Today’s column addresses questions about how taking Social Security retirement benefits at 62 might affect spousal and survivor’s benefits, what spousal benefits can be available after a divorce and withdrawing Social Security disability benefits. 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.
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How Will Taking Retirement Benefits At 62 Affect My Wife’s Spousal And Widow’s Benefits?
Hi Larry, My wife will turn 62 next month and we are thinking about filing for her Social Security retirement benefits. According to the statement she received from Social Security in 2020, her benefit if she starts at 62 will be $538 or $756 if she starts at her FRA of 66 years and 10 months.
She is not working currently and is not planning to go back to work. I am over 70, retired and started receiving my Social Security at 70 after contributing into the system at the maximum level for over 35 years. If she files for Social Security retirement benefits now, will she be able to get half of what I would have received at my FRA reduced appropriately for her current age?
Also, as a survivor, would my wife be eligible to get what I was receiving at that point in time, i.e. my age 70 pay out with cost of living adjustment, if she is at or past her FRA at that time? I presume that her survivor benefit will be adjusted for her age if she is below her FRA. Also, will her survivor benefit be affected by taking spousal benefit at an age earlier than her FRA? Thanks, George
Hi George, Your wife won’t get a full 50% of your full retirement age (FRA) rate, which is equal to your primary insurance amount (PIA), if she files for benefits at 62. Since your wife was born after 1/1/1954, she’ll be deemed to be filing for both her own retirement benefits and for spousal benefits whenever she applies for either benefit. And if she starts drawing prior to FRA, her benefit rate will be reduced for age.
You are correct that if you die before your wife and if she’s at least FRA when she starts drawing survivor benefits, she would get your full benefit rate including the delayed retirement credits (DRC) you earned by waiting until 70 to start drawing your benefits.
That would be true regardless of at what age your wife starts drawing her benefits and her spousal benefits. Note that she wouldn’t get both her own rate and your rate in the event of your death, though, just the higher of the two amounts.
If you die before your wife reaches FRA, her survivor rate would be reduced for age if she chooses to start drawing the survivor benefits prior to her FRA.
You and your wife may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to fully analyze your wife’s options so that she can choose the best strategy for maximizing her benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry
How Can I Make Sure That My Wife Can Collect 50% Of My Benefit If We Divorce?
Hi Larry, My wife and I may be getting divorced in the near future and we want to make sure she would be able to collect 50% of my present Social Security retirement benefit which would be more than she gets now. Also, if she collected her benefit at 62, does that have any impact on the 50% amount? She will be 68 or 69 when we do divorce. Thanks, Harry
Hi Harry, One thing that would prevent your wife from collecting divorced spousal benefits is if your marriage lasts less than 10 years. Assuming that you’ve been married longer than that, a divorce wouldn’t adversely affect her ability to collect benefits from your record.
If your wife started collecting her own benefits at 62, she’ll keep the reduction for age that applies to her benefit rate even if she later becomes eligible for spousal or divorced spousal benefits.
And she’ll only qualify for spousal or divorced spousal benefits in addition to her own benefit if 50% of your primary insurance amount (PIA) is more than her own PIA. A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).
In other words, your wife won’t be eligible for a full 50% of your PIA if she started drawing her own Social Security retirement benefits at age 62. If your PIA is more than twice as much as your wife’s PIA, and if you are already drawing your benefits, then it sounds like your wife should apply for spousal benefits ASAP.
Spousal and divorced spousal benefits don’t get any higher if you wait past FRA to apply for them. If your wife qualifies for an excess spousal benefit in addition to her own benefit, she’ll continue to be eligible for that benefit as a divorced spouse as long as your marriage lasts for at least 10 years. Best, Larry
Is It Possible To Withdraw My SSDI If I’ve Been Collecting Benefits For Two And A Half Years?
Hi Larry, I’d like to do a withdrawal on my SSDI that I’ve been collecting for last two and a half years. Is that possible? The total money I got from them was $3,400. I know I will have to return that in full. Thanks, Simon
Hi Simon, Yes, it’s possible to withdraw a claim for Social Security disability (SSDI) benefits provided that you refund all of the benefits you’ve received. Unlike withdrawing a claim for Social Security retirement benefits, there is no set time limit on when your request for withdrawal of a claim for SSDI benefits must be filed.
You don’t mention why you want to withdraw your claim, so I can’t give you any advice about whether or not it’s a good idea to do so. You should be aware, though, that withdrawing your claim might adversely affect your future Social Security retirement benefit rate.
Also, you probably won’t be eligible for Medicare if you withdraw your claim, unless you are at least age 65. Furthermore, if Medicare has paid any of your medical bills based on your SSDI eligibility, you would need to reimburse them for those charges. Best, Larry