Two Social Security Claiming Case Studies, One Conclusion

This is the latest in a series of biweekly articles featuring Social Security claiming case studies drawn from the ALM publication “2024 Social Security & Medicare Facts,” by Michael Thomas with support from Jim Blair, a former Social Security administrator, and Marc Kiner, a planning expert with extensive experience in public accounting.

Scenario No. 1: Single Earner With the Option to Delay

Virginia was never married and is not eligible for benefits from any other individual’s work record. She was born in September 1962, meaning her full retirement age is 67, and her projected monthly FRA benefit is $2,024.

Given this straightforward situation, Virginia’s options are limited to filing for benefits on her own work record between ages 62 and 70.  If she delays benefits past her full retirement age, she will earn delayed retirement credits — but when she dies, the benefit ends, and no survivor will benefit from the bigger monthly check.

Key to the claiming math is her actuarially projected death age of 87, according to the authors. There is more than a $90,000 difference in the projected total lifetime payout between the potential claiming strategies.

What the Numbers Show

With respect to maximizing the lifetime projected benefit, the least effective approach would see Virginia file at age 62 in October 2024 for a reduced worker benefit of $1,425. This would give her a projected lifetime benefit of $431,775.

More than $60,000 in additional projected benefits comes from assuming Virginia can rely on other income sources and wait to file for her full retirement age benefit in September 2029, when she turns 67. This approach delivers a projected lifetime benefit of $493,856.

The optimal approach, according to the authors, is for Virginia to wait until September 2032 to file for her maximum benefit of $2,509 at age 70. This results in a projected lifetime benefit of $521,872 — an increase of more than $90,000.

Scenario No. 2: Married Couple Five Years Apart in Age

Another scenario considered by the authors involves George and Joan, a married couple five years apart in age. Given their birth years, George will reach full retirement age at age 66 1/2, while Joan reaches her FRA at 67.

In the scenario, George had significantly more income than Joan, who is expected to survive George by 7 1/2 years.