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This week’s question comes from Pedro:
I am 66 years old and my wife is 59. I am waiting until 70 to collect Social Security. Will my wife be able to collect spousal Social Security benefits when she reaches 66 and 10 months? I understand that she gets 50 percent of my full retirement until she turns 70 and collects on her Social Security.
The ‘restricted application’ strategy
This is an interesting strategy called a “restricted application.” Under this strategy, the spouse waits until full retirement age (FRA) and claims a spousal benefit. Then, the spouse claims his or her own benefit later.
The advantage of using this strategy is that the spouse can collect spousal benefits while waiting to claim his or her own benefit. Unfortunately, your wife is too young to pursue this strategy.
Two years ago, Congress passed a change in the law that removed this option for people who were born after Jan. 1, 1954. So, a restricted application strategy is still an option, but only for people who are now 65 or older.
While this option is not available for you, you should still think hard about the best strategy for claiming Social Security benefits. It can make a big difference to your financial situation in retirement. Without more information, I cannot give you detailed advice as to the best strategy. But here are some important considerations.
First, since you are seven years older than your wife, and women have a longer expected life expectancy than men, survivors benefits are an important consideration when choosing a strategy.
When the first person dies, the surviving spouse receives the higher of the two benefits. To maximize the survivors benefits, it is usually a good idea for the higher-earning spouse to delay claiming. Thus, if you are the higher-earning spouse, it is probably a good idea for you to claim at 70 as you plan to do.
Second, the decision about whether your wife should claim a spousal benefit on your record or claim her own benefit depends on the relationship between your benefits and hers. If she waits until her FRA — as you suggest in your question — she will receive 50 percent of the benefit that you would have received if you had claimed at 66. (The spousal benefit does not increase if you delay claiming — only your benefit increases.)
Also, if she plans to take a spousal benefit, there is no reason for her to wait beyond her FRA. The spousal benefit does not increase if she waits to claim. On the other hand, she can get a larger retirement benefit if she does not claim at FRA. Her benefit will continue to increase if she delays claiming until sometime between FRA and 70.
If you wish to obtain more detailed advice as to your best possible claiming strategy, you can get an inexpensive, detailed report with specific recommendations from our firm.
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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 Pennsylvania and taught economics at the University of Delaware for many years. I now do the same at Gallaudet University.
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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 Social Security Administration 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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