Dear Rusty: Both my wife and I are 67 1/2, i.e., past our full retirement age of 66 years and 6 months. Neither of us have yet filed for SS retirement benefits. My wife is entitled to about $1,000/month based on her work history, and I plan to wait until age 70 to file. I was entitled to $3,700 at my full retirement age date and am eligible to receive $4,800 at age 70. Thus, my wife’s spousal benefit, which she can get when I start taking my SS, is another $850 (a total of $1,850), which is 50% of my full retirement age amount. We just recently became aware that my wife should have claimed her own smaller benefit earlier and taken her higher spousal benefit later when I claim. But has she lost Social Security benefits because she waited until now to claim? Signed: Trying Hard to Understand
Dear Trying: Yes, I am afraid your wife has lost some of her SS retirement benefit by waiting too long to claim. In your specific circumstances (where your wife is eligible for a higher monthly amount as your spouse) it is important to know that her spousal benefit amount reached maximum when she attained her full retirement age (FRA) of age 66 and 6 months. Even though she cannot collect as your spouse until you later claim, her eventual spousal amount does not increase because she is now past her FRA. Thus, waiting the extra year after her FRA did not enhance her spousal benefit amount, meaning she could have been collecting her own smaller SS retirement benefit starting at her FRA. The good news, however, is not all those past benefits are lost.
Once someone has passed their full retirement age, it is possible to claim up to six months of retroactive benefits. Full retirement age is the cutoff point because your wife cannot get retroactive benefits before her FRA but, since she is about a year past, she can claim her full six months of retroactive benefits. Thus, she will lose only about six months of her SS retirement benefit by claiming her benefits to start at age 67 (vs. now at 67 1/2), which at least mitigates the loss. And instead of her FRA amount of $1,000, her initial SS retirement benefit will be about 3% higher because she is claiming past her FRA. But, nevertheless, your wife’s eventual spousal amount (when you claim) will still be limited to 50% of your full retirement age entitlement.
The important thing to keep in mind is that retroactive benefits can only be claimed after someone has reached their full retirement age, and only up to six months of retroactive benefits can normally be claimed. So, in your wife’s case, her eventual spousal benefit from you will still be limited to 50% of your FRA amount even though she waited for a year past her own FRA to claim. But she can claim six months of retroactive SS retirement benefits now to soften the financial blow.
Russell Gloor is an Association of Mature American Citizens certified social security advisor. To submit a question, visit amacfoundation.org/programs/social-security-advisory or email ssadvisor@amacfoundation.org.
