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Today’s question comes from Carol:
“I am 59 and will soon be getting disability benefits due to many health issues. My benefit amount is $860 a month. My husband is 66 and working part time. He has not claimed Social Security yet. If he claimed at 66, he would receive about $2,180 a month. He also has some health issues and (based on) family (history) does not have a life expectancy past (his) early 70s.
Would you recommend early retirement for him? Also, if he were to pass before me, would that affect my disability benefits? Would it be better to claim a spousal benefit, or am I even eligible for it?”
Raising important questions
Carol, you raise several interesting issues. First, since your husband was born prior to 1954, he qualifies for a special option often referred to as a “restricted application.” This would work as follows:
He can claim a spousal benefit on your record, receiving half of your benefit, or $430 a month. Then, at age 70 (or earlier) he can switch to his own benefit. If he waits until age 70, his benefit will have grown by 32%, from $2,180 to $2,878.
Second, when your husband claims his own benefit, you are eligible for a spousal supplement. If you claimed it at your full retirement age (FRA) of 67, you would receive a supplement that would bring your overall benefit up to half of his FRA benefit. Half of his FRA amount is $1,090. So, your benefit of $860 would be increased by a supplement of $230, bringing your total benefit up to $1,090.
If you claimed the spousal supplement before age 67, it would be reduced by an early penalty. For example, if you claimed the spousal supplement at age 62, it would be reduced by about 35%, or from $230 to about $150.
Next, if your husband dies first, you become eligible for a widow’s benefit. If you claim it at your FRA of 67, you would receive the same amount that he had received. Claiming it earlier than your FRA would result in an early claiming penalty.
Finally, we have one last question: Should your husband claim benefits soon because of his health issues and family history?
If your husband were not married, I would answer with a definite “yes.” However, since you stand to inherit his benefit, your life expectancy plays an important role here.
If your disability is not life-threatening, then you could outlive your husband by many years. If this is the case, you could benefit substantially by having him delay claiming until age 70.
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The questions I’m likeliest to answer are those that will interest other readers. So, it’s better not to ask for super-specific advice that applies only to you.
I hold a doctorate in economics from the University of Wisconsin and taught economics at the University of Delaware for many years.
In 2009, I co-founded SocialSecurityChoices.com, an internet company that provides advice on Social Security claiming decisions. You can learn more about that by clicking here.
Disclaimer: We strive to provide accurate information with regard to the subject matter covered. It is offered with the understanding that we are not offering legal, accounting, investment or other professional advice or services, and that the SSA alone makes all final determinations on your eligibility for benefits and the benefit amounts. Our advice on claiming strategies does not comprise a comprehensive financial plan. You should consult with your financial adviser regarding your individual situation.
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