What's Wrong With Starting Our Benefits Early?

Jan 9 2017 - 7:15am

Farm wife never worked; filed jointly; we are both turning 66 in the month of October 2017; my payment at FRA is $2167. Spouse has cancer and would get 1/2 of my payment. I would like to start now in January 2017. I would take a reduction of 5% less payment and wife would get 1/2 of that. Whats wrong with us doing this? Does this affect us that much as far a spousal benefit or a survivor benefit? Earnings test would go to $1 for every $3 with a earnings limit of $44,800 which would not affect me.

Hi,

I'm sorry to hear about your wife's illness.

Nothing is necessarily wrong with you and your wife starting benefits early in January, provided that you understand that you will be taking a permanently lower monthly benefit rate if you do so. Based on your stated full retirement age benefit rate, your reduced monthly rates starting in January should be about $2058 for you and $1015 for your wife, as opposed to $2167 and $1083 if you waited until October. Your wife's reduced rate would be a bit lower than half of yours because a higher percentage reduction applies to early spousal benefits.

In order to explore all of your filing options, you may want to consider running the maximization software available on this website.

Best, Jerry