Q & A
I am 63 and am eligible for Social Security Disability Insurance (SSDI). My wife is 64 and needs to work four more quarters. I may receive $1,000 per month from a State Retirement Plan. Should I hold off on taking SSDI?
Answer: You can’t lose from taking your SSDI. At full retirement age (66 in your case), it will convert to your Social Security unreduced retirement benefit. But at 66, you can withdraw your retirement benefit and wait until 70 to collect it, at which point it will be 32 percent larger.
And, if your wife gets those four extra months of coverage and, thereby, ends up with at least 40 quarters of coverage, she’ll be eligible for her own retirement benefit. In this case, you can also have your wife file for her retirement benefit when you reach 66 and then have her suspend its collection. This will let you take your full spousal benefit, which will equal half of her full retirement benefit. But given that your wife won’t have contributed to the system for that many years, her retirement benefit will likely be very small.
If you worked for a state in a job that wasn’t covered by Social Security, you’ll have your spousal benefit reduced and possibly eliminated by the Government Pension Offset provision (GPO), and your retirement benefit will be reduced by the Windfall Elimination Provision (WEP). But neither the GPO nor the WEP will kick in until you start taking your state pension.
As for your wife, when she is 66, she can apply just for a full spousal benefit based on your earnings history and delay her own retirement benefit until 70, when it will start at its largest level. But if you do this, she can’t get you a full spousal benefit when you are 66 because she won’t have filed for her retirement benefit, regardless of whether she suspends its collection. You cannot both receive full spousal benefits unless you divorce.
Source: Ask Larry Kotlikoff, PBS.