• Chris Stein, CFP®

Spousal Benefits

From the email bag this week, we have a question regarding spousal benefits:

“My year of birth is 1953. My wife’s is 1956. I want to file for my spousal benefit on her next year when I turn 66. She will claim her main personal benefit next year when she turns 63. As I understand it, I can file for my spousal benefit on her and begin to collect 50% of her FRA number while letting my own personal benefit grow for 4 years until I’m 70. Is this correct thinking?”

I can answer this in a few bullet points:

Spousal Benefits

Remember you can only file for spousal benefits if you are at least 62 and your spouse is collecting their own retirement benefit. Rules are relaxed in the case of divorce.  Because you will meet these requirements you will be able to file for a spousal benefit after she files for her own next year.

Restricted Application

In order to file for a spousal benefit ALONE and let your own benefit lay dormant and grow due to delayed retirement credits you must be allowed to file a restricted application. Under current law you are only allowed to file a restricted application if you are over your FRA and if you were age 62 by January 1, 2016 (born before January 2, 1954).  Next year you will turn 66, your full retirement age, and you make the cutoff for filing a restricted application.  Therefore you will be allowed to claim a spousal benefit alone as long as you wait to your FRA month to collect benefits.

50% of PIA

A full spousal benefit is equal to 50% of the PIA (FRA benefit) of the person on whose record you are claiming. This can be reduced if you (not your spouse) are below your FRA and by the earnings test, which only applies before your FRA.  Since you are waiting to your FRA to claim the spousal benefit, you will be entitled to receive 50% of your spouse’s PIA, even though she is claiming her benefit early.  Her benefit will be reduced due to early filing, but yours will not since you are not filing early.

Thanks for the great question.  Hope this helps!

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