Q: My wife has already applied for her own Social Security benefit. Does this mean she can't apply for a spousal benefit later? - JC
A: Your wife automatically applied for her spousal benefit when she applied for her own benefit. Both benefits are reflected in her monthly Social Security check.
If you qualify for two benefits when you apply for Social Security, your application is deemed to be for both, and you receive an amount equal to the larger of the two. For example, if your wife's benefit based on her own record was $1,000, and her spousal benefit (based on your record) was $1,025, she'd receive $1,025. If her own benefit was $1,000 and her spousal benefit was $800, she'd receive $1,000.
True, there is one important exception to this rule, but only for people who a) are at their full retirement age, and b) haven't previously filed for Social Security.
If you meet both those requirements, you can specifically restrict your application to one of the two benefits, and switch to the other one later on. In newspaper and magazine articles, and earlier posts on this blog, I've written a lot about this.
But the goal of this strategy is to postpone your own benefit, not your spousal benefit. When you postone your own benefit after you reach full retirement age, it grows 8% a year for up to four years of delay (plus annual inflation adjustments). By contrast, you wouldn't gain anything by postponing your spousal benefit. The maximum spousal benefit is 50% of your mate's full retirement benefit, and that's what you qualify for when you apply for Social Security at your full retirement age.
Let's assume your wife's full retirement age is 66. If she had waited until she was 66 to apply for Social Security, she would have had two choices: a) apply for 100% of her own benefit, automatically also applying for 50% of your benefit. The result: she'd get the larger of the two amounts. Or b), specifically restrict her application to her spousal benefit alone. The result: she could collect 50% of your benefit until she turned 70, and then switch to her own benefit. At that point, her own benefit would be 32% bigger than the amount she would have received had she taken it at 66.
Please note, I said 'switch' from the spousal benefit to her own benefit. You can never receive your own benefit and your spousal benefit at the same time.
Please send your questions to Lynn@LynnBrennersFamilyFinance.com. I'm sorry I can't respond personally to every email. Questions are only addressed online.
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