by AMAC Certified Social Security Advisor Russell “Rusty” Gloor
Association of Mature American Citizens
Dear Rusty:
I have heard many different answers on this but there are so many scenarios I can’t seem to find an answer to mine. My wife and I were both born in 1959 and we both turn 60 next year. Both of us will be eligible for Social Security based on our work records to date, but my SS benefit is much larger than hers. Scenario: Say we both retire from work at 60. For simplicity let’s say neither of us works in retirement, my wife claims Social Security at age 62 and I claim at my full retirement age of 66 plus 10 months. What will her spousal benefit be, as a percentage of my benefit, when she starts receiving it when I claim at my full retirement age?
Signed: Planning Ahead
Dear Planning:
A spouse claiming benefits at full retirement age (FRA) can get 50% of the higher earning spouse’s FRA benefit, if that amount is more than she is entitled to on her own record. But if your wife claims her own Social Security retirement benefit early at age 62, her spousal benefit will be reduced even if it starts at her full retirement age. The reason is that her total spousal benefit will be the sum of her own age 62 benefit plus a “spousal boost” computed from both of your FRA benefit amounts – the spousal boost will be the difference between your wife’s own FRA benefit amount and ½ of your FRA benefit amount.
Let’s use an example: if your wife’s Social Security benefit at her full retirement age is $1000 and your benefit at your full retirement age is $2400, your wife’s spousal boost would be $200 ($1200 minus $1000). If your wife has reached her FRA when you claim benefits that amount would be added to her reduced age 62 benefit of $708 (70.8% of her FRA benefit amount), which would make your wife’s total spousal benefit amount $908 ($708 plus the $200 spousal boost).
So, in this example, your wife’s total benefit would be about 38% of your FRA benefit amount, rather than the 50% she would get by waiting until her full retirement age to apply for both benefits. You can apply that same formula using your currently estimated FRA benefit amounts as provided by Social Security to arrive at a more precise percentage, but it will be somewhere in the 38% range, reduced from 50% because she is taking her own Social Security retirement benefit at age 62.
Of course, your wife’s own full retirement age benefit must be less than 50% of your FRA benefit for her to even be eligible for a spousal benefit. And, since you were both born in 1959, if you both claim benefits some months before your wife has reached her full retirement age, her “spousal boost” amount will be actuarially reduced according to the number of months before she reaches FRA that you claim. The only way your wife can get the full 50% of your FRA benefit amount is by waiting until she has reached her full retirement age to claim Social Security benefits.
This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our websiteamacfoundation.org/programs/social-security-advisory or email us at ssadvisor@amacfoundation.org.
