SemperFiMac
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Social Security question. My wife is 62 and could begin drawing $600/month now vice her full benefit of $800 at full retirement age. I'm 58 and ~10 years away from retirement. My benefit will be around $3600 meaning her spousal benefit would normally be $1800. If she takes her benefit now, what is the impact on her eventually taking the larger spousal benefit? Specifically, would she be disqualified from the spousal benefit or would she simple get a reduced amount? If this isn't clear, I'd like to speak to someone. Thanks.

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Answers (1)

This is a very good question, and an important one as well. The claiming decision for Social Security benefits can have a big impact on a lot of people’s retirement success.  And, with numerous claiming strategies available, the decision becomes even more complex for couples.

In your case, the simple answer to your question appears to be yes; your spouse could claim her benefit as early as age 62, based on her earning’s record, then switch to the higher spousal benefit later when you claim your benefit. However, her early claiming could permanently reduce her benefit amount while both of you are alive. The Social Security Administration says: “A spouse can choose to retire as early as age 62, but doing so may result in a benefit as little as 32.5 percent of the worker's primary insurance amount. A spousal benefit is reduced 25/36 of one percent for each month before normal retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of one percent per month.”

 

To keep things simple, we’ll assume that your primary insurance amount (PIA) at your full retirement age (FRA) 67, is $3,000. If we assume that your spouse was born 1/1/1956, she would reach her FRA in November of 2022. So here are the estimates of her spousal benefit by claiming early, or at her FRA:

 

  • Claiming early at age 62. She could start now to receive her reduced benefits ($600 per month) on her earnings record, but the amount she could later claim at her FRA would be 36.88 percent of your PIA, or about $1,106 per month. 
  • Claiming at her FRA, age 66+. She would receive her FRA amount of approximately $800, and would be able to claim 50 percent of your PIA, $1,500 per month, once you start your benefits at age 67 or later.

 
Note: The calculations above are just estimates based on a hypothetical situation, and individual circumstances can affect the outcomes. It’s important to run the calculations yourself to ensure accuracy.

 

As you can see, these calculations can be quite complex, and can change based on individual circumstances and assumptions. For example, there are other strategies where your spouse could delay receiving benefits until her FRA (age 66+), or where you would delay your benefits to an age beyond FRA, up to age 70. A lot can depend on your life expectancies, and how much of a role the Social Security benefits play in your financial plan, as well as the effect on the survivor. Because of the complexity and importance of the Social Security claiming decision, it may be wise to seek out expert advice from a specialist in Social Security benefits who is familiar with the rules, and who can model different scenarios for you.

 

For more information see: Social Security Benefits for Spouses