I will turn 70 next month. I have applied for my retirement benefit from Social Security. It will be $3419/mo. I have no quarrel with the amount or the computation, although I now understand why the system will go bankrupt in the not too far distant future.
My wife of 37 years, will turn 70 in three months. She has not applied for benefits. She is still working. As I understand her entitlements, she can apply on her own earnings record, in which case she will be entitled to a benefit of $1229/mo. or she can apply for a spousal benefit on my earnings record. Her spousal benefit would be, as I understand it, $1709.50/mo, but, and this is also my understanding, her spousal benefit would be subject to the family maximum which, the SSA statement says is $4535/mo.
Essentially, if she were to apply for a spousal benefit, she would receive $1116/mo.
If her application on her record is not subject to the family maximum, she would be entitled to $113 more than if she applies for the spousal benefit.
My questions are:
1. If my wife applies for a benefit on her own record can she collect the entire amount without being subject to the family maximum based on my record.
2. If my wife applies for and receives the benefit of $1229 on her own record, will that compromise her ability to receive a spousal benefit of $1709.50 after I die.
3. The SSA statement says that in the event of my death while I am receiving benefits, my relict spouse is entitled to a benefit of $2590. Would my wife, be entitled to such a benefit if she had been collecting retirement benefits on her own record at the time of my death.
4. In the event of my death while I am receiving benefits, will my relict spouse be entitled to receive the full spousal benefit and her benefit based on her record, or will she be limited to the higher of the two benefits, hers or my spousal benefit?
BTW: I have your book "Get What's Yours".
Hi,
The family maximum won't affect your wife's benefit rate regardless of whether she draws on her own record or your record. The extra amount that you will get in your benefit rate as a result of delayed retirement credits (DRC) doesn't count toward the family maximum payable on your record.
You appear to be mistaken about how much your wife will receive in spousal benefits, though. The most that she could receive as a spouse is 50% of your full retirement age rate (PIA), not 50% of your age 70 rate. If your age 70 rate is $3419 then your PIA is likely around $2590, which would result in a maximum spousal rate of around $1295.
Your wife won't benefit from waiting until age 70 to start drawing on her own record if her own benefit rate won't be more than 50% of your PIA. So, if you are correct about her own rate being $1229 at age 70, she should probably file for benefits on her own record as soon as possible. She can claim up to 6 months of retroactive benefits, but ideally it sounds like she probably should have filed on her own record at age 66. You could also file for just spousal benefits only on your wife's record for any months that she is entitled to her retirement benefits before you turn 70 and switch to your own record, and your wife could file for spousal benefits on your record effective with the month you start drawing your retirement benefits.
On the other hand if your wife's own retirement rate would be more than 50% of your PIA if she waits until age 70 to file, then waiting until age 70 may be the better choice for her. You may want to strongly consider using the maximization software available on this website in order to determine the best overall filing strategy for you and your wife.
If you die before your wife, she would then be able to receive your full benefit rate inclusive of the DRCs you earned by waiting until age 70 to apply. For example, say you are getting $3419 and your wife is receiving $1295 as a spouse or as a combined retirement/spousal benefit. If you died first, her total benefit rate would then increase to $3419.
Best, Jerry
