I began collecting SS benefit last February (2016) at age 67 (about $2440/month). My wife (born 1955) turns 62 in February 2017, and she is eligible to collect her reduced SS benefit in May or June 2017. She is a naturalized citizen, and has been working various part time, and low-paying fulltime jobs since she came to this country 15 years ago. (She has accumulated around 50+ quarters towards her Social Security benefit. If she began collecting her benefit at 62, her reduced benefit is projected to be $450/month. She does not want to wait until she is 67 (her full SS benefit age) to collect the full benefit.

Would she be better off collecting her reduced benefit at 62? Then, wait until she is 66 to apply for the 50% spousal benefit? Or, can she apply for both the spousal benefit AND her reduced benefit at 62? What would you recommend for our situation? (BTW, we are both in pretty good (not perfect) health, but both our family histories suggest neither of us are likely to live to be late 80s or 90.)

Thanks for your help, and your time,

Sincerely,
Mike

Hi,

Whenever your wife files for benefits, she will be deemed to file for both retirement benefits on her own account and for excess spousal benefits. If she files prior to age full retirement age, which is 66 & 2 months in her case, both benefits will be reduced. She does not have the option of filing for one benefit at 62, and the other benefit later.

Since her own benefit amount is substantially lower than 1/2 of yours, there would be no advantage to her waiting beyond full retirement age (FRA) to apply. Larry strongly believes that her best option would be to wait until FRA to apply, since that would pay her the highest monthly rate for as long as both of you are living. He does not believe in break even analysis, as you can see by reading his posts on the subject.

If your wife does file at age 62, her own benefit amount will be permanently reduced by a little over 25%, and her excess spousal benefit will be reduced by a bit over 30%. The total benefit payable would be the sum of those 2 reduced benefits. Based on the benefit rates you cited in your question, that should total around $820 per month. You may wish to run the maximization software available on this website in order to get a more accurate estimate, and a full analysis of your wife's filing options.

Best, Jerry