Ask Rusty – Please Help Us With Social Security Planning

Dear Rusty: Would you please advise on my wife and my Social Security planning? I’m 69 & 2 months, my wife is 66 & 2 months, so we both hit full retirement age. We both plan on starting to take SS next month. My benefit would be about $3,300 per month, and my wife’s benefit would be about $1,900 per month. Spousal benefits confuse me. Should I start Social Security now so my wife can get a spousal benefit from me? Is that even possible? Or is it better for each of us to get our own? Signed: Uncertain

Dear Uncertain: From what you’ve shared, it doesn’t appear that your wife will be entitled to a spousal 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 about $3300 then your FRA (age 66) benefit amount was about $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 circumstance, both you and your wife should consider your individual objectives in deciding when to claim Social Security. If you plan to claim next month at age 69, you will get a benefit which has increased by about 26% due to the Delayed Retirement Credits (DRCs) you’ve earned since you reached your FRA of 66. Claiming at her FRA, your wife will get the full SS retirement benefit she has earned from a lifetime of working. 

Although your current strategy is a good one, because you were born before 1954 and haven’t yet filed you have another option. If your wife claims her SS first, you will be eligible to file a “Restricted Application for Spousal Benefits Only.” You could use the restricted application to collect a spouse benefit from your wife (half of her FRA benefit amount) while allowing your personal benefit to grow for another 9 months to maximum at age 70. 

If financially feasible and your longevity suggests, both you and your wife might consider waiting even longer to get a higher benefit, but that is a personal choice which you each need to make. Claiming now at age 69 will reduce your payment by about 6% from your age 70 maximum. Since your wife isn’t eligible for a spouse benefit but has reached her FRA, she might also consider delaying a bit longer if her financial needs and her estimated longevity suggest that is wise. Like you, she can delay claiming until she is 70 when her benefit would reach its maximum (about 30% more than it is now). 

If you’d like to get a personal estimate of your life expectancy, I suggest using this link: https://socialsecurityreport.org/tools/life-expectancy-calculator/. The reason life expectancy is important is this: if you live at least to “average” life expectancy, you’ll collect more in cumulative lifetime benefits by waiting longer and maximizing your SS benefit. According to Social Security, “average” life expectancy is about 84 for a man and 87 for a woman in good health in their 60s. But using the tool above to estimate your personal longevity should further assist with making your claiming decision.

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). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at [email protected].