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Spouse A is in their mid-sixties and was the lower earner by far. Spouse B is five years younger and had a very good salary, but only from the past twenty years. (The previous years' income was zero.) They both recently lost their jobs, but they do have a retirement investment. They are trying to do some financial planning, including calculating what effect additional low-earning work in the future would have on their benefits. They have tried calling the Social Security Administration but there were long waits and phone glitches.

When Spouse B, the high earner, files to start receiving retirement benefits, will Spouse A's earnings become irrelevant?

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  • Are you sure you mean UNEMPLOYMENT benefits? In most states (if not all) unemployment benefits simply do not count for Social Security. Collecting unemployment does not count as income to increase benefits, nor does it reduce the amount of SS benefit you receive. Thus both spouses should file for unemployment benefits, assuming they meet the state criteria - like not having left voluntarily or been fired for cause, actively looking for work, &c.
    – jamesqf
    Commented Jan 1, 2020 at 4:55
  • @jamesqf - Thanks for pointing out the mistake. The title was correct. I've now fixed the mistake in the body.
    – aparente001
    Commented Jan 1, 2020 at 14:42

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Without the exact numbers, nobody can tell.

Depending on their age difference, it can be advantageous to draw two independant payment, or tag one onto the other (take 'half of spouse'), or delay one and/or the other spouse's benefits. Without all the exact numbers, it is impossible to say which option is optimal.

You can download a little program from the IRS website, where you can enter your payment history, and it will give you the exact payment you will get for each choice. It is still a lot of effort, and if you are not savy with optimizing many numbers, you should go see a professional about it. I have had multiple times the chance to get this optimization calculations done for free, with recommendations on which of their assets to invest in (which you are free to ignore after you walk out). Try around some larger companies like BlackRock, and they might offer it to you. Of course their interest is that you like them so much that you invest your 401k with them afterwards, but again, you are free to not do it (just don't say so from the beginning on).

A guess for your situation would be that the older spouse files immediately, and takes the relatively lower payment while waiting for the younger spouse to reach 70 (and get a relatively higher payment), and then switch to half of that. But again, depending on your exact numbers, that might be not optimal.

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  • I believe the last paragraph no longer applies. It was part of the initiative by congress to review my personal situation and implement changes to the tax code and social security which would target me. The option to take 1/2 of my (older) wife’s benefit when she hits 70 and let my benefit grow till I hit 70 has specifically been removed from permitted strategies. This happened before the current tax reform went through.
    – JTP - Apologise to Monica ♦
    Commented Jan 1, 2020 at 16:19
  • @JTP-ApologisetoMonica: I thought the change eliminated a very specific tactic, that involves the higher earner filing for benefits early, using that to start spousal benefits, and then suspending the earner's benefits so that they resume growing while collecting the spousal benefits calculated therefrom. The much simpler and less "loopholey" approach Aganju outlined (which does not include suspension of benefits after filing for them) should still work, no?
    – Ben Voigt
    Commented Jan 1, 2020 at 17:52
  • @BenVoigt 4 years ago, I wrote this article, which I believe I researched well enough, as it applied to a number of friends at the time. Specifically, what was changed was my ability to collect half benefit based on my wife getting her full benefit, and waiting to collect mine. If I've misunderstood, please advise.
    – JTP - Apologise to Monica ♦
    Commented Jan 1, 2020 at 17:57
  • @JTP-ApologisetoMonica: Evidently two different loopholes, both closed. See ssa.gov/planners/retire/claiming.html (which is a surprisingly clear presentation for a government website)
    – Ben Voigt
    Commented Jan 1, 2020 at 18:08
  • Aganju indeed the approach recommended in your last paragraph is not possible, "deemed filing" will prevent the younger spouse's benefit from increasing past full retirement age.
    – Ben Voigt
    Commented Jan 1, 2020 at 18:11

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