Does My Benefit Rate Increase Automatically?

Nov 4 2019 - 12:50pm

Hello, I am 67 years old and when I turned 65 I had delayed getting SSA benefits because I understood that with each year I wait, the benefit amount grows by about 8 percent or so. However, does this growth happen automatically, or was I supposed to somehow activate my SSA benefits at 65 but then pause/freeze it until I am ready to start collecting in a couple of years? I don't see anywhere in my SSA account/mailings that would reflect this ~8 percent yearly increase. Question 2: my wife is soon turning 65, but her own SSA would be very low since she did not work much. When she turns 65, can she start collecting her (low) benefits, and then in a couple of years when I start collecting my own (high) benefits, will she be able to migrate over to start collecting from my benefits (i.e. a portion of my benefits), or would that only kick in in the event of my passing? Any insight would be appreciated. Thank you for the help.

Hi,

You don't need to do anything other than not claim your Social Security retirement benefits in order receive a higher future benefit rate. Your benefit rate will automatically grow with each month that you wait to claim your benefits until you reach age 70.

If your wife was born in 1954 her full retirement age (FRA) is 66, and if she was born in 1955 her FRA is age 66 & 2 months. Therefore, if she starts drawing her own benefits at age 65 her benefit rate will be reduced for age, and that reduction would continue even if she later qualifies for spousal benefits when you start drawing your benefits.

For example, say Sara files for her own Social Security retirement benefits at age 65. Sara's FRA rate, or primary insurance amount (PIA), would be $500, but her rate is reduced to $466 in return for starting her benefits a year early. After Sara reaches FRA her husband files for his Social Security retirement benefits with a PIA of $2000. Sara's spousal benefit rate would then be calculated by subtracting her PIA from 50% of her husband's PIA, which would result in an excess spousal rate of $500 (i.e. $2000/2 - $500). That would then be added to Sara's own reduced retirement benefit rate to give her a combined benefit amount of $966.

Since you were born prior to January 1 1954, if your wife does start drawing her benefits before you start drawing your benefits you could potentially file for just spousal benefits from her record. You could then draw spousal benefits until you turn age 70, at which time you could switch to drawing your own benefits and your wife could then apply for excess spousal benefits. In order to determine whether or not that would be your best strategy for claiming benefits, you and your wife should strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully explore and compare all of your options.

Best, Jerry