Due to health conditions I began drawing SS Benefits at age 62, I'll be 64 this July. My wife will be 62 in June of this year and works part-time. We have a small business that we have operated at a modest profit for 10 years, sales are growing and we plan to continue to expand. I draw $1581 per month my wife would qualify for $650 a month SS on her work record at 62. We aren't sure if she should start drawing benefits early, she wants to continue working part-time and we'll also operate the business. We used most of our savings when I couldn't work so getting cashed up is important for us...my health is not good.

Hi,

I'm sorry to hear of your health problems.

If you're earning an average of less than $1220 per month, it sounds like you may want to consider filing for Social Security disability benefits (SSDI). If you meet the requirements for SSDI and you get approved, that would mean a higher monthly benefit rate assuming that what you currently receive is Social Security retirement benefits and not SSDI.

Whether or not you qualify for SSDI, it sounds like your wife may qualify for a small excess spousal benefit in addition to her own Social Security retirement benefit However, both benefits would be reduced for age if she files prior to her full retirement age (FRA). Any such reduction would not carry over to her potential widow's benefit rate if you die before her, though.

If your wife files for benefits at age 62, she would be paid roughly 73% of her primary insurance amount (PIA). A person's PIA is the amount that they would be paid if they started receiving their Social Security retirement benefits effective with the month they reach FRA. And, if 50% of your PIA is higher than your wife's PIA, she could potentially receive an excess spousal benefit in addition to her retirement benefit. However, her spousal benefit rate would be reduced by roughly 32% if she starts drawing at age 62. Your wife wouldn't have the option of filing for just spousal benefits now and retirement benefits later, or vice versa, so whenever she files for either type of benefit she'll be filing for both.

Also, your wife's benefits could be subject to full or partial withholding until she reaches FRA if she works and earns more than the Social Security earnings test exempt amount. The exempt amount in 2019 is $17,640 (https://www.ssa.gov/planners/retire/whileworking.html).

Your wife's best option with regard to when to start drawing her benefits depends largely on your assumptions about your maximum ages of life. Our software could help your wife explore and compare her options so that she can decide which filing strategy would likely work out best for her in the long run.

Best, Jerry