Even though I’m almost exactly 412 years younger than my wife, we’ve been married for over a decade. When I reach the age of 70, I’ll apply for Social Security benefits.
Historically, my earnings have been significantly higher than those of my wife. In my conversation with a representative from my local Social Security office, she recommended that my wife file for her own benefits at age 62 and then convert to her spousal benefit when I turn 70.
On the other hand, from what I’ve learned, she will receive a lower benefit because of her own record, as well as a lower spousal benefit and survivor benefits if I die before she does which is statistically likely. Is what I’ve concluded correct? Signed: Preparing for the Future
To the person in charge of preparation: When it comes to your wife’s spousal benefit while both of you are still alive, your analysis is correct. However, when it comes to her survivor benefit after your death, your analysis is incorrect. Why is this so?
Taking her SS retirement benefit at the age of 62, your wife will receive 70% of what she would receive if she waited until her full retirement age FRA to do so. Her “spousal boost” will be added to that amount when she takes her spouse benefit, which is permanent except for COLA.
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Because she will not yet have reached her FRA of 67 when she takes her spouse benefit from you in the scenario you describe, your wife’s “spousal boost” will be reduced by 30 percent as well as her own benefit for claiming at 62.
As a result, claiming at 62 not only reduces her personal benefit, but it also reduces your FRA benefit amount by less than 50% when you claim at that age FRA amounts are used to compute spouse benefits, regardless of the age benefits are claimed. So, her spousal benefit will be significantly reduced as a result of these circumstances.
Even if she’s not working, this isn’t necessarily a bad plan, but if her earnings are too high, she won’t be able to collect Social Security benefits for the time being because of the earnings limit that would apply to someone who is actively working.
They will take away benefits equal to one dollar for every two dollars that she earns over the limit in 2022, which is $19,560. When your wife reaches her FRA, there is no longer an earnings limit, so your wife’s plans for working should be taken into consideration when deciding when to claim benefits.
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Your wife’s life expectancy must always be taken into consideration when evaluating your overall benefit opportunity as a couple. Your wife’s monthly benefits including her spousal benefit will be increased if she waits to claim her own SS until her FRA, assuming she expects to live a long time. If she has a shorter life expectancy, then making the claim earlier is a good idea. The average life expectancy for a woman your wife’s age is 87 years old.
She will receive her widow’s benefit regardless of whether or not she claims her own benefit or spousal benefit while you are both alive. When she claims her survivor benefit, her age has an impact on the amount she receives. It is possible for a widow to receive 100% of the benefit you were receiving when she died if her full retirement age has been reached when she claims her widow’s benefit.
An actuarially small percentage of her widow’s benefit will be shaved off for each month before her FRA she claims it when she does so. Also, keep in mind that even if you die before your wife reaches her FRA, she can choose to delay claiming her survivor benefit until it reaches its maximum at her FRA.