Social Security: When should I claim the benefit if my wife is younger

Question: I’m trying to decide when to claim Social Security. I am 63 and my wife is 62. I believe my wife will receive near $0 in spousal benefits because she’s a member of the Maine Public Employees Retirement System. I also believe that because her pension is about 1.5 times my calculated Social Security benefit of $25,000 she wouldn’t receive a Social Security survivors benefit if I should die.

If she would outlive me by several years, is it better for me to start the Social Security benefit now, and save some of it for the expected difference, or reduce 401(k) withdrawals until required? We do not currently need the income as we can draw down our substantial 401(k)s. However, I would like to make the best decision in case she should outlive me by, say, 10 years.

Answer: If the wife’s government pension is large enough that the Government Pension Offset (GPO) would completely eliminate her benefit as a widow regardless of when he files, then he should make the decision based on his single life expectancy – without considering hers, says Mike Piper, author of “Social Security Made Simple.”

“The Social Security strategy that will allow them to spend the most over their lifetimes would be the strategy that pays out the most benefits over his lifetime,” he says. “Or, more precisely, it would be the strategy that has the highest ‘present value’ of benefits over his lifetime – to account for the fact that claiming benefits earlier allows additional retirement savings to stay invested.”

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If you are in good health, that would point in favor of waiting, says Piper. But if you’re in poor health, that would point in favor of filing earlier.

The writer notes that his wife’s government pension is roughly 1.5-times his Social Security benefit. “Depending on what (he) means by that – and depending on whether she qualifies for a Social Security retirement benefit of her own – she may still qualify for a benefit as a widow,” says Piper.

If he means that her pension is 1.5 times the monthly amount of his benefit at full retirement age, that means she would still get a benefit as a widow, if he were to wait beyond full retirement age, says Piper. “This is assuming she has no Social Security retirement benefit of her own, since (he) did not mention that,” he says. “There may be a very compelling reason for you to wait — likely until 70, unless you are both in poor health.”

One last note: You might benefit from using an online Social Security calculator.

Q: I am a retired, disabled veteran and was charged $147 per month for Medicare Parts A and B. I get full medical and Veterans Administration Choice when needed. Please tell me if keeping Medicare is necessary. I believe it is not.

A: Veterans Administration (VA) health care and Medicare are mutually exclusive, says Katy Votava, president of Goodcare.com and author of “Making the Most of Medicare: a Guide for Baby Boomers.” “Therefore, you do not need to have Medicare to receive VA health care,” she says.

That said, without Medicare Parts A and B you cannot get care from a non-VA hospital, doctor or clinic unless they’re willing to pay in full, says Votava. “In the current environment, many VA facilities and clinics are not keeping up with the demand for health care,” she says.  “Additionally the VA does not provide all types of care folks might need. People with Medicare can go elsewhere as needed. Those without cannot.” 

Votava’s advice: If Medicare costs are a stumbling block, look into the Medicare Savings Program. That program provides assistance with Medicare premiums, co-payments. Note, she says, that a person must meet income and asset requirements.

This Medicare website, www.medicare.gov/your-medicare-costs/help-paying-costs/medicare-savings-program/medicare-savings-programs.html, has more information. 

Robert Powell is the editor of TheStreet’s Retirement Daily www.retirement.thestreet.com and contributes regularly to USA TODAY. Got questions about money? Email Bob at [email protected]om.

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