There is one wrinkle that people waiting should be aware of. If you’re planning to wait on your own SS until age 70, you can still draw your spousal benefit without impacting your own future benefit, but your spouse has to be at full retirement age (66 for today’s retirees) and I believe you might have to be also.
Say you’re 67 and your spouse turns 66. She declares her intent to file for SS, but then simultaneously defers her benefit. By declaring, she makes you eligible for her spousal benefit which is half of her age 66 benefit.
So, you then file for her spousal benefit and collect a thousand or so per month until you’re 70 at which time you can switch over to your own full 70-year-old benefit (if it’s higher than what you’ve been getting as a spousal benefit.)
Your spouse can take SS anytime after 66 without impacting the strategy. It gives you several thousand dollars extra a year until you’re 70 without having to claim your own, so you can let your future payments on your own SS continue to grow at 8% per year.
I procrastinated on this for a couple of years before checking on it and was relieved to find that you can’t use it until your spouse is 66, and as I said, I believe you have to be also, but I’m not sure on that. The Social Security website will have that info though, if you dig for it.
This only works out if your full age-70 benefit is higher than your spousal benefit however.
If you’re nearing retirement age - say 50 or over - it’s well worth checking out two free social security calculators on the internet -
http://www.aarp.org/work/social-security/social-security-benefits-calculator.html
http://individual.troweprice.com/public/Retail/Retirement/Social-Security-Tool
Once you hit 60 or so you get inundated with invitations to retirement seminars. Many of them throw out figures as to how many different ways there are to claim social security. Yes, a financial adviser can provide that information, but you can do some of your own research, including using those two free calculators.
These free calculators will cover techniques like spousal benefits and “file and suspend”.
My husband and I will also be looking to minimize taxable income between retirement and age 70 so that we can convert some of our conventional IRAs to Roth IRA at a 15% tax bracket.
“There is one wrinkle that people waiting should be aware of. If you’re planning to wait on your own SS until age 70, you can still draw your spousal benefit without impacting your own future benefit, but your spouse has to be at full retirement age (66 for today’s retirees) and I believe you might have to be also.”
Yes, we did that exactly.
It works for us.
I’m waiting for 70 to file for my benefit.