27 Apr How can we get the biggest benefits from Social Security?

Q. My question is about maximizing Social Security spousal benefits. Neither of us has claimed yet. At full retirement age, my benefit was $2,860 per month and my spouse’s will be $695 per month. I was born in December 1954 and my wife in November 1955. I will claim my benefit at age 69, three years after full retirement age. Can my wife claim 50% of my benefit? And if she claims her benefits before her full retirement age, will her amount from my benefit be reduced forever?
— Strategizing

A. Great question.

Finding the most lucrative strategy to claim benefits can be very confusing.

In November 2015, the Bipartisan Budget Act put an end to some of the filing strategies that were available to married couples.

A strategy called “file and suspend,” which enabled a participant to claim a spousal benefit while putting theirs on hold and enabling it to grow until age 70, is no longer available to people born after 1953, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.

“This process also allowed a spousal benefit to be started while the individual’s own benefit continued to increase,” Mott said. “The switch to the individual’s benefit would typically commence at age 70 after accumulating an additional 8% per year in growth.”

But now, a spouse is eligible to claim a benefit at age 62 or when there is a qualifying child in their care, she said, noting it’s important to keep in mind that filing prior to full retirement age will cause a permanent reduction in benefits, she said.

When a spouse files for a benefit, Social Security will compare the amount the individual is entitled to on their own work record to the 50% they would receive as a spousal benefit, assuming an application at full retirement age, she said.

“If the spousal benefit is more, the difference is added to the monthly payment,” she said. “For example, if a worker is entitled to a monthly benefit of $1,000 and the spousal benefit they can claim is $1,200, the $200 difference is added to their monthly payment.”

Now to your specific questions.

If your wife has the work credits necessary to qualify for a Social Security retirement benefit, she can certainly start receiving them at her full retirement age of 66 and 2 months, Mott said.

“When you choose to claim a spousal benefit, the Social Security Administration will look at both your records to determine which has the greater value, as in the previous example, and adjust the payment if it is warranted,” she said. “With the elimination of `file and suspend,’ you no longer have the ability to delay filing for your benefit if you put in an application for a spousal benefit.”

According to the Social Security website, the spousal benefit can be as much as half of the worker’s “primary insurance amount,” depending on the spouse’s age at retirement. If the spouse begins receiving benefits before “normal (or full) retirement age,” the spouse will receive a reduced benefit, it said.

“However, were your wife to qualify for a survivor benefit at some point in the future, the amount she would receive will be based on your PIA at the time of death,” she said.

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This story was originally published on April 27, 2021.

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