Social Security
Chapter 18 describes how a lower earnng spouse can take their own benefits early (say at age 62) and then, when the "main earner" retires at, say, age 70, spouse can take the higher 50% spousal benefit.
However, a Social Security representative told me that in this case when I retire and my spouse applies for the 50% spousal benefit, this benefit is reduced due to taking her own benefit early. That is, she will not get 50%.
This seems at odds with what your book says. Is this correct?
RSS
I'm not sure that you've read that correctly in chapter 18. In this case, "Bill" is the lower earning spouse. When his wife, Hillary, reaches her full retirement age, 66, she applies for her benefits and then suspends. This triggers Bill's spousal benefit, which he collects up to his age 70 at which time he applies for his own full benefit unaffected by the fact that he's been collecting spousal benefits for the past 4 years.
So the key here is for your wife not to apply for benefits. Instead, she can begin to collect the spousal benefit when you reach your full age of retirement--age 65? 66? She is not taking her benefit at this point, just her spousal benefit. You are not taking your benefit either. You applied then suspended. Then, when you both reach age 70, you take your regular benefit. If you set the program to take both benefits at age 70, the program will illustrate the amounts and the timing of these events.
SSA is correct. This is called the "deemed filing" provision, if you file for retirement benefits, you're deemed to have filed for spousal benefits and vice versa. You can dodge this bullet by repaying your wife's benefits at your full retirement age (there is no actuarial increase in spousal benefits beyond FRA so there is no point in delaying).
It's possible that we didn't fully understand the deemed filing provision at the time the book was written (it's actually not in the SSA handbook, but buried in the regulations created by the SSA on their own).
Best,
Dick Munroe
Okay. My wife is receiving her own benefit (she is not yet full retirement age). I am full retirement age (66). According to the book, I can now get spouse benefits (50% of my wife's amount), keep working till I am 70, then get my full age 70 benefit with no reductuion, even though I applied for and got spounse benefits at age 66. Is that right? It seems contrdictory to your earlier comment.
Ah, that's a different situation. You have to file and suspend, then you should be able to get your spousal benefit, but there's and FRA interaction involved as well which I don't quite recall the details of.
Larry?
Best,
Dick Munroe
Was this ever resolved? The example and explanations are quite confusing.