If my wife claims Social Security spousal benefits, will that have any effect on my benefits when I claim at age 70?
I am 67 years old. I intend to take Social Security benefits at age 70. My wife turns 65 years old in June 2019. She does not have the minimum 40 credits of work to get her own Social Security retirement benefits. When she turns 65, can she claim spousal benefits? How will they be calculated? If she claims spousal benefits, will that have any effect on my benefits when I claim at age 70?
Your wife's claim of spousal benefits will have no effect upon your own benefits. And you will have maximized your own benefits be delaying until age 70.
Your wife is eligible for benefits, and has been since age 62, at a reduced rate. If she is turning 65 in June 2019, I'm thinking she was born in 1954. Therefore, her full retirement age is 66. If she takes benefits, including spousal benefits, before then, they will be reduced and remain at that reduced rate for her entire life. Better for her to wait until her full retirement age if possible. Assuming she does wait, at age 66 (or later) she would receive a benefit equal to one-half of your full retirement benefit. Your full retirement benefit is what you would have received at your full retirement age, which was also age 66. She receives no part of the increase you receive for waiting until age 70, nor would she if she also waited until age 70.
There is a catch. She will not be able to collect her benefit unless you are collecting yours, thanks to changes in Social Security claiming rules effective as of the end of 2015. You will need to calculate the dollar cost of her waiting until you are 70, or you collecting sometime before that to allow her to collect as well. Depending upon exactly when your birthday is, that may not be too consequential.
You also do not mention if you are still working and may have family health insurance through your employer. If not, your wife will need to apply for Medicare at age 65 regardess of when she claims Social Security benefits. Hope this is helpful and I wish you both the best.
When your wife files her social security claim this summer, the SSA will give her benefit based on her own working history. She can’t get the spousal benefit since you haven’t filed it. Her filing will not impact your benefit.
Then good news is when you do file at age 70, not only you will have a bigger payout, so will hers. SSA will adjust hers based on the higher amount of her benefit vs. the spousal benefit. Sounds good to you?
So, you heard it right. Your wife will not be allowed to take her spousal benefit until you file for your benefit. When you do file, the spousal benefit kicks in for more income, and will have no effect on your benefit. I have an amazing social security planning tool we can plug your benefit in to, and we can actually see the differences in various filing dates and strategies. I think it would really help answer the long term retirement income questions you may not be aware of. I'm happy to review this with you at no-cost and no-obligation. To book a time please visit: https://calendly.com/jcjones/investopedia
Hope to hear from you!
-Jordan Jones, RFC