First, I would like to thank those who advised me on my previous post requesting information on spousal Social Security.
The author of the book “Money Magic” has a web site, www.maximizemysocialsecurity.com, which for $40 calculates various scenarios given the actual annual Social Security earnings which can be obtained at MySocialSecurity.gov.
Given the importance of the decision, I decided to do this.
As advised by aj485 and BruceCM, I am not allowed to pause my benefit and also receive a spousal benefit based on DH’s benefit. However, the web site advised that our cumulative individual and personal benefits could be maximized by both of us pausing our benefit now (Feb. 2022) and re-starting it at age 70. For DH, that would be late 2022. For me, that would be early 2024. The cumulative benefit was substantial – $88,500 over the course of a lifetime projected to be 100 years.
Ah, but wait! The devil is in the details! The calculator did NOT show the year-by-year cumulative effect of following this strategy.
I copied the annual benefits into an Excel spreadsheet. I would miss almost 2 years of benefits, while DH would miss most of one year, a deep hole. The small increase in the benefit after age 70 gradually filled these large holes.
The breakeven point of this strategy is reached when we are 82-83 years old. After that, the benefits gradually accumulate, growing to the substantial cumulative benefit at age 100.
I feel that this calculator was useful in giving numbers for me to analyze. But I feel that the lack of annual cumulative numbers hides the detrimental effect of following the recommended strategy for those who don’t expect to live a very long life.
The annual positive difference by waiting until age 70 produces a relatively small benefit after a long wait, but a significant negative difference if we die before age 80, as I expect we will.
I think this was a useful exercise. Of course, everyone will have a unique situation based on their income and life expectancy.