probably say things like "we will decide later if you qualify for a survivor benefit." I started SS recently and found myself less than pleased with the way they phrase things in the letters - they're very big on saying they "decided" things on which they have no discretion. For instance, the letter when I started SSA said "we made a decision to approve your application" written in a style that could suggest to some people that things aren't as certain as they are. So I think we're being responsible explainer of things by telling people what the practical result is but that SSA is going to put it in other terms.David Jay wrote: ↑Wed Jun 07, 2023 7:54 amYou are correct. That is reason (see quote above) I keep using the terms “benefit amount” and not “benefit”. It allows me to say something that is correct without getting into the weeds - so many people here on BH get confused when I try to explain the same thing that you just wrote.lstone19 wrote: ↑Wed Jun 07, 2023 5:47 amWhile on a net cash basis that is what happens, that is not (I believe) what SSA will say is happening. If person A's benefit is $1,000 and person B's is $700, if person A dies first, while person B then receives $1,000, SSA will consider it (and probably say somewhere) that person B is receiving $700 on their own record plus is receiving $300 as a survivor benefit. Still $1,000 but I don't believe they'll ever flat out say B is now receiving A's larger benefit.David Jay wrote: ↑Tue Jun 06, 2023 10:10 pmWhen either spouse passes, your benefit amount will continue (because it is larger) and her benefit amount will cease. So regardless of which spouse passes first, it is her benefit amount that will end. Your benefit amount will last for the lifetime of the longest lived spouse.
-
- Posts: 18499
- Joined: Tue Dec 31, 2013 6:05 am
- Location: 26 miles, 385 yards west of Copley Square
Re: Social Security planning
Yes, indeed. The form is actually sitting next to me waiting for DW to agree to withdraw. It's her decision at this point. I've discussed why.Silk McCue wrote: ↑Wed Jun 07, 2023 6:58 amI have great news for you!Jack FFR1846 wrote: ↑Wed Jun 07, 2023 6:26 am I sort of blindly followed the recommendation of opensocialsecurity and have now had a change of heart. For us, it showed DW taking it at 62 and me at 70. While DW and I won't be working, we do plan a lot of Roth conversions. With DW taking SS at 62, either our Roth conversions need to be lower or we're going to pay more tax and I may pay more for Medicare and she may pay more for ACA. So yes, opensocialsecurity does show the optimum way to take SS between the two of us but when adding in the other considerations, it becomes just one leg of the decision.
From a recent post of yours it appears that your wife just started Social Security. If so then please note that she can undo this decision now.
https://www.ssa.gov/manage-benefits/can ... pplicationCancel your benefits application
Cancel or withdraw your application up to 12 months after your benefit approval. You can only cancel your application once and can reapply later.
Cheers
Bogle: Smart Beta is stupid
Re: Social Security planning
Our case is somewhat simple (low income individuals without retirement accounts, which I won't get into). The only variable I have is that my wife plans to work past when she is eligible for SS benefits so in that case, I think it makes perfect sense to postpone until she retires. My understanding is that there's going to be tax implication on income (inclusive of SS benefits) and the threshold appears to be pretty low ($32K for married couples).
Am I safe to assume that if a couple goes over the income threshold of $32K, they will have to pay the usual federal and state income taxes, medicare tax, and social security tax?
Am I safe to assume that if a couple goes over the income threshold of $32K, they will have to pay the usual federal and state income taxes, medicare tax, and social security tax?
Re: Social Security planning
By "freeze and unfreeze" are you referring to suspending and reinstating your benefit, or is freezing/unfreezing something different? Based on what I've read about suspending one's benefit, the SSA will only permit benefit reinstatement the month after your request, which I took to mean you cannot request retroactive reinstatement.*Raycpact wrote: ↑Wed Jun 07, 2023 7:54 am The neat thing about deferring from full retirement age is the ability to freeze and unfreeze. I took benefit at full retirement to pay some debt and use income to refinance mortgage. After 1 year froze it. While its frozen I can start again and get past 6 months if necessary so it's part of my emergency fund.
Here is a question and answer about suspending/reinstating one's benefit from a social security expert: https://maximizemysocialsecurity.com/ho ... t-benefits
* Edited to add: I forgot to mention that retroactive reinstatement was possible in the past, but only for those who attained FRA prior to April 30, 2016 and submitted their request for voluntary suspension before April 30, 2016. But anyone in that situation is over 70 years old now, so as far as I'm aware, retroactive reinstatement is no longer possible.
-
- Posts: 8951
- Joined: Thu Feb 25, 2016 6:11 pm
Re: Social Security planning
Medicare and Social Security taxes are only paid on earned income. Social Security benefits are not subject to those taxes.
Social Security benefits can be taxed based upon your overall income when receiving SS. No more than 85% of your SS will be subject to income federal tax and is not subject to State income tax in most states. There is nothing to be concerned about here.
Please take a look at the Wiki on this topic.
https://www.bogleheads.org/wiki/Taxatio ... y_benefits
Cheers
Re: Social Security planning
Yes, I was careless on my use of terminology. The proper wording is suspend and reinstated.Chip Munk wrote: ↑Wed Jun 07, 2023 2:44 pmBy "freeze and unfreeze" are you referring to suspending and reinstating your benefit, or is freezing/unfreezing something different? Based on what I've read about suspending one's benefit, the SSA will only permit benefit reinstatement the month after your request, which I took to mean you cannot request retroactive reinstatement.*Raycpact wrote: ↑Wed Jun 07, 2023 7:54 am The neat thing about deferring from full retirement age is the ability to freeze and unfreeze. I took benefit at full retirement to pay some debt and use income to refinance mortgage. After 1 year froze it. While its frozen I can start again and get past 6 months if necessary so it's part of my emergency fund.
Here is a question and answer about suspending/reinstating one's benefit from a social security expert: https://maximizemysocialsecurity.com/ho ... t-benefits
* Edited to add: I forgot to mention that retroactive reinstatement was possible in the past, but only for those who attained FRA prior to April 30, 2016 and submitted their request for voluntary suspension before April 30, 2016. But anyone in that situation is over 70 years old now, so as far as I'm aware, retroactive reinstatement is no longer possible.
Regarding your edited to add note: The April 30, 2016 date references the file and suspend method which is dead. I do stand corrected about the ability to get 6 months retroactive. Apparently this was also terminated at the same time.
As I understand, there are two sets of rules for suspending benefits. One for before reaching full retirement age and one for after. The rule for before retirement age allows someone to stop benefits up to the first year by paying what they received back.
My understanding about the rule after full retirement agrees with the link you provided:
"There is no set limit on the number of times that you can suspend and reinstate your benefits between full retirement age (FRA) and age 70."
I understand the one month rule to mean if I requested now in June to reinstate, my benefit would begin in July and my first check would be August.
Re: Social Security planning
I voluntarily suspended my benefit last year. When I read your post about reinstating retroactively, I was hoping you were correct and that I had misinterpreted something. It would have been nice to have the option.Raycpact wrote: ↑Wed Jun 07, 2023 4:06 pmYes, I was careless on my use of terminology. The proper wording is suspend and reinstated.Chip Munk wrote: ↑Wed Jun 07, 2023 2:44 pmBy "freeze and unfreeze" are you referring to suspending and reinstating your benefit, or is freezing/unfreezing something different? Based on what I've read about suspending one's benefit, the SSA will only permit benefit reinstatement the month after your request, which I took to mean you cannot request retroactive reinstatement.*Raycpact wrote: ↑Wed Jun 07, 2023 7:54 am The neat thing about deferring from full retirement age is the ability to freeze and unfreeze. I took benefit at full retirement to pay some debt and use income to refinance mortgage. After 1 year froze it. While its frozen I can start again and get past 6 months if necessary so it's part of my emergency fund.
Here is a question and answer about suspending/reinstating one's benefit from a social security expert: https://maximizemysocialsecurity.com/ho ... t-benefits
* Edited to add: I forgot to mention that retroactive reinstatement was possible in the past, but only for those who attained FRA prior to April 30, 2016 and submitted their request for voluntary suspension before April 30, 2016. But anyone in that situation is over 70 years old now, so as far as I'm aware, retroactive reinstatement is no longer possible.
Regarding your edited to add note: The April 30, 2016 date references the file and suspend method which is dead. I do stand corrected about the ability to get 6 months retroactive. Apparently this was also terminated at the same time.
As I understand, there are two sets of rules for suspending benefits. One for before reaching full retirement age and one for after. The rule for before retirement age allows someone to stop benefits up to the first year by paying what they received back.
My understanding about the rule after full retirement agrees with the link you provided:
"There is no set limit on the number of times that you can suspend and reinstate your benefits between full retirement age (FRA) and age 70."
I understand the one month rule to mean if I requested now in June to reinstate, my benefit would begin in July and my first check would be August.
Yes I believe this change was part of the 2015 Bipartisan Budget Act, along with eliminating the option to file a restricted application, for spousal benefits only, if you were born after Jan 1, 1954. But at least in that case, they kept the option to file a restricted application up to 6 months retroactively for those who are still eligible.
-
- Posts: 56
- Joined: Wed Sep 30, 2009 10:53 am
- Location: Pennsylvania
Re: Social Security planning
Great thread, with wonderful, but overwhelming info. My questions are that the open social security calculator cannot take into account one's health, and the average life expectancy is just that - average. It seems when I run dates of birth for DH and me, or any others of fictitious couples with various dates of birth and monthly payments, the recommendation is always for the older (male) spouse to take SS at 70, the younger at 62. A single person recommendation is always 70. If one does not need the income, is there ever a scenario that this calculator would recommend both waiting until 70? It seems that is what is so often recommended by Vanguard and other sites, especially for those in excellent health? This would be with both spouses earning about the same.
JOY & JERRY
Re: Social Security planning
Click the alternative situations box at the top and choose mortality. Then put in age 100 for both, and I suspect that you will see both as being recommended as waiting until age 70 to claim.joyandjerry wrote: ↑Tue Jul 04, 2023 10:56 am Great thread, with wonderful, but overwhelming info. My questions are that the open social security calculator cannot take into account one's health, and the average life expectancy is just that - average. It seems when I run dates of birth for DH and me, or any others of fictitious couples with various dates of birth and monthly payments, the recommendation is always for the older (male) spouse to take SS at 70, the younger at 62. A single person recommendation is always 70. If one does not need the income, is there ever a scenario that this calculator would recommend both waiting until 70? It seems that is what is so often recommended by Vanguard and other sites, especially for those in excellent health? This would be with both spouses earning about the same.
Re: Social Security planning
I was just about to post the same advice. I played around with this some time ago to see at what ages it would suggest that we both wait until age 70 to claim. As I stepped up the values for the "Assumed age at death" a year at a time through our late 80s, it gradually increased how long I (younger, and with the lower PIA) should wait to claim. Eventually at age 91 for my husband, we reached the point where I should wait until age 70 to claim.Carl53 wrote: ↑Tue Jul 04, 2023 11:15 amClick the alternative situations box at the top and choose mortality. Then put in age 100 for both, and I suspect that you will see both as being recommended as waiting until age 70 to claim.joyandjerry wrote: ↑Tue Jul 04, 2023 10:56 am Great thread, with wonderful, but overwhelming info. My questions are that the open social security calculator cannot take into account one's health, and the average life expectancy is just that - average. It seems when I run dates of birth for DH and me, or any others of fictitious couples with various dates of birth and monthly payments, the recommendation is always for the older (male) spouse to take SS at 70, the younger at 62. A single person recommendation is always 70. If one does not need the income, is there ever a scenario that this calculator would recommend both waiting until 70? It seems that is what is so often recommended by Vanguard and other sites, especially for those in excellent health? This would be with both spouses earning about the same.
Re: Social Security planning
That's normal and makes sense - your deferring until 70 maximizes not only your benefits, but also hers should you pre-decease her. And waiting to collect on her own record doesn't make sense since she'll switch at 70 to collecting spousal benefits on your record anyway.
-
- Posts: 56
- Joined: Wed Sep 30, 2009 10:53 am
- Location: Pennsylvania
Re: Social Security planning
Thanks ever so much for the speedy replies, as I did not take the time to fiddle with the calculator much. It showed with both of us living to 92, younger spouse would start at age 70. While the posters here have a much better understanding of the concept of "present value" than I, the calculator seems to assume one may invest monies received. If one spends it, or the investment is less than the 8% more one could earn if one waited to take SS, that would not apply. Also, predicting inflation would be difficult. It was quite low for many years until recently. For those that do not need the money now, it seems to be a no-brainer that the older spouse, especially if they are the higher earner, wait as long as possible until filing for SS, as the survivor's benefits would be maximized.
So many have "scare" stories about waiting to take SS until FRA, and the person died young. While all situations are unique, some use a confirmation bias to look at the exception to the average.
So many have "scare" stories about waiting to take SS until FRA, and the person died young. While all situations are unique, some use a confirmation bias to look at the exception to the average.
JOY & JERRY
Re: Social Security planning
If you haven't spotted it already, you might want to read this current thread discussing the calculator: viewtopic.php?t=407739 It includes some comments by poster ObliviousInvestor who created the calculator.joyandjerry wrote: ↑Tue Jul 04, 2023 2:14 pm Thanks ever so much for the speedy replies, as I did not take the time to fiddle with the calculator much. It showed with both of us living to 92, younger spouse would start at age 70. While the posters here have a much better understanding of the concept of "present value" than I, the calculator seems to assume one may invest monies received. If one spends it, or the investment is less than the 8% more one could earn if one waited to take SS, that would not apply. Also, predicting inflation would be difficult. It was quite low for many years until recently. For those that do not need the money now, it seems to be a no-brainer that the older spouse, especially if they are the higher earner, wait as long as possible until filing for SS, as the survivor's benefits would be maximized.
So many have "scare" stories about waiting to take SS until FRA, and the person died young. While all situations are unique, some use a confirmation bias to look at the exception to the average.
Re: Social Security planning
I have used the open social security calculator and am confused by one aspect of the table and what I had thought to be the running rule.
For us, the website recommendation is that I start collecting at age 68 years 4 months. My wife had started collecting at age 62.
The pertinent table values are as follows: my annual retirement benefit = $ 45,023; her annual retirement benefit = $ 4,479; her annual spousal benefit = $ 13,524. Combined total annual benefit of $ 63,026.
Under this scenario, I thought the running rule was that the spousal benefit would have been 50% ($22,511.50). Resulting in a total annual benefit of $ 67,534.5. Is the lower calculated amount ($ 63,026) due to the maximum family limit? If yes, perhaps the calculator should provide that detail? Thanks in advance for the help.
For us, the website recommendation is that I start collecting at age 68 years 4 months. My wife had started collecting at age 62.
The pertinent table values are as follows: my annual retirement benefit = $ 45,023; her annual retirement benefit = $ 4,479; her annual spousal benefit = $ 13,524. Combined total annual benefit of $ 63,026.
Under this scenario, I thought the running rule was that the spousal benefit would have been 50% ($22,511.50). Resulting in a total annual benefit of $ 67,534.5. Is the lower calculated amount ($ 63,026) due to the maximum family limit? If yes, perhaps the calculator should provide that detail? Thanks in advance for the help.
-
- Posts: 1219
- Joined: Tue Sep 01, 2020 12:20 pm
- Location: Delaware/Philly
Re: Social Security planning
Your wife claimed early, so she won't be able to get 50% of your PIA.vg55 wrote: ↑Tue Jul 04, 2023 3:19 pm I have used the open social security calculator and am confused by one aspect of the table and what I had thought to be the running rule.
For us, the website recommendation is that I start collecting at age 68 years 4 months. My wife had started collecting at age 62.
The pertinent table values are as follows: my annual retirement benefit = $ 45,023; her annual retirement benefit = $ 4,479; her annual spousal benefit = $ 13,524. Combined total annual benefit of $ 63,026.
Under this scenario, I thought the running rule was that the spousal benefit would have been 50% ($22,511.50). Resulting in a total annual benefit of $ 67,534.5. Is the lower calculated amount ($ 63,026) due to the maximum family limit? If yes, perhaps the calculator should provide that detail? Thanks in advance for the help.
Retired June 2023. AA = 55/35/10
-
- Posts: 56
- Joined: Wed Sep 30, 2009 10:53 am
- Location: Pennsylvania
Re: Social Security planning
Great thread! Thanks for pointing the way.Chip Munk wrote: ↑Tue Jul 04, 2023 2:38 pmIf you haven't spotted it already, you might want to read this current thread discussing the calculator: viewtopic.php?t=407739 It includes some comments by poster ObliviousInvestor who created the calculator.joyandjerry wrote: ↑Tue Jul 04, 2023 2:14 pm Thanks ever so much for the speedy replies, as I did not take the time to fiddle with the calculator much. It showed with both of us living to 92, younger spouse would start at age 70. While the posters here have a much better understanding of the concept of "present value" than I, the calculator seems to assume one may invest monies received. If one spends it, or the investment is less than the 8% more one could earn if one waited to take SS, that would not apply. Also, predicting inflation would be difficult. It was quite low for many years until recently. For those that do not need the money now, it seems to be a no-brainer that the older spouse, especially if they are the higher earner, wait as long as possible until filing for SS, as the survivor's benefits would be maximized.
So many have "scare" stories about waiting to take SS until FRA, and the person died young. While all situations are unique, some use a confirmation bias to look at the exception to the average.
JOY & JERRY
Re: Social Security planning
The spousal benefit is an add on to her own benefit. With the spousal add on, they will add [(0.5 * Your PIA) - (Her PIA)] to her own benefit, so she would receive in total:vg55 wrote: ↑Tue Jul 04, 2023 3:19 pm I have used the open social security calculator and am confused by one aspect of the table and what I had thought to be the running rule.
For us, the website recommendation is that I start collecting at age 68 years 4 months. My wife had started collecting at age 62.
The pertinent table values are as follows: my annual retirement benefit = $ 45,023; her annual retirement benefit = $ 4,479; her annual spousal benefit = $ 13,524. Combined total annual benefit of $ 63,026.
Under this scenario, I thought the running rule was that the spousal benefit would have been 50% ($22,511.50). Resulting in a total annual benefit of $ 67,534.5. Is the lower calculated amount ($ 63,026) due to the maximum family limit? If yes, perhaps the calculator should provide that detail? Thanks in advance for the help.
(0.5 * Your PIA) - (Her PIA) + (Her Own Benefit)
where PIA = Primary Insurance Amount, the amount one would receive if they had not earned any Delayed Retirement Credits by waiting past FRA to file for benefits, nor had their benefit reduced due to filing for benefits before FRA.
1) If she started her benefit right at FRA, then Her Own Benefit is equal to Her PIA and the above resolves to: (0.5 * Your PIA)
2) If she started her benefit before FRA, then Her Own Benefit is less than Her PIA and the above resolves to something less than half of your PIA. For example, if her own benefit is reduced to 75% of her PIA due to claiming early, then with the spousal add-on she would receive a total of:
(0.5 * Your PIA) - (0.25 * Her PIA)
3) If she had waited to start her benefit until after FRA, then Her Own Benefit would be greater than Her PIA and I have no idea what she would get as a spousal add on benefit. I suspect it would just max out at half of your PIA in that case.
Last edited by Chip Munk on Tue Jul 04, 2023 6:14 pm, edited 2 times in total.
Re: Social Security planning
Be careful there since I don’t think it takes into account if you need to do Roth conversions. If you do, that is more important and the yearly conversions should first be decided. And both spouses in a couple should probably use the space in their tax brackets for the conversions instead of SS.dms1170 wrote: ↑Sat Jun 03, 2023 7:38 pm I am using this website to figure out what I am planning to do with my SS and my wife's SS (https://opensocialsecurity.com/).
How would a tool even consider your personal life expectancy? The SS “life expectancy” is not for your “life expectancy” but, statistically, for all people born your year, regardless of gender.joyandjerry wrote: ↑Tue Jul 04, 2023 10:56 am My questions are that the open social security calculator cannot take into account one's health, and the average life expectancy is just that - average.
Please avoid comments like this. The couple will gain the most if the higher wage earner is the one who waits until 70 (assuming their ages are within about 10 years of each other). The fact is that SS uses the same “life expectancy” regardless of your gender.It seems when I run dates of birth for DH and me, or any others of fictitious couples with various dates of birth and monthly payments, the recommendation is always for the older (male) spouse to take SS at 70, the younger at 62.
Try two spouses born the same month with the same wages over their working years. I’ll bet the tools’ recommendation is to both wait until 70.A single person recommendation is always 70. If one does not need the income, is there ever a scenario that this calculator would recommend both waiting until 70? It seems that is what is so often recommended by Vanguard and other sites, especially for those in excellent health? This would be with both spouses earning about the same.
Vanguard doesn’t make SS recommendations, but maybe your advisor does.
Re: Social Security planning
Not saying it is a good idea or even sound for SS calcs, but something like this?
https://apps.goldensoncenter.uconn.edu/HLEC/
Re: Social Security planning
Open SS and most consumer finance sites are optimizing for different things. Open SS is recommending a strategy that maximizes the expected lifetime amount you receive from SS; most of the consumer finance sites are maximizing monthly income from SS but leave you on your own for getting to the recommended starting age.joyandjerry wrote: ↑Tue Jul 04, 2023 10:56 am Great thread, with wonderful, but overwhelming info. My questions are that the open social security calculator cannot take into account one's health, and the average life expectancy is just that - average. It seems when I run dates of birth for DH and me, or any others of fictitious couples with various dates of birth and monthly payments, the recommendation is always for the older (male) spouse to take SS at 70, the younger at 62. A single person recommendation is always 70. If one does not need the income, is there ever a scenario that this calculator would recommend both waiting until 70? It seems that is what is so often recommended by Vanguard and other sites, especially for those in excellent health? This would be with both spouses earning about the same.
Re: Social Security planning
Nope, I tried that. It tells the female to file at 62 and the male to file at 70. And if you enter the same sex for both people, it tells your spouse to file at 62 and you to file at 70.
It's kind of eye-opening - I had thought that we'd be better off both waiting until 70. (Our PIA amounts are similar and we were born in the same year a few months apart.) Now I have to run through various scenarios of "person A dies before person B at such-and-such date" to figure out how the 62/70 strategy could fail relative to the "both wait until 70" strategy.
Re: Social Security planning
Ummmm, I’m pretty sure everyone would choose the “answers” that give them the highest benefit.Lastrun wrote: ↑Tue Jul 04, 2023 6:29 pmNot saying it is a good idea or even sound for SS calcs, but something like this?
https://apps.goldensoncenter.uconn.edu/HLEC/
There wouldn’t be a way to enforce benefits based on your actual health status. So, all they can do is use your birthdate.
Or you could become as healthy as possible when your starting year approaches, then go back to smoking, drinking, and eating junk food in a recliner after your benefit starts.
Re: Social Security planning
The default is to use the social security mortality tables. If you scroll to the bottom of the results, you will see a graph of claim ages vs total $ received. If you hover over any point on the graph, it will give you more decimals on that. You will see that the claim age barely matters for the lower earning spouse. If you want to see what happens in other scenarios, you can test that by checking the box at the top of the page. If you both live a long time, then the lower earning spouse should have waited as well.snic wrote: ↑Wed Jul 05, 2023 7:27 amNope, I tried that. It tells the female to file at 62 and the male to file at 70. And if you enter the same sex for both people, it tells your spouse to file at 62 and you to file at 70.
It's kind of eye-opening - I had thought that we'd be better off both waiting until 70. (Our PIA amounts are similar and we were born in the same year a few months apart.) Now I have to run through various scenarios of "person A dies before person B at such-and-such date" to figure out how the 62/70 strategy could fail relative to the "both wait until 70" strategy.
Because the lower earning spouse claim date barely matters to lifetime benefits, other parts of the tax code become important. For instance, folks mentioned previously in the thread that if Roth Conversions are favorable for you, then the lower earning spouse should wait to claim SS to "get out of the way" of the Roth Conversions.
Re: Social Security planning
Confused, were you not alluding to a tool? Not actually claiming.celia wrote: ↑Fri Jul 07, 2023 1:16 amUmmmm, I’m pretty sure everyone would choose the “answers” that give them the highest benefit.Lastrun wrote: ↑Tue Jul 04, 2023 6:29 pmNot saying it is a good idea or even sound for SS calcs, but something like this?
https://apps.goldensoncenter.uconn.edu/HLEC/
There wouldn’t be a way to enforce benefits based on your actual health status. So, all they can do is use your birthdate.
Or you could become as healthy as possible when your starting year approaches, then go back to smoking, drinking, and eating junk food in a recliner after your benefit starts.
Re: Social Security planning
I was alluding to a tool such as the one you linked to. If Medicare used such a tool and the person getting ready to claim provided the health questions, they could give any answer to get the best benefit amount. That would make their tool useless since we would all know the “best” answers.
And if a physical was required, we could go to a new doctor for it and say we’re feeling great.
Re: Social Security planning
I am back again for more questions. I (65) am in the process of selling my business with seller financing where I will have to pay taxes on capital gain and ordinary income. Considering the income limit of $21240, I will be well above this threshold. I think it's best to wait until the seller financing term gets over or I hit 70 since my tax exposure to my SS income will be minimal then. Is this the right way to think about this?
Also, my spouse (62) will stop working after we sell the business (she doesn't have the business ownership and was considered an employee). Since the income limit is per individual basis, if she starts taking the SS now (reduced amount since she is 62), there won't be any tax implication for her SS. Is this correct?
I've been running different scenarios here (https://opensocialsecurity.com/) where it suggests that we take my spouse's SS at 62 (now). Does anyone know what age it uses as a reference to calculate the maximum benefit? For example, the breakeven point is at 82 if both of us wait until 70 to take SS.
Also, my spouse (62) will stop working after we sell the business (she doesn't have the business ownership and was considered an employee). Since the income limit is per individual basis, if she starts taking the SS now (reduced amount since she is 62), there won't be any tax implication for her SS. Is this correct?
I've been running different scenarios here (https://opensocialsecurity.com/) where it suggests that we take my spouse's SS at 62 (now). Does anyone know what age it uses as a reference to calculate the maximum benefit? For example, the breakeven point is at 82 if both of us wait until 70 to take SS.
-
- Posts: 1219
- Joined: Tue Sep 01, 2020 12:20 pm
- Location: Delaware/Philly
Re: Social Security planning
I'm not sure what capital gain and seller financing has to do with SS. Are you concerned with minimizing taxable SS?
Retired June 2023. AA = 55/35/10
Re: Social Security planning
The SA earnings limit is just for earned income. There is no limit on unearned income other than the more income, the more of SS is taxable. Proceeds from selling the business should be unearned income unless there’s something I’m not understanding.
Re: Social Security planning
Yes. See my response below.RyeBourbon wrote: ↑Sat Nov 04, 2023 7:59 pm I'm not sure what capital gain and seller financing has to do with SS. Are you concerned with minimizing taxable SS?
Seller financing is subjected to capital gain tax (principal) and ordinary income tax (interest) so this is similar to someone taking SS while working with an income higher than $21240. I think taking SS while having an income higher than the annual limit (i.e. $21240 for 2023) is not a good strategy since you have to pay tax on SS income. Is that incorrect?
Re: Social Security planning
You are conflating two different things. SS has an earned income limitation when you are below Full Retirement Age (FRA). That is the $21,240 and it applies only to earned income. When you exceed it, your SS benefit is temporarily reduced, then, when you stop working, SS recomputes your benefit and you get back the amount it was reduced by in the future benefit.dms1170 wrote: ↑Sat Nov 04, 2023 9:13 pmYes. See my response below.RyeBourbon wrote: ↑Sat Nov 04, 2023 7:59 pm I'm not sure what capital gain and seller financing has to do with SS. Are you concerned with minimizing taxable SS?
Seller financing is subjected to capital gain tax (principal) and ordinary income tax (interest) so this is similar to someone taking SS while working with an income higher than $21240. I think taking SS while having an income higher than the annual limit (i.e. $21240 for 2023) is not a good strategy since you have to pay tax on SS income. Is that incorrect?
There is also the taxability of SS. The more you earn in other income, the more of SS is taxable until you reach the maximum of 85% of your SS being taxable. The taxable portion of your SS phases in - first every dollar of other income makes $0.50 of SS taxable, then it increases to adding $0.85 of it to taxable until 85% is taxable.
If you are single, then you should wait to take SS until age 70 or your other income stops if it will make less of SS taxable in the long run. SS for a single person is actuarially neutral before taxes; it is not neutral for a married couple. But what other income will you have after age 70? Pensions? RMDs? It doesn’t take a lot of other income when added to a large SS benefit to immediately get you to the point where the maximum 85% of SS is taxable after which it’s a moot point
Re: Social Security planning
vg55 wrote: ↑Tue Jul 04, 2023 3:19 pm I have used the open social security calculator and am confused by one aspect of the table and what I had thought to be the running rule.
For us, the website recommendation is that I start collecting at age 68 years 4 months. My wife had started collecting at age 62.
The pertinent table values are as follows: my annual retirement benefit = $ 45,023; her annual retirement benefit = $ 4,479; her annual spousal benefit = $ 13,524. Combined total annual benefit of $ 63,026.
Under this scenario, I thought the running rule was that the spousal benefit would have been 50% ($22,511.50). Resulting in a total annual benefit of $ 67,534.5. Is the lower calculated amount ($ 63,026) due to the maximum family limit? If yes, perhaps the calculator should provide that detail? Thanks in advance for the help.
You have two misunderstandings. First, everything in the calculation is based on the PIA, which is the benefit you would each have at your full retirement age. So your actual benefit at 68 and 4 months is not used in the spousal calculation, it is your PIA.
Second, your wife's total benefit will have two parts. You calculate it by figuring her benefit and a spousal benefit based on what the situation would have been if you both claimed at your full retirement ages. The spousal benefit is one half of your PIA and then subtract her PIA from that. Her total benefit is the sum of the benefit on her own work record, plus the spousal benefit. The benefit on her work record is permanently reduced because she claimed on her record at 62. If she waits until her full retirement age to file for her spousal benefit (you also have to have claimed), she gets the full spousal benefit calculated above. If she claims her spousal benefit prior to her full retirement age, that portion of her benefit is also reduced. It's tricky.