Think twice before opting to take Social Security benefits at age 62 (the earliest age benefits are normally available), especially if you are the higher earner in a married couple.
When you take benefits before full retirement age (usually age 66), your benefits are permanently reduced. That reduction will also limit survivor benefits available to your spouse, if he or she survives you.
According to the Center for Retirement Research at Boston College, 40% of all Americans do opt to claim their benefits the same year they turn 62.
That could be a mistake.
“A husband who waits until age 65 can increase his widowed wife’s future benefits by up to $170 a month,” says the Center, citing new research by Alice Henriques, an economist with the Federal Reserve Board in Washington.
That’s because in most two-earner couples, “husbands still work for more years and have higher earnings than their working wives,” explain researchers.
Under the spousal benefit rules, the husband’s higher compensation is used to calculate his own Social Security benefit, and in many couples, even if the wife works, his benefit will determine her widow’s benefit. By taking his benefit early, he reduces his lifetime earnings and will also reduce spousal benefits due his wife for as long as she lives.