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spousal benefits

Q&A: Waiting your way to better retirement benefits

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Dear Liz: You recently wrote, “When you apply for Social Security now, you’re ‘deemed’ (considered by the Social Security Administration) to be applying for both your own benefit and any available spousal benefit. If a spousal benefit is larger, you’ll get that, and you can’t switch back to your own later.”

I turn 62 in August and recently visited the Social Security Administration to apply for benefits. I worked for 20 years and earned a benefit of $1,400 a month if I waited to apply at 66. Since I was applying at the earlier age of 62, my benefit is lowered to about $1,000 a month. Half of my husband’s benefit is $1,300 a month but I was told my only choices are to take $1,000 at the earlier age of 62 or wait another four years and take my full benefit at $1,400.

What makes me incensed is that had I not worked at all, I would be eligible to take the higher amount of $1,300 spousal benefit at 62. This makes no sense!

Answer: No, it doesn’t, and it may be because you’re misunderstanding what you were told.

Your spousal benefit is half of your husband’s benefit only if you wait until your own full retirement age, 66, to take it. Social Security benefits are reduced if you start early.

If his benefit is currently $2,600, your spousal benefit now would be about 35% of that, or $904. Since your own benefit reduced for an early start is $1,000, you would get the larger of the two checks, or $1,000. If you wait until your full retirement age, you’ll get a substantially larger check — and it will still be bigger than your spousal benefit.

Q&A: Social Security spousal benefits

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Dear Liz: In a recent article, you mentioned spousal benefits. If someone started her own Social Security benefit at 62, is there no way of drawing a spousal benefit at a later date?

Answer: When you apply for Social Security now, you’re “deemed” (considered by the Social Security Administration) to be applying for both your own benefit and any available spousal benefit. If a spousal benefit is larger, you’ll get that, and you can’t switch back to your own benefit later.

You may be able to switch from your own benefit to a spousal benefit, however. Let’s say that when you applied at 62, your spouse had not yet applied for his or her own benefit. When he or she does apply, you’ll be automatically switched to a spousal benefit if it’s larger than your own.

Before Congress changed the rules, it was possible for one spouse to “file and suspend” — file and immediately suspend an application for retirement benefits, which was enough to allow a spouse to collect a spousal benefit. Today, a spousal benefit is typically only available if the primary earner has started his or her own retirement benefits.

Q&A: When a Social Security spousal benefit goof is suspected

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Dear Liz: A family member recently lost her spouse. His monthly Social Security check was $1,800 and hers is $750. I have two questions.

First, is my understanding correct that she is able to begin collecting his monthly amount instead of her own?

Second, instead of collecting Social Security based on her earnings history, was she eligible instead to have collected 50% of her husband’s monthly benefit? If so, she was entitled to $150 more than she’s been collecting. If this is accurate, is there any recourse for collecting the additional benefit from Social Security?

Answer: To answer your first question, yes, your relative will now receive a survivor’s benefit equal to what her husband was receiving. She will no longer receive her own benefit.

The answer to your second question is a bit more complicated. Your relative may have started benefits before her own full retirement age, which used to be 65 and is now 66. When people start benefits early, they receive a permanently reduced amount whether they’re receiving their own retirement benefit or a benefit based on a spouse’s earnings. It’s possible that her reduced retirement benefit was more than her reduced spousal benefit.

Another possibility is that she started benefits before her husband. To get spousal benefits, the primary earner typically needs to be receiving his or her own benefit. (There used to be a way around this, called “file and suspend,” that allowed the primary earner to file for benefits and then suspend the application. That no longer exists.)

If your relative started benefits before her husband, she may have been able to get a bump in her check once he applied, assuming her spousal benefit was worth more than her own retirement benefit. That bump in benefits is now automatic, but if she turned 62 before 2016, she would have had to apply to get the increase, says Mary Beth Franklin, a Social Security expert who writes for Investment News.

She wouldn’t be eligible to get all the missed benefits back at this point, but she could get up to six months’ worth.

Q&A: Starting Social Security benefits early will cost you

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Dear Liz: I started getting Social Security at age 62. I would have only gotten $327 a month based on my work history, but they gave me $666 based on my husband’s work history. He gets $1,966 but your article said I should get half. Should I be receiving more?

Answer: Probably not.

Your spousal benefit would have been half of your husband’s “primary benefit amount” only if you’d waited until your own full retirement age to apply. Because you started several years early at 62, your check was reduced by 30%.

His primary benefit amount is what he would have received if he started benefits at his own full retirement age. Full retirement age is currently 66 and will rise to 67 for people born in 1960 and later.

Q&A: Divorce and Social Security spousal benefits

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Dear Liz: My ex-wife and I were married for 12 years. She is 55. I am 64 and collecting Social Security. At what age can she apply for spousal benefits?

Answer: If she doesn’t remarry, she can apply for spousal benefits as early as age 62. If she applies early, though, she would lose the option to switch to her own benefit later if it’s larger.

To preserve that option, she would need to wait until her own full retirement age, which is 67 for those born in 1960 and later.

Dear Liz: My husband is 68 and I am 59. My husband is deferring his Social Security to age 70 to get the largest amount. If he predeceases me, at what age would I be eligible for 100% of my husband’s current Social Security benefit? Would I have to wait to age 66 for that benefit?

Answer: If your husband should die, you could apply for survivor’s benefits as early as age 60 (or 50 if you are disabled). Your benefit would be reduced to reflect the early start. To get 100% of your husband’s benefit, you typically would have to wait until your own full retirement age. If you were born in 1956, that would be 66 and four months.

There’s a wrinkle here, though. By waiting to start his benefit, your husband is earning what are known as delayed retirement credits that increase his benefit by 8% annually (or two-thirds of 1% each month). Your survivor’s benefit would be based on the benefit he’s earned, including the delayed retirement credits, even if he should die before age 70. So at least some of the effect of your early start would be offset by the fact that he delayed benefits.

If your husband had started benefits early, by contrast, your survivor’s benefit would have been based on that permanently reduced amount. By waiting, your husband is ensuring that you will get the largest survivor benefit possible while increasing the odds that you as a couple will get the most out of Social Security.

Q&A: Social Security spousal benefits

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Dear Liz: I started my Social Security benefits at 66 and am now 70. I was married for 23 years and have not remarried.

When I ask about spousal benefits, I am told that my own monthly benefit is too high to get benefits based on my ex’s work record. My monthly benefit is only $1,509, my 401(k) has tanked, and I am surviving on less and less available part-time work.

I was told further that I can apply once my ex passes away and then it won’t matter how high my income is. Could that be correct? What is the exact cut-off amount to get spousal benefits?

Answer: Many people misunderstand the way spousal benefits work, and they think that they can get an additional check on top of their own retirement benefit. That’s not quite how it works.

Essentially, Social Security compares the amount of your retirement benefit with what you would get as a spouse or divorced spouse and gives you the larger of the two. Spousal benefits are up to half of what your spouse or ex receives.

If your ex’s benefit is $2,000 a month, for example, your spousal benefit could be $1,000, which is less than you’re getting now. If your ex dies, however, you can apply for a survivor benefit that equals what he or she received — in this example, $2,000 a month.