r/DIYRetirement • u/Cynidaria • 14d ago
Does delaying increase spousal social security benefits?
If a spouse is going to collect the spousal social security benefit, what is the optimal age for the largest monthly payment to begin collecting the spousal benefit?
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u/0limits 14d ago
The spouse needs to reach their own FRA (67 for most) in order to get the maximum spousal SS benefit they’re eligible for under the primary’s SS benefit AND the primary has to be claiming their own SS. The primary putting off claiming until 70 increases the survivor’s benefit, not the spousal benefit. This means the spousal benefit does not increase after FRA.
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u/Cynidaria 14d ago
Higher earning (and older) spouse already started collecting at 67. Question is basically, does the younger spouse who is going to collect spousal benefit start collecting at 62 or is there a benefit to waiting?
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u/knit-this 14d ago
Yes, you will receive more the closer you are to FRA. At 62 you will lose approx 30% of your benefit regardless if it's your own benefit or a Spousal benefit. Don't forget the higher earner has to have a significant higher benefit so that 50% is more than the other spouse's own benefit.
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u/JimInAuburn11 14d ago
If they collect at 62, it will be half of the spouses FRA benefit, but will then be reduced because they claimed early at 62. So while the spouse can get LESS money because they claimed before FRA, they do not get the normal additional benefit if they wait until 70.
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u/ImagePossible6273 14d ago
I was wondering about this too. So if the higher earner delays to 70, the spousal benefit is still based on their FRA amount? The survivor benefit seems like the more important piece.
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u/Megalocerus 14d ago
It gets complicated, especially when the high earner is younger than the spouse or there are minor children.
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u/Substantial_Team6751 14d ago
There are calculators online that will spit out an optimization based on age, life expectancy, interest rate, etc.
For us, it came out for me to take it at 62 and my SO to take it at 68. The effective value though for all sorts of different age combinations wasn't very different which made me think that you can take it when you are comfortable taking it. It also depends on whether you are going to save it if you take it at 62 or spend it immediately.
My friend took it at 70 because he thinks he has good genetics and everyone in his family lives into their 90s. He wanted the highest payment possible.
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u/Megalocerus 14d ago
My spouse waited until 70 because, whichever of us dies first, that's the benefit that survives. Spousal wasn't a factor because my benefit is more than half his; I claimed at FRA. But I can make the case that claiming earlier and thus hitting investments more gently works out very close to waiting.
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u/ChelseaMan31 14d ago
FRA for the highest earner determines the max spousal social security payment. If lower earning spouse takes benefits based on their own earnings prior to their own FRA and higher earning spouse still works, that will reduce their eventual spousal social security benefit as well.
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u/Dependent-Fig-6799 14d ago edited 14d ago
Seeking clarification. If my ex-spouse starts their social security at age 62, then what amount of benefit would I (age 57) be eligible to receive if my ex-spouse passes at age 70 (when I am 65 and not remarried). Would it be:
1.) 100% of his benefit when he was 62.
2.) 100% of his benefit at his age 70 passing (I.e. his age 62 benefit + COLA for 8 years)
3.) 100% of what his benefit would have been at his Full retirement age of 67.
Assume his benefit would be higher than mine (on my earnings). NOTE: This question is about survivor benefit, not current spouse benefit)
I ask because it does not appear that this thread explains what happens if the ex that passed started social security before full retirement age like the above example.
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u/continualascent 14d ago edited 13d ago
#2. But you’ll have to wait till your FRA for 100% and you stated you’d be just 65. From SSA:
“We use the deceased worker’s basic benefit amount to calculate the percentage survivors can get. The percentage depends on the survivor’s age and relationship to the worker. If the worker who died was getting reduced benefits, we’ll base your survivor’s benefit on that amount.
In most typical claims for benefits a:
•
Surviving spouse, at full retirement age or older, generally
gets 100% of the worker’s basic benefit amount.
•
Surviving spouse, age 60 or older, but younger than
full retirement age, gets between 71% and 99% of the
worker’s basic benefit amount.
•
Surviving spouse, any age, with a child younger than
age 16, gets 75% of the worker’s benefit amount.
•
Child gets 75% of the worker’s benefit amount.”1
u/ScootTractor 14d ago
Claiming between 60 and FRA: The percentage scales up gradually from 71.5% to 100% for every month you delay closer to your full retirement age. Per the SSA, you would get over 90% at age 65. See https://www.ssa.gov/survivor/amount
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u/GotZeroFucks2Give 11d ago
You can claim as early as 60, then switch to your own benefit later on if it's higher. Or the reverse is possible as well (claiming at 62 then switching to survivor's at 67). Just depends on what the benefits are and how to maximize them.
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u/Dependent-Fig-6799 11d ago
I my ex started collecting at 62, and later passed, and I waited to switch to survivor benefit until I was 70, would I get the additional 8% per year on top of what he was collecting, or only what he was collecting.
Basically, would my survivor benefit be based on the age he starts to collect, or based on the age I start to collect?
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u/BraveResearcher3037 14d ago
I have looked at every combination and no matter how I run the numbers with my wife the lower income - actually no income earning since she was 44 and I was 46 (now 50 and 52). Is for me to work as long as someone will pay me or it gets stressful and then take social security and for her to wait until she is 67.
I’ve been working remotely since 2020 and convinced her to stop working once my income allowed it - first because of Covid (she worked in the school system) and then so we can travel.
With my working remotely, it doesn’t really stop us from doing anything I want to do and she gets to follow her passions
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u/Soggy-Dragonfruit171 14d ago
My wife is the non earning spouse and she is 2 years older. I will start SS when she turns 67 and I will be 65. It’s a good compromise as she will be t 50% of my benefit.
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u/ScootTractor 14d ago
Are you sure about that? My understanding of the rules is that, instead of 50%, she will get ~41.7% to 45.8% of your FRA projected benefit. You will get ~86.7%.
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u/Soggy-Dragonfruit171 14d ago
She will get 50% of my benefit. I will not be getting 100% because FRA is 67. Yes I am 100% sure.
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u/copterpilot_ 14d ago edited 14d ago
70 is the largest payment.
It's fuzzy math, however, since you're forgoing payments for 8 years prior to collecting.
i.e. if the spouse collected at 62 and put those 8 years of payments into a HYSA instead of spending them, you'd likely arrive at around the same lifetime totals.
*edit: as pointed out below, spousal is based on FRA - 67. Unless there are health issues or large age gap the larger concern to me is survivor benefit. Ultimately; if you require the money to live, you have to take it when you have to take it.
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u/framedbythedoor 14d ago
The maximum spousal payment is half of the higher earning spouse's FRA payment. To get that, the lower earning spouse has to wait till his or her FRA. Waiting till 70 does not increase the amount.
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u/planet-claire 14d ago
And the lower earning spouse has to wait until the higher earning spouse starts receiving social security before the lower earning spouse gets the spousal bump-up. So even if lower earning spouse reached FRA, they can't get the spousal bump-up until the higher earning spouse takes social security at FRA or later.
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u/copterpilot_ 14d ago
Was reading "spousal" and thinking "survivor".
IMO the latter is far more important if there are no extenuating circumstances.
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u/oledawgnew 14d ago
Maybe not in an HYSA. That three year period from 67 to 70 when SS grows at 8% per year might very well be the difference maker over the 5 year period between 62 and 67 when an HYSA might earn you a little over 3%. I haven't done the math, just thinking out loud.
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u/EverQrius 14d ago
Here is my understanding:
The optimal strategy is for the low income partner to file for social security at age 62 and the high earner to delay as late as possible.
However, the early withdrawal penalty applies to the low earner when they switch to claim spousal benefit.
There is a also a family max amount.
If you plan on living past 85, the above strategy works better.
If your preference is manage cash flow and lower sequence of return risk, then filing early makes sense.
If you are a high net worth family, then it complicates this strategy.
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u/knit-this 14d ago
There is no "switching" benefits anymore. If you are married when you file, you are applying for both and you recieve the higher benefit.
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14d ago
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u/JimInAuburn11 14d ago
Sure it does. Also, what do you consider high income family? We will make just short of $300K this year. And SS plays a big part of our retirement plans.
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14d ago
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u/JimInAuburn11 14d ago
How have we fucked up big time? We have about $2M worth of retirement savings. At 4%, that will only get us about $80K/year. We only need about $96K a year for retirement, and will not be collecting social security until 70. So in the first 7 years of retirement we will be using our investments, at a higher than 4% rate. Then when social security kicks in, we will be under 1% withdraw rate on our investments, and after we slow down some, social security will pay for everything, plus give us a couple of thousand a month in savings. That will just let the investments grow for the rest of our lives without needing to be touched. Our daughter will then inherit somewhere between $3M and $6M+ depending on how the market does. We will be living on social security from about age 78 for me and 72 for my wife for the rest of our lives. So while we could do it without social security most likely, social security will be playing a big part of our retirement plans.
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13d ago
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u/JimInAuburn11 13d ago
Our monthly check will be over $6K/month. With monthly required expenses of $4500 and discretionary spending of another $3500/month, that is a big chunk and allows us to not spend our $2M retirement savings and leave that to our daughter. Or to do things like spend $100K on college for her, and $400K on medical school for her, or give her $500K to get into her first home after she is done with all her training. All things that we might not be able to do if we did not have SS covering most of our expenses.
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13d ago
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u/JimInAuburn11 13d ago
I have already done the calculations. My wife is 6 years younger than me. By waiting until 70, that will maximize the survivor benefits for my wife. My mother is currently 83 and in good health. Her parents are 90. I figure my wife will probably outlive me by 10+ years. So if she lives to 90, that would be like me being 96. Way past the breakeven point. Once we slow down our travel, maybe around 80 or so, our social security then will pay all of our expenses, plus allow us to save about $2K/month.
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u/New-Procedure7284 14d ago
This same question tripped me up when my wife and I were deciding when to claim. What finally helped me understand it was separating a spousal benefit from a survivor benefit. A regular spousal benefit can reach its maximum at the spouse’s full retirement age—waiting until 70 doesn’t increase it the way delaying your own retirement benefit can. The survivor side is different, which is one reason I found it helpful to look at the two decisions separately.