Larry, I have a couple of questions about the spousal benefit. But first a little background. My wife has her own benefit based on her earnings but it is less than half of mine at our FRAs. She is about two years older than I am. My FRA is 67 and my wife's FRA is 66 and 10 months. I am currently 59 and plan to retire next year. I plan to delay claiming my benefit as long as possible, preferably age 70.
1. Assuming we both live until age 70, I don't claim my benefit until 70, my wife waits until her FRA to file for her own benefit, but I then die after age 70, is my wife's spousal benefit based on what my benefit would have been at my FRA (age 67) or what my actual benefit is having filed at age 70? In other words the longer I wait to file (even up to age 70), the greater my wife's spousal benefit, correct?.
2. Given the scenario in Question 1, but my wife files early for her own benefit, her spousal benefit is reduced by her "deeming" factor, correct?
3. Given the scenario in Question 1, but my wife waits till after her FRA to file for her own benefit and then I die after filing for my benefit after age 70, that does not impact (i.e. increase) the amount of her spousal benefit resulting from the scenario in Question 1, correct? In other words, my wife delaying her claim for her own benefit beyond her FRA does not impact her spousal benefit, correct?

Thank you so much for providing this service and clarity to such a complicated system.

Hi,

Your wife's potential survivor rate would be higher if you wait until age 70 to start drawing your benefits, but her spousal rate while your living would be based on 50% of your primary insurance amount (PIA), not 50% of your age 70 rate. A person's PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA). If you wait until age 70 to start drawing your benefits and subsequently die before your wife, she would be eligible for your full age 70 rate as a survivor. She wouldn't get your full age 70 rate and her own rate, though, just the higher of the two amounts.

If your wife files for her own benefits at full retirement age (FRA) and if your PIA is more than twice as much as your wife's PIA, she could file for an excess spousal benefit when you start drawing your benefits. Her excess spousal benefit would be calculated by subtracting her PIA, or her PIA augmented by delayed retirement credits (DRC), from 50% of your PIA. That would then be paid in addition to her own benefit to give her a total monthly benefit equal to 50% of your PIA, assuming that's higher than her own benefit rate.

However, if your wife files for her own benefits prior to FRA her benefit rate will be reduced for age and that reduction will continue for as long as both of you are living. For example, say Amy files for her benefits at age 62. Amy's primary insurance amount (PIA), or full retirement age rate, would be $1,000, but Amy's rate is reduced for age to $712. Nine years later, Amy's husband, Bill, files for his benefits when he turns age 70. Bill's PIA is $2,400, but with delayed retirement credits his monthly benefit rate is increased to $2,976. Amy is eligible for an excess spousal benefit equal to 50% of her husband's PIA minus her own PIA, which in Amy's case is $200 ($2400/2 - $1000). That amount is not reduced for age since Amy has already reached FRA by the time her husband applied for his benefits. The $200 excess spousal amount is then added to Amy's own reduced rate of $712 to give her a combined benefit of $912.

Waiting past FRA to start her own benefits would, in fact, affect your wife's excess spousal rate, because the amount subtracted from 50% of your PIA is the higher of a) her PIA, or b) her PIA increased by DRCs. Therefore, it likely wouldn't be advantageous for your wife to wait past FRA to claim her own benefits if half of your PIA is significantly more than your wife's PIA. You and your wife may want to strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully analyze the options available to you so that you can choose the best possible strategy to maximize your benefits.

Best, Jerry