Dear Rusty: I’ll be 69 in April 2023, and my wife will be 59 [in about a month]. I’m still working and am trying to determine whether I should take Social Security at 69 or 70. My main question revolves around my wife’s future Social Security benefits and how they will affect my decision on whether to start mine at 69 or 70. I would like to know how to map this all out.
Signed: Waiting but Wondering
Dear Waiting: Since you’re now 68 and not yet collecting benefits, you have been (since you were 66) earning Delayed Retirement Credits (DRCs). This will result in an increased personal Social Security benefit for as long as you delay claiming, up to age 70, when your maximum benefit is reached. If you claim at age 69, your benefit will be 24 percent more than it would have been at your full retirement age (FRA) of 66. If you wait until age 70 to claim, your benefit will be 32 percent more than it would have been at age 66 (8 percent additional benefit for waiting that extra year).
Your wife’s future spousal benefit while you are both living (if she is entitled to one) will be based on your age 66 amount, not the higher amount you will get because you waited to claim. But your wife’s benefit as your surviving widow will be based on the amount you were actually receiving at your death, not on your age 66 amount. So, if your goal is to maximize your younger wife’s benefit as your widow, then waiting until you are 70 to claim your benefit will do that. Keep in mind that your wife’s surviving-spouse benefit will be affected by her own age when she claims. If she has reached her own full retirement age of 67 when she claims, she will receive the maximum survivor benefit available to her. Claimed at age 67 while you are both living, her spouse benefit will be 50 percent of your age 66 benefit amount, if that is more than she is personally entitled to on her own. If you die first and your wife claims her survivor benefit at or after age 67, she will get 100 percent of the benefit you were receiving at your death instead of her own smaller benefit. But if she claims her survivor benefit before reaching her own FRA of 67, that benefit will be actuarially reduced according to the number of months prior to her FRA it is claimed. Note that your wife can wait to claim her survivor benefit until it reaches its maximum at her full retirement age.
So, to recap: Your wife’s spousal benefit while you are living will be based on your age 66 amount and her age when she claims it, and your wife’s benefit as your widow will be based on 100 percent of what you are getting when you die and her age when she claims it. The maximum benefit for your wife in either case is attained when she reaches her FRA (67), but if claimed earlier will be reduced. And you waiting until age 70 to claim will maximize your wife’s benefit as your widow.
Finally, since you are still working, you should know that if your current earnings are among the highest of your lifetime, you will still get credit for those earnings even after you start collecting your Social Security benefits. Your SS benefit when you claim will be based on the highest-earning 35 years over your lifetime (adjusted for inflation), but the Social Security Administration will monitor your earnings each year to see if a benefit increase is warranted because your current earnings are higher than any used in originally computing your benefit amount.
Russell Gloor is a national Social Security advisor at the AMAC Foundation, the nonprofit arm of the Association of Mature American Citizens (AMAC). The 2.4-million-member AMAC says it is a senior advocacy organization. Send your questions to: firstname.lastname@example.org.
Author’s note: This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). The NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity.