Ask an Advisor: When Will I Get the Most Social Security and My Wife Will Get Her Spousal Benefit?

I am the only eligible Social Security recipient in our marriage. My wife, at this point, will never have enough credits. I am 61 and my wife is 68. At what age would we get the most in Social Security where I get my social Security and my wife gets her spousal amount?

– Tim

Tim, the final answer to your question mostly comes down to how long each of you will live. Since you don't know exactly how long that will be, you’ll obviously need to estimate. But first, you'll need to calculate what your combined family benefit will be depending on the age at which you file.

A financial advisor who specializes in retirement planning can help you plan for Social Security and build a retirement income plan based on your assets and needs. Find an advisor today .

Calculating Your Benefit at Different Ages

Let's start by thinking about your own benefits. You were born after 1960 so your full retirement age is 67, at which point you become eligible for your full benefit – also known as primary insurance amount (PIA). You can also choose to file early for a reduced benefit or delay Social Security until age 70 and receive an increased benefit.

Since I don't know how much your full benefit will be, let's assume your PIA is $2,000. Here's a breakdown of how much your benefits would be based on when you choose to claim them:

(Choosing when to file for Social Security can have a significant impact on your retirement income. A financial advisor can help you plan ahead and make an informed decision on Social Security.)

Claiming Spousal Benefits

Despite not having enough work credits to claim her own benefits, your wife is eligible to claim based on your record. Spousal benefits can be quite complicated and often misunderstood, but there are only a small number of the spousal rules that may apply at this point due to your wife’s age.

• She has already reached her own full retirement age, so no early filing penalties apply to her.
• You must file for your benefits in order for her to be able to receive spousal benefits.

As long as the spouse has reached their own full retirement age, they’re entitled to up to 50% of the primary worker’s benefit. This makes it really simple in your case. Your wife will be entitled to 50% of your PIA – $1,000 – regardless of when you file, but you have to file for your own benefit before she can begin receiving hers. (And if you need more help planning for spousal benefits, consider speaking with a financial advisor .)

Combining the Two

When you combine your wife’s $1,000 spousal benefit with your own, you’ll see that your combined family benefit would be somewhere between $2,400 and $3,480 per month in our hypothetical illustration.

Estimating Your Life Expectancy

But deciding when to claim your benefits isn’t merely as simple as waiting until age 70. This is where life expectancies come into play. To determine how your life expectancies will impact your lifetime benefits, simply take the benefits above and multiply them by the number of months that you anticipate living.

While estimating your own life expectancy is all but impossible, the Social Security Administration has actuarial tables that can help you determine how much longer you can expect to live based on how old you are now.

Example 1: You Live Until Age 90

Let's assume you are both exactly 62 and 69 when you file, and both expect to live until age 90. That's 28 years or 336 months’ worth of benefits for you and 21 years or 252 months for her. You would collect $470,400 over your lifetime and she would collect $252,000 for a total of $722,400. Keep in mind that these estimates do not include cost-of-living adjustments , which are annual increases associated with the rising price of goods and services.

If you were to wait until age 70 to claim your benefits, you would end up collect $2,480 for 240 months for a total of $595,000. At that point, your wife would be 77, which would give her 156 months of spousal benefits for a total of $156,000. As a result, you would collect a combined $751,000.

Example 2: You Live Until Age 80

Now let's assume that you both end up living only until age 80. That's 18 years or 216 months’ worth of benefits for you and 11 years or 132 months’ worth of benefits for her. You'll collect $302,400 over your lifetime and she'll collect $132,000 for a total of $434,400.

If you were to wait until age 70 to claim Social Security, you would collect $2,480 for 120 months for a total of $297,600. She would be 77 at that time and would only receive spousal benefits for 36 months, collecting just $36,000 in total. Combined, your Social Security benefits would add up to just $333,600.

What these two examples illustrate is the general reality that filing earlier is beneficial if you don’t end up living very long, but delaying can really pay off in the long run.

Also notice that I used the same life expectancy for each of you. That of course may not be realistic. Consider your personal health and family history when estimating your life expectancy. Once you have your estimates, simply perform the same calculations as above to compare your choices. (But if you need additional help estimating your Social Security benefits, connect with a financial advisor and have them walk you through the process.)

Other Considerations

I wanted to answer the question you asked, so I did that by showing you how to come up with the answer. However, I do want to mention that this really should not be the sole reason for your choice. I always recommend making this decision within the context of a complete financial plan that considers things like your income needs, risk factors, taxation, and specifically here, potential survivor benefits .

Bottom Line

Determining the optimal time to claim Social Security benefits involves careful consideration of several factors, including your life expectancy, income needs and overall financial strategy. Waiting until age 70 can maximize your benefits, but filing earlier might be more suitable if you have a shorter life expectancy or immediate financial needs. Evaluate your personal circumstances, such as health status and financial goals, to make an informed decision that aligns with your retirement plan.

Social Security Planning Tips

• If you need help estimating how much you Social Security benefits will based on when you plan to claim them, try SmartAsset’s Social Security calculator . This free tool gives you an estimate of how much you benefits will be based on your age, income and when you plan to start collecting.
• A financial advisor can also help you plan around your Social Security benefits. Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now .

Brandon Renfro, CFP®, is a SmartAsset financial planning columnist and answers reader questions on personal finance and tax topics. Got a question you'd like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future column.

Please note that Brandon is not an employee of SmartAsset and is not a participant in SmartAsset AMP. He has been compensated for this article. Some reader-submitted questions are edited for clarity or brevity.

Photo credit: ©iStock.com/LaylaBird, ©iStock.com/MariuszBlach

The post Ask an Advisor: When Will I Get the Most Social Security and My Wife Will Get Her Spousal Benefit? appeared first on SmartReads by SmartAsset .