Can anyone provide some guidance or advice regarding when spouses are similar age, and having one spouse start collecting Social Security at 62; then activating the other spouse at 70? What makes this situation a bit different is that even though one has reached 62, they have children of 10 and 14 years old. Would it make sense to start Social Security right away at age 62, due to additional child benefits? And then moving to the other spouse at age 70 to maximize the benefit? Any disadvantages, or reasons this may not be a good idea? How does “deemed filing” rules affect this?
If you gave the other spouse's age it would help with the thinking here, a bit anyway.
When one spouse files for retirement benefits, early or at FRA, they are in essence (deemed) filing for all the benefits to which they are eligible. If only (1) spouse is filing for SS retirement benefits and the other spouse hasn't yet - then the only benefit that would be applicable at that time would be their own benefit based on their own work record.
However, one point that I think you aren't considering is that spousal benefits DO NOT include any delayed retirement credits (DRC) so monetarily the amount associated with the DRC isn't a factor for the spouse wanting a spousal benefit. Since that spouse already retired early, their benefit is reduced based on the number of months lacking to FRA. This same reduction is carried forward to any spousal benefits which they may be eligible in the future.
Benefits stop when children reach age 18 unless they are disabled. However, if the child is still a full-time student at a secondary (or elementary) school at age 18, benefits will continue until the child graduates or until two months after the child becomes age 19, whichever is first.
Something else that might affect this spouse that is retiring early + the child's benefit - when children get older, they may want to get a job and earn some money for themselves - the SS earnings limits applies - Social Security will deduct $1 in benefits for every $2 earned over the annual cap, which in 2020 is $18,240.
It also counts for the child for any college financial aid (FSA) they might apply for -
One other thing that many people kind of gloss over - as the FRA is increasing slowly to 67, the early retirement age hasn't changed from 62. But what this does do is increase the % of reduction that a person retiring at 62 experiences because their benefit is reduced based on the number of months lacking to their FRA.
Run the numbers and then hope that life goes according to the plans - 🤔
It's Always Something . . . . Roseanna Roseannadanna