No Cookie Cutters

Just as no two individuals are the same, so too must advice be tailored to the individual.  When the only Certainty in Life is Uncertainty and when everyone has a different Check out Date, it’s imperative that each recommendation on How and When to Claim Social Security Benefits be specifically tailored to the individual and their unique circumstances!  Recently I’ve had a couple of situations that validated this truth.

Case Study #1 – Minor Children

Joe is 65 and currently claiming benefits under SSDI of $744/mo.,  his wife Amy who is 64 is still working but expects to retire in April 2021, her PIA (check at full retirement age is 66 & 4 months) is $3,061.  What’s makes the situation interesting is that they have 3 minor children (daughter 16 and twins 12).  Currently the children are receiving $124/mo. each based upon their father’s benefits.

Under Primary Strategy (Highest Cumulative Lifetime benefits – 85 for Joe & 95 for Amy) Amy would delay her own benefits until age 70, but would be able to claim child at home benefits of $93/mo. until twins turn 16, but this would also reduce the children’s benefits to $93/mo. due to maximum family benefit.  When daughter graduates from high school the twins will split what daughter was receiving.  When Amy turns 70 she will claim her own benefits of $3,900/mo. and Joe would switch to spousal of $1,500/mo.  When she turns 70 the kids will all be over age 18.

An Alternative Strategy would be for Amy to claim in April when she retires.  Since she is not at FRA her check would be $2,631/mo. and Joe would switch to spousal and see his own check increase to $1,077/mo. BUT MOST IMPORTANTLY each of the children would see their own checks increase from $124/mo. to $658/mo. and additional $534/mo. or $6,400/yr.

Overview!  By going with the Alternative Strategy and having Amy claim when she retires in April vs the Primary Strategy where she would wait until age 70 before claiming, the family will have received an additional $300,000 over the next 6 years.  The breakeven between the 2 strategies is when Amy is 91 years old without taking into consideration the time value of money!  The main negative to this course of action will be that Amy’s check at 70 will be $2,600 vs $3,900 or a difference of $1,300.  The key here is exploring all different scenarios and integrating Social Security with other assets and needs of the family in the short and long term!

I’m also sorry to say that I am seeing more and more instances where grandparents are raising their grandchildren, should they become legal guardians of these children Social Security options may apply.

Case Study #2 – Widow

Ann age 64 lost her husband in 2019 and has decided to retire and claim benefits.  Her own benefits at FRA are $1,700 and her survivorship benefits would be $2,848.  She recently visited with the folks at SSA as to what her options would be?  They recommended that she claim survivorship benefits of $2661/mo.  Since she is not at FRA her survivorship benefits would be reduced for the rest of her life since she claimed 2 years early!

A much better option would be for her to claim on her own record now and delay claiming survivorship benefits until she reaches her FRA (66 & 2 months).  Instead of receiving $2,661/mo. she will receive $1,419/mo.  However, when she reaches her FRA her check will be $3,100/mo. vs $2,770/mo. or an extra $330/mo. or $4,000 more per year by waiting 2 years.  The breakeven is about 11 years but the difference at age 90 is approximately $90,000 and $500 more per month going forward.

In this case Ann is 64, but if she were 62 and given this same advice the difference at FRA would be $3.215 vs $2,569 or $646/mo. x 12 = $7,750/yr. and a difference at age 90 of $180,000 and over $1,000 more per month going forward.

WARNING – This is not the first widow I’ve consulted with that was given the advice to claim survivorship benefits early vs. waiting until FRA.  It’s a shame that such advice is not subject to Fiduciary Standards!


This is just 2 examples of WHY it’s absolutely imperative that everyone run a thorough analysis of all their options prior to claiming.  As an aside, these cases were referrals from Financial Advisors who wanted me involved in the recommendation.

Let’s have a Great Year!

Dave Zander, CFP®