Retiree with $140,000 income told waiting may lift wife's safety net

A 67-year-old retiree with about $140,000 a year in pension and disability income has been told that waiting until 70 to claim Social Security may be the stronger move if his chief worry is protecting his wife.

The case came through MarketWatch’s Moneyist column, written by Quentin Fottrell. The reader said he receives military retirement, a state retirement benefit and a disability payment as a disabled veteran. His wife, 62, works by choice and has already begun taking Social Security of $1,500 a month.

The retiree said he could claim $3,000 a month now, $3,420 at full retirement age, or $4,338 if he waits until 2030, when he says he will be 70. His big concern: if he dies first, he said his retirement income for his wife would fall to about $30,000 a year.

Fottrell’s answer was bluntly reassuring: either claiming path is available to the couple, but delaying has a clear survivor-benefit advantage if the husband dies first.

According to the Moneyist column, a surviving spouse can generally receive 100% of the Social Security benefit the deceased spouse was getting, as long as the survivor has reached full retirement age when claiming survivor benefits. That means a larger benefit earned by waiting could translate into a larger payment for the wife later.

The column said the retiree’s break-even point for waiting until 70 would likely fall in his mid-to-late 70s, though the precise age would depend on future cost-of-living adjustments, taxes and investment returns. If he claimed now and died before that point, the earlier claim could produce more total money during his lifetime.

Fottrell noted that the couple does not appear to need Social Security to pay everyday bills. The reader reported roughly $2.5 million in stocks, mutual funds and IRA accounts, including traditional and Roth IRAs, plus about $600,000 in home equity. He also said the couple owes about $50,000 on two cars and generally taps investments only for occasional trips.

Because the household already has enough income, Fottrell said the better argument for delaying would be raising the wife’s guaranteed lifetime benefit rather than building more assets.

The column also urged the retiree to review the survivor terms on his military and state pensions. Fottrell said some pensions can provide substantial survivor benefits if that option was chosen at retirement, while others may not. If pension income would shrink sharply after his death, the case for a larger Social Security survivor benefit gets stronger.

Healthcare got a warning label

The reader said he uses Medicare Advantage and Tricare for Life, while his wife also uses Tricare. He also said both have long-term-care insurance, leaving medical costs largely covered.

Fottrell cautioned that Medicare Advantage can add perks such as dental, vision and gym benefits, but it also makes Medicare Advantage the primary payer and can require patients to use approved networks. The column said original Medicare is the government fee-for-service program, while Medicare Advantage is offered by private insurers and bundles Medicare coverage.

MarketWatch reported that more than 35 million seniors, roughly half of Medicare beneficiaries, are enrolled in Medicare Advantage. The column also said some medical centers are turning away Medicare Advantage patients for certain treatments because reimbursement rates are too low to cover costs, and that prior authorization can be complex.

Fottrell closed by telling the couple to talk with each other and a financial adviser. He also noted that Congress has acted before to keep Social Security from exhausting its funds, while the reader had raised concern about the trust fund’s future.

This story draws on original reporting from MarketWatch.