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Ask Bob: Can I Claim A Spousal Social Security Benefit Then Switch to My Own Benefit?

Our expert explains the impacts of claiming spousal benefits early.

Question

I am 62, my husband is 74. My husband claimed [Social Security benefits] early at age 62.

If I claim spousal benefits at age 62, would I get half of his benefit? Would I be able to claim my FRA (full retirement age) [benefit] at the appropriate time...or wait until 70 and then claim that benefit?

Answer

Your situation requires an understanding of spousal benefits and how they correlate with the retirement benefit that you have earned under your own work record, says Heather Schreiber, RICP®, NSSA®, founder of HLS Retirement Consulting. The potential to claim a spousal benefit in addition to their own retirement benefit places this reader into the dual entitlement category.

“The good news,” says Schreiber “is that you could be eligible for more than one benefit.” Although it’s a bit complicated, according to the deemed filing rules. “Essentially, filing for spousal benefits first under your husband’s record before filing for your retirement benefit is no longer an option, unless you were born prior to January 2, 1954,” she says. “In your case, this means that when you file for a spousal benefit, you are automatically required to file for your retirement benefit.”

Schreiber continues, “Your own retirement benefit is always paid first, by the way, so if you have a healthy retirement benefit of your own, you likely will forfeit a spousal benefit. However, if the spousal benefit produces a higher income benefit, the difference between your own retirement benefit and the higher spousal benefit will be payable to you.”

Regarding the reader’s first question about how spousal benefits are calculated, Schreiber says this is an often-confused topic among consumers.

“The maximum spousal benefit that you may be eligible to receive is 50% of your husband’s Primary Insurance Amount (PIA), or the amount that he would receive at his full retirement age (FRA),” Schreiber explains. “Let’s assume that he was born in 1948, making his FRA age 66. So, for illustrative purposes, suppose your husband’s PIA was $2,000, then the maximum spousal benefit would be $1,000 or 50% of his benefit.”

“However,” she adds, “you mention that he claimed his benefit at age 62, taking a 25% reduction to his benefit. In our example, that would have reduced his monthly income benefit to $1,500.” This is where it gets tricky and tends to confuse those claiming spousal benefits. Says, Schreiber, “If you claim spousal benefits, you are still entitled to a maximum of $1,000 or 50% of his PIA, not 50% of his reduced benefit. However, should you choose to claim the spousal benefit early, at your age of 62, that $1,000 maximum benefit will be reduced based upon the number of months prior to your full retirement age that you claim his benefit.”

Schreiber adds, “For sake of simplicity, my examples assume that both you and your husband are born on the 1st or 2nd of the month so that you both are entitled to benefits for the month you turn 62. At age 62 today, your full retirement age is 67, so your spousal benefit would be reduced by 35% because of your decision to claim five years early.”

But we can’t forget about the dual entitlement rule that requires your retirement benefit to be considered first when you make your claim for benefits. Schreiber explains, “Let’s assume that your estimated PIA is $500 at your FRA of age 67. If you file at age 62, your $500 retirement benefit is reduced by 30% for a monthly income benefit of $350. To determine the combined spousal benefit, reduced for the early claim, we must subtract your PIA of $500 from the maximum spousal benefit of $1,000 for a sum of $500. Next, the $500 is reduced by 35%, to $325, because you of your desire to claim 60 months before your full retirement age. The combined benefit is $675.”

“On the other hand,” she notes, “if your PIA was, $1,200, for example, you would be ineligible for a spousal benefit since your retirement benefit, reduced for an early claim to $840, would exceed the amount you could collect as a spousal benefit.”

The claiming decision is an important one so asking great questions like this one is the perfect way to take control of your own retirement!

Got questions? Get answers!

Email Robert.Powell@maven.io.

Question

I am 62, my husband is 74. My husband claimed [Social Security benefits] early at age 62.

If I claim spousal benefits at age 62, would I get half of his benefit? Would I be able to claim my FRA (full retirement age) [benefit] at the appropriate time...or wait until 70 and then claim that benefit?

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