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spousal benefits

Q&A: Clearing up the deal with Social Security survivor benefits

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Dear Liz: I read your column regarding the wife who filed for her Social Security benefits at 62 and received $1,500, while her husband filed at 70 and was receiving $4,600. You noted that after the husband died she could receive his entire $4,600 payment, but wouldn’t the amount she receives as a survivor’s benefit be reduced due to her early filing?

Answer: That’s not true. An early start reduces retirement and spousal benefits. Survivor benefits operate by different rules.

A survivor benefit can be up to 100% of what the deceased spouse received or had earned. If the husband had filed for his own benefit earlier, for example, that would reduce the survivor benefit the wife could receive. Survivor benefits also can be reduced if the survivor starts receiving them before reaching his or her own full retirement age for such benefits.

But the wife’s early start on her own benefit doesn’t affect the survivor benefit she could get if he dies first.

Q&A: How late-in-life divorce could affect Social Security benefits

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Dear Liz: I’m a CPA and getting conflicting answers from the Social Security office about a case I’m working on. Both clients are 70 and they’re considering legal separation or divorce. She took Social Security at 62 and receives about $1,500 a month before deductions. He started Social Security at 70 and receives about $4,600. How would her Social Security change at his death or their divorce, if she doesn’t remarry?

Answer: Based on the amounts involved, both parties are receiving their own retirement benefits and those aren’t affected by divorce, said William Reichenstein, a principal at Social Security Solutions, a claiming strategy site. (If the wife were receiving spousal benefits, those would continue after divorce as long as the marriage lasted at least 10 years and she did not remarry.)

If the husband dies and they haven’t divorced, the wife would be entitled to survivor benefits equal to his full monthly benefit amount ($4,600, plus any future cost of living increases). If they divorce and the marriage lasted at least 10 years, she also would be entitled to his full amount. Remarriage wouldn’t affect her divorced survivor benefit since she’s over 60, Reichenstein said.

Q&A: When should a second earner start taking social security?

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Dear Liz: I am 64 and still working and earning decent pay. My wife is 61 and retired. I have been a high earner for most of my life while she was working and raising our family. I don’t plan to retire anytime soon. Is it a good idea for her to start taking Social Security at 62?

Answer: The vast majority of people are better off delaying their Social Security applications for as long as possible so they can maximize their lifetime benefits. It’s especially important for you to delay, since as the higher earner, your benefit will determine what the survivor gets.

Your wife, however, may be one of the few who is better off starting early. That may be the case if you continue to delay your application, and her eventual spousal benefit is more than what she would receive on her own record.

If both of those things are true, she could start her own reduced retirement benefit at 62, then switch to a spousal benefit of up to half of your check after you apply for your benefits — preferably at age 70, when they max out.

Your wife won’t be able to get a spousal benefit until you apply for your own. On the other hand, she won’t be allowed to switch benefits if you’re already receiving yours when she applies.

Clearly, there are a lot of rules involved, and the best course for you two will depend on the specifics of your situation. You’d be smart to use a Social Security claiming site, such as Maximize My Social Security or Social Security Solutions, to help you determine your best approach.

Q&A: Benefits’ disappearance is no accident

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Dear Liz: You recently indicated that restricted applications for Social Security spousal benefits are no longer available to people born on or after Jan. 2, 1954. Who is responsible for this change, and when was that enacted? Is there any way it can be reversed?

Answer: Congress is unlikely to revive what was widely seen as a loophole that allowed some people to take spousal benefits while their own benefits continued to grow.

Congress changed the rules with the Bipartisan Budget Act of 2015. As is typical with Social Security, the change didn’t affect people who were already at or near typical retirement age. So people who were 62 or older in 2015 are still allowed to file restricted applications when they reach their full retirement age of 66. They can collect spousal benefits while their own benefits accrue delayed retirement credits, as long as the other spouse is receiving his or her own retirement benefit. (Congress also ended “file and suspend,” which would have allowed one spouse to trigger benefits for the other without starting his or her own benefit.)

Q&A: Social Security spousal benefits

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Dear Liz: My wife plans to file for her Social Security benefit when she turns 66 in April 2020. I plan to file for my benefit at age 70 in July 2022. Can I file for a spousal benefit when my wife files in 2020? Can my wife claim a spousal benefit in 2022 when I file for my own benefit, assuming it is more than her own benefit? Will my wife’s spousal benefit increase like my benefit does between my ages of 66 to 70, or does it max out at my age 66?

Answer: Because you’ve reached your full retirement age of 66 and you were born before Jan. 2, 1954, you are still allowed to file a restricted application for spousal benefits once your wife applies for her own benefit. When your benefit maxes out at age 70, you would switch to your own because there’s no incentive to further delay.

Restricted applications are no longer available to people born later. Instead, when they apply for benefits they are deemed to be applying for both their own and any spousal benefit to which they might be entitled. They’re given the larger amount and typically can’t switch later.

One of the exceptions could apply in your case, however. Your wife won’t be able to take a spousal benefit when she applies because you won’t have started your benefit. Once you start, if her spousal benefit based on your work record is larger than what she’s receiving based on hers, she could switch.

Because only one spousal benefit is allowed per couple, you’ll want to investigate which could result in more money before you apply.

As for your last question: Spousal benefits don’t earn the delayed retirement credits that can increase a worker’s retirement benefits by 8% annually between full retirement age and 70. If your wife had started spousal benefits before her own full retirement age of 66, the amount would have been permanently reduced — she would receive less than 50% of the benefit you’d earned at your full retirement age. But she won’t get more than 50% if she starts them after her full retirement age.

Q&A: Social Security spousal benefits

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Dear Liz: I’m confused by Social Security benefits for divorced spouses, which you’ve written about recently. I was told that because I remarried (after age 60), I have to wait until my ex-husband died before receiving a part of his benefits. Is this still true for remarried ex-spouses? My ex does collect Social Security and I collect my small benefit (both of us started at full retirement age).

Answer: Yes. Divorced spousal benefits would be available only if you are currently unmarried. Survivor benefits, on the other hand, could still be available if you remarried at 60 or older.

Spousal and divorced spousal benefits can be up to 50% of the worker’s benefit, while survivor and divorced survivor benefits can be up to 100%.