Ask Larry: Is There A Good Reason For My Wife To Wait Till Her FRA To Take Social Security?

Today’s Social Security column addresses questions about whether it may or may not be worth delaying filing until full retirement age (FRA), effects on other benefits when the higher earning spouse files and how spousal benefits are calculated. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.

Is There A Good Reason For My Wife To Wait Till Her FRA To Take Social Security?

Hi Larry, When should my wife file for her benefits? I am planning on taking my retirement benefit this spring, which is a couple of months before I turn 68. My wife is two years younger than me and her benefit based on her work record is a little less than what her spousal benefit would be. Is there a good reason for her to wait to file until her FRA in the fall rather than filing when I do in in the spring? Thanks, Kevin

Hi Kevin, Claiming benefits 10 months prior to full retirement age (FRA) would cause your wife to receive a monthly benefit rate that’s lower than her FRA rate for as long as both of you are living. Whether or not you’d consider that to be a good reason for waiting is largely a matter of perspective.

The exact percentage difference between your wife’s benefit rate in the spring rather than in the fall depends on the exact number of months before her FRA she files and how close her primary insurance amount (PIA) is to 50% of your primary insurance amount (PIA), which is equal to your retirement benefit at your full retirement age.

And those two options certainly aren’t the only ones that your wife should consider. You and your wife may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to ensure your household receives the highest lifetime benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

Can My Wife And Daughter Switch Their Benefits To My Account When I Apply For My Benefits?

Hi Larry, My 30 year old daughter is childhood disabled and initially claimed benefits on my wife’s disability and now her retirement. My wife is 69. I’m three years younger than my wife and will file at 70. Can my daughter and wife collect on my record once I file assuming all three benefits are under the family maximum? Also what percentage of my benefit would they receive now and ultimately as survivors? Thanks, Chuck

Hi Chuck, Your daughter’s childhood disability benefit (CDB) could be switched to your record when you start drawing your retirement benefits, but your wife can’t switch from drawing retirement benefits to drawing spousal benefits. She could, however, file for an excess spousal benefit from your record when you apply. Your wife’s excess spousal amount would be calculated by subtracting her primary insurance amount (PIA) from 50% of your PIA. A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).

As long as your wife didn’t collect reduced Social Security retirement benefits, her own benefit plus her excess spousal benefit would add up to 50% of your PIA. Your daughter’s CDB rate would also be equal to 50% of your PIA, although both your daughter’s CDB payment and your wife’s excess spousal payment amount could potentially be subject to reduction due to the family maximum benefit (FMB
) that can be claimed on a single record.

In the event of your death, your daughter’s CDB rate would increase to 75% of your PIA, and your wife’s combined retirement and survivor rate would add up to 100% of your full benefit rate. Survivor benefits are also potentially subject to reduction due to the family maximum benefit (FMB), though. Best, Larry

When I Reach Full Retirement Age, Will My Spousal Benefit Be Half Of My Husband’s Age 66 Amount Or Half Of His Benefit Amount At The Time I Apply?

Hi Larry, My husband is 70 and he just filed for his retirement benefit. I am 63. When I a reach full age, will my spousal benefit be 50% of my husband’s benefit when he was 66 or 50% of his his current benefit at the time I file? Thanks, Kim

Hi Kim, Assuming that you don’t qualify for Social Security retirement benefits on your own record, then you would be eligible for 50% of your husband’s primary insurance amount (PIA) if you apply for spousal benefits at your full retirement age (FRA). A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA). You spousal benefit will not be 50% of his increased benefit taken at 70.

PIAs are updated to include all cost of living (COLA) increases that occur after the worker reaches age 62, and your spousal rate will be calculated based on 50% of the amount of your husband’s PIA at the time you apply. Best, Larry

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