I am 67 and, for various reasons, have not yet filed for benefits, so I have been accruing delayed retirement credits. My spouse is 63 and has not filed for benefits. He plans to delay collecting benefits until he is 70. My benefit is smaller than his.
I plan to file for my own benefit and then file for the spousal benefit when my spouse files for his benefit. I believe that when I file for the spousal benefit that Social Security will pay me my own benefit first, then the spousal benefit (= ½ my husband’s PIA, i.e., his benefit at full retirement age minus my PIA, i.e., my benefit at full retirement age) will be added on top of that. I am hoping that when Social Security pays me my benefit that it will include the delayed credits that I have earned as well as adding my spousal benefit to it. I can’t seem to find any information on that. I understand that spousal benefits can never be greater than ½ of my spouse’s PIA minus my PIA, but that rule is about spousal benefits, which seem to be independent from my own. I have read that people who file for their own benefit early permanently reduce their monthly check even after adding the spousal benefit because the spousal formula subtracts the early filing spouse’s entire PIA not just the reduced amount that the early filing spouse is receiving. That doesn’t apply to me. My case is kind of the opposite.
In planning the timing for beginning my own benefit and whether to ask (or allow) for my benefit to include the 6 months preceding my application when I apply (which would set my retirement date back 6 months and, so, reduce my delayed retirement benefit) it would be helpful to know whether the delayed retirement credits I am now accruing will count in calculating my total monthly benefit after I claim the spousal benefit.
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If you file for both Social Security retirement and spousal benefits, your spousal rate would be calculated by subtracting the higher of a) your primary insurance amount (PIA), or b) your monthly benefit rate augmented by any delayed retirement credits (DRC) you've earned, from 50% of your spouse's PIA (https://secure.ssa.gov/apps10/poms.nsf/lnx/0300615694).
For example, say Mary files for benefits at age 67 with a PIA of $500. Mary's age 67 rate is 8% higher than her PIA, or $540, due to DRCs. When Mary's spouse subsequently files for his benefits with a PIA of $2000, Mary then qualifies for a spousal benefit of $460 (i.e. $2000/2 - $540). Mary's combined rate is then $1000, or 50% of her husband's PIA, which is the same amount that she would have received if she had started drawing her own retirement benefits at her full retirement age (FRA) of 66.
Therefore, suffice to say that if 50% of your husband's PIA would be more than your own Social Security retirement rate even if you waited until age 70 to start drawing, you would ideally want to claim your own retirement benefits no later than your FRA. If you haven't yet applied for benefits, though, you could only claim benefits retroactively for a maximum of 6 months prior to your month of filing.
You and your husband may want to consider using our software to explore and compare your options in order to identify your optimal filing strategy.