Economic Security Planning, Inc.
Today’s column addresses questions about when widow(er)’s benefits can be paid to a surviving spouse, how filing for early retirement benefits can affect other benefits taken later and taking early retirement benefits before divorced spousal benefits. 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.
Would My Wife Be Able To Get A Widow’s Benefit On My Record?
Hi Larry, My wife is currently retired under the terms of the old federal government pension plan. I will be retiring soon on my Social Security retirement benefit. I would like to know if I pass away before her, would my wife be entitled to a widow’s benefit based on the taxes I paid into Social Security on my income? If not, what would be the best way for her to maximize her potential benefit income. Thanks, Phil
Hi Phil, Assuming that your wife is already receiving her non-covered pension, it sounds like any Social Security spousal or survivor benefits for which she’d qualify would likely be offset by 2/3rds of the amount of her government pension by the Government Pension Offset (GPO). So she’ll probably only qualify for any benefits from your account if 2/3rds of the amount of her civil service pension is less than her spousal or widow’s rate.
But if your wife has enough Social Security work credits to qualify for benefits on her own record, she could be paid at least some benefits. The Windfall Elimination Provision (WEP) would likely reduce the amount of benefits she could be paid, but WEP never reduces a person’s own Social Security retirement rate to zero.
Your wife could potentially claim retirement benefits on her own record any time between age 62 and 70, and her rate would get progressively higher the longer she waits. You and your wife could use my company’s software — Maximize My Social Security or MaxiFi Planner — to understand the effects of both the WEP and the GPO and explore your filing options so you can make informed choices about when to file for your potentially available benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry
Would Filing For Her Benefits At 62 Affect What My Wife Can Draw Once I Claim My Benefits?
Hi Larry, I am 65 and plan to claim my Social Security retirement benefit at 66 and two months to get my full retirement age amount. My wife will soon be 62 and has earned a Social Security benefit that is substantially lower than mine as she worked minimally while we reared three children. She’s thinking about filing for her retirement benefits at 62. Will this in any way affect what she can draw once I begin claiming a retirement benefit as well? When she reaches her full retirement age, will she be able to then claim the spousal benefit? And if so, will it be 50% of my benefit? Will her claiming her retirement benefit at 62 affect her widow benefit? Thanks, Anthony
Hi Anthony, Your wife cannot start drawing her own retirement benefits at 62 and then switch to a full spousal benefit at her full retirement age (FRA). If she files for her benefits at 62, her benefit rate will be reduced for age and she’ll keep that reduction for as long as both of you are living. She would also be deemed to have filed for spousal benefits, so she’ll be required to start drawing those benefits when you start drawing your retirement benefits. And if that’s prior to her FRA, then her spousal rate will also be reduced further for age.
For example, say Deb applies for her Social Security retirement benefits at 62. Deb’s full retirement age (FRA) rate, or primary insurance amount (PIA), is $800, but she gets a reduced age 62 rate of $576. A year later when Deb is 63, her husband files for his retirement benefits. Deb’s husband’s PIA is $2,000, and Deb’s unreduced spousal rate would be calculated by subtracting her PIA from 50% of her husband’s PIA. In Deb’s case that would amount to $200 (i.e. $2,000 / 2 – $800), but since Deb is only age 63, her spousal rate is reduced to $143. Deb would then be paid that excess spousal benefit in addition to her own reduced benefit rate, giving her a combined benefit of $719.
However, filing at age 62 would not lock your wife into a reduced widow’s rate. If you wait until FRA to start drawing your benefits and your wife is at least FRA when she starts drawing as a widow, she’d get an unreduced survivor rate equal to 100% of your rate. She wouldn’t get that plus her own amount, though, just the higher of the two. Best, Larry
Would It Be Best To File For My Own Social Security At 62 And Then File On My Ex’s Record When He Turns 62?
Hi Larry, I will be 62 in November and no longer work. My ex is 57 and still working. Will I be able to start my Social Security retirement benefit at 62 then draw my divorced spousal benefit on his record when he turns 62 because he makes more money? Would that be the best situation for me? Thanks, Angie
Hi Angie, You can’t file for your own benefits and later switch to drawing just divorced spousal benefits. However, if you were married for at least 10 years and if your ex’s primary insurance amount (PIA), which is equal to their full retirement age (FRA) retirement benefit amount, is more than twice as much as your PIA, you could file for your own retirement benefits as early as 62 and then get additional divorced spousal benefits when your ex reaches 62. But you’d keep the age reduction in your benefit rate for at least as long as both you and your ex are living. Best, Larry