Ask the Expert: Calculating Social Security spousal benefits
I just turned 70 and got my first Social Security benefit check for $4,559. My wife, who is now 67, started Social Security at age 64. She receives $1,021 per month based on her own earnings record.
She recently applied for a spousal benefit based on my record. I understood she'd get the greater of half the amount of my benefit or her current amount. But Social Security says she'll get $1,538. Half of my benefit is $2,279.50. Did Social Security calculate wrong?
I don't think so. In the situation you've described, your wife isn't eligible for a spousal benefit equal to half your current monthly check.
Why not? Two reasons:
1) The maximum spousal benefit is 50% of what your spouse can collect at his/her full retirement age (or FRA). Your $4,559 monthly check is substantially more than you'd have received at your FRA because you didn't take it until age 70. That four-year delay boosted your FRA benefit amount by 32% in delayed retirement credits, plus inflation. Spousal benefits never include delayed retirement credits. During your lifetime, your spouse's maximum benefit based on your record is 50% of your FRA amount or her own benefit, whichever is greater.
2) Your wife doesn't qualify for the maximum spousal benefit because she applied early for her own benefit. To determine her spousal benefit, Social Security subtracted the amount she'd have received at FRA based on her own record from her maximum potential spousal benefit (half of your FRA benefit amount). The difference is the amount it added to her monthly check.
But survivor benefits do include delayed retirement credits. As a widow, your wife could receive a benefit equal to the amount you were collecting at your death.
The bottom line
Early application reduces spousal Social Security benefits.
More information
CORRECTION: An earlier version of this story misstated the amount a widow can receive. Widows and widowers are entitled to a Social Security survivor's benefit equal to the benefit amount their deceased spouse was collecting at the time of death.
