I'm 58 And My Husband Is 64. Can I Collect Spousal Social Security Now And Switch To My Benefits At 67? Understanding Your Options For Retirement As A Couple

As retirement approaches, many couples grapple with a crucial financial decision: when to start collecting Social Security benefits. Consider the hypothetical case of Jane and John, who are facing this dilemma.

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Meet Jane And John

Jane is 58 years old, and her husband John is 64. They’ve worked hard throughout their lives and are looking forward to a well-deserved retirement. Their retirement planning is intertwined with the question of when to tap into their Social Security benefits.

John decided to start receiving his Social Security benefits at age 62, a decision that many people contemplate. Now, at 64, he’s pondering the implications of his early retirement on their financial future.

Jane, on the other hand, is considering her options. Should she commence her own Social Security benefits immediately, or would it be more advantageous to wait until her full retirement age (FRA) of 67? Jane is also interested in exploring collecting spousal benefits from John now and switching to her benefits later.

Understanding The Rules

To address Jane and John’s situation, it’s essential to grasp the rules governing Social Security benefits. The strategy of file and suspend, which allowed one spouse to collect spousal benefits and switch to their benefits later, has been eliminated since the enactment of The Bipartisan Budget Act of 2015.

If you are eligible for both personal and spousal benefits, you must apply for both simultaneously, a process referred to as deemed filing. This means that if Jane decides to apply for either spousal or personal benefits, she will automatically apply for both, and the Social Security Administration (SSA) will provide a combination of these benefits, capped at the higher of the two amounts.

Spousal Benefits And Timing

For spousal benefits, Jane can receive up to 50% of John’s primary insurance amount (PIA), which represents the full benefit he is entitled to at his FRA. The timing of John’s retirement does not affect the spousal benefit amount, but Jane’s benefit amount will be permanently reduced if she starts collecting benefits before reaching her FRA.

Exploring The Numbers

If John’s PIA is $1,500, and Jane files for benefits at 62, her maximum spousal benefit would be $750, which is half of John’s PIA. This figure is subject to reductions because of early filing.

In cases where people are eligible for both personal and spousal benefits, the SSA will pay out the higher of the two amounts. Jane must carefully consider her overall financial situation, including other sources of income and assets, as she formulates her Social Security strategy.

Consulting A Financial Adviser

Navigating the intricacies of Social Security planning, especially regarding spousal benefits and the timing of benefit collection, can be complex. For people in a position similar to Jane and John, seeking guidance from a financial adviser is advisable. A financial adviser can offer tailored insights based on individual financial goals and circumstances, providing a more comprehensive understanding of Social Security planning strategies.

The decision of when to start collecting Social Security benefits is significant for couples nearing retirement. By understanding the rules, exploring the numbers and consulting a financial adviser, people like Jane and John can make informed choices that align with their financial goals and circumstances. 

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*This information is not financial advice, and personalized guidance from a financial adviser is recommended for making well-informed decisions.

Jeannine has written about personal finance and investment for the past 13 years at a variety of publications including Zacks, The Nest, and eHow. She is not a licensed financial advisor and the content herein is for information purposes only and is not, and does not constitute or intend to constitute, investment advice or any investment service. While Jeannine believes that the information contained herein is reliable and derived from reliable sources, there is no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information.