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With Similar Earnings History, Which Spouse Should Delay Social Security?

A reader writes in, asking:

“My husband and I plan for one of us to file for Social Security at age 70 and for the other to file early, probably at age 62. You have stated that the spouse with the higher benefit should be the one to wait, in order to maximize survivor benefits, but what should we do if we have nearly identical benefits? Is there rhyme or reason for one of us as opposed to the other being the one who should wait?”

In cases in which:

  1. Both spouses have very similar primary insurance amounts,
  2. Neither spouse expects his/her primary insurance amount to grow meaningfully as a result of future earnings (i.e., neither PIA is expected to become meaningfully larger than the other in the future), and
  3. The couple plans for only one spouse to wait to claim retirement benefits

…the question of who should wait is often a function of age.

Specifically, if one spouse is more than 4 years older than the other spouse, that older spouse is the one who should file early. The reason for this recommendation is that this is the strategy that will allow for the most total years of “free” spousal benefits.

How About an Example?

Mario is 62 years old, and his wife Christina is 56. Their PIAs are approximately identical.

Scenario A: The couple decides for Mario (the older spouse) to file at age 62 and for Christina (the younger spouse) to wait until age 70. With this strategy, once Christina reaches her full retirement age, she can file a “restricted application” to receive just spousal benefits. This way, she can receive 4 years of drawback-free spousal benefits while allowing her own retirement benefit to continue growing until age 70.

Scenario B: The couple decides for Christina (the younger spouse) to file at age 62 and for Mario (the older spouse) to wait until age 70. This strategy is not as good, because Mario won’t be able to file a restricted application for spousal benefits until Christina has reached age 62 and filed for her own retirement benefit — by which point Mario will be age 68, meaning the couple only gets 2 years of “free” spousal benefits rather than 4 years.

What If There’s Less than 4 Years Difference in Age?

If there’s less than 4 years difference in ages, then the couple will be able to receive drawback-free spousal benefits for the same number of months regardless of which spouse waits and which spouse files early. (Reason being that, if there’s less than 4 years difference, by the time the waiting spouse –regardless of which spouse that is — reaches full retirement age, the non-waiting spouse will already be age 62 and will have started receiving retirement benefits.) As a result, in these cases, whoever’s PIA is even slightly larger should generally be the person who waits.

Important Exception

There is one especially important exception to the above recommendations. Specifically, if one spouse is in particularly poor health such that he/she isn’t expected to make it to age 70, that spouse should not be the one who waits.

Example: Wallace and Gina are both age 61 and retired. Wallace’s primary insurance amount is slightly larger than Gina’s. Wallace, however, has a serious heart condition, which, his doctors have told him, makes it likely that he only has another 3-7 years left to live.

If the couple decide that Wallace will wait until age 70 for his retirement benefit and Gina will claim early, but then Wallace dies at, say, age 68, Gina will be left with an age-68 benefit for the rest of her life, as opposed to the age-70 benefit that she could have gotten if she (i.e., the healthy spouse) had been the one to wait.

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Topics Covered in the Book:
  • How retirement benefits, spousal benefits, and widow(er) benefits are calculated,
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