Social Security: Effect of early claiming on spousal benefit

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mtr
Posts: 6
Joined: Sat Jan 10, 2015 7:22 am

Social Security: Effect of early claiming on spousal benefit

Post by mtr » Mon Jun 11, 2018 3:38 pm

Hi Bogleheads!

This is likely a simple question, but just want to get some clarity on a specific scenario.

My wife is five years older than I am and each of us has an FRA of 67. Her lifetime earnings are such that her spousal benefit based on my earnings will be higher than the benefit based on her own earnings would be.

If I were to claim my benefits at 62 (when she is at the FRA of 67), I understand that my benefits will be reduced, but will her potential benefit also be reduced? In other words, will her spousal benefit be 1/2 of my FRA PIA (as if I had waited until 67 to claim), or will it be 1/2 of my reduced PIA at 62?

Apologies if this question has been answered before. I have researched on the social security web site, the BH Wiki, and other sources, but just wanted to post this specific scenario for confirmation as most permutations of this type of question seem to involve the effect of the spouse's age, and not the primary worker's age on the spousal benefit.

Thanks in advance

Cheyenne
Posts: 390
Joined: Sun Jun 14, 2015 6:46 am

Re: Social Security: Effect of early claiming on spousal benefit

Post by Cheyenne » Mon Jun 11, 2018 4:00 pm

I think it will it be 1/2 of your reduced PIA. We're waiting to do the same thing.

vested1
Posts: 1519
Joined: Wed Jan 04, 2012 4:20 pm

Re: Social Security: Effect of early claiming on spousal benefit

Post by vested1 » Mon Jun 11, 2018 4:02 pm

Her spousal benefit would be 1/2 of your PIA if she filed at her FRA of 67, even if you filed at age 62. However, this may not be ideal for you, since you would be taking a 30% cut in your own benefits if you filed at age 62. This would also reduce the amount of survivor benefits when one of you dies. This is a significant aspect to consider, since when one member of a couple dies the smaller of the two benefits disappears.

If you provided your estimated PIA there would likely be better responses. The prevailing wisdom is to have the highest earner delay the longest, rather than what you propose, although your relative ages make that less ideal. For planning purposes, delaying to age 70 provides 74% more of a benefit than filing at age 62. That 74% increase would come in handy for the survivor in exchange for some relatively short term patience in delaying.

BTW, PIA (Primary Insurance Amount) is the estimated amount at the FRA of spouse A (you). Spousal benefits for spouse B are based on the PIA of spouse A, who is claiming their own benefit, regardless of when spouse A files. Spousal benefits for spouse B are never higher than the PIA amount of spouse A.

vested1
Posts: 1519
Joined: Wed Jan 04, 2012 4:20 pm

Re: Social Security: Effect of early claiming on spousal benefit

Post by vested1 » Mon Jun 11, 2018 4:09 pm

Cheyenne wrote:
Mon Jun 11, 2018 4:00 pm
I think it will it be 1/2 of your reduced PIA. We're waiting to do the same thing.
Incorrect.

Example (ignoring my restricted application which allows delayed filing credits):

My wife just filed at age 65. We were born on the same date, with me being 1 year older. I filed for spousal beginning at my FRA, which is based on 1/2 of her PIA, even though she filed 1 year prior to her FRA. This was verified by SS. Both of our FRA's are age 66.

Her age 65 benefit (actually 64 and 11 months) is $1,964. Her PIA is $2,116. My spousal benefit is $1,058, exactly 1/2 of her PIA amount even though she filed before she reached FRA.
Last edited by vested1 on Mon Jun 11, 2018 4:13 pm, edited 1 time in total.

Cheyenne
Posts: 390
Joined: Sun Jun 14, 2015 6:46 am

Re: Social Security: Effect of early claiming on spousal benefit

Post by Cheyenne » Mon Jun 11, 2018 4:13 pm

vested1 wrote:
Mon Jun 11, 2018 4:09 pm
Cheyenne wrote:
Mon Jun 11, 2018 4:00 pm
I think it will it be 1/2 of your reduced PIA. We're waiting to do the same thing.
Incorrect.

Example (ignoring my restricted application which allows delayed filing credits):

My wife just filed at age 65. We were born on the same day, with me being 1 year older. I filed for spousal, which is based on 1/2 of her PIA, even though she filed 1 year prior to her FRA. This was verified by SS.

Her age 65 benefit (actually 64 and 11 months) is $1,964. Her PIA is $2,116. My spousal benefit is $1,058, exactly 1/2 of her PIA amount even though she filed before she reached FRA.
Thanks for that. I stand corrected (and am pleased as well).

mtr
Posts: 6
Joined: Sat Jan 10, 2015 7:22 am

Re: Social Security: Effect of early claiming on spousal benefit

Post by mtr » Mon Jun 11, 2018 6:35 pm

Thank you very much for the replies. Very helpful as always!

classicjazzfan
Posts: 61
Joined: Tue Mar 10, 2015 8:44 pm

Re: Social Security: Effect of early claiming on spousal benefit

Post by classicjazzfan » Tue Jun 12, 2018 9:59 am

vested1 wrote:
Mon Jun 11, 2018 4:09 pm

. . . . My wife just filed at age 65. We were born on the same date, with me being 1 year older. I filed for spousal beginning at my FRA, which is based on 1/2 of her PIA, even though she filed 1 year prior to her FRA. . . . Both of our FRA's are age 66.

Her age 65 benefit (actually 64 and 11 months) is $1,964. Her PIA is $2,116. My spousal benefit is $1,058, exactly 1/2 of her PIA amount even though she filed before she reached FRA.
vested1:

Am I correct that under the new rules enacted by Congress at the end of 2015, the spousal-benefit strategy you are pursuing (i.e., filing a restricted application, where one claims just spousal benefits, while leaving the benefit based on one's own earnings record to continue growing) is now available only to people who reached age 62 by January 1, 2016? Thank you.

classicjazzfan

TrustButVerifying
Posts: 18
Joined: Mon Jan 15, 2018 11:16 am

Re: Social Security: Effect of early claiming on spousal benefit

Post by TrustButVerifying » Tue Jun 12, 2018 11:19 am

classicjazzfan wrote:
Tue Jun 12, 2018 9:59 am
vested1 wrote:
Mon Jun 11, 2018 4:09 pm

. . . . My wife just filed at age 65. We were born on the same date, with me being 1 year older. I filed for spousal beginning at my FRA, which is based on 1/2 of her PIA, even though she filed 1 year prior to her FRA. . . . Both of our FRA's are age 66.

Her age 65 benefit (actually 64 and 11 months) is $1,964. Her PIA is $2,116. My spousal benefit is $1,058, exactly 1/2 of her PIA amount even though she filed before she reached FRA.
vested1:

Am I correct that under the new rules enacted by Congress at the end of 2015, the spousal-benefit strategy you are pursuing (i.e., filing a restricted application, where one claims just spousal benefits, while leaving the benefit based on one's own earnings record to continue growing) is now available only to people who reached age 62 by January 1, 2016? Thank you.

classicjazzfan
I also believe this is true but the Social Security Rules are complex. I would suggest that you call SS or visit the SS office to verify your options. The people at our local office have been quite helpful.

Austintatious
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Joined: Thu Sep 13, 2012 7:01 pm

Re: Social Security: Effect of early claiming on spousal benefit

Post by Austintatious » Tue Jun 12, 2018 12:01 pm

To pursue the "restricted application" strategy whereby one files for spousal benefits, only, while allowing one's own benefits to continue to grow at approximately 8% per year, the following criteria must be met:

- the applicant's spouse must already have filed for his/her benefits
- the applicant must have been born before January 2, 1954
- the applicant must be at full retirement age

Dancer
Posts: 75
Joined: Mon Feb 03, 2014 2:06 am

Re: Social Security: Effect of early claiming on spousal benefit

Post by Dancer » Tue Jun 12, 2018 12:15 pm

If the older spouse has lower earnings, I believe technically the way to maximize Social Security without waiting for the younger spouse to reach FRA is to be married at least ten years, get divorced, and wait 2 Years....

Has other costs/implications of course, but the law....

https://www.ssa.gov/planners/retire/yourdivspouse.html

Austintatious
Posts: 682
Joined: Thu Sep 13, 2012 7:01 pm

Re: Social Security: Effect of early claiming on spousal benefit

Post by Austintatious » Tue Jun 12, 2018 12:34 pm

Dancer wrote:
Tue Jun 12, 2018 12:15 pm
If the older spouse has lower earnings, I believe technically the way to maximize Social Security without waiting for the younger spouse to reach FRA is to be married at least ten years, get divorced, and wait 2 Years....

Has other costs/implications of course, but the law....

https://www.ssa.gov/planners/retire/yourdivspouse.html
As the man frequently says, "There's more than one road to Dublin." Now, I would say that way looks to be a Rocky Road. :happy

Nate79
Posts: 3025
Joined: Thu Aug 11, 2016 6:24 pm
Location: Portland, OR

Re: Social Security: Effect of early claiming on spousal benefit

Post by Nate79 » Tue Jun 12, 2018 12:44 pm

Dancer wrote:
Tue Jun 12, 2018 12:15 pm
If the older spouse has lower earnings, I believe technically the way to maximize Social Security without waiting for the younger spouse to reach FRA is to be married at least ten years, get divorced, and wait 2 Years....

Has other costs/implications of course, but the law....

https://www.ssa.gov/planners/retire/yourdivspouse.html
In the recent The New Retirement Podcast with Steve Chen his guest was SS expert Mary Beth who actually commented on this strategy to do this sham divorce. She said basically do it at your own peril and make sure you save up enough money to hire a lawyer to defend it. I don't think she commented more but seems high risk.....

wolf359
Posts: 1304
Joined: Sun Mar 15, 2015 8:47 am

Re: Social Security: Effect of early claiming on spousal benefit

Post by wolf359 » Tue Jun 12, 2018 1:07 pm

Cheyenne wrote:
Mon Jun 11, 2018 4:13 pm
vested1 wrote:
Mon Jun 11, 2018 4:09 pm
Cheyenne wrote:
Mon Jun 11, 2018 4:00 pm
I think it will it be 1/2 of your reduced PIA. We're waiting to do the same thing.
Incorrect.

Example (ignoring my restricted application which allows delayed filing credits):

My wife just filed at age 65. We were born on the same day, with me being 1 year older. I filed for spousal, which is based on 1/2 of her PIA, even though she filed 1 year prior to her FRA. This was verified by SS.

Her age 65 benefit (actually 64 and 11 months) is $1,964. Her PIA is $2,116. My spousal benefit is $1,058, exactly 1/2 of her PIA amount even though she filed before she reached FRA.
Thanks for that. I stand corrected (and am pleased as well).
The actual language posted by SSA is here: https://www.ssa.gov/OACT/quickcalc/spouse.html

I initially misread it, but I believe it is consistent with what happened above. Spouse gets up to 1/2 PIA, unless spouse is filing before full retirement age.

It reads:
When a worker files for retirement benefits, the worker's spouse may be eligible for a benefit based on the worker's earnings. Another requirement is that the spouse must be at least age 62 or have a qualifying child in her/his care. By a qualifying child, we mean a child who is under age 16 or who receives Social Security disability benefits.
The spousal benefit can be as much as half of the worker's "primary insurance amount," depending on the spouse's age at retirement. If the spouse begins receiving benefits before "normal (or full) retirement age," the spouse will receive a reduced benefit. However, if a spouse is caring for a qualifying child, the spousal benefit is not reduced.
If a spouse is eligible for a retirement benefit based on his or her own earnings, and if that benefit is higher than the spousal benefit, then we pay the retirement benefit. Otherwise we pay the spousal benefit.
In the case of the OP, his older, lower-earning spouse should file on her own record at full retirement age. When you file at your FRA, then she should apply for the higher spousal benefit. She doesn't fall afoul of the deeming rules because you haven't filed yet, and she is always at or above FRA.

If you file early at 62, then the survivor will only collect the higher of the two benefits (your reduced benefit, or the spousal benefit.) She could still be collecting something while you are waiting for FRA yourself.

I'm not a social security expert. You can actually pay for an analysis to determine the best approach, or you can ask SSA directly.

vested1
Posts: 1519
Joined: Wed Jan 04, 2012 4:20 pm

Re: Social Security: Effect of early claiming on spousal benefit

Post by vested1 » Tue Jun 12, 2018 6:13 pm

classicjazzfan wrote:
Tue Jun 12, 2018 9:59 am
vested1 wrote:
Mon Jun 11, 2018 4:09 pm

. . . . My wife just filed at age 65. We were born on the same date, with me being 1 year older. I filed for spousal beginning at my FRA, which is based on 1/2 of her PIA, even though she filed 1 year prior to her FRA. . . . Both of our FRA's are age 66.

Her age 65 benefit (actually 64 and 11 months) is $1,964. Her PIA is $2,116. My spousal benefit is $1,058, exactly 1/2 of her PIA amount even though she filed before she reached FRA.
vested1:

Am I correct that under the new rules enacted by Congress at the end of 2015, the spousal-benefit strategy you are pursuing (i.e., filing a restricted application, where one claims just spousal benefits, while leaving the benefit based on one's own earnings record to continue growing) is now available only to people who reached age 62 by January 1, 2016? Thank you.

classicjazzfan
Sorry for the late response, working on the fence. No rest for the weary in retirement. Yes, you are correct, I am 66 next month so am "grandfathered" into the previous rules which allow me to draw spousal after my FRA, as long as my wife has filed, while letting my own benefit grow.

Contrary to other opinions voiced here, this option was valuable for many, including myself, who are not independently wealthy. I feel for my wife's younger siblings and for my own children, who have had these options taken away from them due to cost cutting measures.

It is not popular in this forum, but the fact is that if the cap on FICA was lifted, future insolvency of the SS fund would not be a concern.

vested1
Posts: 1519
Joined: Wed Jan 04, 2012 4:20 pm

Re: Social Security: Effect of early claiming on spousal benefit

Post by vested1 » Tue Jun 12, 2018 6:26 pm

wolf359 wrote:
Tue Jun 12, 2018 1:07 pm
Cheyenne wrote:
Mon Jun 11, 2018 4:13 pm
vested1 wrote:
Mon Jun 11, 2018 4:09 pm
Cheyenne wrote:
Mon Jun 11, 2018 4:00 pm
I think it will it be 1/2 of your reduced PIA. We're waiting to do the same thing.
Incorrect.

Example (ignoring my restricted application which allows delayed filing credits):

My wife just filed at age 65. We were born on the same day, with me being 1 year older. I filed for spousal, which is based on 1/2 of her PIA, even though she filed 1 year prior to her FRA. This was verified by SS.

Her age 65 benefit (actually 64 and 11 months) is $1,964. Her PIA is $2,116. My spousal benefit is $1,058, exactly 1/2 of her PIA amount even though she filed before she reached FRA.
Thanks for that. I stand corrected (and am pleased as well).
The actual language posted by SSA is here: https://www.ssa.gov/OACT/quickcalc/spouse.html

I initially misread it, but I believe it is consistent with what happened above. Spouse gets up to 1/2 PIA, unless spouse is filing before full retirement age.

It reads:
When a worker files for retirement benefits, the worker's spouse may be eligible for a benefit based on the worker's earnings. Another requirement is that the spouse must be at least age 62 or have a qualifying child in her/his care. By a qualifying child, we mean a child who is under age 16 or who receives Social Security disability benefits.
The spousal benefit can be as much as half of the worker's "primary insurance amount," depending on the spouse's age at retirement. If the spouse begins receiving benefits before "normal (or full) retirement age," the spouse will receive a reduced benefit. However, if a spouse is caring for a qualifying child, the spousal benefit is not reduced.
If a spouse is eligible for a retirement benefit based on his or her own earnings, and if that benefit is higher than the spousal benefit, then we pay the retirement benefit. Otherwise we pay the spousal benefit.
In the case of the OP, his older, lower-earning spouse should file on her own record at full retirement age. When you file at your FRA, then she should apply for the higher spousal benefit. She doesn't fall afoul of the deeming rules because you haven't filed yet, and she is always at or above FRA.

If you file early at 62, then the survivor will only collect the higher of the two benefits (your reduced benefit, or the spousal benefit.) She could still be collecting something while you are waiting for FRA yourself.

I'm not a social security expert. You can actually pay for an analysis to determine the best approach, or you can ask SSA directly.
It's important to identify "spouse" in this scenario, which is why I referred to spouse "A" and spouse "B". The new rules state that anyone younger than 62 on 1/2/16 is "deemed" to be filing for both their own and spousal benefits when they file for anything, even after FRA. This eliminates the advantage of a restricted application for those in that category.

If spouse B files for spousal benefits on spouse A before spouse B reaches FRA, their spousal benefits will be reduced. The only way for a person who was younger than age 62 on 1/2/16 to get 1/2 of their spouse's PIA is to wait for their own FRA to file for it. However, the new rules state that filing for the spousal will end all delayed retirement credits for the one receiving the spousal benefits (spouse B).

BTW, I wouldn't trust SS agents to have the correct answer. I recently went through 7 representatives trying to straighten out their mistakes on my application after getting 7 different interpretations of the law. They were sincere in their apologies, but if I wouldn't have already known the answers who knows what would have happened. It's best to educate yourself and not blindly trust the SS agents to have the correct information.

TravelforFun
Posts: 1382
Joined: Tue Dec 04, 2012 11:05 pm

Re: Social Security: Effect of early claiming on spousal benefit

Post by TravelforFun » Tue Jun 12, 2018 6:29 pm

vested1 wrote:
Tue Jun 12, 2018 6:13 pm
.. . My wife just filed at age 65. We were born on the same date, with me being 1 year older. I filed for spousal beginning at my FRA, which is based on 1/2 of her PIA, even though she filed 1 year prior to her FRA. . . . Both of our FRA's are age 66.

Her age 65 benefit (actually 64 and 11 months) is $1,964. Her PIA is $2,116. My spousal benefit is $1,058, exactly 1/2 of her PIA amount even though she filed before she reached FRA.
Our situation is fairly similar. Wife filed for her own benefits at 62 in February, I filed for spousal at age 66 last month and I'm waiting to receive my first check which is half my wife's PIA.There are a couple of more moves we have to make four years from now when I file for my own benefits and my wife files for spousal. What a dance!

TravelforFun

classicjazzfan
Posts: 61
Joined: Tue Mar 10, 2015 8:44 pm

Re: Social Security: Effect of early claiming on spousal benefit

Post by classicjazzfan » Tue Jun 12, 2018 7:33 pm

[/quote]vested1:

Am I correct that under the new rules enacted by Congress at the end of 2015, the spousal-benefit strategy you are pursuing (i.e., filing a restricted application, where one claims just spousal benefits, while leaving the benefit based on one's own earnings record to continue growing) is now available only to people who reached age 62 by January 1, 2016? Thank you.

classicjazzfan [/quote]

[/quote]. . . . Yes, you are correct, I am 66 next month so am "grandfathered" into the previous rules which allow me to draw spousal after my FRA, as long as my wife has filed, while letting my own benefit grow.

Contrary to other opinions voiced here, this option was valuable for many, including myself, who are not independently wealthy. I feel for my wife's younger siblings and for my own children, who have had these options taken away from them due to cost cutting measures. . . . [/quote]


vested 1 (and others):

Thank you for confirming my understanding of the new age requirement for claiming spousal benefits in the way you are doing (and as I had planned to do until I became ineligible, having entered the world a few months too late to qualify). Although the rule changes were widely discussed around the time of their enactment, I suspect that many people outside this forum who are approaching full retirement age remain unaware of them and as a consequence may be banking on a claiming strategy no longer available to them.

classicjazzfan

wolf359
Posts: 1304
Joined: Sun Mar 15, 2015 8:47 am

Re: Social Security: Effect of early claiming on spousal benefit

Post by wolf359 » Wed Jun 13, 2018 6:31 am

vested1 wrote:
Tue Jun 12, 2018 6:26 pm
wolf359 wrote:
Tue Jun 12, 2018 1:07 pm
The actual language posted by SSA is here: https://www.ssa.gov/OACT/quickcalc/spouse.html

I initially misread it, but I believe it is consistent with what happened above. Spouse gets up to 1/2 PIA, unless spouse is filing before full retirement age.

It reads:
When a worker files for retirement benefits, the worker's spouse may be eligible for a benefit based on the worker's earnings. Another requirement is that the spouse must be at least age 62 or have a qualifying child in her/his care. By a qualifying child, we mean a child who is under age 16 or who receives Social Security disability benefits.
The spousal benefit can be as much as half of the worker's "primary insurance amount," depending on the spouse's age at retirement. If the spouse begins receiving benefits before "normal (or full) retirement age," the spouse will receive a reduced benefit. However, if a spouse is caring for a qualifying child, the spousal benefit is not reduced.
If a spouse is eligible for a retirement benefit based on his or her own earnings, and if that benefit is higher than the spousal benefit, then we pay the retirement benefit. Otherwise we pay the spousal benefit.
In the case of the OP, his older, lower-earning spouse should file on her own record at full retirement age. When you file at your FRA, then she should apply for the higher spousal benefit. She doesn't fall afoul of the deeming rules because you haven't filed yet, and she is always at or above FRA.

If you file early at 62, then the survivor will only collect the higher of the two benefits (your reduced benefit, or the spousal benefit.) She could still be collecting something while you are waiting for FRA yourself.

I'm not a social security expert. You can actually pay for an analysis to determine the best approach, or you can ask SSA directly.
It's important to identify "spouse" in this scenario, which is why I referred to spouse "A" and spouse "B". The new rules state that anyone younger than 62 on 1/2/16 is "deemed" to be filing for both their own and spousal benefits when they file for anything, even after FRA. This eliminates the advantage of a restricted application for those in that category.

If spouse B files for spousal benefits on spouse A before spouse B reaches FRA, their spousal benefits will be reduced. The only way for a person who was younger than age 62 on 1/2/16 to get 1/2 of their spouse's PIA is to wait for their own FRA to file for it. However, the new rules state that filing for the spousal will end all delayed retirement credits for the one receiving the spousal benefits (spouse B).

BTW, I wouldn't trust SS agents to have the correct answer. I recently went through 7 representatives trying to straighten out their mistakes on my application after getting 7 different interpretations of the law. They were sincere in their apologies, but if I wouldn't have already known the answers who knows what would have happened. It's best to educate yourself and not blindly trust the SS agents to have the correct information.
I'm only referring to the spouse of the OP as the spouse. There is no need for the terms "Spouse A" and "Spouse B" because the SSA will only consider the one applying for spousal benefits as the spouse.

Let's try again, using the terms of OP and wife.

Wife is 5 years older, and qualifies for her own benefit. However, that benefit is exceeded by the spousal benefit.

Wife applies for her own benefit on her own record at FRA. This happens just as OP is turning 62. However, she can still file for herself even if OP waits. When OP reaches FRA and files on his record, wife can then file for spousal benefits. Wife is FRA, wife is applying for her own benefits, and OP has not filed, so deeming rules do not apply for the wife. Only after the OP has filed is the wife eligible for spousal benefits (and she is already past FRA).

OP only has to choose when to file for his primary amount. If he files at 62, he gets a reduced benefit, but wife gets to file for spousal benefits. If he files at FRA, he gets his full benefit, but wife has to wait 5 years more to file for her spousal benefits. However, she is collecting already, so the cost is only the difference between filing on her own record and the spousal increase.

The issue is that when either the OP or spouse dies, the survivor only gets the higher of the two payments. It's better that that payment be the full amount, rather than the reduced amount caused by filing as early as possible for the primary benefit. The cost of getting both checks at the same time is a permanent reduction in the primary amount, which will really be borne by the survivor when only the one reduced check is available to live on.

Deeming rules never apply for the OP, because he only files on his own record.

Pigeye Brewster
Posts: 183
Joined: Thu Oct 05, 2017 7:33 pm

Re: Social Security: Effect of early claiming on spousal benefit

Post by Pigeye Brewster » Wed Jun 13, 2018 8:46 am

wolf359 wrote:
Wed Jun 13, 2018 6:31 am
vested1 wrote:
Tue Jun 12, 2018 6:26 pm
wolf359 wrote:
Tue Jun 12, 2018 1:07 pm
The actual language posted by SSA is here: https://www.ssa.gov/OACT/quickcalc/spouse.html

I initially misread it, but I believe it is consistent with what happened above. Spouse gets up to 1/2 PIA, unless spouse is filing before full retirement age.

It reads:
When a worker files for retirement benefits, the worker's spouse may be eligible for a benefit based on the worker's earnings. Another requirement is that the spouse must be at least age 62 or have a qualifying child in her/his care. By a qualifying child, we mean a child who is under age 16 or who receives Social Security disability benefits.
The spousal benefit can be as much as half of the worker's "primary insurance amount," depending on the spouse's age at retirement. If the spouse begins receiving benefits before "normal (or full) retirement age," the spouse will receive a reduced benefit. However, if a spouse is caring for a qualifying child, the spousal benefit is not reduced.
If a spouse is eligible for a retirement benefit based on his or her own earnings, and if that benefit is higher than the spousal benefit, then we pay the retirement benefit. Otherwise we pay the spousal benefit.
In the case of the OP, his older, lower-earning spouse should file on her own record at full retirement age. When you file at your FRA, then she should apply for the higher spousal benefit. She doesn't fall afoul of the deeming rules because you haven't filed yet, and she is always at or above FRA.

If you file early at 62, then the survivor will only collect the higher of the two benefits (your reduced benefit, or the spousal benefit.) She could still be collecting something while you are waiting for FRA yourself.

I'm not a social security expert. You can actually pay for an analysis to determine the best approach, or you can ask SSA directly.
It's important to identify "spouse" in this scenario, which is why I referred to spouse "A" and spouse "B". The new rules state that anyone younger than 62 on 1/2/16 is "deemed" to be filing for both their own and spousal benefits when they file for anything, even after FRA. This eliminates the advantage of a restricted application for those in that category.

If spouse B files for spousal benefits on spouse A before spouse B reaches FRA, their spousal benefits will be reduced. The only way for a person who was younger than age 62 on 1/2/16 to get 1/2 of their spouse's PIA is to wait for their own FRA to file for it. However, the new rules state that filing for the spousal will end all delayed retirement credits for the one receiving the spousal benefits (spouse B).

BTW, I wouldn't trust SS agents to have the correct answer. I recently went through 7 representatives trying to straighten out their mistakes on my application after getting 7 different interpretations of the law. They were sincere in their apologies, but if I wouldn't have already known the answers who knows what would have happened. It's best to educate yourself and not blindly trust the SS agents to have the correct information.
I'm only referring to the spouse of the OP as the spouse. There is no need for the terms "Spouse A" and "Spouse B" because the SSA will only consider the one applying for spousal benefits as the spouse.

Let's try again, using the terms of OP and wife.

Wife is 5 years older, and qualifies for her own benefit. However, that benefit is exceeded by the spousal benefit.

Wife applies for her own benefit on her own record at FRA. This happens just as OP is turning 62. However, she can still file for herself even if OP waits. When OP reaches FRA and files on his record, wife can then file for spousal benefits. Wife is FRA, wife is applying for her own benefits, and OP has not filed, so deeming rules do not apply for the wife. Only after the OP has filed is the wife eligible for spousal benefits (and she is already past FRA).

OP only has to choose when to file for his primary amount. If he files at 62, he gets a reduced benefit, but wife gets to file for spousal benefits. If he files at FRA, he gets his full benefit, but wife has to wait 5 years more to file for her spousal benefits. However, she is collecting already, so the cost is only the difference between filing on her own record and the spousal increase.

The issue is that when either the OP or spouse dies, the survivor only gets the higher of the two payments. It's better that that payment be the full amount, rather than the reduced amount caused by filing as early as possible for the primary benefit. The cost of getting both checks at the same time is a permanent reduction in the primary amount, which will really be borne by the survivor when only the one reduced check is available to live on.

Deeming rules never apply for the OP, because he only files on his own record.
Not the OP, but this is very similar to my situation. Spouse is older by 4 years, will qualify for own benefit, and spousal benefit will be higher.

Can you speak to the scenarios of spouse filing for own benefit at 62 or waiting until FRA? At 62, I assume the own benefit would be reduced, but what impact (if any) would that have on spousal benefit down the road when I file at FRA or later?

vested1
Posts: 1519
Joined: Wed Jan 04, 2012 4:20 pm

Re: Social Security: Effect of early claiming on spousal benefit

Post by vested1 » Wed Jun 13, 2018 9:35 am

Rather than continue on with comments asking about different situations I would suggest that members who want an answer to their own situation create their own thread, giving more information. Info should include ages and PIA amounts at the very least. Better advice is usually given when overall goals are shared, such as balances in other accounts and estimated expenses in retirement.

Under the new rules he is deemed to be filing for both his own and spousal, regardless of when he files. If his reduced benefit for filing early is lower than 1/2 of his wife's PIA (if she has already filed) he will get the higher amount. He would be under the same restraints under the new law after his FRA. From the horse's mouth:
How is the law changing? Under existing law, if you are eligible for benefits both as a retired worker and as a spouse (or divorced spouse) in the first month you want your benefits to begin and are not yet full retirement age, you must apply for both benefits. You will receive the higher of the two benefits. This requirement is called “deemed filing” because when you apply for one benefit you are “deemed” to have also applied for the other.

Under the new law deemed filing is extended to apply to those at full retirement age and beyond. In addition, deemed filing may occur in any month after becoming entitled to retirement benefits. For example, if you begin receiving your retirement benefit and only later become eligible for a spousal benefit (or vice versa), you will be “deemed” to have applied for the second benefit as soon as you are eligible for it. Your monthly payment will be the higher of the two benefit amounts.
https://www.ssa.gov/planners/retire/claiming.html

If the OP had given his and his wife's PIA amounts the advice could have been more specific. My advice, for what it's worth, and with the information provided, would be for the OP to delay until at least FRA for longevity insurance reasons, while the wife files for her own at her PIA 5 years earlier. The 30% more in his own benefits by waiting until FRA, or 74% more by waiting until age 70 (as compared to age 62) are significant, and shouldn't be discounted.

cherijoh
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Joined: Tue Feb 20, 2007 4:49 pm
Location: Charlotte NC

Re: Social Security: Effect of early claiming on spousal benefit

Post by cherijoh » Wed Jun 13, 2018 9:47 am

You might want to check out Mike Piper's "Social Security Made Simple". You can find it for purchase on Amazon, but a free pdf version can be found here. He also has lots of good articles on SS on his blog Oblivious Investor.

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