A couple of years back, I was talking to a prospective client, and this prospective client was coming to me with some retirement projections,

showing me how he thought he and his wife were in a position to retire.

What he said, though, didn't seem to make a whole lot of sense.

So I dug into his projections, and what I quickly realized was that his numbers were so off because he was failing to correctly account for social security spousal benefits.

Social security by itself is relatively straightforward to calculate, but how does a spousal benefit work? That's the topic of today's

episode, because if you don't get this number right, you might dramatically over-project or

under-project how well you might be funded for your own retirement. A big part of this question

comes from a listener.

A listener asked this. He said, I'm 52 years old and my wife is 50. We are planning our retirement strategy, which will consist of a combination of employer 401k, Roth IRA, investments, and social

security, but I need some guidance to determine the optimal age for my wife and I to begin drawing

from social security. My wife is a stay-at-home mother,

so will not be eligible for her own individual benefit and will be planning to take the spousal

benefit. My primary insurance amount at age 67 is $3,654, but I was planning to begin collecting

Social Security at 62 to reduce the draw from my retirement account, so my reduced benefit at 62

would be $2,540. For the spousal benefit, I understand that my wife's maximum benefit is 50%

of my full retirement benefit. However, if I retire prior to my full retirement age, and my wife waits

until her full retirement age of 67, would she still be eligible for my 50% of full retirement age. And my wife waits until her full retirement age of 67, would she still

be eligible for my 50% of full retirement age benefit or which be limited to 50% of my reduced

benefit? So this question comes from a listener named Rob. Rob, thank you for that question. I am

going to answer it directly, but then I'm going to give you a more full context to see how does

this decision impact you

and what are the other important things to know.

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