When to take social security

[cmpajor]

I retired at the end of 2021. I am 67 and plan to defer taking social security until I turn 70. I have sufficient funds in my retirement accounts to support myself and my wife. I am in fairly good health but do have several chronic conditions. My wife is also retired but is 4 years younger and is taking her social security. I want to maximize my benefit and also her survivor benefits by waiting until 70. Is that the right strategy? What should I consider

[Cate9]

Hi! Great question!  There are several things to consider when planning for your spouse's future.  One thing that many people don't understand is that when one spouse passes, the surviving spouse does not necessarily get the full benefit of the decedent's social security payments.  The surviving spouse may only receive a portion of the decedent's social security payment, but not the full payment. It depends on the age of the surviving spouse. 

These are examples of the benefits that survivors may receive:

• Surviving spouse, full retirement age or older — 100% of the deceased worker's benefit amount.
• Surviving spouse, age 60 — through full retirement age — 71½ to 99% of the deceased worker's basic amount.
• Surviving spouse with a disability aged 50 through 59 — 71½%.
• Surviving spouse, any age, caring for a child under age 16 — 75%.
• A child under age 18 (age 19 if still in elementary or secondary school) or who has a disability — 75%.
• Dependent parent(s) of the deceased worker, age 62 or older receive:
• One surviving parent — 82½%.
• Two surviving parents — 75% to each parent.

Percentages for a surviving divorced spouse would be the same as above.

There may also be a special lump-sum death benefit.

Here is a link to the SSA website for more explanation.  https://www.ssa.gov/benefits/survivors/ifyou.html#:~:text=Surviving%20spouse%2C%20full%20retirement%....

As for building up your social security account, if you are not currently paying into social security, through working at a job, you will not really get much benefit from waiting to take social security benefits. If you are truly concerned about your spouse having enough to live on after you pass, you might consider taking the SSI now, and putting those funds into a trust or some other secure instrument to be paid out to her upon your passing. That way you can put away those additional funds and allow them to grow for her use after you pass. This can be set up to pay in full upon your passing, or to pay out in monthly payments.  A trust attorney would be able to help you set this up. 

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[rschule1]

Hi There- This question is for a financial planner, which at Turbo Tax we are not.  FYI,  it's very difficult to forecast the best time to claim Social Security because of unknowns such as life expectancy, emergency expenditures, inflation, return on investments, etc. Specialized forecasting software will likely be needed. Hence the need for a financial planner.  Good Luck