My spouse was a low earner and claimed her retirement benefits at age 64 rather than waiting to full retirement age. She is now 66.5 years, so just past full retirement age. I am a relatively high earner, age 66, and will claim at age 70. I have recently learned that her decision to file early will her reduce the spousal benefit she receives when I claim at age 70. I think she will lose something like 15% of the spousal benefit. If she suspends payments now, will that improve her eventual spousal benefit, or is that decision locked in.

Hi. No. The fact that your spouse claimed her benefits early won't reduce the amount of spousal benefits she may be able to receive from your account. And, suspending her own benefits could only reduce her spousal benefit rate, not increase it.

Here's how it works. Once a person starts drawing their own Social Security retirement benefits, those benefits continue to be paid for the rest of their life. If they later become eligible for a higher spousal or survivor benefit rate, they can receive a partial spousal or survivor rate that's then paid in addition to their own benefit rate. Any reduction for age that applies to each benefit is calculated separately based on the person's age at the time they start drawing the benefit.

For example, say Amy filed for her Social Security retirement benefits in 2020 at age 64. Amy's primary insurance amount (PIA), or full retirement age rate, would be $800, but Amy's rate is reduced for age to $675. Later, after Amy reaches full retirement age (FRA), her husband applies for his benefits. Amy's husband's PIA is $3,000, and Amy's unreduced excess spousal rate is then calculated by subtracting her PIA from 50% of her husband's PIA. In Amy's case, that amounts to $700 (i.e. $3000/2 - $800). Amy's spousal rate is not reduced for age since she is over FRA when she becomes eligible for spousal benefits, so she is eligible to receive her full spousal benefit of $700. That amount is then added to Amy's own reduced rate of $675 to give her a combined benefit amount of $1,375 (i.e. $675 + $700).

If Amy in the above example voluntarily suspended her own benefits between FRA and age 70, her spousal benefit would then be calculated by subtracting her PIA inclusive of delayed retirement credit (DRC) increases from 50% of her spouse's PIA. That would result in a lower spousal rate since her spousal benefit amount would then be reduced dollar for dollar by the amount that her PIA was increased due to DRCs. And, it would not increase Amy's combined benefit amount.

The best overall strategy for you and your wife depends on numerous different factors, so you may want to strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully compare and analyze all of your options so that you can determine your best strategy for maximizing your benefits.

Best, Jerry