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Maximize your Social Security

By Jennie L. Phipps · Bankrate.com
Thursday, January 13, 2011
Posted: 5 pm ET

I'm looking for three or four volunteers to help demonstrate how much difference the timing of taking Social Security benefits makes in the total amount that you are likely to collect throughout your retirement.

The suggestion that for many people delaying Social Security to at least full retirement age is a wise idea inevitably brings out a host of readers who feel strongly that doing so will prevent them from getting their fair share. One reason they cite is the need to forgo years of smaller amounts that appear to add up to more than they'd get if they waited for a larger payment.

Sometimes that's true -- but often it isn't. Jasuba, a New Jersey-based technology company, has devised a calculator that allows people doing retirement planning to plug in the estimate they receive annually from Social Security, their birth dates, their marital status and a couple of other key facts and see how much various Social Security scenarios would net them.

The tool is available to anyone for $39.99. I initially bought it to calculate numbers for my husband and me, then I was so amazed by the differences in the potential collection scenarios it presented that I decided to write about it. When I contacted the company to let them know I planned to do this, its staff gave me access to a more sophisticated version of the software that allows for even more potential scenarios, including those available to divorced and widowed people.

The scenario that worked best for us was one I would never have contemplated. The calculator concluded that we would collect the most if my husband, who is five years older than I am, waits to collect until I'm 62 and he's 67. At that point, I would "file and suspend" my Social Security benefit (because I still plan to be working), allowing him to collect the spousal benefit -- half of my benefit -- while I delayed collecting my own Social Security until I reach 66, my full retirement age. When my husband reaches 70, he would refile for maximum Social Security on his own record. It sounds complicated, but it nets us nearly $90,000 more over about 15 years than if we both waited until full retirement age to collect.

I'd like to use this calculator to run some more scenarios and share the results with readers. If you'd like me to use your numbers, tell me so in the comments section below. Describe briefly your situation, including your marital status -- married, divorced or widowed -- your age and your spouse or your ex-spouse's age. I'll choose three or four people with various circumstances and contact you via e-mail. If you agree to participate, I'll need more information, but I don't have to publish your name.

This could be an enlightening exercise for everyone.

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102 Comments
L.M.
March 03, 2011 at 8:38 am

I was married 20 years to my ex husband whenour divorce was final about 2 weeks later in 2006. I have SSI due to a brain injury caused by an intraventricular bleed and damage done in 2002. I quit work to homeschool the youngest stepdaughter. I need to know if this would be a viable option for me when I reach retirement age. I am 58, he is 57 and is rmarried. I am not. It sure would be nice to not have to struggle so hard to live each month to month

Paula Yetman
March 02, 2011 at 6:27 pm

Hi Jennie,

My situation is probably a bit of a challenge. I am 60 years old. I was mariied for 13 years and my husband died in 1990 at the age of 40. I had worked full time for at least 10 years before we were married and then stayed home to raise our famiy. I worked immediately after my husband's death to support our children and provide health insurance. I went to college at night and became a teacher in 1999, I have been teaching since. I remarried in 1997 and divorced in 2002. I am worried that I won't have enough in state retirement and that I won't be able to double dip and collect social security. I do plan to work at least 5 more years. I would appreciate any advice you could give me. What if I remarried my ex-spouse as he has suggested. Would that be a greater benefit to me? Thank you, Paula

Paula Yetman
March 02, 2011 at 6:22 pm

Hi Jennie,

My situation is probably a bit of a challenge. I am 60 years old. I was mariied for 13 years and my husband died in 1990 at the age of 40. I had worked full time for at least 10 years before we were married and then stayed home to raise our famiy. I worked immediately after my husband's death to support our children and provide health insurance. I went to college at night and became a teacher in 1999, I have been teaching since. I remarried in 1997 and divorced in 2002. I am worried that I won't have enough in state retirement and that I won't be able to double dip and collect social security. I do plan to work at least 5 more years. I would appreciate any advice you could give me. Thank you, Paula

LD Stricker
March 01, 2011 at 6:51 pm

I am 62, retired w/($2500/mo pension), not collecting SS. I do Engineer consulting ($80k/yr). My wife is 59 working SW Engineer($100k/yr for the last 6yrs) and wants to retire at 62. We have $40k in savings, $600k in 2-annunities. A small older house & 2-cars paid off. We want to retire in the same year and build a retirement home ($600k).
When would we be able to retire and realize the maximum SS benefit.
Regards, LDS

Colin Messer
March 01, 2011 at 2:58 pm

I am 60 and work full-time. My wife is 50 and works full-time. Combined, we make before taxes $110,000 annually. If I retire at 64 the earliest date possible to receive my state retirement, my combined employer and SS incomes would be around $2,300/month with a 3% annual COLA. This is acceptible as I live frugally and grow more our food on my small farm. My wife will likely continue working until 60 or so when she will receive a full employer (teacher's) pension.
Would it behoove me to work longer or retire at 64 and farm full time,at least for the supplemental food and possible business write off?

Stan
February 28, 2011 at 2:18 pm

I would please like your help. My birthdate is 12/28/45 and my wife's is 03/25/49. From our current SS statement I can receive $1988 at 66 and $2624 at 70. My wife would receive $388 at 62 and $515 at 66. We have our own business and I am reporting $36K in wages and she is reporting $18K although because we are a LLC filing as a Sub-S we take in another $50K without SS. We have about $100K in Cash and another $100K in Gold for retirement. We will not be able to live on SS unless our house is paid off and then we have a fighting chance. We consulted an accountant about taking the SS money now and putting it on the house - that is what he recommended. However, he failed to tell us that we would have to pay tax on the SS money. I'm not sure what to do. I've ran all the numbers myself and it seems to me that it's a real toss-up. What do you think?

Sara McIntosh
February 26, 2011 at 6:18 pm

I'm a 42-year-old homemaker and mother of 9. I've had very little income, enough to qualify for benefits, but much less than 500. My husband is nearly 45, and his current income is only in the 40's, but for 6-8 years it ranged from 55K to 90K. Before that, it was in the 20's and 30's. I think his estimated amount that he will receive will actually go down the next year when it reflects the first year he had really low income. (He's a car salesman) However, his is quite a bit higher than mine. How will our very different earning levels affect the best way to maximize our social security benefits, provided they still exist when we retire?

Ann
February 26, 2011 at 4:40 pm

Ijust turned 64. My husband is 77 and has been drawing SS since he turned 65. We both work full time. I am going to retire from my company January 1 of the year I turn 66. I plan to keep working and start a business. We are divorced from previous spouses. Together we earn over $250,000 per year. I am confused about when I can draw SS myself, and if there is a choice for me to wait.

SALLY LEONARD
February 25, 2011 at 5:09 pm

I'm 55, 22K per year, divorced. Married 91/2 years. Ex is also 55 and retired but not drawing social security.

Owen
February 25, 2011 at 5:31 am

I'm 30. 22K per year, full-time work, full-time student, eventually to be a public school teacher. 24-yo fiancee makes ~62K per year as a second-year nurse for the VA (federal employee). I'm curious as to if you think the social security program will even be around by the time we hit 'retirement age' -- if she'd even be eligible for it -- and what you think 'retirement age' might be in 2045 (when I turn 65) and 2051 (when she turns 65).