My client, who I’ll call Sarah, recently lost her husband, Alan, prematurely at his age of 62.
Fortunately, Alan and Sarah had saved diligently for retirement and Alan also had several life insurance policies in place on his life.
Sarah and I met recently to review the best way for her to take her Social Security option, since she had retired a few months earlier.
Since there are are many timing decisions that she can choose from and ways to coordinate both her own benefit and her survivor benefit, I plugged her situation into my Social Security Timing software to find the best results.
The software is able to run all the potential options available to her and, based on an estimate of how long she may continue to live, provide an optimum claiming strategy.
In her case it made the most sense to begin by taking her own benefit immediately (reduced because she is taking it before her full retirement age), and to allow her survivor benefit to grow each year until she reaches her full retirement age. At that time she would switch to her survivor benefit, which would be higher than her own.
A comparison of taking her own benefit right now for the rest of her life, versus coordinating with her survivor benefit which she will switch to in a future year, gave her more than $250,000 of lifetime benefits (assuming she lives till age 90).
Her claiming strategy ended up depending on her current age, work status, and the amount of her benefit versus her survivor benefit.
It always pays to test all the options available and see which one will yield the most.
PLUS: Whenever you’re ready… here are 3 ways I can help you get the most out of your retirement:
- Get personalized recommendations for Social Security
If you have not decided how or when to take Social Security, evaluate all your options with the Social Security Timing Calculator. Get started.
- Attend a Maximizing Social Security class
Reserve your spot at our upcoming October class at College of the Canyons. Reserve your spot.
- Find out how long your money will last.
If you are not 100% confident about your retirement, evaluate how long your investments may last so that you can make improvements before it is too late. Reply to this email with “EVALUATION” in the subject line for all the details.