How couples can avoid a costly Social Security mistake

Filing early can reduce your lifetime benefits in more ways than one

by Phil Moeller |April 18, 2019

For couples, timing when to claim your Social Security benefits can be tricky, especially if one of you earned far more during your career.

In this week’s column, Phil Moeller, the author of Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs and co-author of the updated edition of How to Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security, offers advice on this topic.

Got a question of your own about Medicare or Social Security? Send it to askphil@considerable.com.

Can my wife collect her Social Security now and half of mine later?

Question: I am nearly 60 years old and my wife is two years younger. In terms of Social Security strategy, when my wife is 62 can she claim her Social Security, and then, when I file for mine at between ages 65 and 67, can she then claim half of mine as a spousal benefit?

My Social Security will be much larger than hers, so that even only half of mine will be larger than all of hers. 

Phil Moeller: Let’s take the “she” and “he” out of this question and frame it instead as a look at a Social Security filing strategy for “lower” and “higher” earners on the one hand, and “younger” and “older” earners on the other. Both sets of variables can come into play.

Under current Social Security rules, it generally makes sense for the higher earner to defer filing for Social Security. This will permit them to maximize their own benefit, of course, but it also will guarantee that whichever spouse lives the longest will have the household’s largest survivor benefit.

This is a big deal, because it is common for one spouse to outlive another, often by 10 or more years (and it’s usually the woman who is the survivor).

When the lower-earning spouse is also the younger spouse, a clear strategy is to have that spouse file first for their own retirement benefit, as this writer suggests, while the older and higher-earning spouse defers filing until later.

The key variable in the decisions of the two spouses is the age at which these filings occur. One assumption in this question reflects a common misunderstanding of how Social Security benefits are determined. The writer asks whether his spouse will later be able to claim half of his benefit as a spousal benefit once he files for his own retirement.

In order to claim a maximum spousal benefit, the filing spouse must not file for this before their full retirement age. If they file sooner, there are potentially large reductions in the percentage of their spouse’s benefit they would receive. 

This question reflects a common misunderstanding of how Social Security benefits are determined.

In this case, there would be a further reduction because the lower-earning spouse is filing early for their own retirement. This not only reduces their own retirement benefit but also the potential amount of their spousal benefit later on. 

That additional benefit, by the way, would equal the amount by which the lower-earner’s spousal benefit exceeded their own retirement benefit. People can’t get the full amount of two benefits but just an amount equal to the higher of the two benefits.

Because the lower-earner in this case would already be receiving their retirement benefit, the additional benefit would be described by Social Security as an excess spousal benefit.

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