Q & A
Ask Rusty – When Should My Wife Claim Social Security?
Dear Rusty: We could use guidance on optimum dates for my spouse to begin taking Social Security (SS). She doesn’t have enough work credits on her own, so she will be using mine for spousal benefits. I was born in 1955, and I now get $3,886 in monthly SS benefits. My wife was born in 1961. We currently receive about $50,000 per year in royalties and VA disability payments that will stop upon my death.
So, with that in mind, can you suggest optimum dates for my wife to claim, based on my projected death in early 2027 or early 2030? My wife is very healthy and will likely live beyond 2040. Of course no one can predict their own passing; these are just random dates I came up with based on probabilities with my health issues. Signed: Planning Ahead
Dear Planning Ahead: Life expectancy and financial need are primary factors for your wife to consider at this point, plus whether she is now working. Her full retirement age (FRA) for Social Security purposes is age 67 and, if she takes her spouse benefit before that, the monthly amount will be reduced (by about 8.3% for each year early), and she will also be subject to Social Security’s Annual Earning Test which limits how much she can earn from working prior to reaching her FRA.
Statistically, your wife’s life expectancy is about 87 (that’s average longevity for a woman your wife’s current age). Even though she isn’t eligible for her own SS retirement benefits, she can still get a spousal benefit while you are both living and will get an even higher surviving spouse benefit when you die. That’s because her spousal benefit (while both living) will be based on 50% of your full retirement age (FRA) entitlement, but your wife’s surviving spouse benefits when you die will be based upon 100% of the benefit you were receiving at your death.
Generally, if you believe you will pass within the next few years, and your wife isn’t working, her best option would be to claim her regular spouse benefit now. Although she will initially get less than 50% of your FRA entitlement, that amount will be replaced automatically by her higher survivor benefit when you pass. Depending on her age when you pass, she will get the full $3,886 monthly amount you are receiving at your death (plus any COLA yet to be awarded). If that happens before she reaches her full retirement age, her monthly survivor amount will be actuarially reduced based upon how far before her FRA it is claimed. Generally, the survivor benefit reduction will be about 4.75% for each full year claimed early (about .396% for each month early).
So, to a large degree, your wife’s options for spouse and survivor benefits are based on your expected longevity. If you have reason to believe you will pass within the next few years, then your wife should probably claim her spousal benefit now (while you are both living). Because she is a bit shy of 65 years old, her initial SS spouse benefit will be reduced (she’ll get about 42% of your FRA benefit amount, instead of the 50% she would get if she claimed at age 67). She can collect that amount until you die, at which time she will receive her survivor’s benefit as your widow. If she has reached age 67 when that happens, your wife’s benefit will become the same as yours was when you died (the $3986, plus any COLA since awarded). And she will collect that higher SS survivor benefit for the remainder of her life which, from what you’ve shared, would likely be about 20+ years. Assuming her life expectancy is at least average, that is how your wife would get the most cumulative Social Security benefits over her lifetime.
As you have said, no one can predict how long they will live, but from the information you’ve provided, I expect that the above would likely be your wife’s best Social Security strategy. And, for the record, I admire you exploring your wife’s options in advance. I hope this answers your question, but rest assured we are always here if you need any further information.