Social Security may be your largest or one of your largest assets. How you manage it, by deciding which benefits to collect and when, can make an absolutely huge difference to your lifetime benefits. And those with the highest past covered earnings have the most to gain from maximizing their Social Security.
I've been answering questions and writing columns about Social Security each week for the past two years on PBS NEWSHOUR's website. The editors at Forbes asked me to post a Q&A each day from those columns. To see all my columns, please go to my software company's site, www.maximizemysocialsecurity.com, and click More Press below the WSJ quote.
Today’s question asks if it’s possible for a spouse to receive a benefit amount equal to 100% of the other spouse’s retirement benefit. The answer reviews how a spouse’s benefit is calculated in relation to the full retirement benefit of the worker whose record the benefit is claimed on and explores two potential claiming strategies that might be appropriate in different circumstances.
Question: My husband and I are planning on a long retirement as we are in good health. He will retire in March at the age 64. His Social Security benefit would be about $1,700 per month, but we will not need to begin his benefit as long as I am working.
I plan to retire in December of the following year, when I will be 66 and my Social Security benefit will be about $2,300 per month. We are wondering if the best move would be to begin taking my husband’s Social Security benefit (which will be $2,000 at that time) at that point, so that we can wait several more years — hopefully until I reach 70 — before I take my benefit? We do have 401k accounts and are trying to delay accessing these as long as possible so that they have more time to grow.
Answer: Glad you wrote, Melissa. If you wait until full retirement age to collect just your spousal benefit based on your husband’s earnings record, it will equal half of his full retirement benefit. You suggest it will equal 100 percent of his benefit. It won’t!
Furthermore, what you can collect as a spouse is based on your husband’s full retirement benefit, not based on what he actually collects as a retirement benefit. And your husband has to have filed for you to collect a spousal benefit, whether it ends up being a full benefit or an excess spousal benefit that you receive.
All this said, your best move is likely to be for your husband to file for his retirement benefit after reaching full retirement age, but suspend its collection and then start up his retirement benefit again at 70. If he does this, you can then, once you reach full retirement age, apply just for a spousal benefit. And then at age 70, you can file for your own retirement benefit when it will start at its largest possible value.
Or, if you are older than your husband and your full retirement benefit is higher than his, it might be slightly better if your husband applies for a retirement benefit immediately upon your reaching 66 (i.e., before he reaches full retirement age), permitting you to collect just your spousal benefit. You can then get a full four years of spousal benefits before switching to your own benefit at 70, and your husband can suspend his own retirement benefit at 66 and start it up again at 70.
