Ask Terry Questions Wife retiring at 62 — delay SS?

Wife retiring at 62 — delay SS?

By Terry Savage on December 04, 2019 | Financial Planning / Retirement

My wife is retiring at 62 and her retirement will cover health insurance + about $1500/month in cash. She also has 403B and SEP IRAs worth about $1M, and about $1M in non-retirement investmens. In addition, if she waits until 70 to take Social Security it will be an extra $20,000/ year over taking it at 62. I’m 68 1/2 and will retire at 70, and then take my maximum social security and my annual tax deferred distributions.
Does the following plan make sense?
Wife: 1. use non tax deferred investments to supplement retirement income until 70 to let deferred accounts continue to grow tax deferred
2. At her full retirement age of 67, take spousal benefit from my Social Security, then transfer to her full Social Security benefit at 70, and at that time start taking her annual tax deferred distributions

Terry Says

It makes sense for your wife to wait until her FRA to take SS. But she can no longer play the game of taking yours and then switching to hers. That ended a few years ago! So, stick with the original plan of both waiting till FRA to take SS. You can afford it.
You know what you can’t afford? Long term custodial care in case of dementia or other health issue! So consider buying Long Term Care Insurance through a combined life/LTC policy, where you won’t be exposed to rising premiums, and where if you don’t use the benefits for care, your heirs get a death benefit. Read the chapter on that and access resources in the new edition of The Savage Truth on Money, available from Amazon through the link on my website!

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