A Double Double Dip: Can a Married Couple Both Collect Social Security Based on Each Other's Earnings at The Same Time?

Q: Thanks to your AARP Magazine article and to this blog, I learned about Social Security spousal benefits. But there is one question I haven't seen addressed here. Can both spouses receive spousal benefits at the same time, while they both postpone taking their own benefits?

 
My wife and I both have earned benefits of our own. She reached her full retirement age (FRA) in October, and I reached mine in December. We both want to defer taking our benefits until age 70. I know that I can apply for Social Security at my FRA, so my wife can apply for a spousal benefit based on my earnings record. And I can then suspend my application, so that my benefit will keep growing until I'm 70. Is there any way I could then apply for a spousal benefit based on my wife's earnings record? - GS via email

 

A:  In a nutshell, no.

Several people have written me to ask the same question, which is really only of interest to people who a) are married and b) can afford to postpone taking Social Security. The first group is huge, of course; the second ... not so big.

First, let's recap the relevant rules:

1. Anyone who is married can claim a Social Security benefit based on his/her spouse's earnings. Your maximum spousal benefit is 50% of what your mate is entitled to receive.

2. You can never collect both your own benefit -- the one based on your own work record -- and your spousal benefit at the same time. 

3. You can't apply for a spousal benefit based on your husband or wife's earnings until he/she has actually applied for Social Security.

4. After you've reached FRA, you have the option of applying for Social Security and then suspending your application. You can't do that when you're younger.

5. After you've reached FRA, you can choose to apply for a spousal benefit ONLY, letting your own benefit continue to grow. You can't do that when you're younger. (People who apply for Social Security while under their FRA are automatically considered to be applying for both benefits, and receive an amount equal to the larger of the two.)

Clear so far? Okay. Here's an example of how the strategy works:

Bob and Nancy have reached their FRA. They're both 66 years old. He has earned a $2,000 monthly benefit and she has earned an $800 monthly benefit. They both want to postpone taking their benefits until they're 70 years old in order to earn extra credits.  (When you wait until after your FRA to apply for Social Security, your benefit gains extra 8% for each year of delay until you're 70.)

But Nancy doesn't have to wait to collect a spousal benefit based on Bob's work record. He can file now for his benefit. That green-lights her application for her spousal benefit. (See rule #5). She gets $1,000 a month - 50% of his benefit amount. Bob can then suspend his application so his benefit keeps growing. (See rule #4).

The result: Bob and Nancy are both delaying their applications for their own benefits, and meantime she is collecting a $1,000 spousal benefit based on his record.

Your question is, Can Bob now also get a spousal benefit based on Nancy's work record?    

No. Nancy hasn't yet filed for her own benefit. (See rule #3, above). She must do that before Bob can collect anything based on her record.  And remember, Nancy wants to delay her application for her benefit until she's 70.

What happens if Nancy applies for her own benefit and then suspends her application?

As soon as Nancy applies for her own benefit, she'll only be eligible for a spousal benefit to the extent that it exceeds her own, says Linda Lauria, a Social Security Administration spokesman in New York City. (This is true even if Nancy later voluntarily suspends her application for her own benefit.)

In this case, her spousal benefit is $1,000 and her own benefit is $800. Lauria says she'd therefore only receive the difference between the two -- $200 a month.

As for Bob, who already applied for and suspended his own benefit, he can only get a spousal benefit to the extent that it exceeds his own. His own benefit is $2,000 a month, and his spousal benefit is $400. So he collects nothing.

The result: Bob and Nancy have both postponed their own benefits. Meantime, she is collecting $200 a month because that's the amount by which her spousal benefit exceeds her own.

And in case you're wondering, this doesn't play out any better with different numbers. Here's an example:

Again, Bob and Nancy are both 66.  But this time, both have earned a $2,000 FRA benefit.

Bob files for his benefit and and then voluntarily suspend the application. Then Nancy files for a spousal benefit and restricts her application to exclude her own retirement benefit. (See rule #5).  She gets $1,000 on Bob's record as his spouse.   

  But  what happens if Nancy files for her benefit so Bob can collect as her spouse, and then suspends her application? Her spousal benefit would stop, because her own retirement benefit is higher. "Once she files an application for her own benefit, even if she later suspends it, she is only entitled to receive a wife's benefit if it exceeds her own,"   says Lauria.  "In this case, her own benefit is $2,000 and the spousal benefit is just $1,000."
 
So she'd get nothing while her own (suspended) benefit kept growing. 

 And since Bob has already filed (and suspended) his application for his own benefit, he too only qualifies for a spousal benefit if it's bigger than his own. His spousal benefit is $1,000 and his own benefit is $2,000. So he wouldn't collect anything while his own benefit grows, either.

The result: Both of them have postponed their own benefits, and neither is collecting a spousal benefit.

The bottom line: This strategy works only for one spouse.

Please send your questions to [email protected].  I'm sorry I can't respond personally to every email. Questions are only addressed online.(c) Lynn Brenner, All Rights Reserved

 

Comments

[Walter Wiatre]

We are both 70, and have only been married since January of 2010. Can my wife claim 50% of my SS benefit, if not when?

[lynn brenner]

Lynn replies: Your wife can claim 50% of your Social Security benefit as soon as you've celebrated your first anniversary.

To claim a spousal benefit, you must meet three requirements: You must have been married at least one year; your husband or wife must have applied for his or her benefit; and you must be over 62 years old.

[Michael Holloman]

My wife and I are on Social Security disability. Is she able to collect up to 50% of my Social Security, if it is more than hers? And if she can, does it reduce my benefits at all?