Hi Larry, My questions are in regard to your "Ask Larry" column from Sept 20, 2021about Spousal Benefits. We own and have read your book and re-read it many times. Thanks! In our case, my FRA is 66 and I will turn 68 in Dec of this year. My wife's FRA is 66 and 8 mo. She will turn 63 this month of Oct. I plan to file for my Social Security when I turn 68. According to your "timing" discussion, My "benefit start date" should be set to one day after my December birthday if I want to be considered to be age 68 at the time my benefit begins, correct? Does my wife have to wait until my benefit actually goes into affect before she files for her spousal benefit? As it turns out 50% of my PIA will be bigger than her individual benefit when she files. Last question. By the time my wife gets to age 70 1/2, her individual benefit is estimated to be about $50 more a month than the spousal benefit she will be receiving for many years. Can she re-file for individual benefits at that time to claim the extra $50/month?
Thanks,
Dave
Hi Dave. You can't specify a particular day as your benefit start date, nor do you need to. You can only choose the month that you want to start your benefits. If you were born on any day of December other than the 1st then Social Security will count you as being 68 for the entire month of December. If you happen to have been born on the 1st of December, Social Security would count you as being 68 for the entire month of November. And, if you choose December as your month of election (MOE) to start benefits, your payment for December will be due in January. Social Security pays benefits a month behind.
However, if you start your benefits effective with December, your initial benefit rate will only include the delayed retirement credits (DRC) you earned through December of 2020. If a person starts drawing Social Security retirement benefits between full retirement age (FRA) and age 70, Social Security initially only gives them credit for any DRCs earned through December of the year prior to the year of the person's MOE. Any DRCs earned in the year that you start drawing are subsequently credited effective with your payment for January of the following year.
Furthermore, the recomputations to include partial year DRCs are only done periodically on an automated basis, so if you choose December 2021 as your MOE your benefit rate might not actually be increased to reflect the additional 11 months of DRCs you earned in 2021 until sometime in 2023. You would, however, be paid any back pay due for months starting with January 2022. The only way to be credited with all of your DRCs effective with your first payment is by choosing either January or the month that you turn age 70 as your MOE.
Your wife could apply for spousal benefits as early as the day you apply for your benefits. However, she can't apply for spousal benefits without also filing for her own benefits at the same time. People born after January 1 1954 are not permitted to apply just for spousal benefits while allowing their own benefit rate to grow until age 70.
Assuming that 50% of your primary insurance amount (PIA) is more than your wife's own PIA, whenever your wife applies for benefits she'll be paid her own benefit plus an excess (i.e. partial) spousal benefit. Your wife's combined benefit rate would then basically add up to the higher spousal rate. But, if she starts drawing benefits prior to FRA both her own benefit amount plus her excess spousal rate will be reduced for age. And, that age reduction will continue for as long as both of you are living.
You and your wife should strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully explore all of your options so that you can determine the best strategy for maximizing your benefits.
Best, Jerry
