Summary

The author describes their decision-making process regarding when to claim Social Security benefits, influenced by personal work history, age, and marital status, ultimately choosing to claim immediately due to specific financial considerations and Social Security rules.

Abstract

The author, approaching 65 and eligible for Medicare, reflects on the complex decision of when to start receiving Social Security benefits. Despite initially planning to wait until age 70 for increased benefits, the author reassesses after considering their teacher retirement pension, which would significantly reduce Social Security payments. The decision is further complicated by years of unpaid work in a spouse's business and the subsequent impact on the author's own Social Security benefit. Ultimately, the author decides to claim Social Security immediately, influenced by the realization that their benefit will not increase by waiting and the potential to receive half of their ex-spouse's benefit, which is more than their own full benefit. The author acknowledges past financial decisions, expresses a pragmatic approach to future Social Security payments, and remains optimistic about the stability and growth of these payments over time.

Opinions

The author believes that the Social Security system is complex and that individual circumstances, such as employment history and marital status, significantly influence benefit decisions.
There is a sense of regret for past financial decisions, particularly for working without pay and attributing income to an ex-spouse, which affected the author's Social Security benefit.
The author values the cost-of-living adjustments that come with Social Security benefits over a teacher retirement pension that lacks such adjustments.
The author expresses frustration with the lack of advice from Social Security workers, who are only permitted to provide information.
There is an appreciation for the additional income that claiming Social Security benefits immediately will provide, despite the benefit not increasing by waiting.
The author views Social Security payments as a supplementary bonus rather than a primary source of income in their budget.
The author is optimistic about the future growth and stability of both Social Security and Medium payments, suggesting a reliance on these sources as a form of income.

How I Finally Decided When To Claim Social Security Benefits

I spent a lot of time and brain cells deciding when to start

Photo credit: Markus Winkler on Unsplash

Disclaimer: When it comes to Social Security, everyone’s situation is different. Read this for insight, not advice.

When I turn 65 next month and become a bona fide senior citizen, I’ll start Medicare. Since I’d incur penalties if I didn’t sign up for Medicare within three months of turning 65, that was an easy decision.

But deciding when to start Social Security was another story. I spent far too much time and brainpower figuring that one out.

Part of the reason is that people’s situations are different and the Social Security laws are a hot mess. Another fly in the honeypot is that by law Social Security workers can only give you information, not advice.

According to 2021 stats from the Congressional Research Service, nearly 30% of Americans start drawing Social Security when they first become eligible at age 62. At that age, I was still working as a public school teacher and paid into the Texas Teacher Retirement System. Since I had enough money coming in, I didn’t claim Social Security.

I’d heard you get 130% of full benefits if you waited until age 70 to claim, and I was shooting to begin benefits then. I expect to live a few more decades, and delayed gratification was also a point of pride. It turns out that percentage is somewhat in flux, but the Congressional Research Service report cited above says a person born in 1960 and later will get 124% of her benefit if she waits to claim until age 70.

Anyway, at age 64 I was on track to claim a $600/month Teacher Retirement System pension. But claiming teacher retirement almost wipes out many people’s Social Security payments. And retired teachers rarely receive any cost of living adjustments.

If I’d had a significantly larger teacher pension, I would have managed. But since I didn’t, I decided to ditch teacher retirement and go with Social Security and its cost-of-living increases.

That meant I ditched teaching in public school, but that’s another story.

I spent many years working without pay in my now ex-husband’s business. When I did the taxes, I credited all the income to him.

Yes, I know. Bad decisions over many years. But that’s water under the bridge.

Thanks to working without pay and in the public sector, my Social Security benefit at age 65 is only about $400. If I waited until my full retirement age to claim, I’d get an extra $100.

But Social Security has a bunch of different rules to cover everyone’s situation.

The rule that most impacts my situation is that I’m entitled to half of my ex-husband’s benefit. I didn’t know how big that benefit was until recently. It turns out that half of his benefit is more than the full amount I would earn on my own record.

Another rule that impacts me is one about still working while drawing benefits. Before full retirement age (20 months away), I can only make $21,240 a year with no impact on Social Security. For every $2 I earn above that, my Social Security benefit is reduced by $1.

At least temporarily. Although Social Security will swallow up part of my payment due to excess earnings, they’ll spit those payments back once I reach full retirement age.

Thanks to writing this article, I finally decided when to claim Social Security: immediately!

Since I can use the money now, and my benefit won’t rise if I wait, I signed up to receive payments starting this month.

Photo credit: Alexander Grey on Unsplash

I wish I would have made more of an effort to figure out my Social Security benefit based on my ex’s payment. There are ways you can approximate your benefit based on your ex’s payments even if your ex won’t tell you.

Another bad decision. Sigh. Oh, well, that’s more water under the bridge.

I don’t know what my Social Security payments will be until I reach my full retirement age, but I’m not worried about curtailing my income to keep under the income limits. The withheld income will be a welcome windfall whenever it shows up.

I expect my Social Security benefit to take care of my Medicare premium, but I won’t count on it for anything more than that.

Social Security will be a bonus in my budget, not the backbone — kind of like Medium money.

But as the years roll on, I expect both Social Security and Medium payments to become larger and more stable.

Hopefully, Medium, Social Security, and I will survive and thrive for many years to come.

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