Ask Larry: Shouldn’t My Wife’s Social Security Spousal Benefit At 66 Be Half Mine?

Today’s column addresses questions about Social Security spousal benefits based on the record of a worker who filed early, retirement benefits for a worker who dies late on the last day of the month, the Windfall Elimination Provision and withdrawing an application. 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.

Shouldn’t My Wife’s Social Security Spousal Benefit at 66 Be Half Mine?

Hi Larry, I retired at 62, not my full retirement age. I receive about $2,100 before Medicare B is deducted. My wife will reach 66 and two months, her full retirement age, next March. She would receive about $680 based on her own work history. If she waited till 70, she would receive about $900. If she retires at FRA in March, She sould she receive 50% of my $2,100 benefit, right? Thanks, Ken

Hi Ken, Actually, if you started drawing your benefits at 62 and if your wife files for benefits at her full retirement age (FRA), she would get more than 50% of the reduced benefit rate you’re collecting. Unreduced spousal benefits are calculated at 50% of the worker’s primary insurance amount (PIA), even if the worker started drawing their benefits prior to FRA. A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).

Based on the numbers cited in your question, your wife would likely not want to wait past her FRA to start drawing benefits. When your wife applies for benefits she’ll be forced to file for both her own benefits and spousal benefits, and she can only be paid essentially the higher of the 2 benefit rates. From what you say, even if your wife waited until 70 to start drawing benefits her own benefit rate would be less than 50% of your PIA. And, since spousal benefits do not increase if you wait past FRA to claim them, your wife would have nothing to gain by waiting past FRA to start collecting benefits.

Assuming that your wife does claim benefits in the month she reaches FRA, what she’ll be paid is her own PIA plus an excess spousal benefit equal to the difference between her PIA and 50% of your PIA. Thus, her combined rate would then add up to 50% of your PIA. Best, Larry

Is It True That Social Security Doesn’t Pay Any Benefits At All For The Month Of Death Even If A Person Dies On The Last Day Of A Month?

Hi Larry, If a person receiving Social Security benefits dies on the last day of the month, a few hours before midnight no less, is it true that Social Security does not pay any benefits at all for the month of death? I would think they would at least prorate it, or have a policy that the person had to live at least x number of days out of the month, especially since they pay a month behind and that money is owed to the decedent or his widow who actually lived the entire month except for a few hours. Is it possible for the widow to appeal under these circumstances? Best, Larry

Hi Larry, Yes, that’s true, at least with regard to benefits payable to the deceased person. A widow could file an appeal on that issue, but there’d be no basis for it because it’s part of the Social Security law passed by congress. Only congress has the authority to amend Social Security law and regulations, so your concern about this provision would best be directed to them.

However, if any survivors (e.g. widow(er), child) meet the requirements for survivor benefits on the record of a deceased individual, they can potentially be paid a full month’s survivor benefit for the deceased worker’s month of death even if the worker dies at 11:59 PM on the last day of a month. Best, Larry

How Much Will WEP Increase If I Wait Past FRA To Start Drawing My Benefits?

Hi Larry, I am going to be hit with the Windfall Provision when I file for my Social Security retirement benefit. I am currently at FRA, however I recently was told by a coworker that by delaying my filing date to get the 8% annual increase the effect of the WEP also goes up. I have been unable to find out how much bigger the WEP reduction will be each year. Will the increased WEP reduction cancel out the 8% annual increase? Is it worth delaying filing only to have the WEP reduction increase? Thanks, Kelly

Hi Kelly, Waiting past full retirement age (FRA) to start drawing your benefits would have no impact on the amount of any Windfall Elimination Provision reduction applied to your benefit rate. Any WEP reduction is applied to the person’s primary insurance amount (PIA), which is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).

If you wait past FRA to claim your retirement benefits, Social Security would first calculate your WEP adjusted PIA. They would then apply any increase resulting from delayed retirement credits (DRC) to your WEP adjusted PIA.

My company’s software — Maximize My Social Security or MaxiFi Planner — is fully programmed to handle WEP computations as well as the effects of the Government Pension Offset (GPO), so you may want to consider using the software to help fully understand your options and discover your best filing 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

Should I Return The Benefits I Was Paid?

Hi Larry, I retired in March 2020 at 66. I signed up for Medicare, and apparently applied for Social Security at the same time, which I did not intend to do. I stopped Social Security payments after receiving checks in April, May and June. Should I return the payments I received so that my benefit when I begin to draw at 70 will be higher? If so, how do I do that? Thanks, Aaron

Hi Aaron, I’m assuming that you did, accidentally at least, actually apply for your Social Security benefits as opposed to being awarded the benefits in error by Social Security. That being the case, since you aren’t allowed to voluntarily suspend your benefits retroactively, the only way that you could return the benefits you were paid and receive delayed retirement credits (DRC) for those months is by formally withdrawing your application. You would then need to reapply for benefits when you want to start drawing them.

There’s probably no right or wrong answer to your question as to whether or not you should return the benefits to get a higher benefit rate later. DRCs add 2/3rds of 1% to your primary insurance amount (PIA) for each month that you don’t draw benefits between your full retirement age (FRA) and 70. So if you decide to keep the three months of benefits and resume drawing your benefits at 70, your benefit rate will be 2% lower than it would have been had you waited until 70 to start drawing.

However, if there’s a chance that you could potentially become eligible for auxiliary (e.g. spousal, divorced spousal) or survivor benefits before reaching 70, then not withdrawing your application could prevent you from drawing those benefits. I don’t have enough information to know if that’s a potential factor in your case or not.

You are generally only allowed one application withdrawal in a lifetime, so if you do decide to withdraw, you’ll want to be sure to choose the right time to eventually reapply for benefits. You may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to calculate what difference withdrawing might make given various inputs based on your current and potential future circumstances. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry