When Should a Spouse Start Drawing Social Security? Understanding Spousal Benefits and Widow Benefits

When advising your client on the best time for Katie to start drawing Social Security benefits, it’s important to consider several factors, including her age, the Primary Insurance Amount (PIA) of her husband, and the implications of spousal and widow benefits. Here's how to approach this decision:

1. Spousal Benefits at Full Retirement Age (FRA):

   • Spousal Benefit Calculation: At Katie’s Full Retirement Age (FRA) of 66 years and 10 months, she would be eligible for a spousal benefit equal to 50% of her husband’s PIA or her own benefit, whichever is higher. However, since her husband has already started drawing Social Security benefits at age 70, his PIA (the amount he would have received at FRA) is no longer displayed in his Social Security account.
   • PIA vs. Current Benefit: The PIA is the amount he would have received if he had started taking benefits at his FRA (66 years). Since he delayed until age 70, his current benefit includes Delayed Retirement Credits (DRCs), which increased his benefit by 8% per year beyond FRA. However, Katie’s spousal benefit will still be based on his PIA, not the increased amount he currently receives.

2. Filing Before FRA:

   • Reduced Benefits: If Katie files for benefits now at age 64, both her own retirement benefit and the spousal boost will be reduced because she is filing before her FRA. The spousal boost is the difference between 50% of her husband’s PIA and her PIA.
   • Immediate Benefits vs. Delayed Benefits: While filing early results in reduced benefits, it allows her to start receiving income sooner, which might be advantageous depending on their financial situation. Additionally, with a six-year age difference, her widow’s benefit would eventually be larger if she outlives him, as it would be based on his higher benefit amount.

3. Widow Benefits Consideration:

   • Larger Widow Benefit: If Katie outlives her husband, she will be eligible for a widow’s benefit equal to the amount he is receiving at the time of his passing. Since he delayed until age 70, her widow benefit would be higher than if he had started earlier. This consideration makes taking her benefits now more attractive, as the widow benefit will replace her current benefit upon his passing.

4. How to Obtain PIA and Spousal Benefit Estimate:

   • Contact SSA: Katie can contact the Social Security Administration (SSA) directly to obtain her husband’s PIA and get an estimate of the spousal benefit she would receive. This will provide a clearer picture of her options.

In summary, filing early could make sense for Katie, especially given the eventual widow benefit she would receive. However, obtaining the exact numbers for the PIA and spousal benefit is essential to making the most informed decision. Feel free to reach out if you’d like to proceed with a detailed analysis for your clients!