INmail: Claiming early nixes switching to spousal benefits

Judy: I am 64 and took my Social Security benefit last year so my husband could claim a spousal benefit on my earnings record while allowing his own retirement benefit to continue to grow until 70. When he turns 70, I will be 67. At that point, can I switch to a spousal benefit and let my own benefit grow until 70?

MBF: No, you can’t switch to a spousal benefit and allow your own retirement benefit to continue to grow until 70 for a few reasons. Primarily, you were born after the Jan. 1, 1954, cutoff date. People like you (and me) will never have the option of filing “a restricted claim for spousal benefits” because we were born after that date.

Secondly, even if you were born before the Jan. 1, 1954, cutoff date, you have already claimed your Social Security benefit. If you chose to suspend your benefit at full retirement age to earn delayed retirement credits worth 8% per year for every year you postpone claiming Social Security beyond your full retirement age up to age 70, you cannot claim benefits on anyone else’s earnings record during the suspension.

Once your husband claims his Social Security at 70, you might be able to step up to a bigger spousal benefit if it is larger than what you are already collecting. To calculate your potential new benefit, you would add any “excess spousal amount,” which is the difference between your full retirement age benefit and half of your husband’s full retirement age benefit amount, to your reduced benefit.

Although your retirement benefit is permanently reduced because you claimed Social Security before your full retirement age, you will still eligible for a full survivor benefit if your husband dies first. A survivor benefit is worth 100% of what your husband was collecting or entitled to collect at the time of his death — including any delayed retirement credits — assuming you are at least full retirement age at the time. At that point, your smaller retirement benefit would go away.

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