I'm confused about spousal Social Security choices. When I turn 66, my wife will be 63. My earnings have always been much higher than hers. Even if I apply for my benefit at full retirement age, I intend to keep working. Can my wife take a reduced Social Security benefit on her account at 62, and then switch to half of mine when she reaches age 66?

 

No. If she takes her own benefit at 62, when she's 66 her spousal benefit will be less than half of yours.

Let's say that at 66, her own benefit would be $1,000. If she applies at 62, she gets $750. Her spousal benefit won't be part of the calculation at that point because she won't qualify for a benefit based on your record until you file for Social Security yourself, which you don't intend to do until she's 63.

When she turns 66, she can apply to switch from her own discounted benefit to her spousal benefit -- but the result will be an amount that's less than half yours. Here's what will happen.

Say your full benefit is $2,500. Her maximum spousal benefit is 50 percent of that amount, or $1,250. The Social Security Administration determines the amount she's entitled to receive by subtracting her own maximum benefit ($1,000) from her maximum spousal benefit ($1,250). The result is $250. That $250 is added to the $750 she's already collecting. Her new benefit is $1,000 a month.

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If your wife waits until she's 66 to apply for Social Security, the agency will do the same calculation, subtracting her full benefit ($1,000) from her maximum spousal benefit ($1,250). But in that case, the $250 result is added to her unreduced $1,000 benefit. So she gets $1,250 -- i.e., 50 percent of your benefit.

THE BOTTOM LINE Applying early for Social Security reduces your potential spousal benefit.

WEBSITES WITH MORE INFORMATION nwsdy.li/spousalbenefit and nwsdy.li/survivorbenefit

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