File and suspend?
We were going to use this strategy since we have an adult daughter with a severe disability. So...since this strategy won't be available to us(neither my husband nor I is 62 this year), I'm wondering why wait until 70 to retire? Is it true that waiting until you're 70 to retire means you need to live to early or mid-80s to break even? If so, foregoing our daughter's 50% amount for a few years, well, that would push the break-even point farther out. I know the software is not updated yet, but I'm wondering if I'm missing anything. I think it might be obvious. The big problem is that my husband and I are self-employed and plan to work into our 70s, if possible. We love our businesses.... But if we take Social Security before age 70, we will get slammed by taxes, correct? Read that this strategy was used primarily by the wealthy. Not so. I know others with adult children with disabilities were counting on this strategy -- a loophole that was left open until ordinary families, and singles, started benefitting from it.
Sat, 11/07/2015 - 10:38
Your best bet for now is to
Your best bet for now is to wait until the software is updated which should be fairly soon. Then, given your complexity, I would use Maximize My Social Security to see which claiming option it recommends.
Once you have that, input those recommendations into ESPlanner. Call this your "baseline" profile. Make a copy of this profile and run a few experiments. See if taking Social Security earlier works for you overall when compared to your baseline. My guess is it still does not, but you have to test it to know. Even if taxes are high in certain cases, you probably have financial levers that can be adjusted to reduce these. If you are still confused or wondering if you can do better at this point, you may consider purchasing some 1 on 1 consulting from ESPlanner after you've gone through these steps. That may lead to some good alternatives.
The whole breakeven point discussion is somewhat of a red herring. Any of you may live well past the "assumed" dates and ESPlanner can help you if you do, including with your Social Security claiming decisions.
For example, if you are both age 60 right now, the 2011 Period Life Table from Social Security would lead to an over 70% probability that at least one of you will still be alive at age 85 or 25 years from now. It drops fairly quickly, but there would still be a roughly 18% probability that at least one of you is alive at age 95. Of course, your health, family history, current age, etc. all matter, but these are the estimates across everyone in the US.