Economic Security Planning, Inc.
Today’s column addresses questions about whether someone can switch to spousal benefits after already receiving a retirement benefit reduced for filing early, a public pension’s effect on potential spousal benefits and whether early survivor benefits will reflect the deceased spouse’s delayed retirement credits (DRCs). Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.
See more Ask Larry answers here.
Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.
Can My Wife Take Social Security Retirement Benefits At 62 Then Spousal When I File?
Hi Larry, Can my wife draw her Social Security retirement benefit at 62 and then switch to her spousal benefit off of my record when I start drawing my own Social Security retirement benefit? She has been the lower earner since most of the work she’s done has been in the house and raising our children. She did some part time work though so she’ll get her own benefit but it will just be smaller than half of mine. Thanks, Daniel
Hi Daniel, If your wife claims her benefits retirement at 62, she’ll receive those benefits for life and she’ll continue to receive a reduced rate for at least as long as both of you are living. However, if you start drawing your benefits after your wife is already drawing her own benefits, she could potentially file for an additional partial, or excess, spousal benefit when you file for your benefits.
A person can’t switch from drawing their own retirement benefits to drawing benefits on someone else’s Social Security record. However, if a person is drawing their own benefits and they become eligible for a higher auxiliary, e.g. spousal or survivor benefit, they can potentially receive a partial auxiliary or survivor benefit in addition to their own benefit.
For example, say Mary files for her benefits this year at age 62. Mary’s full retirement age rate, or primary insurance amount (PIA), would be $800, but she receives a reduced rate of $576 in return for starting her benefits early. After Mary reaches full retirement age (FRA), her husband files for his benefits. Mary’s husband’s PIA is $2,000, and Mary’s spousal benefit would be calculated by subtracting her PIA (i.e. $800) from 50% of her husband’s PIA. That would give Mary an excess spousal rate of $200, which would be paid in addition to her own reduced benefit of $576 to give her a combined benefit of $776.
You and your wife may want to try out my company’s software — Maximize My Social Security or MaxiFi Planner — to help you determine your best strategy for maximizing your benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry
Am I Allowed To File On My Spouse’s Social Security?
Hi Larry, I have teacher pensions from AK and CO from work that did not pay Social Security taxes on. I have calculated the WEP’s impact on my Social Security payments. I paid into Social Security for 19 years when teaching in two other states. Am I allowed to file on my spouse’s Social Security since he has paid into it his entire career and his Social Security retirement benefit is higher? Thanks, Annalee
Hi Annalee, You could file for spousal benefits if you’re at least 62 and provided that you spouse is drawing his retirement benefits, but your spousal benefits would likely be offset by 2/3rds of the total amount of your teacher pensions due to the Government Pension Offset (GPO) provision. Also, unless you were born prior to 1/2/1954, if you file for spousal benefits you’ll be deemed to also be filing for your own Social Security retirement benefits at the same time.
The Windfall Elimination Provision (WEP) can only affect a person’s own Social Security retirement or disability benefits. The GPO on the other hand can only affect auxiliary (e.g. spousal) and survivor benefits. Here’s an example of how benefits are calculated for someone born after 1/1/1954 who files for both spousal and retirement benefits. Best, Larry
If I Begin Collecting Survivor Benefits Before FRA Will My Rate Include My Husband’s DRCs?
Hi Larry, My dear husband passed away in 2018. He was receiving Social Security which included his delayed retirement credits. I turned 60 in 2020 and understand that if I begin collecting survivor’s benefits now, they will be reduced at 71.5% beginning in 2020. I was told they would then slowly increase each month until I reach full-retirement age at 67 — is that actually true?
If I begin collecting survivors benefits before my FRA, will the survivor’s benefits include my late husband’s delayed retirement credits or only his PIA? Also, if I elect to begin collecting survivor’s benefits before FRA, once I turn 67 will I then receive my husband’s delayed retirement credits included in my survivor’s benefits? Thanks, Jennifer
Hi Jennifer, I’m sorry for your loss.
Just to be clear, if you start drawing your widow’s benefits the month you reach 60 your benefit rate will be calculated at 71.5% of your husband’s benefit rate inclusive of any delayed retirement credits (DRCs) that he earned.
If you do start drawing at age 60, though, your widow’s rate won’t increase except for future cost of living (COLA) increases. The 28.5% reduction is permanent unless some of your benefits are withheld prior to full retirement age (FRA) due to your earnings.
If you file for your widow’s benefits at FRA or later, you’ll receive 100% of your husband’s benefit rate inclusive of any DRCs he earned. Or if you start drawing in any month between 60 and FRA, the percentage reduction applied to your rate would depend on your age at the time you start drawing. And the closer you are to FRA when you start drawing, the closer you’d get to 100% of your husband’s rate. By the way, if you were born in 1960 then even though your FRA for benefits on your own record would be 67, your FRA for widow’s benefits would be age 66 and eight months.
Your best filing strategy is could be either filing for reduced widow’s benefits early and then switching to your own record at 70, or filing for reduced retirement benefits on your own record early and then filing for unreduced widow’s benefits at full retirement age (FRA).
Normally, you would want to start out drawing the lower benefit first and then switch to the higher record when it reaches its highest potential rate. Best, Larry