Welcome to Ask Money Talks News, a series answering financial questions submitted by Money Talks News readers and podcast listeners.
In this installment, we’re talking about an aspect of Social Security for married couples that got a little trickier after a 2015 change to Social Security laws — switching from your own retirement benefit to your spousal benefit.
J. Marko asks Money Talks News:
“I am 64 and my wife is 62. My wife would like to start receiving her Social Security payments, which if taken now would be about $1,100/month. My payment at FRA (66 & 10 months) will be about $2,900/month. I would like to have her take advantage of the spousal benefit due to the gap in our payments. If she starts taking payments now, will she be able to apply for the spousal benefit when I start drawing at FRA?”
Thanks for your question, J. Marko. Your plan for your spouse to receive reduced benefits for a few years can be a good strategy when one spouse is younger and considering stepping back from work sooner.
As for the logistics, you have it mostly but not entirely correct. Let me break down how this would work.
Your spouse will draw her reduced retirement benefit amount, which is based on her own earnings record, if she claims now at 62. (For those who don’t know, someone who claims Social Security benefits before reaching what the government refers to as their full retirement age, or FRA, typically receives a reduced benefit rather than their full retirement benefit amount.)
Your spouse will continue to receive her reduced benefit amount even if you begin to draw your full amount. She cannot switch to the spousal benefit amount, which would be up to half of your own benefit amount, until she becomes eligible for her own full retirement amount.
So, when your spouse reaches her full retirement age, she can apply for her full amount and additionally apply to increase her benefits to her spousal benefit amount. Note that she must apply for both at the same time, known as deemed filing, under that 2015 law change I mentioned.
At that point, she will receive the larger of the two amounts — her own benefit or her spousal benefit, although the spousal benefit would be reduced due to her claiming early.
How to Ask Money Talks News
You can submit a question for the Ask Money Talks News series for free. Here’s how:
- Hit “reply” to the Money Talks Newsletter.
- Change the email subject line to Ask Money Talks News.
- Put your question in the email. Make sure to include enough detail for us to fully understand your question and any relevant context — but keep it all under 50 words.
- Hit “send.”
We can’t answer every question we receive, of course, but we do prioritize questions from Money Talks News members and questions that apply to a majority of our audience.
Add a Comment