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3 Social Security Rules to Know and Live By

Category: Financial and taxes in retirement


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December 28 , 2019 — Social Security is the single most important source of retirement income for most people. So it is crucial that you understand how the rules apply to your situation.  Here are three important things you need to understand about how Social Security works.

1. Know when to claim

The earliest you can claim is age 62.  Your Full Retirement Age (FRA) is somewhere between 66 and 67, depending on your birth year (if born before 1954 it is 66 and increases one month per year after that up to 67). Your benefit maxes out at age 70; there is no advantage in waiting past that.  if you file at age 62 you will only get 75% of what you would get if you wait to your FRA. If you claim between your FRA and 70 your benefit will increase by 8% a year.  You can file for your benefits online or in person.

2. Know how your benefit is calculated

You must have had taxable earnings in at least 40 quarters to be eligible. Benefits are calculated on your 35 highest earning years, indexed to account for changes in average wages since the year the earnings were received. You can improve your earning record by continuing to work, if your new earnings replace a lower earning year.  Likewise if you did not have earnings in all 35 years, new earnings could replace a zero in the calculation.

3. Know how your spouse is affected by your claiming decision

This is the area that is most misunderstood or neglected by retirees. The topic is a little simpler than it used to be because the last of two sophisticated claiming tactics, File and Suspend and Restricted Benefit, will end for new retirees as of Jan 2, 2020. 

Spousal benefits. If you have filed for benefits, your spouse can claim a spousal benefit on your record.  The earliest a spouse can normally claim is age 62 – but benefits will be reduced if not yet 66. Spousal benefits max out when the spouse reaches 66. However, the spouse can potentially get a much higher benefit (assuming they had a fairly long working and earnings career) by waiting up until age 70 to claim on their own earning record. You can use the Social Security Benefit Calculator to determine which course is better in your case.

Survivor benefits. The other critical area affecting your spouse is the survivor’s benefit.  The following illustration applies to a couple who waits to claim the maximum benefit at age 70.

Assume that Dorothy is a high earner and claims her benefit at age 70.  She qualifies for the maximum benefit available in 2020, $3790. If she had claimed at age 66 her monthly benefit would have been $3011 (difference of $779 per month). Bud, who is 3 years younger, claims a spousal benefit at 66 (and gets 50% of Dorothy’s  Full Retirement Age benefit ($1505).  His spousal benefit was about the same as he would have received on his own earning record.

Ten years from now Dorothy dies at age 80.  At that point Bud’s spousal benefit stops, but now he receives 100% of Dorothy’s benefit ($3790 and adjusted every year for inflation). Bud lives to age 95, and for 18 years gets $779 more per month ($168,264 more in total) than he would have if Dorothy had claimed at age 66.  The monthly difference would have been even more ($1525) if she had claimed at age 62. Bottom line: Dorothy got 10 years of higher benefits and came close to breakeven vs. claiming at age 66. Bud meanwhile was very sad to lose his wife, but at least benefited financially with 18 years of a higher benefit, because she waited to age 70 to claim.


What do you think are the most important things to know about taking your Social Security benefits?  Are you happy with your decision on when you claimed?

For further reading

Posted by Admin on December 28th, 2019


  1. Thanks for this great info. I hope to claim SS at only 70. My wife will then be 61. Her FRA is 67. Does she have to wait until her FRA of 67 to claim 50% of my FRA? if she claims earlier than her FRA, does that limit her future SS income once I die? I want her to be able to claim my full age 70 SS income so it’s critical to understand when she can claim. I am the higher earner. tks.

    by Joseph Campo — January 2, 2020

  2. my wife has a lower benefit so she is going to file at 62 and I am going to wait to file until age 70, my question is can I claim a spousal benefit and collect while not filing for my own benefit at age 70 without any negative effect on my benefit amount?

    by Bob — January 2, 2020

  3. Joseph. My understanding is your spouse will get 50% at her FRA, if she waits that long to claim. Once you die she should get your benefit regardless of when she claimed, assuming yours is the higher. So she could claim at 62 and start get something, but she gets more if she waits till 67. Interesting choice, considering your age differential. Good luck, and long life!

    by Admin — January 2, 2020

  4. Bob, if I understand your question correctly, if you claim a spousal benefit it will affect you. Under the “deemed filing’ rules now in effect, once you apply for benefits you get the highest benefit you qualify for at that time. If you apply now (and assume you are 66, e.g.), you will get the highest of a spousal (doubtful since she is claiming at 62), or your benefit for claiming at 66. That will be your benefit for all time, except for COLAs.

    by Admin — January 2, 2020

  5. Joseph. Please be very careful with this! If your wife claims SS at 62 and then expects to drop hers and claim your benefit at 70 (or whenever), it may not happen if what she is getting is within a certain percentage of yours. You need to drill down, way down, on the SS website to find that obscure regulation. I was stunned. We walked into our SS office as my hubby had turned 70. I fully expected to get my spousal benefit. Instead I am stuck with my own (which I claimed when I was 62), which is a full $300 less than the spousal benefit I expected to claim when my hubby turned 70. Please go to a SS office to get an opinion on this, go to a financial planner who knows all the “ins and outs” of social security law, or sit down and drill waaay down on the SS website.

    by Dee — January 9, 2020

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    by Admin — January 9, 2020

  7. About Spousal Benefits: I applied at age 66 and was denied benefits because I have a state pension. I have enough quarters to earn my own SS but will wait till I am 70 because it will increase dramatically till then (8% a year). It was a task applying online and then having to spend most of a day at the SS office nearby.

    by Joanne — January 16, 2020

  8. Joanne, I’m confused. SS said you were ineligible for spousal benefits because you have a state pension, but the state pension doesn’t affect your own social security benefits? I assume the state pension is your own and not a spousal benefit? Why would one be affected and not the other?

    by Partagas — January 17, 2020

  9. Hoping someone has a quick answer to this question. I deferred my SS to get the 8% annual growth in my own benefit. I receive widow’s benefits, my family is long-lived and I have no known significant medical issues. (My own benefit would be about $400/mo higher than my spousal benefit.) I’m coming up on a birthday. If I delay to 67-1/2, would I get a 6-month proportionate raise in my benefit, or does SS only adjust benefits annually on birthdays?

    by Kate — January 30, 2020

  10. You might be better answered by talking to a SHIP rep in your state, I always read it’s an increase of 2/3% per month delay after FRA.

    by Billy — January 31, 2020

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