Larry & Friends:
Pray All are doing well. Purchasing your book has been a big help re SS info. Know much more now after reading your book, but have a question for you. My Husband just turned 66 (DOB 7/29/52). He currently is still working, but is making plans to retire before year's end. I am 62 (DOB 8/18/55), and I am not working. My work career has been sporadic as I've been a stay at home Mom for a number of years. At FRA, my husband's SS payment would be $2512; At Age 70, it will be $3301; At FRA, my SS payment will be $798; At age 70, it will be $1042. To start our SS payments, does it matter if my husband files 1st, or if I file 1st? I realize that if I file now, I will receive a reduced benefit. Once my husband files for his SS payment, can I immediately switch to a reduced spousal benefit, or will I be required to wait until my FRA before I am able to switch over to a reduced spousal benefit? Due to the lower levels of my SS payments, compared to my husband's, unless I', missing something here, it would behoove me take advantage of the spousal benefits (full if I wait till FRA to file, or reduced if I file before FRA) available to me. Also, because of my husband's date of birth, once I file for my SS payments, can't my husband file for spousal benefits based on my work record, while letting his own SS payment be on hold till his 70th birthday?? If my husband was to file for spousal benefits based on my record, would the amount the he would receive be 1/2 of my FRA amount, or 1/2 of the reduced amount that I would receive as a result of filing early? Thank you very much for your valuable time. I do appreciate any help/info that you may be able to provide. Thank you!
Terri

Hi Terri,

You and your husband have a lot of different options to consider, and yes, which of you files first can definitely make a big difference. One option would be for you to file for your retirement benefits now so that your husband could file just for spousal benefits only on your record. Your husband would then get 50% of your full retirement age rate (PIA, or primary insurance amount) even though your benefit rate would be reduced for age. Your husband could then switch to his own benefits at age 70, at which time you could file for an excess spousal benefit that would be paid in addition to your reduced retirement benefit.

The downside of you filing now would be that your retirement benefit rate would be reduced, and that reduced rate would continue for as long as both you and your husband are living.

For example, say Molly files for reduced retirement benefits now at age 63. Molly's PIA is $800 but her reduced retirement rate at age 63 is $633. Molly's husband is age 66 and files for spousal benefits only on her record and receives a benefit rate of $400. Molly's husband then switches to his own record at age 70 and receives a monthly rate of $3300, which is 32% more than his PIA of $2500. Molly's excess spousal benefit would be calculated by subtracting her PIA from 50% of her husband's PIA, which would result in a rate of $450 in this example (i.e. $2500/2 - $800). Molly's excess spousal benefit is not reduced because she is already above full retirement age when she becomes eligible for that benefit. Molly's combined benefit rate would then be $1083 (i.e. her reduced retirement rate of $633 plus her $450 unreduced excess spousal benefit).

The filing strategy outlined in the above example is just one of numerous possible options available to you and your husband. You should strongly consider using our maximization software to explore and compare all of your options so that you can determine which strategy you feel would work out best for the two of you.

Best, Jerry