Dear Rusty: I have applied for and been approved to start collecting my Social Security this month (at age 66). My wife will turn 62 in March 2019 and is planning to apply for benefits then. In a group meeting with a financial advisor he mentioned a spousal benefit of $500/month in addition to her own monthly benefit. Can you enlighten me on the proper name for this benefit and how do I apply for it? Signed: Wanting to Know
Dear Wanting: I can only speculate on what the financial advisor in that group meeting was referring to, but it may have been one of the following:
When she is 62 your wife can claim her own Social Security and, if her benefit on her own work record is considerably less than yours, she may also be entitled to a “spousal benefit”. If she were to claim Social Security at her full retirement age her spousal benefit would be 50% of your benefit amount. But if she takes it at age 62, it will be something less – about 34% of yours. If she is entitled to the spousal benefit, she gets that larger amount as her full Social Security benefit. The spousal benefit is an amount which is added to your wife’s own benefit to bring her up to what she’s due as your spouse. In this sense, it is extra benefit on top of your wife’s benefit, but only up to the total amount she’s entitled to as your spouse. Your wife doesn’t need to apply separately to receive the spousal benefit because, if you are already collecting benefits when she files at age 62, she will be automatically deemed to be filing for any spousal benefit she is due from your record.
If at the time of your group meeting with the financial advisor you had not yet claimed your Social Security, he may have been referring to something called a “restricted application for spousal benefits only.” You qualify for the restricted application (RA) because you were born before the January 1, 1954 cut-off date after which it was eliminated. If your wife claims her own Social Security first, you can file the “restricted application for spousal benefits only” and collect 50% of your wife’s full retirement age (FRA) benefit amount while allowing your own Social Security benefit to grow. That growth would be 8% per year of delay (0.667% per month), and at age 70 your benefit would be 32% more than it is at age 66. But there’s a catch – you can only do this if you have not yet claimed your own benefits. Thus, the only way the RA could work for you now would be for you to withdraw your current benefit application, wait until your wife files at age 62, and then file the “restricted application for spousal benefits only” to get 50% of her FRA amount. If you withdraw your application now you will need to pay back any benefits which have already been paid, essentially wiping the slate clean with Social Security, and this can only be done within one year of when you first applied. But doing that will give you an extra spouse benefit while your own benefit grows. Again, I can only speculate on what the financial advisor in that group meeting was referring to, but the above seem most probable.
This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at [email protected].