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BusinessColumnistsCarrie Mason-Draffen

Social Security ‘two-step’ still works for some spouses

Some spouses collect spousal Social Security benefits until

Some spouses collect spousal Social Security benefits until they reach retirement age and apply for their own -- a process known as "restricting an application." Photo Credit: Istock

From time to time Help Wanted focuses on a single topic. Today’s subject is Social Security benefits.

DEAR CARRIE: I am 68 years old and collect Social Security benefits. My wife, who is 64, just retired and is not collecting benefits. Would the rules allow me to continue to collect my full benefits while she collects a spousal benefit? And would she then be able to switch to her own benefits when she reaches full retirement age at 66? If so, what is the deadline for the filing?

— Two-Step Benefits?

DEAR TWO-STEP: Your question involves a strategy known as “restricting an application.” In other words, your wife wants to collect benefits now but restrict them to a spousal benefit while she waits to reach full retirement age, so her own benefits won’t be cut for taking them too early.

Alas, she can’t employ that tactic because she hasn’t reached full retirement age, said Linda Lauria, a spokeswoman in the Social Security Administration’s Manhattan office.

“She cannot choose this option until she attains full retirement age,” Lauria said.

And the news gets worse for people born after Jan. 2, 1954, because of a rule change. Even when they reach full retirement age, they will be unable to take spousal benefits before accessing their own, Lauria said.

DEAR CARRIE: I am 70 and started receiving Social Security benefits at age 62. My wife will be 67 mid-year, and my plan is to have her take half of my Social Security [her spousal benefit] for the balance of 2016, and then apply for her full benefits in January 2017. Is this allowable?— Two-Step, Too

DEAR TWO-STEP TOO: The answer is yes, Lauria said, because, unlike the wife in the previous question, your wife will be at full retirement age when she applies for benefits.

“The person can restrict her application to just spouse’s benefits at this time because she has already attained full retirement age,” Lauria said.

The advantage of “restricting an application” is that the longer she delays applying for her own benefit, the bigger her own monthly payments will be.

DEAR CARRIE: Before my husband left to work in the public sector for the U.S. Postal Service, he had worked in the private sector and accumulated 3/4 of the credits he needed to qualify for Social Security benefits. If he gets another private-sector job and obtains enough credits, what is the minimum benefit he could collect? — Social Goal

DEAR SOCIAL: A worker needs 40 credits to be fully insured for retirement benefits, Lauria said. Based on your “3/4” comment, your husband must have about 30, she said. And, yes, he can continue to earn credits.

Social Security credits are based on annual earnings. This year, workers receive one credit for each $1,260 they earn, and they can obtain up to a maximum of four credits per year, the agency’s website says. Each year the amount of earnings needed for a credit rises slightly as average wages increase.

Lauria said it isn’t possible to say what your husband’s minimum benefit would be once he reaches the magic number of 40 credits.

“Since there is no guaranteed minimum retirement benefit, we cannot estimate what his benefit would be if he earned enough work credits to become eligible for retirement benefits,” Lauria said.

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