08 Apr Is this couple getting the most from Social Security?

Q. I’m 73 and my wife is 66 and we both work. We are receiving “file and suspend” Social Security benefits. She’s collecting $1,000 a month based on my Social Security, and we can do this for four years. Our total Social Security income is $3,419 a month. My wife’s thinking of retiring in three years, at which time her Social Security will match mine at $2,500. Should we do the “file and suspend,” or not bother?
— Married

A. Deciding the smartest Social Security strategy for you depends on many issues.

Consider: Do either of you have health issues? How old were your parents when they died?

These conversations are relevant because this pension-like income could extend for more than 30 years, said Jody D’Agostini, a certified financial planner with AXA Advisors/The Falcon Financial Group in Morristown.

She said starting to collect at a significantly higher level will make more sense if you expect to live longer.

Before deciding, you also need to look at what other assets you have, and what your monthly expenses are.

“If you have other resources, it might make sense to utilize them first to grow your wife’s benefit,” she said.

It appears that your wife was born in 1953, therefore her full retirement age for Social Security purposes is 66, D’Agostini said.

You mentioned the “file and suspend” option. It’s still available to individuals who turned age 62 before Jan. 1, 2016, D’Agostini said, so your wife can continue to collect a benefit on your earnings history and allow her benefit to accrue.

“This is often referred to as ‘collect now and collect later,’” she said.

Your wife will be adding an additional 8 percent per year, or 32 percent in total, if she holds off collecting the benefit based on her earnings history until age 70, D’Agostini said.

“If her benefit at age 70 is $2,500 a month, then most likely her current benefit would be $1,827 a month,” she said. “Also, if your wife continues to work for three more years, she will most likely improve her ultimate Social Security payout as it takes the top 35 years of your earnings history into account.”

It’s smart to have a conversation with a local Social Security office to confirm the numbers and run projections based on both of your earnings histories.

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This story was originally published on April 8, 2019.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.