I took Social Security at 62 because of health issues. My wife is now 66. She could claim her spousal benefit now, delaying her application for her own benefit until age 67 to get a higher payout. Meantime, we'd live off our savings and an IRA. Is that the way to go?

 

Yes. Experts say it's financially sensible for a couple to tap savings for up to four years to postpone Social Security if either spouse is likely to live past age 78 -- and the average 65-year-old couple now has a 70 percent chance that at least one spouse will live to be 90.

When you delay Social Security after reaching your full retirement age, your unclaimed benefit grows 8 percent a year, plus annual inflation adjustments, for up to four years. That's an unbeatable combination. No investment or savings account will deliver four years of risk-free, inflation-adjusted 8 percent annual growth.

At 66, your wife can restrict her application to her spousal benefit. What's more, she'll qualify for the maximum spousal benefit -- 50 percent of the amount you'd have received at your full retirement age, plus the subsequent inflation adjustments. And postponing her application for her own benefit won't just boost her initial payout. An even greater advantage is that the postponement substantially increases her monthly benefit in old age, because she'll receive future yearly inflation adjustments on a larger starting amount.

She can switch from her spousal benefit to her own benefit any time she wants. Indeed, she stands to gain even if she doesn't wait a full year because the 8 percent annual credit for delay accrues on a monthly basis. A nine-month delay boosts her benefit 6 percent, for example.

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THE BOTTOM LINE For many couples, it makes financial sense to spend savings in order to delay taking Social Security.

WEBSITES WITH MORE INFORMATION nwsdy.li/DelaySocSec and nwsdy.li/SocSecCalculator

TO ASK THE EXPERT Send questions to Ask the Expert /Act 2, Newsday Newsroom, 235 Pinelawn Rd., Melville, NY 11747-4226, or email act2@newsday.com. Include your name, address and phone number. Questions can be answered only in this column. Advice is offered as general guidance. Check with your own advisers for your specific needs.