Ask Larry

How Do The Deeming Rules Apply To Us?

I am 62; My wife is 66; Both of use plan to defer taking Social Security until we are 70. I am the higher income earner. When my wife turns 70, we planned for her to take her benefit at it's maximum. Since I am waiting until I turn 70 to start my benefit, she cannot apply for spousal benefits. What happens when I turn 70 and begin taking benefits since she will be 74. Will her benefits go up to 1/2 of mine (my FRA estimate is approx. $3000 and her's is $1000; Age 70 benefit is $ 4000 and $1300 respectively). How do the deeming rules apply in this situation?

Hi. Your wife would technically be deemed to be applying for spousal benefits when she applies for her own benefits, but it really wouldn't matter since she'll be above full retirement age (FRA) by the time you start drawing your benefits. Your wife will first be eligible for spousal benefits when you claim your benefits, and she'll need to file a separate application for spousal benefits at that time.

More importantly, if your figures are accurate then your wife would likely be better off claiming her own benefits at FRA as opposed to waiting until age 70. If her FRA rate is $1000 and her age 70 rate would be $1300, she'd collect much more by the time she becomes eligible for spousal benefits if she starts drawing her benefits at FRA. And, if 50% of your primary insurance amount (PIA) will be higher than your wife's age 70 rate, her combined rate once she starts drawing spousal benefits would be the same whether she starts drawing her own benefits at FRA of age 70.

Excess spousal benefits are calculated by subtracting the higher of a) the person's PIA or b) their PIA + DRCs from 50% of the higher earning spouse's PIA, so if your figures are accurate your wife's excess spousal rate would be $500 if she starts drawing her own benefits at FRA (i.e. $1500 - $1000), or $200 if she starts drawing her benefits at age 70 (i.e. $1500 - $1300). Either way, her own benefit rate plus her excess spousal benefit would add up to half of your PIA. Therefore, waiting until age 70 to start drawing her own benefits doesn't appear to be your wife's best strategy.

It sounds like you and your wife should strongly consider using our software ( to fully analyze the options available to you in order to determine your best strategy for maximizing your benefits.

Best, Jerry

Jun 2 2021 - 9:13am
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