• Chris Stein, CFP®

Miscellaneous Social Security Questions

A Kentucky reader asks about the best Social Security claiming date for her and her husband.


"I am trying to dial in the best Social Security claiming date for my husband and me, and I'm hoping for some guidance. My full retirement age (FRA) is at 66 years and six months in August 2023, and my husbands is at 66 years in September 2020. My FRA benefit is about $500/mo. My husbands is $3,000/mo. We want my husband to delay as close to age 70 as possible to get the maximum benefit for him and me. It makes more sense for me to claim a spousal benefit than my much smaller FRA amount. I also believe that when I reach my FRA, my spousal benefit will not get any larger than half of his FRA benefit. I understand that, because we're still married, I can't claim my spousal until he begins to claim his benefit, which effectively reduces his ability to wait until age 70. I think that our best claim date to maximize our combined benefit is when I reach my FRA in August 2023. Can you advise if my assumptions are correct and that you agree? I was initially hoping that I could claim my spousal at my FRA, and he could continue to defer his benefit until he turns 70, but based on what I read, I don't think we can do that anymore."


Before answering your question, let's first go over the rules to receive Social Security spousal benefits. It's true that a spousal benefit is unlocked only when the spouse (upon whose record you're claiming) files themselves. So, in this case, you want to claim a spousal benefit on your husband's record, but that door only gets opened when he claims.


That's the case because you're still married. If you were divorced – and had been so for at least two years – and if you had been married for at least ten years before that, the restrictive rule about claiming goes away. Your ex-husband would only have to be at least old enough to claim (age 62), but he wouldn't have to have claimed. But that's not our case here.


Your spousal benefit will be at its greatest once both you and he reach Full Retirement Age (FRA): it will be 50% of his benefit at FRA. It could be less if you file before FRA, but it will not increase if you wait to file after FRA.


There used to be a file-and-suspend strategy where your husband could file any time after age 62 and open the door for you to claim a spousal benefit. Then he could suspend his benefits and let them continue to grow until a later time when they were worth more. But that strategy has gone away, so today, he has to be claiming and receiving a benefit for you to get the spousal benefit.


You mention that your benefit will be $500 per month at your FRA in August 2023. Your husband's benefit will be $3,000 at his FRA in September 2020. He will reach his maximum benefit at age 70 in September 2024.


Your question is whether it makes more sense to have your husband claim when you reach your FRA to open the door for you to receive the spousal benefit, or if he should wait one more year until he reaches his maximum benefit in September 2024.


Let's look at some of the numbers. I actually disagree with your logic, and it becomes clear with the numbers.


You have a benefit of $500 a month at FRA, which you could receive even without a spousal benefit. Granted, if you have your husband file for his benefit at your FRA in August 2023 to open the spousal benefit door, your spousal benefit at 50% of his FRA benefit is $1,500. You would get that instead of your $500. (You'll receive the largest of the two, so it's a total of $1,500, not in addition to your $500.) But your husband will only be 69 and not at his maximum benefit.


I think you should stick to your original strategy of having your husband wait to age 70 for claiming. If you claim your benefit at your FRA, you will get $500 a month for the year you wait for your husband to reach age 70 (in September 2024). That's $6,000 for the year before he unlocks the door for the spousal benefit. But your thought is that you could make a lot more by having him file earlier: $1,500 times 12, or $18,000 a year. So, the difference would be $12,000 more for that year if your husband claims earlier than age 70.


Now let's look at how your husband's benefits will be affected by filing a year earlier than at his maximum benefit. By my calculation, if his benefit at FRA is $3,000, his benefit at age 70 is going to be 32% bigger than that, or $3,960. If he files at age 69, it'll only be $3,720. That's a difference of $240.


By waiting until your husband reaches his maximum benefit at age 70, you're giving up $12,000 in total for him to get $240 extra each month forever. As a couple, you forgo $12,000 over the year's wait ($18,000 less your benefit of $6,000 if you file at FRA). How long would it take to recover the $12,000 lost by waiting the year?


It would take 50 months – or four years and two months. You would be back to whole again after 50 months, and ahead each month after that. And that's not the only advantage. If your husband dies before you do, you will continue to get that extra $240 in a survivor benefit. By waiting, you will have created the largest survivor benefit for whoever lives longest.


We don't do many payback calculations – or breakeven analyses if you will – in Social Security strategies because we're such big proponents of the highest recipient waiting to age 70 to create the most robust survivor benefit for whoever lives longest. We look for longevity protection.


In this case, in my eyes, the breakeven is so compelling that I think you should stick to your original plan, all else being equal. We don't know your whole story. I'm just talking about Social Security as a standalone decision here. Because you're going to get that entire $12,000 back in just over four years, I think you should claim your benefit at your FRA. You may as well collect $500 a month while you're waiting for your husband to unlock the door for the spousal. (We call that "being paid to wait.") Then, a year later, when he files, your benefit will go from $500 to $1,500, and he'll still get his maximized age-70 benefit.


Your question was whether I agreed with the idea of having your husband take his benefit before he maximizes it at age 70. The answer, in this case, is no.

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