How age differences in couples affect Social Security

Q: I turned 66 on April 7. My wife turned 64 on Feb. 27. I suspended my Social Security to let it grow, but If I were to take it now I would receive $2,250 per month. If I wait until age 70, however, I would receive $2,900 per month. My wife has signed up to collect half of mine, less about 12%, or $950 for receiving before full retirement age. She would receive about $450 on her own work record. We are both in good health. Is this a good strategy or should she wait to draw at FRA? — Charlie Anderson, Medford, Ore.

A: Often when there's a few years between the ages of a couple, it makes sense for the younger of the two to take benefits early, especially if the dollar amount of reduction to benefits is relatively small, say Jim Blankenship, author of A Social Security Owner's Manual: Your Guide To Social Security Retirement, Dependent's, and Survivor's Benefits.

In the case of the figures you've given, Blankenship says the difference between what would have been her maximum spousal benefit — $1,125, which is one-half of your $2,250 FRA benefit — and her actual benefit of $950 is roughly $175 per month. “Since by starting benefits now at the annual rate that's approximately $2,100 less than starting at her FRA will result in two more years of benefits, it might pay off in the long run to have her go ahead and file now rather than wait,” says Blankeship

Of course, the only way to know for sure if this is the optimum strategy, says Blankenship, would be to know in advance how long you and your wife will live. “Not knowing that, your strategy seems like a good balance between current benefits received and future, enhanced benefits from delaying,” he says.

Robert Powell is editor of Retirement Weekly, contributes regularly to Paste BN, The Wall Street Journal and MarketWatch. Got questions about money? Email rpowell@allthingsretirement.com .

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