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Ask Larry: Is It True That I Should Wait Until 70 ½ To Lock In All My Delayed Retirement Credits?

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Today’s column addresses questions about whether it’s best to file at 70 ½ or 70, potential spousal benefits before retirement benefits and when excess spousal benefits might be available. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.

Is It True That I Should Wait Until 70 ½ To Lock In All My Delayed Retirement Credits?

Hi Larry, I am approaching 70 and I have been allowing my monthly delayed retirement credits to accumulate in order to maximize my monthly benefit going forward. If I file at 70 and take the retroactive lump sum, will I lose the six months delayed retirement credits I earned from 69 ½ to 70, and thus a get smaller check every month going forward? If so, should I wait until age 70 ½ to file, to lock in all possible delayed retirement credits and then accept the retroactive lump sum? Thanks, Rodney

Hi Rodney, If you choose to start your benefits retroactively months prior to the month you reach age 70, you won’t receive delayed retirement credits (DRC)s for those months. If you really want to receive six months of retroactive benefits for some reason and you still want to receive the maximum number of DRCs, then you could apply for your benefits in the month you turn 70 ½.

You don’t need to do that, though. When you apply for benefits, you aren’t obliged to take retroactive benefits. That’s just a potential option in some cases.

All you need to do to be sure to get the maximum amount of DRCs when you apply is to specify that you want your benefits to start effective with the month you turn 70. Social Security allows you to file your application up to four months in advance, meaning that when you’re within four months of the month you turn 70, you can file your application and specify that you want your benefits to start the month you turn 70. Best, Larry

Can My Husband Collect Spousal Benefits Now And Then Switch To His Retirement Benefits At 70?

Hi Larry, My husband was born in 1959 and his earning are significantly higher than mine. I was born in 1962. Can my husband collect his spousal benefit this year and then switch to his retirement benefit at 70, when I would then claim my retirement benefit? Thanks, Luz

Hi Luz, The answer to your question is no, and for multiple reasons. First, you would have to be drawing either your Social Security retirement or disability (SSDI) benefits in order for your spouse to potentially qualify for spousal benefits. Furthermore, only people born prior to 1/2/1954 are now able to file just for spousal benefits without being required to file for their retirement benefits at the same time, and even they can only do so if they are FRA or older.

Therefore, even if you were drawing your retirement benefits, if your husband applied for spousal benefits he would also be required to file for his retirement benefits simultaneously. He could then only be paid essentially the higher of his own benefit rate or his spousal rate, and his benefit amount would be reduced for age if he started drawing prior to full retirement age (FRA).

It sounds like you and your husband may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to fully analyze the options available to you so that you can determine your best strategy for maximizing your benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

Is It Correct That I Can Draw A Partial Benefit On My Husband’s Social Security Record?

Hi Larry, I started drawing my Social Security retirement benefit at 62 and am now 69. I am four months older than my spouse, who also started drawing his Social Security at 62. He will be 69 in June. I was told by a friend that I can draw a partial of his Social Security. Is this information correct? My spouse receives almost three times what I receive. Thanks, Emily

Hi Emily, Yes, it’s certainly possible to be able to qualify for a partial, or excess, spousal benefit in addition to your own Social Security retirement benefit. However, you would only qualify if your husband’s primary insurance amount (PIA) is more than twice as much as your own PIA. A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).

If both you and your husband started drawing your benefits at age 62 and if his benefit rate is nearly three times as much as yours, then it certainly sounds like you may be able to qualify for an excess spousal benefit. The only way to know for sure though is to contact Social Security and apply for spousal benefits. Best, Larry

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