Social Security Questions? Ask a Social Security Expert
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Yes, your wife can receive benefits based off your benefit before your death. The file and suspend will not be applicable here but the restricted benefit might. She cannot make a restricted election until full retirement age (age 66 in 2016). What would happen is your wife would elect to take ONLY the spousal benefit (at this age it would be 50% of your benefit) and she would let her benefit grow until age 70 collecting 8% credits per year of delay. If she is not eligible for SS then this would not be applicable. If she takes a benefit now (at age 63) she would have her benefit reduced by the early retirement penalty. At age 62 she would get 32.5% of your benefit and that would increase to a full 50% of your benefit at age 66. The decision to take it now or later is based on health, need and basically whether you want a smaller benefit for a longer time or a larger benefit for a smaller time. If she elects to take the spousal benefit at her age she will also automatically elect to take her normal benefit as well. She will receive the larger of her normal retirement benefit and the applicable percentage based on her age of the spousal benefit. The decision is up to you and your circumstance but the restricted benefit can be good if it will increase her benefit while still getting the spousal benefit during that time. There is a reason this loophole is being eliminated on May 1, 2016.
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