Social Security
An aging professor is married, and both he and his wife are approaching the age when they can start drawing on Social Security. determine the best strategy regarding when each of them should start receiving benefits.
If the professor starts collecting benefits at age 66, he will receive a PIA of $2000 per month, based on his record of employment and social security taxes. If the professor’s spouse starts collecting benefits at age 66, she will receive a PIA of $1000 per month based on her record of employment and taxes.
1. Considering all three types of benefits (own record, spousal, and survivor), identify the best age for each person to begin taking social security benefits. They do not need to start at the same age. Include the time value of money,and use an interest rate of 3% to discount future cash flows.While the age at death is uncertain, consider that both people will live to their expected age at death, based on their current age and gender. What is the couple’s best strategy as a couple of when they should begin taking benefits?
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