T Rowe Price recently rolled out a new Social Security benefit calculator. Unfortunately, their calculator is not ready for prime time. In fact, in its current state, it is not ready for any time. It gives incomplete and misleading advice that, if followed, could cost some married couples $100,000 or more. I will illustrate some [...]
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How to Calculate the Social Security Supplemental Spouse Benefit
A client recently asked me: “Should I claim my modest Social Security retirement benefit early, say at 62, and then switch to my larger spousal benefit later on?” This question shows a serious misunderstanding of the relationship between retirement benefits and spousal benefits. One can never switch from retirement benefits to spousal benefits. If a [...]
Social Security and the Fiscal Cliff
As negotiations have continued to avert the ‘fiscal cliff”, there have been attempts to balance increases in taxes with reductions in projected entitlement payments. Press reports indicate that the Obama has offered to change the way that Social Security cost-of-living adjustments (COLAs) will be measured. The projected savings from using an alternative measure of inflation [...]
Social Security COLA Watch: October 2012
The CPI-W for September 2012 was released this morning by the Bureau of Labor Statistics, and, just as in August, the index increased considerably from last month, moving up from 227.056 to 228.184. The average of the July, August, and September CPI-Ws is 226.936 which is 1.65% higher than the third quarter 2011 average (the [...]
Presidential Debate: Romney and Obama on Social Security
During the first Presidential Debate the two candidates were directly asked to address the issue of Social Security. Here is what they said: LEHRER: All right? All right. This is segment three, the economy. Entitlements. First — first answer goes to you, two minutes, Mr. President. Do you see a major difference between the two [...]
How Important are Social Security Spousal Benefits?
Many people do not know about Social Security spouse benefits. There may be a good reason for this. There is no mention of spousal benefits in the Your Social Security Statement that the Social Security Administration is again sending out annually to people 60 and over. Spousal benefits are important for just about everyone who [...]
How Do I Maximize My Social Security Benefits?
There are two answers to the question expressed in the title. First, if you are interested in maximizing your monthly Social Security retirement benefits, all you need to do is wait until age 70 to claim your benefits. If you are looking to maximize your monthly spousal benefits, then you should wait until your full [...]
A Misleading Tool: Social Security Break-Even Calculator
Those thinking about whether to claim their Social Security benefits now or later often ask the following question: “If I delay claiming and give up benefits now in return for greater benefits later on, how many years must I wait to get those forgone benefits back? This is known as the “Social Security breakeven time [...]
Can I Double My Monthly Social Security Benefit by Claiming at 70?
Answer: Maybe In a recent posting on Reuters, Lynn Brenner writes about an example provided by T Rowe Price’s Christine Fahlund where someone who claims at 70 can double the monthly benefit that they would have received if they had claimed at 62. This is a surprising result. The usual calculation is that the difference between [...]
New Online “Your Social Security Statement”
On May 1st the Social Security Administration announced that you can now get “Your Social Security Statement” online. To get your own personal statement you can go to: www.socialsecurity.gov/mystatement To obtain your statement you must first set up an account. This can take some time as it requires filling out some personal information and verifying [...]