Economic Security Planning, Inc.
Today’s column addresses questions about applying for spousal benefits only while delaying retirement benefits, when someone can become eligible for retirement benefits and how filing for widow’s benefits at 60 affects the amount of the benefit. 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.
How Do I Apply For Social Security Spousal Benefits Only?
Hi Larry, I am 67 and I plan to begin benefits at 70. My wife reached FRA earlier this month. Our plan is for her to file for retirement benefits in December and then I will file a restricted application for my spousal benefits till I turn 70. Her retirement benefit is $2,070.
Do I need to wait until she receives her first benefit check or when she is approved to file my claim? I’ve heard that I need to wait till she gets her check January but I don’t really know. Also, when I file my claim, what do I say so they know I am going to be filing for my retirement benefits at 70? Thanks, Jeffrey
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Hi Jeffrey, you can file your application on the same day your wife files her application. Or you can file after she does as long as it’s within six months after the month you want choose as your month to start your benefits. You’ll want to pick the same month that your wife chooses as her initial month of entitlement to retirement benefits as your month of election to begin spousal benefits. By the way, if your wife reached full retirement age (FRA) earlier in November 2020, she’ll get her FRA rate if she elects November 2020 as her initial month of entitlement to benefits.
If you apply online there should be a question on your application that asks you if you want to defer filing for your own retirement benefits, which you’d want to answer “yes.” You can also add a statement in the remarks section stating: “I wish to restrict the scope of this application to spousal benefits only.” You don’t need to say anything about when you want to claim your own retirement benefits. You will be required to file a separate application form when you want to file for your retirement benefits.
For the benefit of other readers, I should note that only people born prior to 1/2/1954 are allowed to file for spousal benefits without also being deemed to be filing for their own retirement benefits. And they can only do so if they claim the spousal benefits effective at FRA or later. People born after 1/1/1954 cannot file for either spousal benefits or their own retirement benefits without being deemed to be filing for both benefits at the same time. My company’s software — Maximize My Social Security or MaxiFi Planner — correctly accounts for these and other rules and regulations that determine benefit eligibly and amount and can help you decide how to file in a way that’s best for you. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry
Can My Husband Get Benefits Now?
Hi Larry, My husband has worked a lot but mostly in work that didn’t pay into Social Security. Now he is 63 and ready to retire. I work for the government and have for about 37 years but I am 54 and won’t retire for a while. Can he get his Social Security retirement benefits now? Thanks, Nickie
Hi Nickie, If your husband has at least 40 Social Security quarters of coverage (QC), then he would be eligible for Social Security retirement benefits based on his own earnings. However, he could not qualify for any spousal benefits from your record at least until you start drawing your Social Security retirement benefits.
If your husband claims benefits prior to full retirement age (FRA), his benefit rate will be reduced for age. And if he’s working, his benefits could be partially or fully withheld if he earns too much. For example, if your husband claims benefits this year and continues working, Social Security would need to withhold $1 of his benefits for each $2 that he earns in excess of $18,240.
So whether he’s eligible for Social Security retirement benefits and how much they would be if he is eligible depend on a number of factors. He can contact Social Security to see if he has enough credits. If he is, they’ll tell him their estimate for his retirement benefit at his FRA but understand that Social Security’s estimates are based on some unrealistic assumptions so can be unrealistic themselves. Best, Larry
How Much Will My Widow’s Benefit Be If I File At Age 60?
Hi Larry, I’m a 59 year old widow whose husband filed for Social Security disability at 62 due to cancer and was approved. I was told that I can apply at 60 to start collecting my Social Security widow’s benefit. I know it will only be a certain percentage if I file early, but how much would it be? I am only working a couple of days a week and my my benefit at retirement age is nothing close to his. Can I still work and collect my widow’s benefit? Thanks, Gwen
Hi Gwen, I’m sorry for your loss.
If you start drawing widow’s benefits at 60, the amount you’ll due is equal to 71.5% of your husband’s 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), or their full Social Security disability (SSDI) benefit rate. If you instead waited until your FRA to start drawing your widow’s benefits, and as long as your husband didn’t receive reduced Social Security retirement benefits prior to his death, your widow’s rate would equal 100% of your husband’s PIA.
You can be paid all of your benefits as long as you don’t earn more in a year than the Social Security test exempt amount. The exempt amount for people who are under FRA in 2020 is $18,240. If you earn more than the exempt amount, Social Security would need to withhold $1 of your benefits for each $2 that your earnings exceed the exempt amount. Assuming that you start drawing at 60 and none of your benefits are withheld due to your earnings, the 28.5% reduction applied to your benefit rate for filing at age 60 will be permanent.
If your own retirement benefit rate based on your own earnings would always be lower than your widow’s rate, you may want to at least consider a different filing strategy. It may be a better long-term strategy to claim your own benefits at age 62 and then file for unreduced widow’s benefits at 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