20 Feb Which Social Security rules apply to me?

Q. I turned 66 in July of 2019, born in 1953. I’m told I fall under the old rule where I can file for half my husband’s benefit so mine can grow until age 70. Is that correct?
— Senior

A. Let’s review the Social Security rules.

You are eligible for spousal benefit equal to 50% of the primary insurance (PIA) amount of your spouse.

The PIA is the benefit amount at full retirement age (FRA), said Deva Panambur, a fee-only planner with Sarsi, LLC in West New York and an adjunct professor of personal finance at Montclair State University.

People born between the years of 1943 and 1954 have FRA of 66 years. You can file for spousal benefits either when you turn 62 or when your spouse applies for his own benefit — whichever is later.

For the benefit on your own work record claimed before FRA, the PIA is reduced by 5/9 of 1% for each of up to 36 months immediately preceding FRA, and by 5/12 of 1% for each of any prior months, Panambur said.

For benefits claimed after FRA, the PIA is increased by two-thirds of 1% per month, up to age 70, he said.

Spousal benefits claimed before reaching FRA are reduced by 25/36 of 1% for each of up to 36 months immediately preceding FRA, and by 5/12 of 1% for each of any prior months, he said.

In 2015, Social Security rules were changed to plug some loopholes.

Among them is the rule pertaining to deemed filing.

“Deemed filing means that when you file for either your retirement or your spouse’s benefit, you are required or `deemed’ to file for the other benefit as well,” Panambur said. “The exception is for people born before Jan. 2, 1954, who can file for one and delay the other.”

In your case, Panambur said, you would have to wait until your husband applies for his own benefit.

“Since you were born in 1953, you can apply for spousal benefits but delay applying for your own benefit and accrue delayed retirement credits to age 70,” he said. “Your husband, since he was born after Jan. 2, 1954, cannot adopt this strategy as he will have deemed to have filed for his spousal benefit when he files for his own benefit.”

As you can see, planning for Social Security can be is a complex and complicated exercise.

“The most important and obvious factor is the relative values of your and your husband’s benefits and the related spousal benefits,” he said. “Other important factors that would impact your decisions are your and your husband’s health, your desire to bequeath assets to your loved ones, your expected rate of return on investments, expected inflation rate, your cash flows and discipline in managing your finances.”

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This story was originally published on Feb. 20. 2020.

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.