Hi - am I understanding the spousal benefit correctly? There's so much conflicting information.

My husband and I are both 67, and reached full retirement age in 2020. He is the higher earner, and will delay filing for Social Security until age 70. Based on the 2020 FRA maximum, I'm eligible for a spousal benefit of $1505.50. This will breakdown into my own PI of $1000, plus a spousal top up of $505.50.

If I claim my own SS benefits now, I will receive $1000, and the spousal top up of $505.50 will be delayed until my husband starts his benefits in 3 years? Is that correct, and will it automatically be added, or will I need to file?

Are there any pitfalls I'm missing?

Thank you,
Sybil

Hi Sybil. Yes, you apparently understand spousal benefits correctly, but if you haven't already applied for your own benefits it sounds like you should do so immediately. Any spousal benefits you eventually collect will be calculated by subtracting the higher of your primary insurance amount (PIA), or your PIA augmented by delayed retirement credits (DRC), from 50% of your husband's PIA. A person's PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA). Therefore, if half of your husband's PIA is more than you could draw on your own record even if you waited until age 70 to start drawing, then you would ideally want to start drawing your own benefits no later than at your full retirement age (FRA).

For example, say your husband's PIA is $3000, and your PIA is $1000. If you were born in 1954 and if you waited until age 70 to start drawing your own benefits your benefit rate including DRCs would be $1320. In that case, when your husband starts drawing his benefits your spousal rate would be $180 (i.e. $3000/2 - $1320). But, if you'd started drawing your own benefits at FRA your spousal rate would be $500 (i.e. $3000/2 - $1000). Either way, your combined retirement and spousal benefit rate would then be $1500, so you wouldn't want to wait past FRA to start drawing your own benefits.

You can claim your own benefits up to 6 months retroactively, and based on the information in your question you'd almost certainly want to apply for your benefits now and claim the full 6 months of retroactively. You will also have to file a separate application for spousal benefits when your husband applies for his benefits. I don't have access to all of your records, though, so you may want to strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully analyze the options available to you so that you can determine your best strategy for maximizing your benefits.

Best, Jerry