Spousal Benefit Adjustment Question

[D56auction]

My wife started collecting her own SS at age 62.  I won't start until 70 at which time she'll be eligible for a spousal adjustment.  I believe, since she began collecting early, her spousal benefit will be less than 50% of my primary insurance amount.  Does anyone know how this adjustment is calculated?  Thanks.

[GailL1]

---

@D56auction wrote:

My wife started collecting her own SS at age 62.  I won't start until 70 at which time she'll be eligible for a spousal adjustment.  I believe, since she began collecting early, her spousal benefit will be less than 50% of my primary insurance amount.  Does anyone know how this adjustment is calculated?  Thanks.

---

Social Security - Benefits Planner - Benefits For Your Spouse

If you qualify and apply for your own retirement benefits and for benefits as a spouse, we always pay your own benefits first. If your benefits as a spouse are higher than your own retirement benefits, you will get a combination of benefits equaling the higher spouse benefit.

Your benefits as a spouse do NOT include any delayed retirement credits your spouse may receive.

If you begin receiving benefits:

• between age 62 and your full retirement age, the amount will be permanently reduced by a percentage based on the number of months up to your full retirement age.

There are other things that might affect it too depending upon specific situations so read the whole link.

The maximum benefit that she will receive is 50% of your FRA benefit without adding in the delayed retirement credits.

When she files for spousal benefits when you turn 70 and retire with your delayed retirement credits:

•  SS will look at your SS benefit at FRA, without adding in the delayed retirement credits -
• they will figure 50% of that figure as the spousal benefit and
• then reduce this spousal benefit amount by whatever % reduction she got for retiring early ( it is not always the same anymore since the retiring early age is staying the same - 62 - but the FRA is advancing).
• they will then take her benefit amount that she is receiving and adjust it upwards to whatever the spousal benefit figures out to be.

I think this article would be good to read -

Investopedia -1/04/2019 - How are spousal benefits calculated for Social Security?

I am not a SS expert - I just do a lot of reading and helping others figure out how the system might work best for them.

Happy Retiring !

[D56auction]

GailL1 (VSB)

Thanks so much for that comprehensive response.  I have pretty much figured out everything except the following - 

• "between age 62 and your full retirement age, the amount will be permanently reduced by a percentage based on the number of months up to your full retirement age."

What is the "reduced by a percentage"?  I know it's based on number of months up to FRA (in her case 48 months) but what is the percentage?  Four calls and multiple hours on line with SSA and no one seems to know what the actual calculation is.  I know her maximum spousal benefit is 50% and I think perhaps her minimum is 35% but I can't seem to get the last step to the actual calculation.

Thanks again for your time. 

[GailL1 · Accepted solution]

---

@D56auction wrote:

GailL1 (VSB)

Thanks so much for that comprehensive response.  I have pretty much figured out everything except the following - 

• "between age 62 and your full retirement age, the amount will be permanently reduced by a percentage based on the number of months up to your full retirement age."

What is the "reduced by a percentage"?  I know it's based on number of months up to FRA (in her case 48 months) but what is the percentage?  Four calls and multiple hours on line with SSA and no one seems to know what the actual calculation is.  I know her maximum spousal benefit is 50% and I think perhaps her minimum is 35% but I can't seem to get the last step to the actual calculation.

Thanks again for your time. 

---

Sorry I missed your reply post until I saw it today -

This chart from SSA should answer your question -

SSA Benefit Planner - Retirement - Chart by year of birth with FRA and Early Benefit reduction

Notice it also gives an example of the Spousal Benefit too.

from the link:

The chart below lists age 62 reduction amounts and includes examples based on an estimated monthly benefit of $1000 at full retirement age. Select your year of birth to find out how much your benefit will be reduced if you retire between age 62 and full retirement age.

. . . . The maximum benefit for the spouse is 50 percent of the benefit the worker would receive at full retirement age. The percent reduction for the spouse should be applied after the automatic 50 percent reduction. Percentages are approximate due to rounding.

• Figure your FRA benefit - do NOT include your delayed retirement credit (from your FRA to 70 years old). 
• Figure 50% of your FRA benefit - that is a FULL Spousal Benefit
• then reduce the Full Spousal Benefit by the applicable % shown on the chart.  This should also be the same reduction benefit % (approximately) which she received on her own benefit when she started drawing it at age 62.