How A Spouse Can Claim Spousal Benefits Now And More Benefits Later

Social Security pays benefits (i.e. income) based either on your own earnings or on your spouse's earnings. The latter is a spousal entitlement. Gimmicks abound by how you can increase your takings from the Social Security System. Here's another...

The Social Security System pays benefits based on you waiting to your full retirement age (FRA) to receive them. Your birthday determines your FRA as defined by Social Security. It used to be 65 for all, but the age is moving slowly higher.

Nevertheless, benefits paid out to you before your FRA - as early as 62 - are permanently reduced from your FRA benefits according to how much earlier you begin them. And, if you wait until after your FRA to begin receiving benefits, they increase by about 8% per year. There's no further increase for waiting beyond 70.

You always have the right to claim either your own earnings benefits or your spousal entitlement - whichever is greater.

The maximum spousal (let's assume wife's for clarity) benefit you can claim is 50% of your husband's earnings benefit. If the wife claims this before she turns her FRA, it's further reduced -as her earnings benefits would be too.

Working out the best way to get the most from Social Security over time really depends on your age, your spouse's age, your own earned benefits and those of your spouse.

Below is one option for a spouse (assume wife again) to claim now, and then to claim more later.

Claim Spousal Benefit at FRA, and then own benefit at 70

If a wife also has her own earnings benefits and has reached her FRA, she has a choice to make. She can choose to take her own benefits or her spousal entitlement benefits - whichever is larger. If she took her own benefits at her FRA, there could be no possibility for them to increase - outside of Social Security annual Cost of Living Adjustment (COLA).

But she could also choose to receive only her spousal entitlement benefit now. Because she is delaying receiving her own benefits until after her FRA - perhaps at age 70, those benefits will increase by about 8% per year. At, say, 70, she could then switch to her own benefits.

This would make sense only if her own benefits were equal or less than her spousal benefits, but would increase - because of her delay in taking them beyond her FRA - to a greater amount than her spousal entitlement. You can neglect the effect of COLAs since all benefits go up each year by that amount.

She can continue working too. Her work credits can serve to increase her final benefits just that much more. But check with current law just to be sure nothing has changed since this writing.

at 9:57 PM
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