Products You May Like
Today’s column examines the determination of spousal benefit amounts, taking reduced retirement benefits before later filing for spousal benefits, widow(er)’s benefits before retirement benefits, the availability of spousal benefits and how they can be reduced. Larry Kotlikoff is the founder and president of Economic Security Planning, a company that markets Maximize My Social Security, a Social Security benefits calculator referred to in this post.
See more Ask Larry answers here.
Ask Larry about Social Security:
How Will My Social Security Spousal Benefit Be Calculated?
Hi Larry, I will be 62 in August and am thinking of drawing my Social Security benefits. My husband is still working and will not be eligible to draw until 202. I do not have a private pension and am confused regarding spousal benefits based on my husband’s Social Security record. Since he will not have filed for his Social Security retirement benefit yet, will I not receive my spousal benefit if I file first? Thanks, Charlotte
Hi Charlotte, You can’t receive spousal benefits at least until your husband starts receiving his retirement benefits. And if and when you qualify for both spousal benefits and retirement benefits on your own record, each benefit rate will be calculated separately. For example:
Say Mary files for her retirement benefits at 62. Mary’s Primary Insurance Amount (PIA), which is equal to her full retirement age (FRA) retirement benefit amount, would be $800, but her reduced age 62 rate is $600. Two years later when Mary is 64, her husband files for his retirement benefits. Mary’s husband’s PIA is $2,000, so Mary’s unreduced spousal benefit rate would be calculated by subtracting her PIA from 50% of her husband’s PIA, which in this case would be $200 (i.e. $2,000 / 2 – $800). However, since Mary starts drawing spousal benefits before her full retirement age, her rate is reduced to $161, which would then be added to her reduced retirement benefit to give her a combined benefit rate of $761 (i.e. $600 + $161). An expert Social Security benefits calculator, such as Maximize My Social Security or other accurate and careful software, explore and compare your options in order to determine your best overall filing strategy. Best, Larry
Can My Wife File For Her Own Benefits At Age 64 And Then Later File For Spousal Benefits When I File?
Hi Larry, My wife is 64 and I am 62. I am the higher wage earner and plan to work until I am 70. Would it make sense for her to file for benefits on her own limited work record now and then file for a spousal benefit once I file for my benefits? Can that be done? Thanks, Hal
Hi Hal, Yes, that could be done, but your wife would then be stuck with a reduced retirement benefit rate for as long as both of you are living.
For example, say Amy files for reduced retirement benefits at 64. Amy’s Primary Insurance Amount (PIA), which is equal to her full retirement age (FRA) retirement benefit amount, is $500, but her reduced rate at 64 is $433. Amy’s husband subsequently files for his benefits after Amy reaches her full retirement age of 66, and his PIA is $2,000. Amy’s spousal rate would be calculated by subtracting her PIA from 50% of her husband’s PIA, which in this case would be $500 (i.e. $2,000 / 2 – $500). This $500 spousal benefit would then be added to Amy’s reduced retirement rate of $433 to give her a combined benefit rate of $933. Best, Larry
Can I Receive Widow’s Benefits Now And Then Collect My Full Retirement Benefits At Age 66?
Hi Larry, I will be 62 in April. I’m wondering about collecting widow’s benefits now; my husband passed in 2002 at 58. I am still working and plan to continue until my full retirement age of 66, maybe 70 if I am able. Can I receive widow’s benefits and then collect my full retirement benefit under my record when I reach 66 or higher later? Thanks, Loretta
Hi Loretta, You can apply for reduced widow’s benefits now and then for your own retirement benefits later, but $1 of your benefits will need to be withheld for every $2 that you earn in excess of this year’s exempt amount. That could result in as much as all of your benefits being withheld depending on your widow’s rate and the amount of your earnings.
It sounds like your best strategy for claiming benefits would be one of the following:
- File for reduced widow’s benefits now or as soon as your earnings will permit at least some benefits to be paid, then switch to your own record at age 70; or,
- File for reduced retirement benefits on your own record now or as soon as your earnings will permit at least some benefits to be paid, then file for unreduced widow’s benefits at your full retirement age.
Generally, you would want to start out drawing the lower benefit first and then switch to the higher record when it reaches its highest potential rate. An expert Social Security benefits calculator as described in other answers can help sort all of this out for you in order to help you determine your optimal filing strategy. Best, Larry
Can My Husband Claim Benefits On My Record?
Hi Larry, I am currently working at 61, with a nice annual income. My husband, currently 69, is retired but waiting until he turns 70 to file for his Social Security retirement benefit. What is the best way for him to file? Can he claim spousal benefits on my work record, which is greater than his? If the stars align, I will also wait to 70 to file to maximize my payout. Do I have to claim my retirement benefits before he can claim his spousal benefit on my earnings record? Thanks, Kay
Hi Kay, Your husband couldn’t draw spousal benefits at least until you start drawing your benefits, and he would only be eligible for spousal benefits if 50% of your Primary Insurance Amount (PIA), which is equal to your full retirement age (FRA) retirement benefit amount, is higher than his own full benefit rate inclusive of any delayed retirement credits that he earns by waiting past full retirement age to start drawing his retirement benefits.
If 50% of your PIA is higher than what your husband’s own rate would be if he waits until age 70 to claim his retirement benefits, then he almost certainly should claim his own benefits as soon as possible. You and your husband might want to use an expert Social Security benefits calculator, such as my company’s software or another very careful program, to explore and compare your filing options in order to determine your best overall strategy for claiming benefits. Best, Larry
What Benefits Will My Wife And I Be Entitled To When I Retire?
Hi Larry, I am 64 years old and my wife is 59. I have been employed for 30 years and my wife is a stay home mom. I plan on retiring at 66. What benefits will we be entitled to at that point? Thanks, Alvin
Hi Alvin, You would be entitled to your Primary Insurance Amount (PIA), which is equal to your full retirement age (FRA) retirement benefit amount, but your wife wouldn’t be eligible for spousal benefits until she’s at least 62. If she chooses to start drawing her spousal benefits at 62, though, her spousal rate would be reduced by roughly 33%. If your wife instead waits until her FRA to claim spousal benefits, her rate will be a full 50% of your PIA. Best, Larry
To learn more about your Social Security options, visit Economic Security Planning, Inc.