Q & A
Should my husband take Social Security benefits at his full-retirement age and use it to pay down credit card debt? Should he wait until age 70 with $25,000 credit card debt and try to continue with monthly payments? Do we have any options with student loans?
Full Question: My husband is 66. I am 58. We are employed as teachers. My husband is healthy and still has energy for this job. We have a ton of credit card debt, plus loans for two children going through college and a loan for my master’s degree. The credit cards were used for travel for our children to and from college and for us to visit aging parents. We live far away from family, and our children went to college out of state. Not the best decision now with the debt, but when you live in Hawaii and all the family is on the mainland, our kids didn’t even consider in-state universities.
Here is my question: Should my husband take Social Security benefits at his full-retirement age and use it to pay down credit card debt? Should he wait until age 70 with $25,000 credit card debt and try to continue with monthly payments? Do we have any options with student loans?
Answer: You have a complex situation, and only expert life-cycle financial planning software can assist you. Social Security provides a tremendous return to patience. If you have some other means of paying down the debt or if it doesn’t carry a huge interest rate, your husband should wait until 70. This will maximize his retirement benefit and also your widows benefit were he, God forbid, to pass away.
Source: Laurence Kotlikoff: a William Fairfield Warren Professor at Boston University, a Professor of Economics at Boston University, a Fellow of the American Academy of Arts and Sciences, a Fellow of the Econometric Society, a Research Associate of the National Bureau of Economic Research, President of Economic Security Planning, Inc., a company specializing in financial planning software, and the Director of the Tax Analysis Center
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