Today’s Social Security column addresses questions about the earnings test and retirement benefits, spousal benefits while a retirement benefit is suspended and survivor’s benefits and public pensions. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc.
See more Ask Larry answers here.
Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.
What Happens If I Accepted A Raise In January?
Hi Larry, I turned 66 in January and started collecting retirement benefits at 62. I am still employed and have not exceeded income limit from 62 until now. What happens since I accepted the raise in January? Thanks, Mark
Hi Mark, A substantially higher Social Security earnings test exempt amount applies in the year that you reach full retirement age (FRA), and only your earnings in the months prior to the month you reach FRA count toward the exempt amount limit. If you turned 66 in January 2022, then you reached your FRA in May.
What that means is that you could have earned up to $51,960 in the first four months of this year, and an unlimited amount after that without losing any of your Social Security benefits. So unless your raise caused your salary to exceed $51,960 prior to May 1st of this year, then you won’t lose any benefits due to the increase. Best, Larry
Can I Receive A Spousal Benefit While My Benefits Are Suspended?
Hi Larry, I started receiving Social Security retirement benefits at 62 and I suspended them at FRA. My spouse will be 62 later this year. Can I receive a spousal benefit when they turn 62? Thanks, Barney
Hi Barney, You can’t. Even if you suspend your benefits you continue to be technically entitled to those benefits. So if you apply for spousal benefits, your spousal rate would be calculated by subtracting your primary insurance amount (PIA) from 50% of your spouse’s 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). Therefore, you could only qualify for spousal benefits if your spouse’s PIA is more than twice as much as your own PIA.
But still, even if your spouse’s PIA is more than twice as much as your own PIA, you couldn’t be paid spousal benefits for any month(s) that your own benefits are suspended. Best, Larry
If I Die Before My Spouse, Will His Survivor’s Benefits Be Reduced?
Hi Larry, I have a government pension and my spouse will receive a benefit if I predecease him. Will his survivor’s benefit equal my unreduced Social Security retirement benefit or my reduced amount? Both are higher than his own retirement benefit. Thanks, Leslie
Hi Leslie, That depends on the type of reduction involved. If your benefit rate is reduced due to the Windfall Elimination Provision (WEP), that reduction will not apply when calculating the survivor benefit amount payable from your account.
However, if your benefit rate is reduced because you started drawing your Social Security retirement benefits prior to full retirement age (FRA), then your surviving spouse’s widower’s benefit amount would be limited to the higher of a) your reduced for age benefit rate, or b) 82.5% of your primary insurance amount (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).
You may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to ensure your household receives the highest lifetime benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry