Say a spouse takes early retirement on her own record (say at 62), and then converts to the spousal benefit when her husband files for benefits. My understanding is that the spousal benefit is calculated based upon 50% of husband's PIA less spouse's PIA, (less additional reduction if spouse is less than FRA) and that this amount is added (if positive) back to spouses current payment. My questions are 1) is spouse's PIA used in above calculation locked in at 62 when she first begins getting early payments, or can it still grow with inflation adjustments? (assume no additional work credits). Also, if husband has filed before his FRA and triggered this calculation, will his PIA still be used in calculation even though he has not yet reached his FRA? Thanks!

Hi,

A person's primary insurance amount (PIA) is increased by all Social Security cost of living adjustments (COLA) that occur after they turn age 62. So, the excess spousal benefit rate in the scenario you present would be calculated using the couple's PIAs as of the date of the spousal benefit entitlement.

And, yes, the spousal benefit calculation uses the worker's PIA, not the worker's benefit rate.

For example, say Karen files for her retirement benefits this year at age 62 and receives a reduced rate of $590 based on her PIA of $800. When Karen turns 65, her husband files for his retirement benefits at age 62 with a PIA of $2000. Karen's unreduced spousal benefit would be calculated by subtracting her PIA from 50% of her husband's PIA, even though her husband's benefit rate would be reduced for starting his benefits at age 62. Karen's unreduced excess spousal benefit of $200 (i.e. $2000/2 - $800) would then be reduced to roughly $177 for starting her spousal benefits at age 65. That would make Karen's combined benefit rate $767 (i.e. $590 + $177).

The above example assumes no COLAs between the time Karen filed for retirement benefits and when she later files for spousal benefits. If there were COLAs, her excess spousal rate would be calculated using the PIAs in effect at the time of her spousal benefit entitlement.

Best, Jerry