Q: I just turned 65, am still working, have no plans to retire, and make a significant income. My wife is 62 years and 4 months old, doesn't work, and has no plans to work. Is there a strategy whereby it would make sense for her to begin Social Security benefits now? Would it make sense for me to claim a spousal benefit when I turn 66 in one year (or will all of that be taxed away?) and then claim my own benefit at age 70? --AM
A: Your question about taxes is rhetorical, right? Without a good deal more information -- starting with the amount of your 'significant' income -- I can't hazard a guess about the tax treatment of any Social Security benefit you may receive.
And I assume that your wife at some point in her life did work and pay Social Security payroll taxes for at least ten years. If not, there is no spousal benefit you can claim based on her earnings record because as far as Social Security is concerned she has no earnings record.
If she does have Social Security earnings record, you can't apply for a spousal benefit based on that record until she has applied for her own benefit. Similarly, she cannot apply for a spousal benefit based on your record until you have filed for Social Security yourself.
However, as I've explained in previous posts, after you turn 66 you could greenlight her application and at the same time effectively postpone your own until you're 70,with a strategy called 'file and suspend.'
With 'file and suspend', you file for your benefit so that she can apply for her spousal benefit; and then immediately suspend your application so that you can delay taking your benefit until you're 70.
If your wife has earned her own Social Security benefit, she should call the Social Security Administration (or go to www.ssa.gov) and find out the amount she would receive if she applies for it now, versus when she's older, in order to make a decision about when to apply for it.
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
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