I just finished the latest version of "Get What's Yours." Thank you for writing this book. It was most informative. But, I have a situation that I don't believe was covered in the book:

I am 61 with a birthday of 3/30. My wife is 62 and her birthday is 5/5. Her age-70 retirement benefit is less than half of mine (as is her full retirement benefit.) We are not eligible to grandparented under the new law to file-and-suspend or to be excluded from deeming.

Based on the book, under current law, my best strategy seems to be the following:

1. We should both file when I turn 70. I will file for retirement benefits and she will file for spousal benefits. Since she is older than I am, she will apply for six months of retroactive spousal benefits and would forfeit three. We would stand to lose upfront ~ $5400 total if the spousal benefit was based on 1/2 of my age-70 retirement benefit, ~ $4200 total if based on 1/2 of my full retirement age benefit. Since we will gain an extra benefit of ~ $30/month total between the two of us, "break even" would be about 15 years, but since this is like insurance, we could live to be ~ 100 so I could gain another $5400 at least.

What do you think?

Thanks so much.

Hi,

I'm fine with your decision to wait until age 70 to start drawing your retirement benefits, but if your wife's own retirement benefit rate wouldn't exceed 50% of your full retirement age rate (PIA) even if she waited until age 70 to start drawing, then she should file for her retirement benefits no later than her full retirement age (FRA). She can then file for additional spousal benefits when you file for your retirement benefits, which would be calculated by subtracting her PIA from 50% of your PIA.

For example, say Jane files for her retirement benefits at FRA with a PIA of $400. 5 years later, Jane's husband files for his retirement benefits with a PIA of $2000. Jane would then qualify for an excess spousal benefit of $600 (i.e. $2000/2 - $400), which would be added to her own retirement rate to give her a combined monthly rate of $1000.

If Jane didn't file for her own benefits at FRA and simply filed for spousal benefits when her husband filed, she would still only receive a monthly total of $1000. In other words, Jane would simply have forfeited 5 years of benefits at $400 per month for no net gain in her future benefit rate.

By the way, I'm not sure what you're referring to when you mention that your wife would receive 6 months of back pay when you file at age 70. Regardless of the fact that your wife is older than you, she couldn't be paid spousal benefits for any months prior to your first month of entitlement to your retirement benefits. So, if you file at age 70 that will be the first month that your wife could be paid spousal benefits.

You and your wife should strongly consider using our maximization software in order to analyze your options and make sure that you have all of your facts straight. When to file for benefits is an extremely important decision, and you'll want to be certain that you fully understand your options so that you can make the best possible choice.

Best, Jerry