Welcome to our “Social Security Q&A” series. You ask a question about Social Security, and a guest expert answers it.
You can learn how to ask a question of your own below. And if you would like a personalized report detailing your optimal Social Security claiming strategy, click here. Check it out: It could result in receiving thousands of dollars more in benefits over your lifetime!
Today’s question comes from Virginia:
“My husband is 65 and I am 63. Neither one of us have started taking Social Security. He is waiting until full retirement age to take his Social Security.
Since half of his Social Security is more than I would receive on my own, I would like to take that. Do I have to wait until my full retirement age to take that option, or can I start mine earlier and switch to half of his when I reach full Social Security age?”
Life expectancy and the best time to claim
Virginia: What you probably really want to know is what the optimal claiming strategy is for someone in your situation. So, instead of answering your question directly, I decided to just identify an optimal strategy, using our Social Security Choices algorithm.
I do not know your actual Social Security benefits, but I can choose a set of numbers that reflect what you have described in your question. For your husband, I used a Social Security benefit at full retirement age of $2,000. For yourself, I put in $750, an amount less than half your husband’s benefit.
Since very few people can really predict how long they might live, and optimal strategies depend on life expectancy, our algorithm provides optimal strategies for different life expectancies. We generally start with a scenario where people live a “normal” life expectancy for people who are now 62. This is 86 for women and 82 for men.
Under this normal life expectancy scenario, your optimal strategy is to claim your Social Security benefits now and receive $581 per month. You will not receive $750 because you are claiming before your full retirement age. Your husband should wait until 68 to claim his benefits and receive a monthly benefit of $2,292 This is more than $2,000 because he waited to claim benefits until after his full retirement age, and benefits increase by 8% each year you wait to claim beyond your full retirement age.
When your husband claims his benefit, you will receive a supplemental spousal benefit, which will increase your benefit to $820. Note that this is less than $1,000, which is half his benefit. The reason for this is that you claimed your benefit before full retirement age, and this will cause your benefit to be lower even after you receive this supplemental spousal benefit.
Longer life, different strategy
For reasons of family history or health issues, you might believe that normal life expectancy figures are not good predictors of how long you will live. Another scenario is that you both will live a long time. If you believe that you will live a long time, the optimal strategies will be different.
In such a situation, you should wait until 66 to claim your benefit, which will now be $725. It is still less than $750 because your full retirement age is 66 years and 6 months. Your husband should now wait until 70 to claim his benefit, which will increase his benefit to $2,612. At that time, your supplemental spousal benefit will increase your benefit to $975.
Of course, I do not know your actual Social Security benefits, so you may want to go to our algorithm to find out what your actual situation looks like. But it appears that in neither case is claiming at full retirement age the best claiming solution.
Got a question you’d like answered?
You can submit a question for the “Social Security Q&A” series for free. Just hit “reply” to the Money Talks News newsletter and email your question. (If you don’t already receive the newsletter, you can sign up for free, too: Click here, and the sign-up box will pop up.)
You also can find all past answers from this series on the “Social Security Q&A” webpage.
I hold a doctorate in economics from the University of Pennsylvania and taught economics at the University of Delaware for many years. Presently, I am teaching at Gallaudet University.
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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