Today’s column addresses eligibility for spousal benefits if the other spouse hasn’t yet filed, the calculation of spousal benefit amounts, switching from spousal to retirement benefits, spousal benefits after retirement benefits and potential effects of a home sale. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, a company that markets Maximize My Social Security and MaxiFi Planner.
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Ask Larry about Social Security here.
Will My Wife Get Spousal Benefits At Her Full Retirement Age Even If I Haven’t Filed?
Hi Larry, If my wife starts her Social Security retirement benefit at 62 and I, being 2 years older, defer starting my own retirement benefit until 70, would my wife automatically receive her spousal benefit from my record when she reaches her full retirement age at 66 years and 4 months even though I still won’t have filed? It seems like since this would be the most she can earn, Social Security should start paying her even though I have not filed for benefits yet. Thanks, Clive
Hi Clive, You must be drawing your benefits in order for your wife to potentially qualify for spousal benefits on your record. And if your wife files for her own retirement benefits at age 62, she’ll be stuck with the resulting reduction in her benefit rate for as long as both of you are living, even if she later qualifies for additional spousal benefits from your record. You and your wife may want to use one of my company’s two tools — Maximize My Social Security or MaxiFi Planner — to help maximize your lifetime Social Security benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry
Can I Get Spousal Benefits On My Wife’s Record?
Hi Larry, I’m trying to see if I qualify for spousal report off my wife’s record. I was getting Supplemental Security Income (SSI) at 57. When I turned 62, I switched over to reduced Retirement benefits. My wife just started to get Social Security at 62. She worked longer than I did and made more money too. How do I get spousal benefits off her record and who will be able to calculate that for me to see will that be for me? I went from $778 SSI to $927 Social Security. Thanks, Bill
Hi Bill, You wouldn’t be eligible for spousal benefits unless your wife’s primary insurance amount (PIA), which is the amount that her Social Security retirement benefit would be if she’d started drawing at her full retirement age (FRA), is more than twice as much as your PIA. If your reduced age 62 benefit rate is $927, then your PIA is likely higher than $1,200, so your wife’s PIA would probably need to be more than $2,400 in order for you to qualify for any spousal benefit while your wife is living.
If your wife started drawing her benefits at age 62 and her benefit rate is below roughly $1,800, then it sounds like you probably wouldn’t be eligible for any spousal benefits. To make sure, though, you may want to check with Social Security and possibly file an application for spousal benefits. Best, Larry
Do I Have To Pay Back My Spousal Benefits When I File For My Own Benefits?
Hi Larry, I turn 66 in December and am still working. My husband is going to be 62 but is disabled with MS for years. If I file a restricted application and take my Social Security spousal benefit, what happens if at say age 68 I want to fully retire and take my retirement benefit instead? Do I have to pay that money back? Best, Deanna
Hi Deanna, You wouldn’t have to pay back any of the spousal benefits you receive prior to when you start drawing your own retirement benefits. Assuming that your own retirement rate is higher than your spousal rate, you would simply switch from drawing spousal benefits to drawing your own benefits whenever you decide to make the change. You’d be free to file for your retirement benefits at any time, but if you wait until 70 to start drawing your retirement benefits, you’ll maximize your monthly benefit rate. Best, Larry
Is Social Security Correct That I Can’t Switch To Spousal Benefits?
HI Larry, I am 10 months older than my wife. Her Social Security benefits are larger than mine, so I filed for retirement at full retirement age, and she began receiving spousal benefits. Last May at the age of 70 when she filed for benefits on her own account, I planned to change to spousal benefits on her account. But we were told by the Social Security representative that I could not. My increase would have been over $100 per month. Is what the Social Security rep told me correct? Thanks, Ben
Hi Ben, You couldn’t change from drawing your retirement benefits to drawing just spousal benefits, but you could file for an additional spousal benefit, your excess spousal benefit, if you’re eligible. To be eligible for an excess spousal benefit, your wife’s full retirement age rate, or primary insurance amount (PIA), would have to be more than twice as much as your PIA.
If you think that you should be eligible for spousal benefits you can recontact Social Security and insist on filing an application. Note, however, that your spousal rate, if any, would be based on 50% of your wife’s PIA, not 50% of her age 70 benefit rate. And if your own PIA is higher than 50% of your wife’s PIA, you won’t qualify for spousal benefits. Best, Larry
If I Sell My Home Can Social Security Take Money From The Proceeds?
Hi Larry, If I receive SSI benefits and Medicaid, if I were to sell my home, could they take money from me from the proceeds to my sale of my home? Thanks, Melody
Hi Melody, If you sell your home it could cause your Supplemental Security Income (SSI) payments to stop, but you would not have to forfeit any of the proceeds from the sale of your home.
SSI is a needs based program administered by the Social Security Administration. To be eligible for SSI payments you must not only have little or no other income, you also can’t have more than $2,000 in available resources. The home you live in is excluded from counting as a resource for SSI eligibility purposes, but if you sell your home and the proceeds cause your countable resources to exceed the $2,000 limit then your SSI payments could stop. However, if you use the proceeds from the sale of your current home to buy a different home within 3 months of the sale, then you may still continue to be eligible for SSI. Best, Larry
To learn more about your Social Security options, visit Economic Security Planning, Inc.