By AMAC Certified Social Security Advisor Russell Gloor, Association of Mature American Citizens
Dear Rusty: Would you please advise on my wife and my social security planning? I am 69 and 2 months, my wife is 66 and 2 months so we are both reaching full retirement age. We both plan to start taking social security next month. My benefit would be around $ 3,300 a month, and my wife’s benefit would be around $ 1,900 a month. Spouse services confuse me. Should I start social security now so my wife can get a spousal benefit from me? Is it even possible? Or is it better for each of us to have our own? Signed: Unsure
Dear Unsure: From what you have shared, it does not appear that your wife will be eligible for a spouse benefit because her own benefit at her full retirement age (FRA) is more than half of your FRA benefit amount. If your age 69 benefit is around $ 3300, then your FRA (age 66) benefit amount was around $ 2660. Half of your FRA amount ($ 1330) is less than your wife’s FRA amount ($ 1900), so no spousal benefit will be available to your wife.
In your specific situation, both you and your wife should consider your individual goals when deciding when to require social security. If you plan to claim next month at age 69, you will receive a benefit that has increased by about 26% due to the Delayed Retirement Credits (DRCs) you have earned since reaching your FRA at 66. By claiming her FRA, wife will receive the full pension benefit from social security she has earned from a lifetime of work.
Even if your current strategy is good because you were born before 1954 and have not yet reported, you have another option. If your wife first claims her social security benefits, you will be eligible to file a “Limited application for spousal benefits only.” You can use the limited application to collect a spouse’s benefit from your wife (half of her OFF benefit amount) while allowing your personal benefit to grow for an additional 9 months to a maximum of 70 years of age.
If it is financially possible, and your life expectancy dictates it, both you and your wife may consider waiting even longer to get a higher benefit, but it is a personal choice that you must each make. If you make a claim now at the age of 69, your payment will be reduced by about 6% from your age of a maximum of 70 years. Since your wife is not eligible for a spouse benefit but has reached her FRA, she may also consider deferring a little longer if her financial needs and her estimated life expectancy suggest it is wise. Like you, she can defer the claim until she is 70 years old, when her benefit will reach its maximum (about 30% more than it is now).
If you would like a personal estimate of your life expectancy, I suggest you use this link: https://socialsecurityreport.org/tools/life-expectancy-calculator/. The reason why life expectancy is important is this: If you live at least to “average” life expectancy, you will collect more in cumulative life benefits by waiting longer and maximizing your social security benefits. According to Social Security, the “average” life expectancy is around 84 for a man and 87 for a woman in good health in the 60s. However, using the tool above to assess your personal longevity should further help in making your claims decision.