Please define "excess" spousal benefits? I am 4 years older than my spouse. I have been the primary income earner. My spouse earned minimal income. I will defer until age 70. Does that mean my spouse can receive half the benefit I receive at age 70 if she waits to file until her FRA or later (and after I file at age 70), or will her spousal benefit peak at the half my FRA benefit even though I defer until 70?

Hi,

Excess spousal benefits refers to the partial spousal benefit paid to someone dually entitled to both retirement, disability or widow's benefits and spousal benefits. If a person is entitled to more than one type of benefits at the same time they can basically only be paid the highest of those benefit rates, but benefits are paid priority order with spousal benefits receiving the lowest priority.

For example, say Sally is entitled to spousal benefits on her spouse's record. Sally's maximum unreduced spousal benefit would be equal to 50% of her spouse's full retirement age rate (PIA), but since Sally also receives retirement benefits on her own record she could only get, at most, an excess spousal benefit. So, if Sally filed for benefits at full retirement age or later and her own retirement benefit rate is $800 and her spouse's PIA is $2000, her excess spousal benefit would be $200 (i.e. $2000/2 - $800).

And no, your wife could not receive 50% of your age 70 rate if you defer filing until then. The most she could receive as a spouse is 50% of your PIA. However, in the event of your death your wife could potentially receive up to your full age 70 rate as a widow.

It sounds like you and your wife should strongly consider using our maximization software to explore and compare all of your filing options in order to determine your best strategy.

Best, Jerry