My husband, born 12/28/53, will reach FRA (66) in December 2019. He will still be working. His PIA is currently estimated at $1864 per month at FRA and $2589 per month at 70. Some of his 35 highest earnings records are "0", so I am assuming his PIA will increase as long as he continues to work for a few more years at least. I am currently 60 (DOB May 1959) and was thinking about filing for retirement benefits early at age 62 in 2021 at which time my husband could apply for Spousal Benefits which will allow his benefit to grow and then at 70 he can switch to his retirement benefit. My PIA is far less than my husbands although I am continuing to work which will raise it somewhat, but as of now I have only about 10 years working Full Time and a few years part time since I was a stay at home mom. If I understand correctly, he will receive the Spousal Benefit (half of my FRA amount) and I will receive the reduced retirement benefit with $1 for every $2 of earnings over the earnings limit withheld and then recalculated back into what I will receive at FRA until he applies for his retirement benefit at age 70 (DEC 2023). At that time I will be 64 years old and still not FRA (66 and 10 months) Once my husband switches to his Retirement Benefits, am I automatically subject to "deeming" based on my early filing at 62? In a nutshell, husband receives his full age 70 benefit and I receive the higher of half of his benefit reduced due to early filing or my full with adjustments for months I didn't get due to the earnings limit then reduced due to early filing? Am I getting this right?
Hi,
Yes, since you were born after January 1 1954 if you file for your own Social Security retirement benefits at age 62 you'll be deemed to have filed for spousal benefits as soon as your husband starts drawing his own benefits. For example, say Sally files for her benefits at age 62 in 2021 in order to enable her husband to draw spousal benefits. Sally's full retirement age rate, or primary insurance amount (PIA), is $600, but her reduced age 62 rate is $425. Sally's husband was born prior to January 2 1954, so he is over full retirement age (FRA) when Sally files, and since he hasn't filed for his benefits he can be paid an unreduced spousal benefit of $300 (i.e. 50% of Sally's PIA).
When Sally's husband reaches age 70 he files for his own Social Security retirement benefits. Sally would then be required to file for spousal benefits if she qualifies, and since she's under FRA her spousal rate would be reduced for age. Sally's husband's PIA is $2000, so Sally's unreduced spousal rate would be calculated by subtracting her PIA of $600 from 50% of her husband's PIA, resulting in a rate of $400. However, since Sally is only 64 years old when she becomes eligible for spousal benefits her spousal rate is reduced to $305. That would then be paid in addition to Sally's own reduced benefit rate of $425 to give her a combined rate of $730.
Otherwise, it sounds like you have a pretty good handle on how your case would work, but if you continue working and earn more than the amount allowed under Social Security's earnings test both your benefits and your husband's spousal benefits would be subject to at least partial withholding, not just your benefits. And, when you start drawing spousal benefits those benefits would also be subject to withholding if you earn more than the earnings test limit. If some of your benefits are withheld due to the earnings test, your benefit rate will be adjusted after you reach FRA to remove the percentage reduction that was applied to your benefit rate for any months that end up being withheld due to your excess earnings.
You and your husband should strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to explore and compare all of your various options so that you can determine the best overall strategy for claiming your benefits.
Best, Jerry
