When should my wife claim her Social Security benefits?

Question: My wife turns 65 in November 2023. She was born on Nov. 21, 1958. I am a year younger with an Aug. 1, 1959 birthdate. I know my wife is not at full retirement age, but the difference in her SS payment is not much and collecting three years of the lower amount far exceeds her waiting until age 68. My question is: because half of my SS is more than her SS, if she retires this year, will she still get 50 percent of my SS when I retire? Signed: Planning Our Future

Dear Planning: Spouse benefits are one of Social Security’s trickiest areas, so you’re wise to get answers before either of you claim benefits. The short answer is, “No” – if your wife claims her own benefit this year, she will not get 50 percent of your benefit when you later claim. Here’s how it works.

Born in November 1958, your wife’s full retirement age is 66 years plus 8 months, which she will attain in July 2025. Born in August 1959, your FRA is 66 years plus 10 months, which you will reach in June 2026.

Your wife will get a “spousal boost” to her personal SS benefit if her FRA entitlement is less than 50 percent of your FRA entitlement but, if she claims before reaching her FRA, her monthly payment when you claim will be less than 50 percent of your FRA entitlement (taking her own benefit early affects her total payment amount as your spouse). If, instead, your wife waits until her own FRA to claim her SS retirement benefit, her payment when you later claim will be increased to equal 50 percent of your FRA entitlement.

I assume your reference to your wife “waiting until age 68” refers to her age when you claim at your FRA, but there is no reason for your wife to wait past her own FRA to claim benefits because her spousal benefit will not be more if she waits longer. So, the question is whether your wife should claim this year and get a reduced payment when you later claim or, instead, wait until her FRA to claim her own benefit and get her maximum benefit later. And that depends on 1) whether your wife is working, and 2) what her life expectancy is:

  1. If your wife is working and claims early SS benefits, she will be subject to Social Security’s “earnings test” which limits how much she can earn before some benefits are taken away. The earnings limit for 2023 is $21,240 and, if that is exceeded, SS will take away benefits equal to $1 for every $2 she is over the limit. The earnings limit lasts until she reaches her full retirement age.
  2. If your wife’s life expectancy is long (average for a woman your wife’s current age is about 87), then maximizing her monthly benefit by waiting until her FRA to claim is likely her smartest choice.

If your wife’s FRA entitlement is less than 50 percent of your FRA entitlement, waiting until her FRA to claim will result in getting her full personal amount first and then later her maximum entitlement (including her spousal boost). If she claims now, her later payment (which includes her spousal boost) will be less than half of your FRA amount. If your wife’s life expectancy is at least average, waiting until her FRA to claim will likely yield the highest cumulative lifetime benefits.

But if your wife isn’t working full time, by claiming now (vs. at her FRA) she would get her reduced personal benefit for an extra two years. If you divide the amount your wife would collect over those two years by the difference between her current benefit amount and her maximum spousal amount (half of your FRA entitlement), you will see how long it would take for your wife to recover those two years of benefits. And if her life expectancy is less than that length of time, then claiming earlier is likely the right move.