Husband’s Early Retirement Will Lower Wife’s SS Entitlement Benefits
By Shane Flait © 2011

Usually, about 50% of people eligible to collect Social Security at 62 begin to collect it then. But collecting your Social Security benefits (i.e. income) before your full retirement age (FRA) will permanently reduce your benefits. That reduction is about 25% if you begin at age 62. This article explains how beginning your Social Security benefits early will limit your spouse’s Social Security marriage entitlement benefits.

 

The work earnings of each person determine how much Social Security benefits (income) he receives when he reaches his full retirement age (FRA). His FRA is anywhere from 65 to 67 depending on the date of birth. He can retire as early as 62 but his benefits will be permanently reduced by about 25% from the full benefits he’d get at his FRA. Waiting longer than his FRA to begin receiving Social Security (SS) benefits will increases his benefits beyond those at his FRA. If he waits until he’s 70 his benefits will increase by about 32% over his FRA benefits.

 

A spouse (i.e. a married person) always has the option of taking the larger of her own working earnings SS benefit or a ‘marriage or spousal entitlement’ SS benefit that’s based on the benefit her husband collects. Let’s consider the limits of that spousal entitlement SS benefits now.

 

 A wife’s marriage SS entitlement benefits while her husband is alive

Since men generally have worked and earned more than their wives, their own SS benefits will probably by greater than any entitlement benefits they’d get through the wives. But in the case of wives, their entitlement benefit through their husbands may be larger than their working SS benefits. So any limitation of their entitlement benefit – due to their husbands’ benefit limitation - will affect them.

 

 A wife’s spousal entitlement benefit can be as high as 50% of her husband’s full retirement age (FRA) benefit. To receive this amount, though, she must wait to begin it until she reaches her own FRA and he must wait until reaching his FRA.

 

If he retires early, but she waits for her FRA, she still get 50% of her husband’s SS benefit – but his is less than his full FRA benefit because his benefit is reduce due to his early retirement. If he retired at 62, his benefit would be reduced by about 25% from his FRA benefit.

 

If she retires early at 62, and he waits for his FRA, her spousal benefit will be a reduced about 30% below whatever her 50% spousal benefit would have been. So you see when one spouse retires early it affects the other spouse’s entitlement amount of the first spouse’s benefits. 

 

A surviving spouse’s benefit

A surviving spouse – meaning the husband has died - is entitled to the greater of 100% of the deceased spouse’s social security benefits or his/her own working benefit. So you see a spouse’s entitlement benefits increases at the death of the other spouse. As stated above, this option is more typical for a surviving wife to make since her earnings record (her own work earnings SS benefits) are often significantly less than that of her husband.

 

Here, the wife’s 100% of her husband’s benefit is, again, affected by what he actually received. So, if he retired early, then her 100% benefit will be smaller to the same extent that his benefit was reduced for early retirement. I.e. she gets whatever he got.

 

Note too, that if the husband delays beginning his SS benefits beyond his FRA benefit, his wife’s entitlement benefit will increase too. So it works both ways. Of course, age 70 is the longest one can wait to increase his SS benefits.

 

So, we can see that a married man’s decision when to collect Social Security has direct implications not only on how much he’ll receive in Social Security benefits, but how much his living wife or his surviving wife may receive – for her spouse entitlement SS benefits.

 

But remember, there’s more to life than just financial gain. Men don’t statistically live as long as women; they deserve some decent retirement time too.

 

 

 

 

Shane Flait is a writer and educator. See more at www.EasyRetirementKnowHow.com