Dear Rusty: I am almost 64 and still working, and I plan to work until about 66 or 67. My wife is 62. Should she go ahead and file for her Social Security? Is it true that she can draw on my SS after I pass away? Signed: Inquiring Husband 

Dear Inquiring Husband: The answer to your first question (should your wife claim at 62) isn’t simple, because it depends upon a number of things.  

Is your wife working? If so, and she claims before her full retirement age, she’ll be subject to Social Security’s earnings test, which limits how much she can earn before they take back some of her benefits. If your wife starts collecting at age 62 and exceeds the annual earnings limit ($18,240 for 2020) SS will take back benefits equal to half of what she exceeded the limit by. This is true until she reaches her full retirement age (66 ½ if she was born in 1957), although the earnings limit goes up by about 2.5 times and the penalty is less in the year she reaches her full retirement age (FRA). 

Will your wife be eligible for a spousal benefit from you when you start collecting? If so, and she claims at age 62, her eventual spousal benefit from you will be less than 50% of your full retirement age (FRA) benefit because she took her own benefit early. Whether your wife is eligible for a spousal benefit depends upon whether her own benefit (from her own work record) at her FRA (regardless of when she claims) is smaller than half of your benefit at your FRA (regardless of when you claim). If it’s not, she won’t get a spousal benefit. If it is, she’ll get a spousal boost on top of her own benefit but claiming at age 62 will mean a smaller spousal benefit.

Your wife’s age 62 benefit amount will be 27.5% less than her benefit would be at her full retirement age, and that reduction is permanent. And Social Security benefits are taxable if your combined income (married, filing jointly) is more than $32,000. If your combined income is between $32,000 and $44,000 then 50% of your wife’s SS benefits will become part of your taxable income, and if more than $44,000 then up to 85% of your wife’s SS benefits will become part of your taxable income. My point is, with you still working, your wife’s SS benefits will almost certainly add to your income tax obligation. 

I’m not trying to dissuade your wife from applying; rather only making you aware of the potential consequences of her claiming at age 62, or at any time prior to her full retirement age. If she needs the money now and the above points are not a concern, then applying at 62 could be the prudent choice. But you and your wife should consider the above before deciding if she should claim at age 62. 

Regarding your second question, if you should predecease your wife, and if the benefit you are receiving at your death is more than your wife is already receiving (or is entitled to receive) on her own, then she will get a survivor benefit from you. If she has already reached her full retirement age when that happens, she’ll get 100% of the benefit you were getting. If she hasn’t yet reached her FRA, she can still claim the survivor benefit, but it will be permanently reduced by a fraction of a percent for each month earlier than her FRA. However, if she hasn’t yet reached her FRA, she can also delay taking her survivor benefit until she reaches FRA to get 100% of your benefit (instead of her own). Remember, she gets her survivor benefit, or her own benefit, whichever is higher (she doesn’t get both).

Russell Gloor is an Association of Mature American Citizens certified social security advisor. To submit a question, visit amacfoundation.org/programs/social-security-advisoryor email ssadvisor@amacfoundation.org.