Should Husband Take Social Security Now?

[iditarod]

HI,

He had a stroke 3 years ago, and was forced into early retirement 2 years ago.
He has a pension of $600 per month, but has not yet filed for social security.
He is now 64.

He has recovered from the stroke extremely well, and can still work as a freelance professional. He just doesn't have much gumption to get customers, and pretty much sits around surfing the net unless somebody calls him to give him work.

He had savings of $17,000 2 years ago when he was forced to retire. That's pretty much gone now, and he is now looking at having to take money out of his 401K to get by. He has $70,000 in his 401k.

Wouldn't it be better if he files for social security, and continues to work part time, than do things this way? I know he wants to wait and get the full social security benefit, but he is eating up his own assets doing things this way.

He might be able to expect a long life - his father is in his 90's. But my husband is on nasty meds with nasty side effects, and it's a constant fight to protect his health from that. We just went through this with one med that caused him stage 3 kidney failure, which is now back to normal because I got him off that med. But who knows what nasty med the doctor will come up with next?

Should he file for social security now?

Thanks for your thoughts!

 

[bluediamond]

Here is one thing to consider:

Some pensioners stand to lose $413 a month in Social Security

 

[FRJ]

I guess everyone was afraid to answer this one. Read this brochure from SSA on When to Start Receiving Retirement Benefits:
http://www.ssa.gov/pubs/EN-05-10147.pdf

Consider an immediate annuity for some of the funds in the 401K.

 

[AlTheGud1sRtakn]

The longer you can delay social security the more monthly income you can draw from it. BUT, you're also spending down your other funds in delaying it which reduces your liquidity.

You need to find a licensed professional in your area that you can sit down with, go over your goals, needs, etc to figure out what makes the most sense for you. It's a balancing act between maximizing cash flow and your liquid net worth.

 

[scagnt83]

The longer you can delay social security the more monthly income you can draw from it. BUT, you're also spending down your other funds in delaying it which reduces your liquidity.

You need to find a licensed professional in your area that you can sit down with, go over your goals, needs, etc to figure out what makes the most sense for you. It's a balancing act between maximizing cash flow and your liquid net worth.

Most people will get the same amount out of SS if they wait or if they take it as soon as possible. Even the SSA says that.

SS is designed like a SPIA. You get x amount up to your life expectancy. Take it early and it is a lower monthly payment. Take it late and its higher. Either way the cumulative payments are designed to be the same or close to the same.

The big difference is that your loved ones do not get what is leftover (generally speaking) like they do with traditional assets. So spending down extra retirement assets just to delay SS lessens the chance that there will be anything left for your loved ones when you pass.

I have seen statistics that show every year you delay SS is like an 8% increase in account value. But the same could be said for delaying a SPIA payment... and it's often an even higher number with the SPIA.

Imo, the biggest factor is if they actually could use the extra income now vs. later. What % of overall income will it make up? Will it make a difference? etc.