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January 30, 2024 at 10:42 AM
When and how one claims Social Security will have a profound effect on their lifetime retirement wealth. Getting the call right can result in tens or potentially even hundreds of thousands of dollars of additional lifetime benefits compared with suboptimal claiming choices. Unfortunately, there’s nothing simple about Social Security claiming.
Presented below is the first in an ongoing series of biweekly articles featuring Social Security claiming case studies drawn from a newly updated ALM publication, “2024 Social Security & Medicare Facts,” by Michael Thomas with support from Jim Blair, a former Social Security administrator, and Marc Kiner, a planning expert with extensive experience in public accounting.
Blair and Kiner boast more than 35 years in practice. They work together at Premier Social Security Consulting, a firm providing Social Security education, accreditation and resources to financial advisors.
As the authors demonstrate through these case studies, every claiming scenario is unique and requires its own considerations.
The Scenario: Single With a Deceased Ex-Spouse
One case study shared by Blair involves a woman named Brenda.
Brenda was married to her ex-husband for more than 10 years. Her ex-spouse has passed away and she is now eligible for surviving divorced spousal benefits or her own retirement benefits. Under the law, she can file for the survivor benefit at any time now since she is at age 60.
Brenda is currently single, but since she is past age 60, even if she remarries, she is still entitled to surviving divorced spouse benefits. She has several options for claiming involving both her own workers benefit and the surviving divorced spousal benefit.
Given the specific details of her claiming situation, Brenda effectively has six main claiming strategies to consider, and their respective projected lifetime benefit values range from a low of $573,620 to a high of $843,429.
What the Numbers Say
The least effective projected strategy would involve two claiming actions, starting with Brenda filing for her own worker benefit in June of 2026 when she reaches at 62, which would give her a reduced monthly benefit payment of $1,851.
