I began taking Social Security in 2016 at age 62 and receive about $530/mo. The agent used Break Even figures to advise that it would not benefit me to wait until FRA due to the low amount it would increase (I stayed home to raise children for 30+ years). My husband just lost his job and will turn 68 in October 2019. We were hoping to hold off till he turns 70, but not sure we can. He is planning to claim his Spousal Benefit so at least that bit will help (our accountant also said he should request it be retroactive to January 2019). We are worried about him having to begin taking his own early. If we can't hold off, but wait until April of 2020 (6 mos. into the next year) are we right in assuming he would lose 12% of the roughly $2678 he would get at 70? Also it now sounds to me like listening to the agent and taking my benefit at age 62 may have impacted my benefits as far as what I can get in Spousal Benefits once my husband does begin his own benefits? Thanks for your help.
Rose
Hi Rose,
It's a shame that your husband didn't file for spousal benefits when he reached his full retirement age (FRA) of 66 since he could have been drawing those benefits since that time no matter how much he's been earning. He can now only claim benefits for a maximum of 6 months retroactively, so he should apply ASAP in order to prevent a further loss of benefits.
Ideally, it sounds like your husband should wait until age 70 to switch to his own record, but I understand that may not be possible for you financially. His permanent benefit rate will go up by 2/3rds of 1% for each month that he delays drawing his own benefits until age 70, so he should at least consider holding off on filing for his own benefits as long as possible. Not beyond age 70, though.
If your husband waits until age 70 to claim his own Social Security retirement benefits his benefit rate will be 32% higher than his primary insurance amount (PIA). A person's PIA is equal to the amount of their Social Security retirement benefit if they start drawing at FRA. If your husband turns age 68 1/2 in April 2020, and he files for his own benefits effective with that month he will ultimately receive a benefit rate that's 20% higher than his PIA (i.e. 2/3rds of 1% x 30 months). However, when a person files between FRA and age 70 they are initially only credited with the delayed retirement credits (DRC) that they accrued through December of the year prior to the month and year that they claim benefits. So, if your husband files for his benefits effective with April 2020 his initial benefit rate will only be 18% higher than his PIA (i.e. 2/3rds of 1% x 27 months). The other 2% would be added effective with his benefit payment starting with the month of January 2021, but it could take Social Security a year or two to actually get around to processing the increase.
The reduction for age that you accepted in order to start drawing your benefits at age 62 will continue even after you become eligible for spousal benefits. Any additional spousal benefits for which you become eligible will be calculated by subtracting your PIA from 50% of your husband's PIA. So, for example, say that your husband's PIA is $2000 and your PIA is $800. In that case your unreduced spousal benefit would be $200 ($2000/2 - $800), which would then be added to your own reduced benefit rate. However, if your husband files for his benefits before you reach FRA your spousal rate will also be reduced based on your age at the time you become eligible for spousal benefits.
One bit of good news that I can give you is that the fact you took your own benefits early would not adversely affect the amount that you would receive as a survivor if your husband dies before you. If your husband dies first and if you are at least FRA at that time, you would be eligible for the higher of your own benefit rate or your husband's full benefit rate. That's another point in favor of your husband waiting until age 70 to apply for his benefits if possible, since it could provide you with a higher survivor rate.
Your husband may want to strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully compare his filing options in order to make sure that he chooses the best possible filing strategy.
Best, Jerry
