When to claim Social Security

Hi,
I am a dual US/UK citizen resident in the UK. I can’t decide whether to start claiming SS at 63 (nearly there) or wait until I can clam the full amount at 66 years 6 months. I’ve done the math to the best of my ability, including WEP estimate that starts from 66 when I get my UK State Pension. I’ve calculated up until age 80 that I’ll get $1000 more by waiting to claim the full SS. Obviously that  increases significantly the longer I live (Oh for that crystal ball).However, I’m no longer  working and will need to withdraw from my IRA  to support myself for the next 3.5 years.
 I’m thinking that SS is probably a safer bet than the financial market given the unsettled times we are living, and wonder if the safest option for  long term would be to wait until I’m 66.5.
Does anyone have any advice?. My husband thinks I should claim earlier, and it is tempting.
Many thanks in advance.

If it is just you involved then it is impossible to say for certain which is better. Easy of course if you knew when you were going to die.

In our case we are both dual citizens and my SS is worth much more than my wife’s so as a sort of insurance I am waiting until age 70 so then when I die she will retain my much higher SS. That said, if she files early, before her FRA, then she will get a reduced SS including after I die. (I am a year older and her family have a lot of members living well into their 80s and 90s)

I'm in the camp of it's 50-50 either way. I just started mine at 62.....if for no other reason than I don't trust the politicians to solve the future money crunch coming. I'll take it while I'm still young (ish). There is no "right" answer unless you know when you are going to die. Take it now if your health is iffy or you don't trust politicians........or wait if you think you are going to live a long time. These arguments go on and on online about which is the better choice.

These arguments go on and on online about which is the better choice.

...and on and on and on...   

Thank you, both.
So far,  I’m a fit and healthy 62 year old so will mull it over, but probably will hold off until full retirement age. I had assumed my UK citizen spouse (never lived or worked in US) was not eligible for survivor benefits. If he was, then my decision would be to definitely hold off.

I had assumed my UK citizen spouse (never lived or worked in US) was not eligible for survivor benefits. If he was, then my decision would be to definitely hold off.

That is well worth checking into.

. I had assumed my UK citizen spouse (never lived or worked in US) was not eligible for survivor benefits. If he was, then my decision would be to definitely hold off.

You better check on this.....I am under the impression my wife (UK) is eligible for spousal benefits, and would assume survivor benefits as well. We did move back to the US for 4 years, but I don't know if that has anything to do with it. As it stands, I was planning on her applying for US SS benefits when she becomes eligible in about 2.5 years. I ALWAYS  assume I could be wrong....been a few years ago while researching I thought that was what she was able to do. I think she told me I might be eligible for some of HER UK benefits.

The only way to be positive regards any of the following would be to contact the Federal Benefits Unit at the London Embassy:
https://uk.usembassy.gov/u-s-citizen-services/federal-benefits/

Having said that, US SSA benefits for a non-USC spouse (are/were) possible. I am very familiar with the situation, but I now find all the information on the SSA site is no longer accessible. I don't know if things have changed recently but the US UK Totalization Agreement is still in place. It is the guarantor of the right for a UK resident spouse to claim SSA benefits and survivors benefits from the UK.
https://www.ssa.gov/international/Agreement_Texts/uk.html

The primary SSA retirement beneficiary
First, the SSA must have affirmed an individual is an SSA qualified retirement benefit recipient. In other words, someone with 40+ quarters of SSA qualified contributions. That person must be entitled to (receiving) an SSA retirement benefit.

The non-USC spouse
The UK, non-USC, spouse may not apply for a spousal SSA benefit until the primary SSA beneficiary is in receipt of the SSA retirement benefit, and must meet the SSA age requirements for receiving a benefit. They apply directly to the FBU at the London embassy. The spousal SSA benefit will be 1/2 of the primary beneficiaries benefit amount, provided it is taken at full retirement age (66.5). If the spouse is below FRA when applying, the benefit will be reduced in line with normal for SSA practice. The non-USC spouse may never have lived, worked, or even set foot in the US, but they are still entitled to the SSA benefit.

WEP
The primary SSA beneficiary may have had their SSA entitlement reduced by WEP. The spousal pension will be 1/2 of the WEPed benefit amount if taken at FRA. If taken earlier, it will be 1/2 the WEPed amount plus the normal reduction for an early benefit on the WEPed amount.

The spousal benefit
It may be paid in the UK as is normal practice to the spouse's UK bank account, monthly. It will increase (%) yearly if a COLA award is made by the SSA to SSA retirement benefits. The spouse will be issued with a 'not allowed to work in the USA' social security number and card. They will also be issued a Medicare Part A card.

UK tax
The spouse must file a Self Assessment tax return with HMRC, on the 'Foreign pages', claiming the gross amount of payment made by the SSA during the UK tax year.

US tax
The spouse, if not a US person, will not have to file a US tax return (unless they file as MFJ with a US Person). No US tax is withheld from the SSA benefit. A 1099-R will be issued yearly to both the IRS and the recipient, but SSA retirement benefits are not taxed by the US if the individual is resident in the UK, under the US UK Treaty.

https://www.crevelingandcreveling.com/blog/what-expat-americans-foreign-spouses-need-know-about-social-security

Thank you all. Very useful information.

It's a common and important question. I think one important factor is if you don't claim early will you continue to work? If you do, then financially of course you will be better off if you continue to work. If you have already stopped working and are just deciding whether to claim early or wait (which is where I am), my preference is to claim early. I did the calculations as well using different scenarios and I think I would be 81 before the additional payment received by waiting caught up with the amount I got by taking it early.  And that didn't take into account any income I would generate from the early money by investing it. Not to mention the advantage of not working!

If you will be receiving a UK pension as well, as I will, you have to factor in WEP. If you take US pension at 62 and UK pension at 70, you have 8 years of WEP free pension. Still, in my case, there was little difference between taking UK pension at 66 or 70. The other thing I consider is the fact I'd rather have then income in 60s / 70s when I assume I will be more active than in my 80s....if I waited I would start receiving more money at 81 / 82 but really it was not that much more.

Thanks for your input. It’s a big decision.

Something else to consider - if you are a USC and live outside the USA and you take US social security early, you generally cannot work more than 45 hours per month or own your own business or your entire monthly payment will be docked by the SSA. You get nada for those months. Once you are of full retirement age that should no longer apply.

I'm not sure that applies to non-USC drawing  US social security early, so you'd want to check.

https://blog.ssa.gov/social-security-benefits-u-s-citizens-outside-the-united-states/

https://www.ssa.gov/pubs/EN-05-10137.pdf

Wow! I just retired but this is a minefield. Thank you for the info.