Over 66 and continuing to work... should I also start collecting benefits?

[bt7810]

My wife is 66 and is currently working full time (at home due to COVID 19) and wishes to continue working, but she wants to know if she should also retire on paper with SS and start collecting her benefits so we can bank them. 

1: Thoughts on doing this?

2: Since she is still working, will her benefits increase every year?

3: Does she have to notify her employer?

4 Something we didn't think about?

[GailL1]

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@bt7810 wrote:

My wife is 66 and is currently working full time (at home due to COVID 19) and wishes to continue working, but she wants to know if she should also retire on paper with SS and start collecting her benefits so we can bank them. 

1: Thoughts on doing this?

2: Since she is still working, will her benefits increase every year?

3: Does she have to notify her employer?

4 Something we didn't think about?

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If it were me, the "banking" the benefits would be a concern to me, at least right now - relatively safe and safer investments are currently pretty dismal - so I think I would elect to keep working and not file for benefits until 70 (or anytime between FRA and 70) because those delayed retirement credits would probably reap a better financial reward than any "banking" or "investment" right now unless you are a real gamble and risk taker.

Social Security Retirement Benefits - Delayed Retirement Credits 

8% as a 12-month rate increase is actually really good and will really help to boost the retirement benefit, since this is EXTRA -  in addition to continuing to work and paying into the system.

Item C on this Social Security page answers many of your questions and gives some other info on Medicare (Part A & B) benefits that could also be beneficial in the decision

Social Security - Retirement Benefits - Your Options: Working, Applying for Retirement Benefits, or ... 

from the link ~

C. You can continue working and not receive your retirement benefits

If you decide to continue working and not start your benefits until after full retirement age, your benefits will increase for each month you do not receive them until you reach age 70. There is no incentive to delay filing for your benefits after age 70. Continuing to work may also increase your benefits, because your current earnings could replace an earlier year of lower or no earnings, which can result in a higher benefit amount.

If you are not receiving your Social Security benefits when you turn 65, you will need to apply for Original Medicare (Part A and Part B) three months before you turn 65. If you don’t sign up for Medicare Part B when you’re first eligible at age 65, you may have to pay a late enrollment penalty for as long as you have Medicare coverage.

However, if you or your spouse are still working and covered under an employer-provided group health plan, talk to your personnel office before signing up for Medicare Part B. Once the covered employment ends, you may be eligible for a Special Enrollment Period to sign up for Part B. If so, you won’t have to pay a late enrollment penalty.

[fffred]

1- Sounds good to me. On the other hand, why not simply delay taking benefits until age 70? She will get the 8% increase each year until that age. It sounds as though the SS will be "banked" anyway, meaning to me it isn't really needed now for cash flow. So consider the advantage of the 8% higher benefit for the duration, versus banking or investing the SS benefit taken now and how much greater that may be. You'll probably want to determine a "break-even" point, although in general I don't find that principle to be worthwhile when considering when to take SS benefits but in this case it's a valid consideration.

2- theoretically, in principle, yes. Depending if the new working years have income high enough to replace some of the 35 working years considered in determining the SS benefit. See https://www.ssa.gov/benefits/retirement/planner/whileworking.html and scroll down to "How Much Can I Earn and Still Get Benefits?".   CORRECTION:   see https://www.ssa.gov/pubs/EN-05-10147.pdf and scroll down to "You Can Keep Working". They say " In addition, as long as you continue to work and receive benefits, we’ll check your record every year to see whether the extra earnings will increase your monthly benefit"

3- I see no reason why this is necessary

4- no comment

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@bt7810 wrote:

My wife is 66 and is currently working full time (at home due to COVID 19) and wishes to continue working, but she wants to know if she should also retire on paper with SS and start collecting her benefits so we can bank them. 

1: Thoughts on doing this?

2: Since she is still working, will her benefits increase every year?

3: Does she have to notify her employer?

4 Something we didn't think about?

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[bt7810]

27 views and not one reply? 🙂

Come on folks...

[cat0w]

Have you all visited the Social Security website and created accounts?

You should be able to find answers there in FAQs.

You both should talk it over and decide what is best for the two of you. How long do you all expect to live?

[bt7810]

cat0w, while your reply contains facts, it doesn't speak to my questions. Do you have any input that would help me with those?

[cat0w]

@bt7810   I provided you with information and my last two sentences are my input. As I was taught in the Army as an NCO I don't want to make a decision for you. If you end up unhappy with what I told you then you would say, but cat0w told me!