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By Philip Moeller
January 20, 2015
Robert A. Di Ieso, Jr.

Q. My husband is 10 years 4 months older than me. He began drawing his Social Security benefits at 65 and 10 months. I will be 62 next month. My benefits will be less than his since he was the larger wage earner. Based on statistics, I am likely to outlive him. We don’t need my benefits now so we could wait. But since it’s likely he will pass away first, and I will get his benefits because they are higher, is there any reason to wait to draw my benefits? —Lynda

A. First off, I hope you both live forever. But in the interest of being practical, you need to choose the Social Security strategy that will give you the highest amount of income over both your lifetimes, based on your expectations for longevity. Here’s what to consider:

If, as you say, your husband’s Social Security benefits are much larger than your own, then you will be receiving spousal benefits while he is still alive and survivor benefits after he dies. So you and your husband should figure out the strategy that will provide the best balance of current and future income.

Your spousal benefits will be 30% larger if you wait to take them until 66, which is what Social Security defines as Full Retirement Age (FRA) for you. (This age will rise from 66 to 67 for people born after 1954.)

So your decision is whether to take reduced spousal benefits at 62 or wait four years to take them at age 66. I don’t know what these different amounts might be, but you and your husband can figure them out by signing up for online Social Security accounts that will let you see your projected benefits.

Your maximum spousal benefit at age 66 will be half of what’s called your husband’s Primary Insurance Amount, or PIA. This is half of what he was entitled to receive at his FRA, and from your description, it sounds like that’s when he began taking benefits.

For example, let’s assume your spousal benefit at age 66 will be $1,000 a month. Then, at 62 you will receive only $700 a month, because of the 30% early filing reduction. Even at a reduced level, this will total $8,400 a year, or $33,600 from age 62 to 66. If you waited until age 66 and thus qualified for the larger spousal benefit, you would be getting $300 more each month.

Given these amounts, it would take you 112 months to recoup the $33,600 you would have received by taking benefits early. Your husband would need to live to more than age 86 for this deferral strategy to just break even in unadjusted terms. And this doesn’t reflect what economists call the present value adjustment of getting that $33,600 many years earlier than your full spousal benefit.

Your survivor benefit will be the actual benefit your husband was receiving when he dies, or in your case twice your spousal benefit. So you would want to contact Social Security and switch to this higher benefit as soon as possible after his death.

By the way, if your husband had deferred his retirement benefit from his FRA to age 70, his benefit would have been roughly 31.2% higher than he actually received. So, your widow’s benefit would have been even higher.

Philip Moeller is an expert on retirement, aging, and health. His book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” will be published in February by Simon & Schuster. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

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