top of page
Search

Savvy Social Security Insights

  • Bob Lawson
  • Feb 23, 2017
  • 3 min read

Retiring with an Age Difference.

If you are 10 or 15 years older than your spouse or partner, to what degree should that age gap influence your retirement planning? You will want to consider this question, for it may affect many aspects of your financial future – such as your planned retirement dates, how you decide to claim Social Security, and how you choose to invest. (1)


Your age difference will lengthen your total retirement experience as a couple. For example, the Social Security Administration projects that the average man turning 62 this month will live 84.6 years and die in 2039. The average woman turning 45 this month is forecast to live 85.5 years and die in 2057. So a hypothetical couple with a 17-year age gap would need to keep a 40-year retirement time horizon in mind if the older spouse or partner retired today, potentially including 17 years alone for the younger spouse or partner.


If you and your partner have an age gap, the two of you might need to work longer and ramp up your retirement saving. A more aggressive approach to investing may be wise. If you are the older spouse, you may want to claim Social Security as late as possible and opt for joint-and-survivor pension benefits. If you are more than 10 years older than your spouse, the calculated Required Minimum Distributions from your 401(k)s and IRAs will end up being slightly smaller than standard. (1,2)


Do You Understand the Social Security “Earnings Penalty”?

Most baby boomers know that their Social Security benefits can be reduced if they earn too much in retirement. While 76% of baby boomer respondents to a 2015 AARP survey understood this fact, 57% also thought they would never recoup those surrendered benefits. That is incorrect.


Social Security’s “earnings test” only applies before you reach Full Retirement Age (66-67 years old, depending on your birthdate). If you receive Social Security benefits before your FRA, your benefits will be reduced by $1 for every $2 in wage income or self-employment income you earn above a $15,720 yearly threshold. During the 12 months prior to your FRA, you can earn up to $41,880 without any of your benefits being withheld; $1 of your benefits will be held back for every $3 you earn above that amount.


If some of your benefits are withheld as a consequence of all this, Social Security will try and make it up to you. After your FRA, your monthly Social Security payment will grow slightly larger; any benefits withheld will gradually be paid out to you, and you will no longer face the “earnings test.” (3)



Citations:

1 - tinyurl.com/zthnpdq [2/2/17] 2 - ssa.gov/cgi-bin/longevity.cgi [2/11/17] 3 - time.com/money/4489827/poverty-among-seniors-has-dropped/ [9/13/16]

This post has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Bob Lawson is not engaged in rendering legal or accounting services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 
 
 

Comments


Financial Plan | Personalized Report | Financial Advisor - Minneapolis

Barrington's Financial Blog

MRFC - PHOTOSHOP 151x104.png

About   |    Our Services   |    Financial Planning   |    Employer Retirement Plans   |    Contact

Litigation Support   |    Expert Witness   |    Pro Bono Services   |    Careers       

Barrington Capital Management, Inc.

3800 American Blvd West   |   Suite 1500

Bloomington, MN  55431

952-835-1000   |    800-741-0704   

Info@BarringtonCap.com

 

Barrington Capital Management, Inc. only conducts business in states and jurisdictions where it is registered or where an exemption from registration exists. This site and its contents do not constitute investment advice or a solicitation to sell securities. Past performance is not indicative of future results. This website is for informational purposes only and Barrington Capital Management, Inc. reserves the right to modify it at any time without notice. Copies of Barrington Capital Management Inc.’s Form ADV Part 2 are available upon request. Images and photographs are included for the sole purpose of visually enhancing the website. No photographs are of current or former clients and they should not be construed as an endorsement or testimonial from any of the persons in the photograph.

All materials used on this site, including all images, are copyrighted and are protected worldwide by copyright laws and treaty provisions. They may not be copied, reproduced, modified, published, uploaded, posted, transmitted, or distributed in any way, without Barrington Capital Management Inc.'s prior written permission.

Neither Barrington Capital Management, Inc., nor any of their Investment Adviser Representatives, provide tax or legal advice. Tax and legal advice should only be obtained from a qualified professional. All written content on this site is for informational purposes only. All information and ideas should be discussed in detail with an advisor prior to implementation. Examples from our news feeds, blogs or articles do not take into consideration commissions, investment management fees, miscellaneous transaction fees, tax considerations, or margin requirements, which are factors that may significantly affect the economic consequences of a given strategy. Investors should review transaction costs, margin requirements and tax considerations with their financial or tax advisor before entering into any investment or financial planning strategy. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness.

Investment Advisory services are offered by Barrington Capital Management, Inc., a Registered Investment Adviser in the state of Minnesota. Barrington Capital Management, Inc. may utilize the services of First Ascent Asset Management, LLC for certain investment portfolios. Insurance products and services are also offered through Barrington Capital Management, Inc., a licensed insurance agency. 

Disclosure: Barrington Capital Management, Inc. is not a law firm. Robert D. Lawson and his associates are not practicing attorneys. The scope of any activities performed by Robert D. Lawson, subcontractors or employees of Barrington Capital Management, Inc. is limited to litigation consulting and litigation support. 

By using this website, you agree to our Terms of Service and Privacy Policy. View our Business Continuity Plan.

Copyright © 2025 Barrington Capital Management, Inc.

A Registered Investment Adviser  |  All Rights Reserved

 

bottom of page