Q: In a recent column, you said that if you took reduced benefits on your own Social Security record, you could not later switch to full benefits on a spouse’s Social Security record. Yet I just did that. I signed up for my own Social Security when I was 62 several years ago. My husband just turned 66 and filed for his own Social Security. I am now also 66 and the Social Security people had me file for full wife’s benefits on his record. So how does this jive with what you wrote in your column?
A: The point I am constantly trying to make to my readers is that as a general rule, you cannot file for reduced benefits on one record and later switch to full benefits on another record. (That rule does NOT apply to widows and widowers.)
The law (again, except for widows and widowers) says that if you are under age 66 when you apply for Social Security, you must file for any and all benefits you are eligible for at the same time. So had your husband already been getting his Social Security at the time you filed for your own at age 62, you would have been required to file for both reduced retirement benefits and any reduced wife’s benefits you might have been due on his record.
But the difference in your case is that your husband was not yet getting Social Security when you applied for your own benefits. So you were not required to file for any spousal benefits on his account at that time — because he had no account.
When he did file for his own retirement benefits at age 66, then at that point, you could also file on his record. So you are now able to claim a full wife’s benefit, which will be added to your reduced retirement benefit. Here is how the Social Security people will figure your spousal supplement. They will take your full age-66 rate (even though you took benefits at 62) and they will subtract that from one half of your husband’s age-66 rate. Any difference will be added to your reduced retirement rate.
So that’s how things will work in your situation. But now let me get back to my overall point about the impact of taking Social Security benefits before age 66. Over the years, thousands of women have told me this: “I plan to file for wife’s benefits on my husband’s record at age 62, and then switch to full benefits on my own record when I turn 66.” And my message to them is that they simply can NOT do that. If they waited until age 66, then they could file for full spousal benefits and at 70, switch to a full retirement benefit and get a 32 percent delayed retirement bonus added to their monthly Social Security retirement checks.
But again, assuming their spouse is already getting Social Security when they turn 62, they can’t file for one benefit then and switch to another benefit later on. However, they could switch if the spouse dies.
To clarify all of this, let’s follow an example. Barney applied for his Social Security when he was 66. He started getting $2,000 per month. His slightly younger wife, Betty, turned 62 the next year and applied for Social Security. Her own full retirement benefit is $1,200, but because she took benefits at 62, her rate is reduced to $900.
Some might wonder if Betty is due any benefits on Barney’s account. After all, they ask: “Isn’t a wife due half of her husband’s Social Security?” If she waited until 66, she would be due half. But again, Betty filed at age 62, so her spousal rate would be cut to about one third. One third of Barney’s $2,000 Social Security check comes out to about $666. Well, Betty is already getting more than that in her own $900 retirement benefit, so she isn’t due anything on Barney’s record.
Others might wonder if Betty could take that reduced wife’s benefit of $666 at age 62 and then at age 66, switch to her own full retirement rate of $1,200. And again, the answer is NO. She can NOT take reduced benefits on one record and later switch to full benefits on another account.
When Barney was 72 years old, he died. Betty, who was 67 at the time, is now due widow’s benefits. And because she was over age 66 when she became a widow, she is due 100 percent of Barney’s Social Security. She gets a full widow’s rate even though she took reduced benefits at 62. Let’s say that at the time of death, with annual cost-of-living increases, Barney was getting $2,400 per month and Betty was getting $1,100 per month. Betty will keep getting her own $1,100 retirement benefit, but she will also start getting $1,300 in widow’s benefits to take her total benefits up to Barney’s month-of-death rate of $2,400.
I want to make one more point about widow(er)s. Remember that earlier in this column, I pointed out that the rule that normally says that if you apply for Social Security before age 66, you must file for any and all benefits you are due. But I said that rule does not apply to widows or widowers. Here is an example of how that would work.
Fred is retiring at age 62. He is a widower. His wife, Wilma, had worked and paid Social Security taxes until she died a couple years ago. Fred’s full age-66 retirement rate is $2,100. Wilma’s full Social Security rate is $2,400. Fred can file for reduced widower’s benefits at 62. He would get about 82 percent of Wilma’s benefit, or around $1,968 per month. He could get those benefits until age 66, when he could switch to his full retirement benefit of $2,100. Or he could choose to delay switching to his own account until age 70, when he would get 132 percent of his full rate, or $2,772.
And finally, I want to get back to the letter writer’s Social Security case that started this column. Remember, she said she took reduced retirement benefits at 62, and then when her husband recently filed for his own Social Security at age 66, started getting part of his benefits added to her own. That couple actually had another option using one of the Social Security maximizing strategies discussed so often in this space. He could file for husband’s benefits on his wife’s record and get half of her age 66 rate. He could get those benefits until age 70 when he could take 132 percent of his own rate. And then at that point, his wife could file for her spousal benefit, although that supplement would be based on his age 66 rate, not his age 70 amount.
If you have a Social Security question, Tom Margenau has the answer. Contact him at firstname.lastname@example.org.