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Valued Social Butterfly
Posts: 8,612
Registered: ‎08-18-2008

Re: Early Retirement Best Options to Avoid Penalties

Message 1 of 5 (10,589 Views)

iaustin wrote:

Why thank you GailL for such an informative response.

 

In reviewing the table you referenced I need a couple of clarifications:
a - The Spouse's Benefit listed in the tables is confusing me(I see that whopping 65% for age 63). That benefit reduction applies to a none working spouse correct? It has nothing to do with two individuals like the both of us who has worked over the past 40 years right? Our early retirement reductions are still range around 7% - 25% correct?


Sorry for the delay in getting back to you with a reply - got a lot going on.

 

To answer you last question 1st:

You asked:  Our early retirement reductions are still range around 7% - 25% correct?

From your description of both of your ages when you retire - you 65, your spouse 63 - that seems about right since both of your full retirement ages are 66.

 

You asked:

That benefit reduction applies to a none working spouse correct? 

Not all the time - a working spouse can file to get spousal benefits too -

 

Social Security Benefits: Benefits for Spouses

 

Social Security Benefits - Retirement Planner: Benefits For You As A Spouse

 

If you qualify and apply for your own retirement benefits and for benefits as a spouse, we always pay your own benefits first. If your benefits as a spouse are higher than your own retirement benefits, you will get a combination of benefits equaling the higher spouse benefit.

 

Hope this helps - just remember that by filing for benefits BEFORE Full Retirement Age, there will be a reduction - regardless of filing for ones's own benefit or as a spouse.

 

 

 

 

Info Seeker
Posts: 3
Registered: ‎10-15-2010

Re: Early Retirement Best Options to Avoid Penalties

Message 2 of 5 (10,624 Views)

Why thank you GailL for such an informative response.

 

In reviewing the table you referenced I need a couple of clarifications:
a - The Spouse's Benefit listed in the tables is confusing me(I see that whopping 65% for age 63). That benefit reduction applies to a none working spouse correct? It has nothing to do with two individuals like the both of us who has worked over the past 40 years right? Our early retirement reductions are still range around 7% - 25% correct?

Info Seeker
Posts: 3
Registered: ‎10-15-2010

Re: Early Retirement Best Options to Avoid Penalties

Message 3 of 5 (10,637 Views)
Why thank you GailL for such an informative response. In reviewing the table you referenced I need a couple of clarifications:
a - The Spouse's Benefit listed in the tables is confusing me(I see that whopping 65% for age 63). That benefit reduction applies to a none working spouse correct? It has nothing to do with two individuals like the both of us who has worked over the past 40 years right? Our early retirement reductions are still range around 7% - 25% correct?
Valued Social Butterfly
Posts: 8,612
Registered: ‎08-18-2008

Re: Early Retirement Best Options to Avoid Penalties

Message 4 of 5 (10,648 Views)

iaustin wrote:

Hello,

 

I will be 65 years old this year and my wife will be 63. According to SSI tables I have seen, I will be assessed a penalty of about 7%. My wife's penalty will be appx 25%(that's huge--please verify).

 

Question:  Looking for suggestions; what is the best way for us both to retire this year without being over penalized?

 

Any feedback or suggestions will be greatly appreciated.

 

Thank You

IAustin

 

 


Your analysis seems about right - 

Social Security Administration Info: Retirement Planner: Full Retirement Age

Notice the chart at the bottom of the page.  By my calculations your wife was born in 1954 - so her Full Retirement Age (FRA) is 66, just like yours -

 

I say this because, starting THIS year, 2017, those who are turning 62 will have even more of a reduction in early retirement because starting this year, 2017, we are on the way to 67 being the FRA and this rise is incremental.   As you will notice from the chart, for those born in 1955 to 1960 and later, months start adding into the FRA and if you begin an early retirement with those birth years, the reduction will add in an amount based on that FRA, including the months.  This will increase the reduction in benefits for early retirement unless the number of months is also accounted for when filing application for early retirement for those born in 1955 and later based on this chart.

 

I see NO way to get around the calculations in reduced benefits if both of you have decided to retire this year based on your 2017 ages of 65 and 63 - neither of these ages is FRA so the reductions will be figured into each of your benefits.

 

For you, since you will be 65, remember that Medicare Part B premiums will also have to be paid out of your benefit.  For MOST of those signing up in 2017, the standard Part B premium amount is $134 (or higher depending on your income).  You will make a decision about how you will get your Part D benefits and/or how you want to get your Medicare benefit - under the original Medicare program or via a Medicare Advantage plan.  You might want to start thinking about and learning about Medicare too.

Medicare.gov - Medicare 2017 costs at a glance

 

 

Info Seeker
Posts: 3
Registered: ‎10-15-2010

Early Retirement Best Options to Avoid Penalties

Message 5 of 5 (10,656 Views)

Hello,

 

I will be 65 years old this year and my wife will be 63. According to SSI tables I have seen, I will be assessed a penalty of about 7%. My wife's penalty will be appx 25%(that's huge--please verify).

 

Question:  Looking for suggestions; what is the best way for us both to retire this year without being over penalized?

 

 

Any feedback or suggestions will be greatly appreciated.

 

Thank You

IAustin