Question: Since my wife took an early benefit at age 62, when she files for a spousal benefit on my record, it will not be 50 percent of my benefit. What will be her eligible percentage?
Answer: Because your wife plunged into excess benefit hell the nanosecond she filed for her own retirement benefit, she lost her ability to collect a full spousal benefit starting at full retirement age. By “collecting a full spousal benefit,” I mean collecting a spousal benefit just by itself, while letting her own retirement benefit continue to grow.
Your wife also, in that same nanosecond, forever lost the ability to collect a widow’s benefit just by itself. So, were you to die today, she wouldn’t be able to start collecting just her full widow’s benefit while suspending her own retirement benefit and letting it grow through age 70. During this period, she’d collect just her excess widow’s benefit. At 70, she’d collect her retirement benefit plus her excess widow’s benefit. Her retirement benefit would be augmented by 32 percent due to the delayed retirement credits, but her excess widow’s benefit would be reduced by exactly the same amount.
Hence, if at 70, her excess widow’s benefit is still positive, this strategy of suspending her benefit would simply mean lower benefits (potentially a lot lower) for four years and no higher benefits after age 70 than she’d otherwise have received. So, if you should die and she should become eligible for a widow’s benefit, she should check using highly accurate software before she suspends her benefit.
So, yes, the strategy you chose was, to put it nicely, sub-optimal. Because you did not file for your retirement benefit and then suspend it when you filed just for your spousal benefit, your wife wasn’t deemed to be filing for her spousal benefit when she went early to collect her own retirement benefit. But as soon as she does so file, she’ll just get her excess spousal benefit, which if not zero, will likely be very small.
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