when to claim Social Security Archives

Dear Liz: My husband is 13 years older than I. Unfortunately, when he went in to sign up for Medicare several years ago, the clerk talked him into taking his Social Security as well since he had reached full retirement age. Now I am wondering when to take mine. My benefit at full retirement age would be more than half of his but less than his full amount. Considering that there is a fair chance I will outlive him, what should I do about claiming? We are supporting an elderly relative and the expenses are fairly high. Other than that we are well off.

Answer: As you probably know, it’s the higher earner’s benefit that determines what the survivor ultimately gets. By starting at his full retirement age, your husband missed out on several years of delayed retirement credits that could have boosted both benefits by up to 32%.

There’s nothing you can do about that now, but you can be careful to maximize your own benefit. That means waiting at least until full retirement age to apply. Delaying until age 70, when your benefit maxes out, makes sense for most people, but consider using a claiming strategy tool such as Maximize My Social Security or T. Rowe Price’s Social Security Optimizer.

Dear Liz: The standard advice is to delay taking Social Security as long as you can. But if I plug my expected benefits into an Excel spreadsheet, I find that my total benefit if I retire at 67 doesn’t pass my total benefits if I retire at 62 until I turn 77. Retiring at 70 seems like it only pays off, in the long run, once I am 79.

Answer: A spreadsheet is not the best way to determine when to take Social Security, since it can’t capture many of the important factors that should go into the decision.

A key one is survivor benefits. If you’re married and the higher earner, your benefit determines what the survivor gets after one of you dies. Applying early could mean locking the survivor into an inadequate income for the rest of their life.

Another factor is longevity risk, which is often poorly understood. Many people underestimate their life expectancy and the possibility of outliving their savings. Maximizing a Social Security benefit gives you some insurance against that risk.

A free Social Security claiming calculator, such as the one offered by AARP, is a much better place to start. You can learn even more from a paid version, such as the ones offered by Maximize My Social Security and Social Security Solutions.