Social Security Matters: The optimum time for wife’s benefits

Dear Rusty: I would like some advice on the optimum time for my wife to start drawing her Social Security. Pertinent facts are: I am 11 years older than her (born in 1949) and waited until my full retirement age to start my own Social Security. She made significantly less money than I did so I understand she will be able to file based on my record instead of hers. If that is true then I would like to know how to maximize her monthly benefit by starting at the best age for her. I am not concerned about lifetime benefits as we both have a good chance to live long lives. Also, I read she will be able to continue my benefit after my death but that doesn’t make sense so am skeptical of that. Please clarify and also advise if she should start at FRA or wait until 70. Signed: Need to Know

Dear Need to Know: If your wife is 11 years younger than you, I assume her birth year is 1960, which would make her full retirement age 67. Since your wife “made significantly less money” than you, she should first look at the value of ½ of your benefit and also what her own retirement benefit would be at age 67. If the difference is substantial and she wouldn’t make more by delaying past her full retirement age, even up to age 70 and earning delayed retirement credits on her own benefit, then her focus should be on optimizing her spousal benefit.

If you’re financially able and her health is good, waiting until she reaches age 67 will yield your wife her highest spousal benefit amount. Her full retirement age is when she will get the full 50% of your “primary insurance amount” (or “PIA” – the amount you are entitled to at your FRA plus any COLA increases). If she claims benefits any earlier, they will be reduced to as little as 32.5% of yours if she claims as soon as she is eligible at age 62. Please note that her benefit will be comprised of two parts – the first part being her own retirement benefit, and the 2nd part being a supplemental amount to bring her up to the spousal benefit she is entitled to. Whenever she files, she will be deemed to be filing for both her own benefit and her spousal benefit, and since spousal benefits don’t grow beyond one’s full retirement age, she need not wait any longer than that to apply.

As to your second question, if you should predecease your wife, she will indeed be eligible to collect 100% of the amount of your benefit at your death, provided that is more than her own benefit, and provided she has reached her full retirement age when she applies for the widow’s benefit (she doesn’t have to take it immediately upon your death). In the event of your untimely early death, survivor’s benefits can be taken before your wife reaches FRA – as early as age 60 – but they will be reduced to less than 100% of the benefit you were receiving (the reduction amount would depend on her age when she takes her widow’s benefit). Please note that the widow’s benefit would replace her spousal benefit; it’s not in addition to it. Lastly, for widow’s benefit purposes, her full retirement age would be 4 months earlier than her normal retirement age, in other words 66 + 8 months rather than age 67. This is due to a special Social Security provision, which benefits a worker’s surviving spouse.

The information presented in this article is intended for general information purposes only. The opinions and interpretations expressed are the viewpoints of the AMAC Foundation’s Social Security Advisory staff, trained and accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). NSSA, the AMAC Foundation, and the Foundation’s Social Security Advisors are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state government. Furthermore, the AMAC Foundation and its staff do not provide legal or accounting services. The Foundation welcomes questions from readers regarding Social Security issues. Dear Rusty: I would like some advice on the optimum time for my wife to start drawing her Social Security. Pertinent facts are: I am 11 years older than her (born in 1949) and waited until my full retirement age to start my own Social Security. She made significantly less money than I did so I understand she will be able to file based on my record instead of hers. If that is true then I would like to know how to maximize her monthly benefit by starting at the best age for her. I am not concerned about lifetime benefits as we both have a good chance to live long lives. Also, I read she will be able to continue my benefit after my death but that doesn’t make sense so am skeptical of that. Please clarify and also advise if she should start at FRA or wait until 70. Signed: Need to Know

Dear Need to Know: If your wife is 11 years younger than you, I assume her birth year is 1960, which would make her full retirement age 67. Since your wife “made significantly less money” than you, she should first look at the value of ½ of your benefit and also what her own retirement benefit would be at age 67. If the difference is substantial and she wouldn’t make more by delaying past her full retirement age, even up to age 70 and earning delayed retirement credits on her own benefit, then her focus should be on optimizing her spousal benefit.

If you’re financially able and her health is good, waiting until she reaches age 67 will yield your wife her highest spousal benefit amount. Her full retirement age is when she will get the full 50% of your “primary insurance amount” (or “PIA” – the amount you are entitled to at your FRA plus any COLA increases). If she claims benefits any earlier, they will be reduced to as little as 32.5% of yours if she claims as soon as she is eligible at age 62. Please note that her benefit will be comprised of two parts – the first part being her own retirement benefit, and the 2nd part being a supplemental amount to bring her up to the spousal benefit she is entitled to. Whenever she files, she will be deemed to be filing for both her own benefit and her spousal benefit, and since spousal benefits don’t grow beyond one’s full retirement age, she need not wait any longer than that to apply.

As to your second question, if you should predecease your wife, she will indeed be eligible to collect 100% of the amount of your benefit at your death, provided that is more than her own benefit, and provided she has reached her full retirement age when she applies for the widow’s benefit (she doesn’t have to take it immediately upon your death). In the event of your untimely early death, survivor’s benefits can be taken before your wife reaches FRA – as early as age 60 – but they will be reduced to less than 100% of the benefit you were receiving (the reduction amount would depend on her age when she takes her widow’s benefit). Please note that the widow’s benefit would replace her spousal benefit; it’s not in addition to it. Lastly, for widow’s benefit purposes, her full retirement age would be 4 months earlier than her normal retirement age, in other words 66 + 8 months rather than age 67. This is due to a special Social Security provision, which benefits a worker’s surviving spouse.

The information presented in this article is intended for general information purposes only. The opinions and interpretations expressed are the viewpoints of the AMAC Foundation’s Social Security Advisory staff, trained and accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). NSSA, the AMAC Foundation, and the Foundation’s Social Security Advisors are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state government. Furthermore, the AMAC Foundation and its staff do not provide legal or accounting services. The Foundation welcomes questions from readers regarding Social Security issues.

To submit a request, contact the Foundation at ssadvisor@amacfoundation.org, or visit the Foundation’s website at www.amacfoundation.org.