Dear Larry,
I turn 69 this October 2019 and have not filed for SS. My wife turns 67 February 2020. When do I need to file for benefits to receive an entire year of credits, my income will be negligible in 2019? We are planning to wait for another year or two before my wife files. Would you recommend that strategy?
FYI I’m a BU graduate CFA 73.
Thank you
Michael

Hi Michael,

I'm not sure that I understand exactly what you're asking. You accrue delayed retirement credits (DRC) for each month that you don't draw your Social Security retirement benefits between your full retirement age (FRA) and age 70. In your case your FRA was age 66, so if you don't start drawing your benefits until effective with the month you reach age 70 then you'll accrue 48 DRCs. Each DRC increases your primary insurance amount (PIA), which is equal to your Social Security retirement benefit rate if you start drawing at FRA, by 2/3rds of 1%. So, if you wait until age 70 to start drawing your monthly benefit rate would be 32% higher than your PIA.

If you start drawing before age 70, you won't receive the maximum possible 32% DRC increase. Instead, your increase would be 2/3rds of 1% less than 32% for each month that you collect benefits prior to age 70. Also, if you file to start your benefits prior to age 70, Social Security initially only credits the number of DRCs earned through December of the year preceding the month that you start drawing. So, for example, if you started drawing your benefits effective with October 2019, you would initially only receive the DRCs you accrued through December 2018. Credit for the remaining 9 DRCs accrued from January through September 2019 would be due effective with your benefit payment for January 2020 and continuing, but it could take Social Security up to 2 years to actually get around to recalculating your benefit rate. They would, however, pay any back pay due retroactive to January 2020.

As for a recommended strategy, that depends on a number of factors. Since both you and your wife were born prior to January 1 1954 and are over FRA, one or the other of you could file for spousal benefits if the other spouse starts drawing their benefits. For example, if you filed to start drawing your Social Security retirement benefits now your wife could file just for spousal benefits only on your record while letting her own benefit rate grow until age 70. Or, vice versa. Your actual best strategy would depend on your and your wife's relative benefit rates as well as your personal preferences. You and your wife should strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to compare all of your various options so that you can determine which option would work best for your particular set of circumstances.

Best, Jerry