Social Security and Spouses – Part 3

In recent visits we explored how spousal benefits can affect the decision of when to begin Social Security benefits. In this visit we will take a look at one more scenario.
First, we’ll review the key points from past visits.

A spouse is entitled to receive the higher of either his or her earned retirement benefits or one-half of the spouse’s benefits. In either case the benefits are reduced if they are taken before normal retirement age.

If a person waits until full retirement age before beginning benefits, he or she can elect to apply for only the spousal benefit. Later, the person can apply for retirement benefits based on his or her earnings record. The first advantage is that payments can begin at full retirement age, though they are based on the spouse’s benefits. The second advantage is that delaying the beginning of one’s own retirement benefits allows the delayed retirement credit to increase the payments.

Here are a couple of additional scenarios, compliments of syndicated columnist Humberto Cruz, that were verified by Social Security.

Suppose Max and Rosie Profits reach full retirement age. Max is entitled to $2,000 monthly retirement benefits on his own record and Rosie is entitled to $900 monthly based on her record. Max elects to take the $450 spousal benefit based on Rosie’s record, and Rosie elects to take her $900 retirement benefit.

At age 70, Max files for retirement benefits based on his record, which now are $2,700. In addition, Rosie applies to receive the spousal benefit, which is one half Max’s full retirement benefit. So, Rosie now is receiving $1,000 monthly and Max is receiving $2,700 monthly. Each is indexed for inflation.

Details are available on the Social Security web site at www.socialsecurity.gov/retire2/-yourspouse.htm.