Economic Security Planning, Inc.
Today’s column addresses switching from retirement to spousal benefit, from spousal to retirement benefits, the availability of lump sum payments after filing and suspending, qualifying for spousal benefits and whether Social Security benefits can be garnished for back taxes. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, a company that markets Maximize My Social Security and MaxiFi Planner.
See more Ask Larry answers here.
Ask Larry about Social Security here.
Will I Be Able To Switch From Social Security Retirement Benefits To Spousal Benefits?
Hi Larry, I was born in 1956 and my husband in 1953. I plan to file for my Social Security retirement benefit this year. At this time, My husband will file a restricted application and collect his spousal benefit. When he turns 70, he will file and collect his own Social Security retirement benefit. At his age 70, my spousal benefit based on his record will be more than my retirement benefit. Can I switch to my spousal benefit when he turns 70 and files? Thanks, Becca
Hi Becca, You couldn’t switch to drawing just a spousal benefit when your husband files for his benefits, but you could potentially qualify for an excess spousal benefit at that time. However, the only way that you’ll qualify for an excess spousal benefit is if 50% of your husband’s primary insurance amount (PIA) is more than your PIA. A person’s PIA is equal to the amount they would receive if they filed for their Social Security retirement benefits at full retirement age (FRA).
You and your husband may want to try one of my company’s two tools — Maximize My Social Security or MaxiFi Planner — to explore and compare her options so that she can choose the best possible strategy for claiming 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
Can I Switch From Spousal Benefits To My Own Record Even Before I Turn 70?
Hi Larry, My wife is one month from 70 and started her benefit at 68.5. I turned 66 in November. I intend to file a restricted application so I can collect my spousal benefit while delaying my own retirement benefit for one or two years.. At that point my benefit will be twice what she is now receiving.
I can start receiving my own retirement benefit at the time of my choosing before 70 and her benefit will not be affected in any way, correct? If I should die prior to the transition to my retirement benefit then my wife will still be eligible to receive the spousal benefit at the level I would have received which is higher than hers, correct? Thanks, Aziz
Hi Aziz, Yes, you’d be free to file for your own Social Security retirement benefits at any time, and yes your wife could file for widow’s benefits even if you die prior to claiming your own benefits.
If you do die after reaching full retirement age (FRA) and prior to filing for your own benefits, your wife would be eligible for the higher of a) her own benefit rate, or b) the amount that your Social Security retirement benefit would have been if you had started drawing effective with the month of your death. In other words, your wife’s widow’s rate would include any delayed retirement credits (DRCs) that you had accrued prior to your death and prior to claiming your own benefits.
You mention that your plan is to switch to your own record prior to 70, but doing so will not only give you a lower rate than you’d get if you waited until age 70, it would also reduce the amount that your wife could receive as a widow. To maximize both your monthly rate and your wife’s potential widow’s rate, you would want to wait until age 70 to switch to your own record. Best, Larry
Can I File And Suspend At 66 And Later Unsuspend And Get A Lump Sum Back Payment?
Hi Larry, as a single person, can I file and suspend at 66, and then at a later date unsuspend and ask for a lump sum back payment for the 24 months from 66 to 68? I’ve read that if I did this, I could not request any back payment. I’ve also read that if don’t apply at 66 and then apply later, I can only request up to six months of back payments. I’ve read many conflicting comments on this so I’d appreciate any clarity you can provide. Thanks, Frank
Hi Frank, Only people who voluntarily suspended their benefits prior to 4/29/2016 are able to later revoke the suspension retroactively and claim back pay.
If you voluntarily suspend your benefits after the deadline, the earliest that you can reinstate your benefits is the month after the month you submit your request. In other words, no back pay. On the other hand, if you simply delay filing for your benefits until at least 6 months after you’ve reached full retirement age (FRA), you could claim benefits for up to 6 months retroactively from the month of your application. If you did so, Social Security would normally pay your back pay for those 6 months in a lump sum. Best, Larry
Will I Qualify For Spousal Benefits When My Husband Starts Drawing His Benefits?
Hi Larry, I am currently 61 and my husband is 63. His PIA at full retirement age is $2,670 and mine is $3,010. When he starts taking his retirement benefit at 66, will I be qualified for his spousal benefits? If so, how much will they be? Thanks, Sandy
Hi Sandy, Neither you or your husband could ever qualify for spousal benefits. Since you were both born after 1/1/1954, if you filed for spousal benefits you would be deemed to also be filing for you own Social Security retirement benefits at the same time. You could then only be paid the higher of the two benefit rates, which for both of your would be your own retirement benefit rate. Best, Larry
Can Benefits Be Attached For Back Taxes?
HI Larry, I owe a lot in back taxes I now need to repay. I was planning to file for my Social Security but now I’m not sure if I should. Can benefits be garnished for back taxes? Thanks, Morton
Hi Morton, Yes, Social Security benefits can be garnished to collect delinquent federal income taxes, but in most cases the rate of garnishment is limited to 15% of the debtor’s benefit rate. Best, Larry