By AMAC Certified Social Security Advisor Russell Gloor Association of Mature American Citizens
Dear Rusty: I would like to know more about spousal benefits allowing a husband or wife to receive up to 50 percent of a spouse’s Social Security benefits. I believe it is called spousal deeming of Social Security benefits, and I’m wondering if this is something we can take advantage of. My wife, who is 64, has not retired yet, and I retired in June at the age of 66. Thank you for your time. I hope you can clarify whether or not this is something relative to us. Signed: Wondering
Dear Wondering: From your question I assume you are referring to your wife possibly receiving up to 50% of your current Social Security benefit.
The “deeming” you refer to is called “deemed filing” by Social Security and it refers to when a person files for benefits and is also entitled to spousal benefits, they are “deemed” to have filed for benefits on both their own record and their spouse’s record. When your wife files, Social Security will calculate the benefit she is entitled to on her own work record, and then what she is entitled to as your spouse, and she will receive whichever benefit is higher.
You are correct that your wife can receive up to 50% of your benefit, but she will only get the full 50% if she has reached what Social Security considers her “Full Retirement Age” (or “FRA”, which for her is 66). If she files before that, her benefit amount will be reduced to something less than 50% of yours, depending upon how many months before her FRA she files. Since you retired at your FRA of 66, you are receiving 100% of the benefit you are entitled to. Since your wife’s 65th birthday is approaching in February, if she chooses to retire then she would get 45.8 % of your full benefit instead of 50%. If she chooses instead to retire in December of 2016, she would get 45.1% of your full benefit, and if she chooses to wait until after February the percentage of your benefit she will receive will increase monthly until she reaches age 66 when it will be the full 50%.
Please note that filing early has consequences in that once your wife files, her benefits will be at the reduced level permanently; they do not increase at her full retirement age. This not meant to discourage her from filing early if financially necessary, but rather just to make you aware. Note also that this same scenario would apply if the wife was the higher wage-earner and it was the husband seeking 50% of the wife’s Social Security benefit.
While the above answers your question about “spousal deeming”, there is another strategy your wife may want to pursue to maximize her own benefits. Since your wife attained age 62 prior to the end of 2015, if she waits until age 66 to file she would be entitled to file a Restricted Application for Spousal Benefits Only. Doing this would mean she could avoid the new deemed filing rules that were enacted in 2015, apply for spousal benefits only, and allow her own benefit to grow. By doing this her benefit amount on her own work record would increase by about 8% for each year after she became 66, until age 70 when it would reach a maximum of 132% of her benefit at age 66. She could then switch from spousal benefits to increased benefits on her own work record at any time it becomes financially prudent to do that.
The information presented in this article is intended for general information purposes only. The opinions and interpretations expressed in this article are the viewpoints of the AMAC Foundation’s Social Security Advisory staff, trained and accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). NSSA, the AMAC Foundation, and the Foundation’s Social Security Advisors are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state government. Furthermore, the AMAC Foundation and its staff do not provide legal or accounting services. The Foundation welcomes questions from readers regarding Social Security issues. To submit a request, contact the Foundation at [email protected]