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When to Take Social Security: Spousal Benefits and Retroactive Payments

Knowing when to take Social Security (SS) can be tricky, which is why I answer questions about Social Security every week on my radio show Money Matters. Recently a listener had a question about a little-known option: retroactive Social Security spousal benefits. “Is there any advantage to taking a spousal benefit before the end of one year, rather than waiting until the next year?” the listener asked. “Can I get payments retroactive back to the start of the year? A friend of mine is getting a lump-sum payment of approximately $13,000 from Social Security for this reason.”

Before I tell you my answer, let me explain a couple of the basic rules underlying the question. Regarding spousal benefits, if you are or have been married, you may be eligible for up to half of the benefits your spouse would receive at their full retirement age. You need to be 62 years old, or “any age and caring for a child entitled to receive benefits on your spouse’s record and who is younger than age 16 or disabled,” according to the Social Security Administration (SSA). You can also apply on a divorced spouse’s record, as long as your marriage lasted at least 10 years.

The second half of the listener’s question pertains to retroactive benefits. If you weren’t sure when to take Social Security, you may have missed out on benefits for a period of time, and you may be entitled to that money. You can ask for up to six months in back benefits, which the SSA will pay in a one-time lump sum. You cannot ask for benefits for a period before your full retirement age, so the answer for my radio show listener would depend on her age.

One more thing to know about retroactive payments: If you take a retroactive payment  on your own record, you will lose any delayed retirement credits. You’ll reduce your future SS benefits by two-thirds of 1 percent for each month you claim retroactively. This rule does not apply to spouses, however, who can take retroactive payments without reducing any future benefits.

Is some, or all, of this information new to you? I suspect it is. And if you don’t know all the different options available to you, you could potentially leave thousands of dollars on the table—even hundreds of thousands of dollars over your lifetime. We’d like to help you avoid that. All RPOA advisors complete an in-depth Social Security course. If you’re wondering when to take Social Security, contact us today.

Ken Moraif, CFP®, MBA
Senior Advisor at Retirement
Planners of America

Author of Buy, Hold, and SELL! Author Page