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Figuring Social Security options

By Jennie L. Phipps ·
Tuesday, June 4, 2013
Posted: 5 pm ET

I've been using a sophisticated Social Security calculator -- Social Security Income Planner -- to determine the best way for my divorced friend to take her Social Security.

There are a number of these calculators available for a modest fee that help those aged 50-plus figure out a Social Security strategy that can make a huge difference in their retirement planning. These calculators are particularly effective for married couples, widowers and divorced people who were married at least 10 years. All of these people have the option of claiming spousal benefits.

My friend didn't work outside the home during her 13-year marriage and has never earned very much since her divorce. Her ex-husband is a very high earner. She is 62 and has no pension and little savings. Social Security will be her largest source of income in retirement.

Here's how we calculated her situation:

  • If she takes Social Security at 62, she'll be entitled to $908 on her own account, plus $70 in spousal benefits for a monthly total of $978. If she lives to be 85, the average lifespan for a woman her age, she would collect a total of $335,240, assuming a 2 percent annual cost-of-living allowance.
  • If she waits until age 66 to collect Social Security, she'll be entitled to $1,263 on her own account, plus an additional $104 in spousal benefits, for a total of $1,367 a month. By age 85, she will have collected $376,571. That's $41,331 more for waiting four years.
  • If she delays collecting until age 70, her monthly benefit will grow to $1,804, and she'll get an additional $112 in spousal benefits for a total of $1,916 a month. By age 85, she'll have collected $400,968 -- an additional $24,397 for waiting another four years.
  • But there's a better way. If she waits until 66 and files for spousal benefits only, called a "restricted application for spousal benefits," she'll get $1,395 a month, which is more than she would have received had she filed for her own benefits, plus a share of spousal benefits. In the meantime, her own benefits will grow until she reaches age 70, when she can collect $1,840 on her own record. By age 85, this adds up to a lifetime total of $454,823 -- a $53,855 difference compared to collecting at age 70 with spousal benefits.

If you are in a similar position, it pays to get access to one of these calculators and examine the options. My friend found it very comforting to know that a few more years of work and choosing the right strategy could make such a big difference in her retirement security.

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April 26, 2014 at 5:23 pm

What about widow's social security? I will be 60 in about 3 months
and SS will not give me the full amount my husband was getting.
They will be shorting me about $50.00,per month which is alot.

March 31, 2014 at 9:06 am

You ever notice that anytime you're involved with the good ole U.S. Government, you feel as if you missed the wrong days in school? Whatever the topic, social security, income taxes, veteran's benefits, must have been discussed on those days you were absent? Or, maybe we the people didn't get any education on these and other essential subjects, because like everything else in this system, it's a political football and we're all riders? I'm just saying.

Judy S
March 29, 2014 at 4:33 pm

All of this info is a bit confusing. If you decide to take a spousal benefit at age 66 from a divorced situation. Do you state that in a application? If you do this and continue to work does it allow you to resubmit a claim or are you stuck with the initial value given on the spousal claim? Also, how much can you earn until you decide to retire at 70? and how much can you earn if you continue to work after 70?

Jacklyn Curtis
March 26, 2014 at 3:25 pm

I was told the highest you can collect from SS is $1800 per month. How can I find out where SS gets the info that they figure what I am Paid. I filed after retirement age. Can I possibly get a higher amount now that I am 70. If I want to find out the information on how SS figured out how much I should get in SS payments , where should I go. Would the irs have this information. Do you know anything about borrowing money from SS on the monthly payment I get. On website yahoo windfall frim SS. Thank You Jacklyn Curtis

Edward Woolverton
March 26, 2014 at 2:54 pm

I'm 76 & have been getting Social security for 11 years, (about 1,300 per mo.)I'm still working (self-employed) still paying into the system.can I get an increase at any time?

Fran Street
March 26, 2014 at 1:48 pm

When I applied for Social Security at age 66 I was told that the original amount quoted to me, nine hundred and something would be decreased based on the fact that I took an early retirement from Department of Defense (May 14, 1994) when the Presidio closed and was receiving a small annunity. I went to work in private industry sometime in 1995 and I'm still employed in private industry. I also worked in private industry prior to working for DOD. I don't understand why my Social Security would be decreased based on my annunity from DOD and would appreciate the details involved. Also, in Oct or Nov of the past two years I was sent a letter from Social Security stating I was underpaid and would receive a lump sum minus taxes sometime in December, which I did. I can understand a mistake and the adjustment for the first year but I wuold think that would be corrected instead of repeated the following year, is this the norm? Thanks for your time.

Phyllis Nourie
June 18, 2013 at 7:39 pm

When I tried to sign up for SS using this scenerio,(collect 1/2 of husband's then collect all of mine @ 70) I was told that was not the way it worked. You sign up once and that is what you get. There is no program where you can refile at a later date if you have already received benefits. Either correct this article, or show me how I can make use of this.

Rebecca R
June 05, 2013 at 6:27 am

How can she bring in so much if she never paid into the quarters that folks always talk about?