I am 67 and my wife is about to turn 64. I plan to wait until 70 to begin collecting social security. At 70 my benefit is projected to be $2500. (If I started collecting now it would be $1850.) If my wife begins collecting her personal benefit now her benefit will be $850. If she does so, can she then apply for spousal benefits once I begin receiving benefits at 70? At that point would she receive $1250 in benefits? Would this be the best way to maximize our lifetime benefits, especially assuming we live to a ripe old age? Would there be any advantage for my wife to wait to begin collecting benefits?
Hi,
No, that's not how it works. If your wife takes her benefits now, when you file for your benefits her spousal rate (if any) would be determined by subtracting her own unreduced full retirement age rate (PIA) from 50% of your PIA, not 50% of your age 70 rate.
For example, Joni has a full retirement age rate (PIA) of $1000 but decides to take reduced benefits at a rate of $866 at age 64. Joni's husband Bob subsequently files for his benefits when he turns age 70, and Bob's PIA is $2000. Bob is paid 32% more than his PIA, or $2640, because he waited until age 70 to start drawing. However, even though Bob's monthly rate is $2640 and Joni's is $866, Joni would not be eligible for any spousal benefits because 50% of Bob's PIA minus her own PIA is zero (i.e. $2000/2 - $1000).
Assuming that your wife was born prior to January 2 1954, based on the figures you cite in your question your best option may be for you to file at age 70 and for your wife to file a restricted application for spousal benefits only at that time. She could then draw 50% of your PIA until age 70, at which time she could switch to her own retirement benefits at a rate 32% higher than her PIA. However, there are several alternate strategies that you may consider to be as good or better, so you should strongly consider using the maximization software available on this website in order to compare all of your filing options and determine your optimal strategy.
Best, Jerry
