Washington, DC - Social Security Matters by AMAC’s Certified Social Security Advisor C.J. Miles, Association of Mature American Citizens:
QUESTION: My husband and I are both 64 years old. We both work, but don’t make as much money as we used to. So we decided it would be best for just one of us to file for Social Security now while the other one waits. We already know that his benefit is higher than mine, which makes my spousal benefit higher than his. So we thought it would be best for me to be the one to file, but we don’t know if it’s smarter for me to take a spousal benefit or my own benefit. Any suggestions?
ANSWER: That’s a great question. Unfortunately, you do not have a lot of options here. When you file for Social Security, they will first look to see if you are eligible for benefits on your own record. If you are eligible for both your own benefits and spousal benefits, Social Security always pays the higher benefit. So if your own benefit is more than your spousal benefit, you will not have the option to take the spousal. In addition, do not forget that at age 64 you will not get the full 50% of his benefit – you will have to take an additional 16.67% reduction. Furthermore, your age 64 reduction on your own benefit is less than the spousal reduction – 13.33%. So there is a good chance that your own benefit will be higher.
If you do expect the spousal benefit to be higher than your own, your husband must file for his benefit first in order for you to be eligible for a spousal benefit. The same rule applies if he wants to get a spousal benefit – you would have to apply for your own benefit first.
You may hear that there are some strategies for getting around these rules, and there are. However, they are only available once you have reached full retirement age. So until you or your husband is 66, this is what will happen if you apply. You will have the other options available to you in the future. For example, let’s say you go ahead and file for your benefit based on the situation that you described, and your husband leaves his benefit alone. When he reaches his 66th birthday, he can choose to file a restricted application. This will allow him to receive only spousal benefits while his own benefits earn delayed retirement credits. This is just one of a few strategies you both can examine when the time comes. But for now, your options are limited.
QUESTION: I am 63 years old. I originally wanted to wait until 66 to get Social Security so that I could get the full amount, but it’s been difficult waiting and paying the bills, so I figured I will just have to apply now. Then I heard that I might be able to get ex-spouse benefits while I let my own benefits continue to grow. Can I really do that?
ANSWER: Ex-spouse benefits do exist as long as you meet the eligibility criteria: A minimum length of marriage of 10 years to your ex-husband; your divorce finalized at least two years before you file for ex-spouse benefits; you cannot be remarried; and you have to meet the general age requirements for Social Security, which you do.
As for whether or not you can take ex-spouse benefits instead of your own, that is where it gets a little more complicated. When you are younger than full retirement age, you can only get ex-spouse benefits if they are more than your own. When determining this, you have to keep in mind the reductions involved. A lot of times spouses and ex-spouses assume they will receive 50% of the other person’s benefit; however, that 50% is the maximum amount you can receive at full retirement age. So the answer to your question depends on which benefit is larger - if the reduced spousal benefit is higher, you can take that; if not, you have to take your own benefit.
The only exception to this would be if you were full retirement age (66) or older. At this point your filing options expand and you would be allowed to choose which benefit you prefer – your own or the ex-spousal benefit. This is one of the main differences between spousal and ex-spousal benefits because you do not have to coordinate with the other person. For example, if you were going to take spousal benefits from your husband, your husband would have to file for his benefit first. Since you are divorced, this requirement does not apply. As long as your ex-husband is at least 62 years old and otherwise eligible for Social Security, you can file for ex-spouse benefits – when he files does not affect you at all.