Does My Plan Sound Crazy?

Dec 10 2018 - 7:22am

Hi,

my husband started collecting social security last spring at 66 (his full retirement age) and we got married last month. He's 17 years older than I. And I am wondering if it makes sense for me to pay my husband to stop his benefits and pay back what he got and pay him myself what he would have collected, so that he when 70 can get his highest benefits - and therefor me when I reach my full retirement age - 67 (I was always a low earner). I've heard about a resent study that suggests this might be a good idea, and I have an inheritance to cover this.

So does the above plan sound crazy? Would this make sense? Since he's 17 years older than I, odds are that there will be some years where he's passed away and before I reach my full retirement age of 67: would any cost of living adjustments be applied to the benefit amount in those years when neither will be drawing on the benefits? If cost of living adjustments are not applied after he passes but before I collect, that would make the above plan sound even crazier - and a bad idea.

OK, thanks for reading this and any insight you might provide.

Hi,

Your plan doesn't sound crazy to me. If your husband withdraws his claim and reapplies for benefits at age 70 he would receive a 32% higher monthly benefit rate, and that higher rate could potentially be passed on to you as widow's benefits in the future. It would not make any difference in the rate you would potentially receive as a spouse while your husband is living, though, since spousal benefits are based on 50% of the worker's full retirement age rate, or primary insurance amount (PIA). And yes, any Social Security cost of living increases that occur between the time of your husband's death and the time you start drawing widow's benefits would be added to your widow's rate.

However, your husband would only be permitted to withdraw his claim if he files a withdrawal request within 12 months of the month he started drawing benefits, and if he repays all of the benefits he's already been paid (https://www.ssa.gov/planners/retire/withdrawal.html). Before you decide what to do, you and your husband may want to consider using our software to fully compare your options.

Best, Jerry