Single Individuals

For the purposes of this example and the application of Social Security benefit provisions, let’s be clear on what “single” Means. A “single” is a person whose earnings record is his or hers alone – no one else can claim benefits on it (children, spouses, ex-spouses, parents, etc.). If you have any of these potential claimants, then complexities that relate to couples, and the allied unfavorable consequences of making the wrong decisions, apply to you, as well, and I strongly suggest that we talk. Schedule an appointment.

The Scenario:

You really are a confirmed 60 years young singleton, your Full Retirement Age (FRA) is 66, and your life expectancy is 85.

Strategy 1:

You figure that it would be nice to get some extra income sooner rather than later and decide to claim benefits at age 62.
You would collect the following benefits:

Single Individual Chart 1

And now, let’s find out how a more strategic approach could help you earn more benefits.

Strategy 2:

In this case, there are 19 different scenarios to examined to determine the one producing the highest value for your lifetime benefits given your age and life expectancy.

  • You should take retirement benefits in Jan 2022, at age 70.

Using this strategic approach, total benefits increase by more than 32% over your expected lifetime:

Single Individual Chart 2

  • Lifetime benefits using strategy 1: $419,832.
  • Lifetime benefits using strategy 2: $556,800.

Using maximized strategy 2, the lifetime benefits increase by $136,968.

NOTE: All amounts are in today’s dollars. Lifetime benefits are calculated as the present value of all future benefits assuming you live through your maximum age of life. Discounting is non-actuarial and is based on the real rate of return implied by your assumed nominal rate of return and inflation rate.

But is that really the only answer… to just wait until 70? Frankly, that depends on you. Depending on your other retirement assets, there may be scenarios that call for an earlier claiming strategy. Also, “singles” have a way of becoming “couples” (in this case, I mean “get married or establish a legal common-law relationship”) later in life, and when that happens, the equation changes immediately.

“Singles” who become half of a “couple” often find that children are part of the deal. In any event, each “Single” making up the “couple” must now begin to consider the probable life expectancy of the other person, their FRA, their Primary Insurance Amount (PIA), and the consequences of each of them filing for benefits at different times.
Before you change your status from “single” to “coupled,” we (you, me, and your prospective spouse) should talk. Even if you are resolute in your single-hood, I recommend that we meet to discuss what part your Social Security benefit plays in your larger overall retirement strategy.

The example (even with only 19 different scenarios) appears straight-forward, but any approach to Social Security needs to take into account all of an individual’s potential assets and the unique life circumstances that we all face. I can help sort this out so that you are in the best possible position moving forward.

If you haven’t already clicked on “Schedule an Appointment,” perhaps you’d like to take a moment and do it now.