INmail: Birthdate foils ex-spouse’s Social Security claiming strategy

Donna: I plan to retire when I turn 66 in April. Originally, I wanted to wait until 70 to claim my maximum Social Security benefits, but my accountant told me I could claim spousal benefits on my ex-spouse when I reach my full retirement age of 66 and 2 months and allow my own retirement benefits to continue to grow. How do I do that?

MBF: Sorry, Donna, but your accountant gave you outdated information. Only people born on or before Jan. 1, 1954, have the right to file a restricted claim for spousal benefits, allowing them to collect half of their spouse’s (or ex-spouse’s) full retirement age benefit amount while their own retirement benefit continues to grow up by 8% per year up to age 70. The last group eligible to use this valuable claiming strategy turned 66 in 2019.

Because you were born in 1955, you are not able to restrict your Social Security claim benefits on your ex-husband’s earnings record while your own benefits continue to earn delayed retirement credits. Whenever you claim Social Security, you will receive the highest benefit to which you are entitled at that age, whether on your own earnings record or as a spouse.

You don’t get to choose.

Although your benefits would be about 30% larger if you waited until age 70 to claim benefits compared to your full retirement age of 66 and 2 months, you may not want to wait that long to claim. One of the main reasons to delay claiming benefits is to maximize not just your retirement benefit, but to create the largest possible survivor benefit for the remaining spouse. As you are divorced, that may not be your top priority.

However, if your ex-husband dies first, you may step up to a larger survivor benefit if it is bigger than your retirement benefit, assuming you were married at least 10 years before the divorce and are currently single or waited until age 60 or later to remarry.

Mary Beth Franklin, a certified financial planner, is a contributing editor for InvestmentNews.