I am 66. My wife is 63. If she applies for reduced benefits (for which I will receive spouse benefit), then suspends from age 66 till age 70, will her benefit with delayed retirement credits be based on her full FRA benefit or her early reduced benefit?

Hi,

This is what we refer to as the start-stop-start strategy. Basically, your wife would keep the reduction she takes for starting prior to full retirement age (FRA), and the delayed retirement credits (DRC) would be calculated based on her reduced benefit amount.

For example, say her full retirement age benefit (PIA) is $1000. If she simply waited until age 70 to start, her benefit would increase by 32%, or to $1320. If instead she starts drawing at age 63, her reduced benefit would be $800. Then, if she suspended her benefits from age 66 until age 70, her benefit amount would increase by 32% to $1056.

Another consideration is that if your wife suspends her benefits at FRA, your spousal benefits will be suspended as well. Obviously, the best option for you and your wife is a complex problem which depends on a number of factors. You may wish to consider running the maximization software available on this website in order to be sure you make the best decision.

Best, Jerry