Social Security Matters

by AMAC Certified Social Security Advisor Russell Gloor

Association of Mature American Citizens     

Ask Rusty – About the Mystery of Spousal Benefits

Dear Rusty: From what I’ve researched, the formula for spousal benefits seems very complicated. I read somewhere that it was a good idea to start the lower earning spouse’s benefit at age 62 and have the higher earning spouse file at full retirement age, for the spouse to get maximum benefit. But that information does not seem correct from other things I’ve read. Please help me clear this up. My wife’s birth year is 1956 and she now gets $656/month in Social Security benefits after claiming at 62. I have not claimed my benefits yet and Social Security’s estimator says I qualify for about $2850/month when I reach full retirement age. My birth year was 1957. So, if I take my benefit now at 63 will my wife’s benefit go up? And if I wait until my full retirement age to claim, will she get half of my benefit? I’ve tried to research all of this, but it is still very unclear. Signed: Seeking Knowledge

Dear Seeking:  Yes, the spousal benefit formula is complicated, especially when both of you are entitled to your own Social Security benefits. And there’s never a simple answer to whether it is a good idea for the lower earning spouse to start benefits first at age 62. For one thing, it depends upon whether they are still working, but it also depends upon health, life expectancy, and need for the money early. 

Nevertheless, if your wife’s current age 62 benefit is $656, then her benefit at her full retirement age (had she waited) would have been about $895. This is known as her Primary Insurance Amount, or “PIA.” Spouse benefits are computed using PIA amounts, so if your full retirement age (FRA) benefit will be $2850, here’s how your wife’s spousal benefit will be calculated if you claim your SS after your wife has already reached her FRA: 

• 50% of your FRA benefit (PIA) is $1425. Because your wife’s PIA is $895, her spousal boost is $530 ($1425 – $895). Her spousal boost ($530) will be added to her actual early benefit ($656) and her new benefit amount as your spouse, at her FRA, will be about $1186. Obviously, less than half of your FRA benefit amount. 

The computation changes if you claim your SS benefit now, before your wife has reached her full retirement age, because getting her spouse benefit before her FRA means her spousal boost will be reduced (she automatically gets her spousal benefit when you claim). 

The reduction to the spousal boost is actuarial, according to the number of months before her FRA that it is taken. If you were to claim now when your wife is 64, her spousal benefit would be computed like this: 

• The spousal boost amount of $530 would be reduced because your wife hasn’t yet reached her FRA. Instead of the full $530 spousal boost, it would be reduced to about $442. The reduced spousal boost is added to your wife’s early SS benefit of $656, for a total benefit of about $1098. Once again, less than 50% of your FRA benefit amount. 

So, as you can see, because your wife took her own benefit at age 62, she cannot get a spousal benefit equal to 50% of your FRA benefit, regardless of when you claim. If you claim your Social Security before your wife reaches her FRA, your wife’s spousal boost amount will be reduced, further lowering the total benefit amount your wife is entitled to as your spouse. The basic rule is this: any time any Social Security benefit is taken before one reaches their full retirement age, that benefit is reduced. And a spouse who claims their own SS retirement benefit before FRA will never get a spouse benefit equal to 50% of the other spouse’s PIA. 

(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. The 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 amacfoundation.org/programs/social-security-advisory or email ssadvisor@amacfoundation.org.)