What most people don't realize is, while people with higher incomes have paid more into SS, it's designed to benefit/assist lower earners. SS is a "program" in a sense. It was never intended to be a sole source of retirement income.
Wowowowowow! That's a plethora of useful information on SS. I can definitely make some informed decisions on SS using this video. I won't remember 85% so you're going in a Playlist!
The way I understand it is the total income up to the yearly cap for the highest 35 years is added together after applying the wage index adjustment each year. This amount is divided by 35 years and 12 months. This AMI is then applied to bend points. Working a short amount after reaching second bend point helps very little. I've worked 30 years at mostly max. Working each additional year will only add like 50 a month to PIA.
I believe that a surviving spouse can also get a social security benefit at age 60 vs the "normal" 62. This can make the decision of drawing the deceased spouse benefits at age 60 then switching to their own at age 67 or 70 even more beneficial.
Great info James! In my case, I began collecting last year art FRA. I also maxed out my FICA in 2023, resulting in an additional $55 per month in 2024. I will replace a crappy year from 1982 this year and likely receive an additional $12 or $13 next year based on 24 earnings even though I won’t come near the maximum this year. Life is good. I don’t even take out money from my retirement accounts.
The main premise is correct but the calculation for SS benefits is very wrong. The bend points are not used on current earnings, only on the AIME which is calculated after wages earned are indexed to current wage levels and after division by 420 months (35 years x 12 months).
Thank you for this excellent explanation, James. Thanks to your previous help, I will start SS as early as 65 - depending on how the market is doing when I turn 65 (in 4 yrs). If the market is doing well, I will continue to defer.
Excellent, very informative video! With one small quibble: I wish that when discussing delaying social security as was done in this video, that the sort of obvious point that NOT delaying social security and in fact collecting early puts a lot of the money that you would get by delaying instead into your pocket immediately or much earlier (thereby creating the mentioned break-even point when age eighty-something is reached) that it would ALWAYS be explicitly explained. (Because, in my experience, people who are not particularly good with numbers or finances in general don’t always necessarily catch on to this critical idea…that is, that the government is always paying you the same overall social security benefit regardless of when you collect, when you are actuarially combined with everyone else.)
Exactly. The difference from delaying comes if you live longer than the break-even, or you have a spouse that might outlive you to collect the increased benefit longer (odds increase that one of you will live well past the break-even age).
Another way to increase Social Security benefits is to replace low income years with higher income years (all must be adjusted for inflation to determine how much needs to be earned for it to count as "higher"). I already had 35 years of Social Security earnings, but 10+years were at low income (working very part-time while caregiving or in school). Over each of the last few years, I have worked enough to replace one of those very low income years with a still part-time but significantly higher income year (still in the 35% range). As I have done this, I have watched my projected benefit at 67 increase from about $1640/month to just over $2000. I plan to continue working part-time for a few more years yet (I enjoy it) and will keep replacing low earnings years as I do so. I am curious to see how much higher my projected benefit may go.
I James, in the case of divorced people, is it still possible to claim spousal benefit? If so, is there some threshold length of marriage to qualify? Five years, ten, twenty? - OK. You just answered that question. Ten years or more. Thanks.
My kind of video, although I bet few people are geeky enough to agree with me ;) I would point out though that once the second bend point is passed, the ROI on the marginal contributed dollar is 0.52 on an actuarial basis. That might go up to 0.52*1.5 = 0.78 if the spousal benefit is maximized, and more if a spousal benefit comes into play. It's hard to justify continuing to work for extra SS benefit in this context. But it is worthwhile to continue working for other reasons for people who have marginal retirement numbers. The most obvious is another year of W=2 or self-employment income to cover living that does not come out of the nest-egg. The other reason, as mentioned, are DRC.
The Social Security quarter credits and the $1,174 90% rule is why we advise business owners to put their children on payroll, even if those children may be on course to be highly compensated employees. 1. A certain number of Quarter Credits, based on age, are required for benefits. So, if someone dies early, just out of college, there could be no benefits for surviving children, because of a lack of quarter credits. 2. Sometimes every highly compensated people won't work a full 35 years, and there are many reasons why a person may lack a full 35 years of credit, illness, long term unemployment, left the workforce to take care of children. By paying children at least that $1,174 monthly income, you replace a zero calculation year with $12,679.20 year. That may sound small, but in terms of calculation of benefit, it is more important to have that year in your account, than a higher level year. Going from $50,000 a year to $100,000 a year, only generates an additional $7,500 calculation for that year. Years in Social Security really matter. You really need that base of 35 years.
My last year of work I figured I just needed to earn more than $16,000 to replace a prior low earning year (don't forget AWI adjustment). I was hoping the last bonus would be better, but oh well. I still figured I was done with 47 years of earning history.
I’m 62. Plan to retire at 67. My SS says I will get $3570. Not sure that’s good or not. I have 2.2 million in 401k. Should have close to 2.5 million at 67. Will have no debt. I still don’t feel that is enough!!
Pal, unless you have 2 wives, 1 yacht, and 1 airplane, you have more then enough, and yes $3570 is plenty, almost twice the average amount, don’t forget that $3570 will get 5 years of COLA adjustments also, so conservatively 12% more, so $4000. With 2.5 mil I’d wait till 70 for SS and live off my 401k for 3 years. Add another 24 % to that $4000, that’s another $960 for a total of $4960 a month. And don’t forget every future COLA increase, say 2% on $4000 as opposed to 2% on $4960, see how it works year after year
You may be able to retire sooner, consider your health and “go go” healthy years of early retirement ! You can delay collecting SS, maybe start at 65 when you qualify for Medicare. That’s what I did, used 18 months of COBRA for my health care, and retired at 63.5.
Very interesting on the first $1174 you earn. Makes a lot of sense to take a part time job to get the 35 years of working and/or replace years where only earned a couple of thousand per year. Like during high school
If you only have a couple of 0s or very low earning years, replacing those with higher earning years won't actually make much of a difference. Cuz your base is 35 years.
Not sure where my murder mystery head is at, but as you were discussing spousal benefits of someone who was married for at least ten years before divorce, there appears to be a potential incentive for the divorced spouse to become a surviving divorced spouse (in other words, off their divorced partner) to receive 100% rather than 50%. Hmmm.
Can you explain how a teacher pension works together with spousal benefits? As a teacher in CA, we don't pay into SS and don't get our own SS benefit, but as I understand it, we are entitled to a reduced amount of a spousal and survivor benefit.
Yes, government pension offset (GPO) and windfall elimination provision (WEP) will apply to most who have a pension where they didn't pay into SS (although legislation has been proposed to change that). There are some exceptions (like if that person was also employed for 20-30 years in a job where they did pay into SS).
Strange to think I’ve worked for 49 years when including those part time jobs during high school and during college. I’m part of the generation that didn’t get a social security number until that first job.
In the Work 35 Years section, you talk about the first $1,174/month. But does SS care about monthly granularity? For example, could I earn 12 X $1174 in January and not work the rest of the year, or does it need to be spaced out?
Even if the main provider in the family takes his Social Security benefit at 65 so two years early ……..as long as the spouse then waits until 67 she will receive half of the benefit as if the main provider had waited until till 67. I have plenty of money, but I’m taking mine at 65 because I want to spend the Feds money while I’m still young to enjoy it. The break even is 81 years of age and at 81 I want care about the difference in money moving forward.
The higher-earning spouse has to be collecting their benefit in order for the lower-earning spouse to collect spousal excess benefits. So, if the higher-earner is waiting until age 70 to maximize their benefit (which is often a good way to go), the lower-earning spouse can take their own benefit, but won't get the extra "top off amount" until the higher-earning spouse collects. That's if they are still married- if divorced, rules are different.
Basically, yes. The exception would be if your own benefit is close to 1/2 of the spouse benefit, then the increase in your benefit by waiting longer may mean yours could exceed the 1/2 spouse amount and you always get the higher amount. The way it works, simplified, is your benefit is calculated as of your full retirement age. Then the spousal benefit is calculated and the "top up" of your benefit to 1/2 that spousal benefit is calculated. Then if you claim early that discount amount is subtracted from the total, so the net will be less than 1/2. If you claim later, the top up portion is reduced because your component is more, but the top up will never subtract from your component.
Basically nothing. Working while taking SS prior to your full retirement age, if you earn enough, will reduce your current SS benefit but increase your future benefit.
One thing you didn't specifically mention is that your spousal benefit is half of what your spouse's benefit is at full retirement age of 67,even if your spouse starts collecting at 62 - as long as you wait until 67 to start collecting your spousal benefit.
And, if still married, your spouse has to be collecting in order to collect a spousal excess payment. If divorced, the spouse just has to be at least 62 and you have to have been divorced for 2+ years.
For maximum benefit, start collecting Social Security at age 62. If two men begin collecting at different ages-62 and 67-and both pass away at 78 (average life expectancy), the man who started at 62 would receive $18,000 more in total payments than the one who waited until 67. Don’t be misled into delaying!
I think it is about correct that a male born 62 years ago had an average life expectancy of 78 years the day he was born, but for those who made it to age 62, the average life expectancy is 83.5 at 62 years old. Taking benefits 5 years before FRA reduces the benefit by 30% Taking those two things together (and presuming that that the benefit is spent rather than invested), the average early retiree gets 0.7*21.5 Vs the late retiree who gets 1.0*16.5 The late retiree is already ahead**. If the late retiree has a spouse then delay is likely that much better (presuming other considerations are equal.) ** For completeness sake for those that like their discussions a bit more involved, I'll mention that the average remaining longevity numbers can have much better accuracy than mentioned. The reason is that males at age 62 already have a good idea of their health. They know if they smoke, if they are obese, or if they are diabetic or have untreated hypertension. They know if they have a lifetime of eating meat, and if they are slugs. Many already know about heart disease. The 62 year old cohort can easily be segregated by lifestyle risk factors and a few hereditary risk factors, and the average remaining longevity can then be calculated for each sub-group. The sub-group without lifestyle risk factors gains about a 10 year advantage, so they can use the average longevity of a 72 year old which is over 89 years old.
The median life expectancy for a male who has already made it to 62 is 81, according to the Social Security Administration. 50% of 62 year old males will live well into their 80’s. Don’t confuse the average life expectancy of the entire population with the L.E. of the cohort that has already outlived many of those who died early. Average life expectancy increases as you age.
Survivor benefits are based on what the deceased was collecting (or was eligible to collect) when they passed. That's one reason why it is often best for the higher-earning spouse in a couple to wait until age 70 to collect- a higher benefit for their lower-earning spouse who will only get the higher benefit after the spouse's death (their own lower benefit will cease). There is an exception called RIB-LIM for people whose spouse began collecting at an early age, which may provide a higher amount for the survivor benefit. So, that is what the survivor benefit is based on. The benefit is reduced if the surviving spouse takes it before their full retirement age. It maxes out at their FRA (so there is no benefit to waiting until age 70). The surviving spouse can take their survivor benefit as early as age 60 (50 if disabled), and let their own earned benefit grow until it maxes out it age 70. Or, they can take their own as early as age 62 and wait until their survivor benefit FRA to take the max survivor benefit. Earnings limits are in place for either benefit until FRA, so that is something to keep in mind as well.
I beleive that if the surviving spouse starts benefits before their FRA they will be penalized accordingly, just like anyone who starts benefits early. If the deceased spouse started SS at 70 then the surviving spouse can benefit from their delayed credits. However, there is really no benefit for the surviving spouse to wait beyond their FRA to begin benefits.
Survivor is whatever the other spouse was collecting, unless they had not yet started. Then, if I understand correctly, you get what they would have received if they claimed the month they passed. If they pass before full retirement age then more factors come into play.
Those Bend Points are a middle to higher income earner killer for the social security benefit. That’s why it is laughable when folks cry “the wealthy don’t pay their fair share”. The “wealthy” (over $88K for 2025) heavily subsidize the social security system. It is one of the more progressive taxes we have. That’s why Devon Carroll shouldn’t feel so guilty about his expected SS benefit. This also means for consistently high earners, working longer has a diminishing return on your SS benefit. Even if you do not have 35 years of FICA taxed income. The bend points wash out most of the gain - specifically, 1st every extra year of income gets washed out by 35 years of inflation adjusted income average… 2nd only 15% of your income over $88K (2025) gets counted in your SS AWE income base. Keep in mind you’re also continuing to pay the 7.65% FICA (twice that for self-employed, or from your employer) tax every year you work.
True, but remember that working longer shouldn't just be about your Social Security amount. If one has a higher income, in theory they can save additional sums of $. That figure is probably much higher than the additional Social Security amount gained. Social Security wasn't meant to be the sole source of income during retirement years.
Strange to think I’ve worked for 49 years when including those part time jobs during high school and during college. I’m part of the generation that didn’t get a social security number until that first job.
What most people don't realize is, while people with higher incomes have paid more into SS, it's designed to benefit/assist lower earners. SS is a "program" in a sense. It was never intended to be a sole source of retirement income.
Kudos to you, you explained some thing that’s incredibly nuanced in a way that the general public can understand and apply.
I’m 59 and have worked 45 years. We should get a bonus
Wowowowowow! That's a plethora of useful information on SS. I can definitely make some informed decisions on SS using this video. I won't remember 85% so you're going in a Playlist!
Another great video James, thanks for all the great content!!
The way I understand it is the total income up to the yearly cap for the highest 35 years is added together after applying the wage index adjustment each year. This amount is divided by 35 years and 12 months. This AMI is then applied to bend points. Working a short amount after reaching second bend point helps very little. I've worked 30 years at mostly max. Working each additional year will only add like 50 a month to PIA.
An example with an inherited IRA would be good. That adds a complexity on sequence of return risk
I believe that a surviving spouse can also get a social security benefit at age 60 vs the "normal" 62. This can make the decision of drawing the deceased spouse benefits at age 60 then switching to their own at age 67 or 70 even more beneficial.
Great info James! In my case, I began collecting last year art FRA. I also maxed out my FICA in 2023, resulting in an additional $55 per month in 2024. I will replace a crappy year from 1982 this year and likely receive an additional $12 or $13 next year based on 24 earnings even though I won’t come near the maximum this year. Life is good. I don’t even take out money from my retirement accounts.
The main premise is correct but the calculation for SS benefits is very wrong. The bend points are not used on current earnings, only on the AIME which is calculated after wages earned are indexed to current wage levels and after division by 420 months (35 years x 12 months).
Thank you for this excellent explanation, James.
Thanks to your previous help, I will start SS as early as 65 - depending on how the market is doing when I turn 65 (in 4 yrs).
If the market is doing well, I will continue to defer.
Excellent, very informative video! With one small quibble: I wish that when discussing delaying social security as was done in this video, that the sort of obvious point that NOT delaying social security and in fact collecting early puts a lot of the money that you would get by delaying instead into your pocket immediately or much earlier (thereby creating the mentioned break-even point when age eighty-something is reached) that it would ALWAYS be explicitly explained. (Because, in my experience, people who are not particularly good with numbers or finances in general don’t always necessarily catch on to this critical idea…that is, that the government is always paying you the same overall social security benefit regardless of when you collect, when you are actuarially combined with everyone else.)
Exactly. The difference from delaying comes if you live longer than the break-even, or you have a spouse that might outlive you to collect the increased benefit longer (odds increase that one of you will live well past the break-even age).
I'm 62, plan to retire at 63 with a $50K annual pension. Will my social security check be reduced because of the pension value if I apply at 63?
Another way to increase Social Security benefits is to replace low income years with higher income years (all must be adjusted for inflation to determine how much needs to be earned for it to count as "higher"). I already had 35 years of Social Security earnings, but 10+years were at low income (working very part-time while caregiving or in school). Over each of the last few years, I have worked enough to replace one of those very low income years with a still part-time but significantly higher income year (still in the 35% range). As I have done this, I have watched my projected benefit at 67 increase from about $1640/month to just over $2000. I plan to continue working part-time for a few more years yet (I enjoy it) and will keep replacing low earnings years as I do so. I am curious to see how much higher my projected benefit may go.
I
James, in the case of divorced people, is it still possible to claim spousal benefit? If so, is there some threshold length of marriage to qualify? Five years, ten, twenty? - OK. You just answered that question. Ten years or more. Thanks.
Ten years + never remarried. If remarried, you can't claim spousal benefits.
My kind of video, although I bet few people are geeky enough to agree with me ;)
I would point out though that once the second bend point is passed, the ROI on the marginal contributed dollar is 0.52 on an actuarial basis. That might go up to 0.52*1.5 = 0.78 if the spousal benefit is maximized, and more if a spousal benefit comes into play. It's hard to justify continuing to work for extra SS benefit in this context.
But it is worthwhile to continue working for other reasons for people who have marginal retirement numbers. The most obvious is another year of W=2 or self-employment income to cover living that does not come out of the nest-egg. The other reason, as mentioned, are DRC.
The Social Security quarter credits and the $1,174 90% rule is why we advise business owners to put their children on payroll, even if those children may be on course to be highly compensated employees.
1. A certain number of Quarter Credits, based on age, are required for benefits. So, if someone dies early, just out of college, there could be no benefits for surviving children, because of a lack of quarter credits.
2. Sometimes every highly compensated people won't work a full 35 years, and there are many reasons why a person may lack a full 35 years of credit, illness, long term unemployment, left the workforce to take care of children. By paying children at least that $1,174 monthly income, you replace a zero calculation year with $12,679.20 year. That may sound small, but in terms of calculation of benefit, it is more important to have that year in your account, than a higher level year. Going from $50,000 a year to $100,000 a year, only generates an additional $7,500 calculation for that year. Years in Social Security really matter. You really need that base of 35 years.
You misunderstand how AIME is calculated
My last year of work I figured I just needed to earn more than $16,000 to replace a prior low earning year (don't forget AWI adjustment). I was hoping the last bonus would be better, but oh well. I still figured I was done with 47 years of earning history.
Don't simply retire from something; have something to retire to.
Do the 35 years have to be consecutive? Thanks for this informative video
No they don’t
I’m 62. Plan to retire at 67. My SS says I will get $3570. Not sure that’s good or not. I have 2.2 million in 401k. Should have close to 2.5 million at 67. Will have no debt. I still don’t feel that is enough!!
Pal, unless you have 2 wives, 1 yacht, and 1 airplane, you have more then enough, and yes $3570 is plenty, almost twice the average amount, don’t forget that $3570 will get 5 years of COLA adjustments also, so conservatively 12% more, so $4000. With 2.5 mil I’d wait till 70 for SS and live off my 401k for 3 years. Add another 24 % to that $4000, that’s another $960 for a total of $4960 a month. And don’t forget every future COLA increase, say 2% on $4000 as opposed to 2% on $4960, see how it works year after year
You may be able to retire sooner, consider your health and “go go” healthy years of early retirement ! You can delay collecting SS, maybe start at 65 when you qualify for Medicare. That’s what I did, used 18 months of COBRA for my health care, and retired at 63.5.
Very interesting on the first $1174 you earn. Makes a lot of sense to take a part time job to get the 35 years of working and/or replace years where only earned a couple of thousand per year. Like during high school
If you only have a couple of 0s or very low earning years, replacing those with higher earning years won't actually make much of a difference. Cuz your base is 35 years.
Not sure where my murder mystery head is at, but as you were discussing spousal benefits of someone who was married for at least ten years before divorce, there appears to be a potential incentive for the divorced spouse to become a surviving divorced spouse (in other words, off their divorced partner) to receive 100% rather than 50%. Hmmm.
Can you explain how a teacher pension works together with spousal benefits? As a teacher in CA, we don't pay into SS and don't get our own SS benefit, but as I understand it, we are entitled to a reduced amount of a spousal and survivor benefit.
Yes, government pension offset (GPO) and windfall elimination provision (WEP) will apply to most who have a pension where they didn't pay into SS (although legislation has been proposed to change that). There are some exceptions (like if that person was also employed for 20-30 years in a job where they did pay into SS).
Strange to think I’ve worked for 49 years when including those part time jobs during high school and during college. I’m part of the generation that didn’t get a social security number until that first job.
Thank u .
In the Work 35 Years section, you talk about the first $1,174/month. But does SS care about monthly granularity? For example, could I earn 12 X $1174 in January and not work the rest of the year, or does it need to be spaced out?
1 month or 12 it doesn’t matter.
In you example January work will cover the first bend point for the year.
Even if the main provider in the family takes his Social Security benefit at 65 so two years early ……..as long as the spouse then waits until 67 she will receive half of the benefit as if the main provider had waited until till 67. I have plenty of money, but I’m taking mine at 65 because I want to spend the Feds money while I’m still young to enjoy it. The break even is 81 years of age and at 81 I want care about the difference in money moving forward.
So should you take the spousal benefit (if applicable) at 67…since it won’t go up at all from 67 to 70 anyway? Is that correct?
The higher-earning spouse has to be collecting their benefit in order for the lower-earning spouse to collect spousal excess benefits. So, if the higher-earner is waiting until age 70 to maximize their benefit (which is often a good way to go), the lower-earning spouse can take their own benefit, but won't get the extra "top off amount" until the higher-earning spouse collects. That's if they are still married- if divorced, rules are different.
Yes
You can’t take the spousal benefit until the spouse takes their benefit.
Basically, yes. The exception would be if your own benefit is close to 1/2 of the spouse benefit, then the increase in your benefit by waiting longer may mean yours could exceed the 1/2 spouse amount and you always get the higher amount. The way it works, simplified, is your benefit is calculated as of your full retirement age. Then the spousal benefit is calculated and the "top up" of your benefit to 1/2 that spousal benefit is calculated. Then if you claim early that discount amount is subtracted from the total, so the net will be less than 1/2. If you claim later, the top up portion is reduced because your component is more, but the top up will never subtract from your component.
What happens to SS calculations if I take SS at 67 AND still work part time in a low wage fun job.
Basically nothing. Working while taking SS prior to your full retirement age, if you earn enough, will reduce your current SS benefit but increase your future benefit.
If someone has divorced twice, and was married to each for more than 10 years… do they get to pick which spouse benefit to take?
Yes, SS will offer the highest amt.
Yes..pick whatever is higher
One thing you didn't specifically mention is that your spousal benefit is half of what your spouse's benefit is at full retirement age of 67,even if your spouse starts collecting at 62 - as long as you wait until 67 to start collecting your spousal benefit.
And, if still married, your spouse has to be collecting in order to collect a spousal excess payment. If divorced, the spouse just has to be at least 62 and you have to have been divorced for 2+ years.
For maximum benefit, start collecting Social Security at age 62. If two men begin collecting at different ages-62 and 67-and both pass away at 78 (average life expectancy), the man who started at 62 would receive $18,000 more in total payments than the one who waited until 67. Don’t be misled into delaying!
The average life expectancy of a male that is already 62 y/o is 82, although there is still an argument for claiming early
I think it is about correct that a male born 62 years ago had an average life expectancy of 78 years the day he was born, but for those who made it to age 62, the average life expectancy is 83.5 at 62 years old.
Taking benefits 5 years before FRA reduces the benefit by 30%
Taking those two things together (and presuming that that the benefit is spent rather than invested), the average early retiree gets 0.7*21.5 Vs the late retiree who gets 1.0*16.5
The late retiree is already ahead**. If the late retiree has a spouse then delay is likely that much better (presuming other considerations are equal.)
** For completeness sake for those that like their discussions a bit more involved, I'll mention that the average remaining longevity numbers can have much better accuracy than mentioned. The reason is that males at age 62 already have a good idea of their health. They know if they smoke, if they are obese, or if they are diabetic or have untreated hypertension. They know if they have a lifetime of eating meat, and if they are slugs. Many already know about heart disease. The 62 year old cohort can easily be segregated by lifestyle risk factors and a few hereditary risk factors, and the average remaining longevity can then be calculated for each sub-group. The sub-group without lifestyle risk factors gains about a 10 year advantage, so they can use the average longevity of a 72 year old which is over 89 years old.
Actually, to arrive at your life expectancy, one needs to factor in your current age - not from age 0.
www.ssa.gov/oact/population/longevity.html
Average life expectancy of a 62m in the US is around 82. The fact that you made it to 62 improves your odds.
The median life expectancy for a male who has already made it to 62 is 81, according to the Social Security Administration. 50% of 62 year old males will live well into their 80’s. Don’t confuse the average life expectancy of the entire population with the L.E. of the cohort that has already outlived many of those who died early. Average life expectancy increases as you age.
How are survivor benefits affected if the surviving spouse collects before their full retirement age? What if they wait till 70?
Survivor benefits are based on what the deceased was collecting (or was eligible to collect) when they passed. That's one reason why it is often best for the higher-earning spouse in a couple to wait until age 70 to collect- a higher benefit for their lower-earning spouse who will only get the higher benefit after the spouse's death (their own lower benefit will cease). There is an exception called RIB-LIM for people whose spouse began collecting at an early age, which may provide a higher amount for the survivor benefit.
So, that is what the survivor benefit is based on. The benefit is reduced if the surviving spouse takes it before their full retirement age. It maxes out at their FRA (so there is no benefit to waiting until age 70). The surviving spouse can take their survivor benefit as early as age 60 (50 if disabled), and let their own earned benefit grow until it maxes out it age 70. Or, they can take their own as early as age 62 and wait until their survivor benefit FRA to take the max survivor benefit. Earnings limits are in place for either benefit until FRA, so that is something to keep in mind as well.
I beleive that if the surviving spouse starts benefits before their FRA they will be penalized accordingly, just like anyone who starts benefits early. If the deceased spouse started SS at 70 then the surviving spouse can benefit from their delayed credits. However, there is really no benefit for the surviving spouse to wait beyond their FRA to begin benefits.
Survivor is whatever the other spouse was collecting, unless they had not yet started. Then, if I understand correctly, you get what they would have received if they claimed the month they passed. If they pass before full retirement age then more factors come into play.
Those Bend Points are a middle to higher income earner killer for the social security benefit. That’s why it is laughable when folks cry “the wealthy don’t pay their fair share”. The “wealthy” (over $88K for 2025) heavily subsidize the social security system. It is one of the more progressive taxes we have. That’s why Devon Carroll shouldn’t feel so guilty about his expected SS benefit.
This also means for consistently high earners, working longer has a diminishing return on your SS benefit. Even if you do not have 35 years of FICA taxed income. The bend points wash out most of the gain - specifically, 1st every extra year of income gets washed out by 35 years of inflation adjusted income average… 2nd only 15% of your income over $88K (2025) gets counted in your SS AWE income base. Keep in mind you’re also continuing to pay the 7.65% FICA (twice that for self-employed, or from your employer) tax every year you work.
True, but remember that working longer shouldn't just be about your Social Security amount. If one has a higher income, in theory they can save additional sums of $. That figure is probably much higher than the additional Social Security amount gained.
Social Security wasn't meant to be the sole source of income during retirement years.
Social Security is the base upon which all other retirement income is stacked, so choose wisely.
Is the social security benefit not running out when I retire? 😂
Strange to think I’ve worked for 49 years when including those part time jobs during high school and during college. I’m part of the generation that didn’t get a social security number until that first job.