Does It Make Sense For Me To Take My Reduced Benefits Now If I Expect To Receive Spousal Benefits Later?

Feb 9 2018 - 7:16am

My husband is 59 and will work until 65. I am 63, no longer working and eligible for reduced benefits. His benefits if he waits until age 70 will be approximately $3,800 per month-my reduced benefits are now approximately $760; at age 70- $1,200. Does it make more sense for me to take my reduced benefits now and change over to take spousal benefit when he reaches 70? My husband believes we're just throwing money away by not having me take my reduced benefits right now. Do you believe that is the case? Thank you!


It sounds like you wouldn't benefit from waiting past full retirement age (FRA) to start drawing your benefits, but it wouldn't necessarily be advantageous to start drawing before FRA. If you take reduced benefits before FRA, you'll be stuck with any reduction that you take for as long as both you and your husband are living.

For example, say Sally files for her benefits at age 63. Her unreduced rate at FRA (PIA) would be $950, but her reduced age 63 rate is $760. After Sally reaches FRA, her husband files for his benefits with a PIA of $2800. Sally's spousal rate would be calculated by subtracting her PIA from 50% of her husband's PIA, giving her a spousal rate of $450 (i.e. $2800/2 - $950). This would then be added to Sally's reduced retirement rate of $760 to give her a combined rate of $1210. In other words, Sally would still be stuck with the $190 reduction that she accepted in return for starting her own benefits early.

You and your husband should strongly consider using the maximization software available on this website in order to compare all of your options and determine your best overall filing strategy.

Best, Jerry