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Hello, I would love some input. My husband was recently told he will be placed on straight commission on his job. This will significantly reduce his income and he feels it may be a precursor to being laid off entirely. He will be 62 in March. We are trying to determine whether to go ahead and apply for SS benefits. If his income does go back to an acceptable level, it seems we have the option to decline the SS benefit if we do it within 12 months. My question is, if he starts receiving benefits and then stops within 12 months, will the benefit amount go up as it would have if he had waited until he was older?
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Make sure you know what he is going to be making on straight commission because depending on income you will have to pay back some of the benefits you receive.
http://https://www.ssa.gov/oact/quickcalc/early_late.html -
Do you have any other sources of retirement income (i.e. IRA, 401k, etc.)? If you do, I would suggest that you start using those resources first to supplement your income. This would prevent any payback of SS benefits as well as allowing your husband to continue to let his SS benefits grow.Comment
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collect early and put it directly into a retirement accountGunga galunga...gunga -- gunga galunga.Comment
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There is really no way to know how much he will make. Based on the past year, not much. Under $20,000. The following could happen:
1. He could be unemployed altogether
2. He could make a small amount in commissions, keep his job and his insurance.
3. He could win a large account he has proposals out for and make pretty good commissions.
Yes, we do have some money in 401K, less than 200,000.
My thinking is maybe we should go ahead and apply for benefits, if one of the first 2 possibilities occurs, we will need it. If the 3rd occurs, my understanding is you can pay back the SS within the first year and delay again.
Any thoughts?Comment
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I wouldn't take it, as the earlier you do the less you will get eventually. Is there any way either of you can pick up an extra part time job? I don't know how much you are scheduled to get in SS, but if it is around the same amount of what he will be making this might be a good chance to to adjust your living standards.
There really are ways to make money on line if needed. A $200K 401K isn't much (but a whole lot more than we have). Most things I have read about using your retirement funds usually recommend not withdrawing more than 4% a year. That is about $8000/year plus your SS.
Is your home paid off or are you renting? Car paid off? There are a lot of things to look at prior to tapping too soon your SS. The longer you can go without doing that the better. Also understand that you can't get Medicare until age 65 for those retiring conventionally. I've been on SSD for about 13 years now and on MC for about 11. Medicare isn't free, unless your income is low enough to make you eligible for Medicaid in your state. That is something you will want to check into, whether if his income falls to $20K/year (did I understand that correctly) and if you aren't working, you might want to see what programs are available for folks in your circumstances.
I know I had to go on SS to replace an income that I would never make again, but I hate the fact that because I had to go on it 20 years too early, my check amount is $1000-1500/month less than it could have been. It has been a struggle with no real hopes of getting much more. COLA raises for SS recipients are a joke. Our 2% increase this year, except for $2, all went into our MC premium, so 3 years in a row at the same amount and you know how the cost of everything is way up.
Anyhow, IMHO, the longer you put off SS the better financially.Comment
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It would be better if you could find a way to wait.
Here is an article that explains it better than I could https://www.nolo.com/legal-encyclope...etirement.html
link to social security How Work Affects your benefits
Social Security Calculator for reduction in benefits due to early retirement.
Something else to consider.
SS will pay more if are able to wait until 70. The SS is comes out to be the same amount of money when you look at the actuarial tables. So, on average the "house" always wins. If you can beat the odds (wait for 70 and live longer than the actuarial tables https://www.ssa.gov/planners/lifeexpectancy.html), you win. But, there is another factor and that is the survivor benefit. Widow or widower, full retirement age or older—100 percent of the deceased worker's benefit amount (assuming it is greater than filing off your own work record). So, if your spouse waited until 70, your survivor benefit will also be greater. https://www.ssa.gov/planners/survivors/ifyou5.html Chances of 1 spouse making it beyond the life expectancy listed in the tables are really pretty good. Nerd's Eye View Life: Expectancy Assumptions In Retirement Plans – Singles, Couples, And Survivors March 19, 2014
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Thanks for the advice. You all have given me a lot to think about. For now, we will wait and see how the straight commission situation turns out.Comment
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Mae, if you need help, many are here that are glad to help in every possible way. No one person is an expert, but there are enough to combine their thoughts and give you good advice, from ways to make daily expenses less to investing what you do have to drawing down what retirement money you have set aside.
Best wishes as you and your husband go on this new route together.Comment
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