Ask Larry: Will Social Security Automatically Delay Our Benefits Till 70?

Taxes

Today’s Social Security column addresses questions about whether it’s necessary to tell Social Security you want to delay until 70 to start benefits, claiming on an ex’s record and whether to withdraw an application and repay benefits received. 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.


Will Social Security Automatically Delay Our Benefits Till 70?

Hi Larry, My wife will be our full retirement ages in April but we want to wait to 70 to draw Social Security. Do we need to tell them we want to wait or will they mail us something so we can elect to wait? Thanks, Rebbeca

Hi Rebecca, Social Security doesn’t start paying people benefits automatically, so assuming that neither you or your wife are drawing Social Security disability (SSDI) benefits, you don’t need to tell Social Security that you want to wait until 70 to start drawing your benefits. When you do decide that you want to start collecting your benefits, you’ll need to file an application with Social Security.

People who receive SSDI benefits have their benefits automatically converted to standard Social Security retirement benefits when they reach full retirement age (FRA). Such individuals can choose to suspend their retirement benefits until 70 in order to earn delayed retirement credits (DRCs), in which case they would need to contact Social Security to request voluntary suspension of their benefits. You and your wife won’t need to do that though, assuming that you aren’t in fact collecting SSDI benefits.

You and your wife 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


Can I Claim From My First Husband’s Social Security?

Hi Larry, I am 62 and six months. I’ve been divorced twice. Can I claim on my first husband’s Social Security record? We were married over ten years. My second marriage only lasted 1 1/2 years. How would this affect my claiming my own retirement benefits when I’m 67? Thanks, Fred

Hi Fred, The only way that you could claim divorced spousal benefits without claiming your own retirement benefits at the same time is if your ex is deceased. If they’re not deceased, you could only be paid essentially the higher of your own benefit retirement amount or your divorced spousal amount, and your benefit rate would be reduced for age if you start drawing prior to your full retirement age (FRA).

Also, the only way that you could claim divorced spousal benefits is if your ex is at least 62 or drawing Social Security retirement or disability benefits.

Furthermore, if you claim benefits prior to FRA, at least some of your benefits could be subject to withholding due to Social Security’s earnings test. The earnings test would still apply even if your ex is deceased, but in that event there would be different filing strategies you may want to explore. Best, Larry


Can I Repay My Benefits In Payments?

Hi Larry, I turned 62 last September and took early retirement. I worked until September and I got my first check in October. I have now changed my mind about retiring and want to return to work. I will get one more check. I read that one option is to repay my benefits I have taken so far. Can I do this in installment payments? Thanks, Paul

Hi Paul, The answer depends on what you decide to do. Your options are to either a) withdraw your application, in which case you’d need to repay all of the benefits you’ve received in one payment, or b) tell Social Security that you’re returning to work so they can suspend your benefits if necessary.

If you withdraw your application, you could then reapply for benefits later and your benefit rate would be calculated based on your age at the time you start drawing payments. However, if you choose the latter option, you’ll be stuck with your age 62 rate at least until you reach full retirement age (FRA) when you could then suspend your retirement benefit to earn delayed retirement credits (DRCs).

If you opt not to withdraw your application, you may not need to repay the benefits you’ve collected so far. But if you don’t withdraw your application and if it turns out that you were paid too much in benefits due to your earnings, you could then choose to repay your overpayment in installment payments. Best, Larry


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