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  • Writer's pictureChris Stein, CFP®

Spousal Benefits and Social Security

A reader from Arizona wants more information on claiming Social Security spousal benefits at her husband's Full Retirement Age (FRA).

"I am 62 and began taking my Social Security in February 2020. (I am retired.) I receive $1,300/month. My husband works full time and plans to retire in December 2021 at age 66 and two months, which coincides with his FRA. His FRA benefit is estimated to be $2,900/mo. My question is: when he begins taking his Social Security, am I eligible to receive half of his monthly benefit? That is, can I go from receiving $1,300/ month to $1,450/month? I'm not sure if that's how the benefit works or if I must stay at the original benefit that I took at age 62."

Let's simplify this to understand how spousal benefits are calculated. Let's pretend you and your husband are both the same age, and you will both reach your Full Retirement Age (FRA) in December 2021. At that time, you will be entitled to half of your husband's full benefit at FRA, regardless if you have your own benefit. Social Security will pay you 50% of the $2,900, or $1,450. But say you have your own benefit of $1,000 a month. They won't pay $1,450 on top of the $1,000. They will give you your $1,000, and then top it off with the "spousal offset," or difference, of $450 in this case.

But let's say you collected your benefit early and receive $800 instead of $1,000 because of the early-claiming penalty. In that case, when you go to collect your spousal benefit, you will still only get the spousal offset of $450. So, your total will be $800 + $450, or $1,250. Not $1,450.

The point is that your benefit creates the base upon which the spousal benefit is added, and it's permanently reduced if you claim early.

Now, using real numbers, the $1,300 you are receiving is not your full potential benefit. It has been reduced because you claimed early, at age 62.

Let's run some numbers. If you are 62 in 2020, you were born in 1958. Your FRA will be at age 66 and eight months. (You're in that transition period where they took FRA from age 66 to 67.) So, you claimed your benefit four years and eight months early to get that $1,300. Without doing any complicated math, I can tell you that your full benefit is bigger than half of your husband's benefit. And that's the number Social Security will use when calculating if you are eligible for any spousal offset.

The spousal benefit calculation is not based on what you are collecting. Instead, it is based on your whole FRA benefit compared to one-half of your spouse's FRA benefit. And only if one-half of his benefit is larger than your whole FRA benefit would you be eligible. So, you will continue to receive $1,300, and your husband will get $2,900.

In the future, if your husband predeceases you, your benefit will be replaced by the full $2,900 for the rest of your life as a survivor benefit, as long as he dies after you reach FRA. The fact that you claimed your benefit early (which reduced it) will not reduce your survivor benefit.

Your benefit and the survivor benefit have separate claiming dates. The survivor benefit's claiming date to receive the benefit in full is your FRA. If your husband were to die, as long as you don't switch from your benefit to the survivor benefit before you reach FRA, it will not be reduced.

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