Today’s column addresses questions about when to file for spousal benefits, marrying a working spouse, when the earnings test will no longer reduce benefits and whether filing and suspending might be a good strategy for a particular case. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.
See more Ask Larry answers here.
Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.
Should My Wife File At FRA To Get Social Security Spousal Benefit?
Hi Larry, I am married and I was born in December 1953. My wife was born in September 1954. I am currently working full time, maxing my 401K and company match. I am enrolled in an HDHP medical plan at work and maxing out my HSA contribution. My company has well over 500 employees. I plan to work for another year or two. Should my wife start taking her Social Security spousal benefits this year on her birthday when she reaches her full retirement age (FRA)? Fortunately, we do not need the money at this time. I have not filed for my Social Security retirement benefit and was planning to wait to file for my Social Security benefit. I thought I’d have to wait until 70 and 1/2 but someone told me I just need to wait till 70. Which is correct? Thanks, Tim
Hi Tim, Your wife couldn’t qualify for spousal benefits at least until you start drawing your retirement benefits. You don’t mention whether or not your wife will be eligible for benefits based on her own work record, but she could claim those benefits without regard to when you start drawing your benefits. Plus, if your wife qualifies and files for benefits on her record, then you could potentially draw spousal benefits while allowing your own benefit rate to grow until 70. Only people born prior to 1/2/1954 are allowed to file just for spousal benefits without also being required to file for their own Social Security retirement benefits at the same time.
Also, you wouldn’t want to wait past age 70 to claim your benefits. The 8% annual increase in benefit rates resulting from delayed retirement credits (DRC) ends the month you reach 70, not 70 1/2.
It sounds like you and your wife have a number of possible filing options available to you, so you may want to use my company’s software — Maximize My Social Security or MaxiFi Planner — to fully explore all of your options in order to determine the filing strategy that would maximize your benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry
Would My Benefits Be Reduced If I Get Married And My Spouse Is Working Full-Time?
Hi Larry, I am 62 and recently applied for Social Security retirement benefits. I am curious about how getting married would impact my benefits. Would they be reduced given her income? And would the kids be eligible for benefits under my record? Thanks, Rafael
Hi Rafael, Your new wife’s income would have no effect on your benefits if you’re receiving Social Security benefits. Your step-children might qualify for child’s benefits based on your entitlement to Social Security retirement benefits, but not until you’ve been married for at least a year and only if you’re providing at least one-half of their support. Based on the manner in which Social Security normally calculates one-half support, you could probably only meet the one-half support requirement if your income is equal to or greater than that of your new wife. Best, Larry
When Can I Draw Full Benefits And Still Work All I Want To?
Hi Larry, I’m working and can work more but I’m not sure how that will affect my Social Security benefits. When will I be able to work as much as I can without it lowering my benefits? Thanks, Cara
Hi Cara, Starting with the month you reach full retirement age (FRA), you can collect any Social Security benefits to which you’re entitled regardless of how much you earn. A person’s FRA depends on their year of birth and is between 66 and 67 for most people now collecting or who are about to collect. Best, Larry
Can My Husband And I Use File And Suspend For Me To Claim Spousal Benefits?
Hi Larry, My husband’s birthday is in 12/1953 and mine is in 1/1954. Can we use the file and suspend strategy for me to claim spousal and my husband would then wait till 70 to file? Thanks, Elania
Hi Elania, You couldn’t claim spousal benefits without also being deemed to apply for your own retirement benefits at the same time, nor could you be paid spousal benefits at least until your husband starts drawing his own Social Security retirement benefits. That’s because you were born after 1/1/1954.
On the other hand, your husband could file just for spousal benefits while allowing his own benefit rate to grow until age 70, but he could only be paid spousal benefits if you’re drawing your retirement benefits. He couldn’t be paid spousal benefits if you file for and suspend your benefits. Your best filing strategy depends in large part on your and your husband’s relative benefit rates. Best, Larry