Q. I'll be 62 in December of 2016, and my husband will be 66 in September of 2016. We thought we had our Social Security claiming strategy all locked up until Congress changed the law last November. He would file and suspend once I turned 66, and I would collect a spousal benefit for four years, and we would wait until age 70 to claim our maximum retirement benefits. If we were just a year older, it looks like we would have been able to do this before the new law takes effect at the end of April. But we're not. So, do you have any strategies for those of us who just missed the boat? —Penny
A. Even though the new law no longer allows you to file and suspend, there's a next-best Social Security claiming strategy you can follow. Because your husband turned 62 before the end of 2015, he retains the right to file a restricted application for just his spousal benefit. This move will enable him to defer his own retirement benefit until age 70, when it will reach its maximum amount. But he can only make a restricted application after you have filed for your own retirement benefit, and only after he has turned 66.
The earliest you can file for retirement is when you turn 62 this December. At that point, your husband can make his restricted application for a full spousal benefit. That payout will equal half of the benefit you would have been entitled to at age 66, not half of what you will actually get at age 62.
The downside to this strategy is that by claiming at 62, before your Full Retirement Age (FRA), your benefit will be hit by Early Claiming Reductions. In addition, if you're still working and your wages are high enough, your payment may be reduced, or even eliminated by what's called the Earnings Test. Still, you would get those reductions back in the form of higher benefits once you've reached your FRA.
After your husband files for his own retirement benefit at 70, you can suspend your own retirement benefit since you will have reached 66, or your FRA. (Since he has filed for his benefit, your husband will no longer depend on your claiming status.) By suspending your claim till age 70, you will be able to earn Delayed Retirement Credits, which will give you a higher lifetime benefit.
If that sounds a bit complicated, there's an alternative strategy you can consider: both of you can wait until age 70, and then file for your maximum benefits. I'm a strong advocate of delaying benefits as long as possible Still, few people put off filing that long—most claim well before FRA.
Choosing the right strategy for your needs will require you to assess different variables, including your income, spending needs, your health and your longevity outlook. Start out by checking your Social Security statement and reviewing the agency's explanations about claiming. You can also try retirement planning software, which can make this process easier. Many tools are free, while others charge a fee for more personalized service. You may also want to consult a financial adviser with expertise in Social Security claiming strategies.
Best of luck!
Philip Moeller is an expert on retirement, aging, and health. He is co-author of The New York Times bestseller, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” and is working on a companion book about Medicare. Reach him at firstname.lastname@example.org or @PhilMoeller on Twitter.