Ask Rusty: When Should My Wife Claim SS Benefits?

Dear Rusty: I turned 64 in July and my wife turned 62 in August. My wife has not worked for about 15 years but does qualify for Social Security (SS) on her prior work record. My wife is having some physical issues and would like to not return to work. Since she is eligible to collect Social Security, that would be an option to provide additional income, so she doesn’t have to work. My question is how would it affect her future SS spousal benefits based on my record if she begins collecting her own benefit now? I plan to work until at least my full retirement age (67), and maybe longer, but plan to start collecting SS at 67 even if I continue working. Signed: Working Husband Dear Working: If your wife has the required 40 SS quarter credits, she is eligible to collect reduced retirement benefits at 62 (for that needed extra income), but her age 62 benefit will be about 70 percent of what it would be if she waited until her SS full retirement age (FRA) to claim. That reduction would, in turn, carry over to her spousal benefit when you eventually claim your SS benefit. Here’s why: Your wife’s spousal amount when you claim will be a combination of her own SS retirement benefit, plus an auxiliary amount (a spousal boost) that she is entitled to as your spouse. At age 62, her own benefit will be cut by 30 percent and she can collect that reduced amount until you claim — at which point her spousal boost will be added to make her benefit equal her spousal entitlement. So, her total benefit as your wife (when you claim) will consist of her reduced age-62 amount, plus an additional amount as your spouse. If you claim at age 67, your wife will be about two years short of her own FRA, which means that her spousal boost amount will also be cut for claiming early. That reduced spousal boost will be added to her already reduced (age 62) SS retirement benefit, which will make her total benefit less than 50 percent of your FRA benefit amount. So, your wife claiming her own reduced SS retirement benefit at 62 also means her spousal benefit amount will be affected, and taking her spousal boost before her FRA means that the boost amount will also be cut for early claiming. The only way your wife can get the full 50 percent of your FRA entitlement is to wait until she reaches her own FRA (67) to claim Social Security benefits.   Having said all of that, if your wife’s physical issues suggest that she claims her benefits early and she is comfortable with the smaller benefit she will get, then that may be the right choice. For reference, the reduction to your wife’s spousal boost amount (if you claim at your FRA) will be about 17 percent, and that reduced spousal boost will be added to her reduced age 62 SS retirement amount. The end benefit for your wife (if you claim at age 67) will likely be about 42 percent of your FRA entitlement (instead of 50 percent). FYI, you can further delay your own SS retirement benefit (up to age 70) for a higher benefit yourself, but that would also mean your wife would need to wait longer to get her spousal boost. You could also wait to claim your SS until your spouse reaches age 67 (her FRA), which would give you a higher personal amount and also ensure your wife gets her maximum spousal boost (but her total will still be less than 50 percent of yours because she claimed her own SS retirement benefit at 62). When to claim Social Security depends on financial need and life expectancy. If a long-life expectancy is anticipated, waiting longer to claim is often the best move. But financial need always trumps waiting longer.      

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Russell Gloor is a national Social Security advisor at the AMAC Foundation, the nonprofit arm of the Association of Mature American Citizens (AMAC). The 2.4-million-member AMAC says it is a senior advocacy organization. Send your questions to: ssadvisor@amacfoundation.org. Author’s note: This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained, and accredited by the National Social Security Association (NSSA). The NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity.