I will be 66 in July 2017, and my husband just turned 64. He has made much more than me. If he filed for SS early and I filed for spousal benefits rather than my own, half of his benefits would give me $1,079/mo (versus the $1,053/mo I’d get with my own benefits), according to SS numbers. In addition, my benefits would build until I was 70.
More important, he could start drawing about $1,950/mo now (vs. the $2,158/mo he’d get if he waited till 66). I’ve done a rough estimate of the math: $1,950 X 20 years=$39,000 vs. $2,158 X 18 years=$38,844. That is, waiting till FRA doesn’t seem to be an advantage until my husband reaches his late 80s. (I was unable to find a calculator that could do this--if you know of one, please link to!).
We are both self-employed freelancers, currently making low incomes. Here are my questions: 1) Is my math more or less accurate? 2) Given our circumstances, doesn't it make sense to start his benefits at 64 and for me to do spousal benefits--or am I missing something? and 3) I understand that in any year before age 66 that my husband earns more than $16,920, he would lose some benefits—but would I still get the spousal benefit of $1079/mo, or my own of $1053/mo?
Thank you very much!
Hi,
Your math isn't exactly right. Your husband's personal break-even point between starting to draw at 64 vs. 66 should fall between his ages 78 & 80. But, if you factor in your spousal benefits, the break-even point would be closer to age 86 or 87.
We don't recommend using break-even analysis for decision making, though. You may want to review Larry's answers in the 'Break Even Analysis' link in the topics column on the left side of this page for his thoughts. We feel that you should use the filing strategy that is most likely to assure you of having enough income to support you in the event that you live to your maximum possible age.
That said, it appears as though you could make a case for having your husband file for a reduced benefit in order to allow you to file for spousal benefits only at full retirement age (FRA). If he did so, he could still suspend his benefits when you switch to your own record at age 70 in order to boost his own benefit rate somewhat. You should strongly consider using the maximization software available on this website to compare all of your and your husband's filing options to determine your best overall strategy.
With regard to your third question, if your husband's earnings prior to his FRA exceed the exempt amount, both your husband's benefits and your spousal benefits would be withheld for as long as it takes to recover the amount required by the Social Security earnings test (https://www.ssa.gov/planners/retire/whileworking2.html).
Best, Jerry
