To Rusty: My wife began receiving social security benefits at the age of 65 (full retirement age), and she will turn 69 this July. Under an older law, I was eligible to receive half of her social security. I will turn 70 in April and will begin receiving my own Social Security benefits. I understand that I will lose my spousal benefit at that time, but what I don’t understand is whether my wife will be able to claim a spousal benefit and collect 50% of my Social Security at that time. She is currently receiving approximately $930, but 50% of my social security could be around $1800. Are you able to shed any light on this? Signed: On the Verge of Turning 70
To Turning: You are correct in claiming your spouse benefit under a “old law” that was repealed by the Bipartisan Budget Act of 2015 and is no longer available to anyone born after January 1, 1954. Additionally, you are correct that because you are now receiving a spousal benefit from your wife under a “restricted application for spouse benefits only,” you can begin claiming your personal Social Security retirement benefit at age 70, at which point your wife’s spousal benefit will cease. You may apply for your age 70 benefit now, prior to April, but you must specify on your application that you wish to begin receiving your Social Security retirement benefit in April (to avoid a reduction).
FYI, you can apply online at www.ssa.gov – a question on the application asks if you are currently receiving benefits from another source, to which you should respond “yes” and provide your wife’s Social Security number. To apply online, you must first create a personal “my Social Security” account, which can be done easily at www.ssa.gov/myaccount. Of course, you can apply by phone at your local Social Security office or by calling 1.800.772.1213; however, applying online is far more efficient.
After you have applied for your own Social Security retirement benefit, your wife may apply for a spousal benefit from you, but the amount of her spousal benefit may not be exactly what you believe. To begin, your wife’s spousal benefit will be calculated using the benefit amount you were entitled to at full retirement age (FRA) 66, not the benefit amount you received at age 70.
Second, your wife was born in 1953, which means she is eligible for full retirement at the age of 66. (not 65). If your wife claimed her own Social Security benefit at age 65, she did so a year early, which resulted in a slight reduction in her full benefit amount. This is not a bad thing because it allows you to collect your spouse benefit a year earlier, but it will have a slight effect on her spousal benefit from you, reducing it to slightly less than half of your FRA benefit amount.
Due to the way spouse benefits are calculated, if a spouse takes their own benefit early, their spousal benefit will be less than 50%. Your wife’s new benefit as your spouse will be composed of two components: her own benefit and a “spousal boost” that will bring her payment up to the level of her spousal entitlement. Her “spousal boost” – the difference between her FRA benefit and half of your FRA benefit – will be added to her slightly reduced age 65 benefit, creating her spousal payment, which will be slightly less than half of your FRA benefit. Nonetheless, you were wise to take advantage of a “old law” that allowed you to receive a spouse benefit from your wife while your own benefit increased to its maximum.