The Investment Scientist

Posts Tagged ‘social security

images-82Recently, a doctor nearing retirement age approached me with the question of how to maximize his social security income. He is 62, and his wife is 4 years his junior. He made substantially more money than his wife, and as a result, his PIA is $2400, and his wife’s PIA is only $1000.

PIA, or primary insured amount, is the monthly amount a retiree would get if he or she retires at the normal retirement age, currently 66. For every year earlier (or later) that one retires, one would get 8% less (or more). The youngest one may retire is 62 and the oldest is 70.

I’ve found over the years that many people give very little thought to maximizing their social security income, and they jump at the first opportunity when they turn 62 to claim their benefits. But in so doing, they could be leaving nearly half a million dollars on the table. Read the rest of this entry »

ImageA few days ago, my wife came home telling me the story of a sweet old lady she had met at her army clinic.

She is a 75 year old lady from Thailand, married to an American veteran for 40 years. Her husband just passed away a few months ago at the age of 92.

She couldn’t stop telling my wife how much she missed her husband, that he had married her despite the fact that she was a divorced woman with kids and that she could barely speak English. She went on and on about how he had treated her like a queen, buying her all the pretty things women like and so on and so forth.

Now everytime she passes by her husband’s picture, she still cries; and yet the memory of her husband is all she’s got left, now that she has no income and the home she has lived in for 40 years is being foreclosed.

What happened?

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Is this your retirement fund?

A client of mine is about to retire, and she asked me when she should start to receive social security payments.

Complicating her decision is that her husband passed away 10 year ago, and she is currently working for the federal government.

It quickly dawned on me that this is actually a very complicated question, one that this advisor, most of whose clients are doctors and business people in their 40s and 50s, is not well-equipped to answer.

You can imagine my delight when I found out on a flight that the foremost social security expert of the country, Mary Beth Franklin, was sitting right next to me.

She is a former senior editor of Kiplinger. After she retired from the job, she became a contributing editor of InvestmentNews, a magazine for financial advisors.

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Author

Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC.

Twitter: @mzhuang

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