Both of them have earned enough credits to be eligible for social security benefits. They could begin as early as next year, when they reach age 62.
These are among the considerations:
- If Bob retires at age 62 and begins collecting social security benefits, he will only receive 80% of what the benefit would be if he waited until 66, his "full retirement age."
- If he waits until age 70, the benefit he will receive will be 32% higher than the NRA figure, and 64% higher than the age 62 figure.
- The percentages of each will change each year. No one has to choose between age 66 and age 70. If Bob wants, he can decide to retire at age 68.
- When Bob begins collecting his benefits, Carol will be paid a spousal benefit that is 50% of Bob's benefit. That calculation, which uses his earning record, will be much higher than her own benefit, using her earning record. Essentially, the household will receive payments equal to 150% of his benefit. This is all the more reason to wait until he is age 70.
- If Bob dies, Carol will begin collecting benefits equal to those he was receiving, based on his earning record, in her own name.
Most people in her position should take that step. When Bob does retire, the total combined 150% figure will take effect, and it will not be affected by her decision to start taking her own benefits early. The cost-benefit analysis that goes into the personal decision on the question of when to retire does not enter into this question. If she does not begin collecting benefits on her own record now, that money will be forever lost.
As always, consultation with a qualified adviser is recommended.