Dear Liz: My husband and I plan to delay taking Social Security retirement benefits until the higher-earning spouse is 70. This is to ensure the highest possible survivor benefit. However, the lower-earning spouse will be turning 62 at the same time that the higher earning spouse turns 70. We are concerned that the lower-earning spouse’s future survivor benefit will be reduced if the lower earner starts benefits early. When would be the best time for the lower-earning spouse to take retirement benefits and ensure that the survivor’s benefit remains the same?
Answer: The lower earner won’t reduce the survivor benefit by starting early, but they will permanently reduce their own benefit or any spousal benefit they’re owed. Most people are better off waiting at least until their full retirement age to start Social Security benefits so they can avoid this reduction.
While mostly correct I think you have forgotten that when the lower earning spouse takes SS when they reach retirement age it does not effect what they will get when the high earning spouse hits 70. The lower earning spouse gets a bump to 50% of the high earning spouse regardless of past payments
The early start can affect spousal benefits as well. See under the “odds and ends” subhead in this article. https://www.cnbc.com/2021/09/02/how-claiming-social-security-early-affects-your-spousal-benefits.html
So the bump would be less than 50% of the higher earner’s benefit at the higher earner’s full retirement age.
I happened to read your post today and noticed a mistake. If you appreciate constructive criticism read on, if not thank you for your writings and have a great day.
In your post today you advised a married couple that if the higher earning spouse begins taking Social Security retirement benefits at age 70 and the lower earning spouse simultaneously begins taking Social Security retirement benefits at age 62, that “The lower earner won’t reduce the survivor benefit by starting early.” That is incorrect.
In this case, for the younger lower earner to receive the full survivor benefit after the death of the higher earning spouse she would need to wait until her own full retirement age (67) to begin taking her own Social Security retirement benefits. This is according to the Social Security website https://www.ssa.gov/survivor/amount
You also advised the couple that the younger lower earner “will permanently reduce her own benefit or any spousal benefit” if she applies at 62. I believe that is correct. If the younger lower earner subsequently dies before the older higher earner, the older higher earner will continue to receive his retirement benefit because it will be higher than the survivor benefit he would be entitled to so his survivor benefit is unrelated to when she applies.
I don’t believe that the age at which either spouse applies has any influence on any lump sum death payment, only on the survivor benefit.
The reverse situation however is ambiguous to me. Social Security written publications are unclear, and I have received different answers from different Social Security employees. If the higher earning spouse is younger than the lower earning spouse, the lower earning spouse may apply for Social Security before the higher earning spouse. When she does, she will receive her retirement benefit based on when she applies: discounted before 67 (full retirement age), increased after that until age 70. Once the higher earning spouse applies she will continue to receive her own benefit unless her spouse’s benefit is then more than twice as much; if so she would receive a spousal benefit to bring her total benefit to one-half of his benefit until one of them dies. What is ambiguous to me is what happens if the younger higher earning spouse dies first? If the surviving lower earning spouse waited until age 67 (or later) to apply she will receive the full survivor benefit based on her spouse’s earnings. But is that 100% of (a) what he was receiving (and thus depends on the age he applied) or is it based on (b) what he would have received had he applied at age 67? As I said, Social Security written publications are unclear on this, and different Social Security staff members have different opinions. I understand the answer is (b) if the younger spouse dies before applying for benefits.
Thanks for listening,
Jim
The page you linked to discusses the reduction if the survivor starts survivor benefits early. The survivor benefit is not affected if the lower-earning spouse starts early.