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spousal 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.

Q&A: Social Security spousal benefits

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Dear Liz: I’m 52 and my wife is 57. I recently retired from the military and will have a small retirement from my new job. When should I take Social Security and when should she take hers? Her letter from the Social Security Administration says that based on her work record, she will receive $88 a month. She has spent most of our married life as a homemaker and caregiver to our children.

Answer: Your wife can’t file for spousal benefits until you file for your own benefit, and that can’t happen until you turn 62 in 10 years.

You may not want to file that early, though, since that would force you to take a permanently reduced benefit. You would be settling for about half of what you could get by letting your benefit grow, which also means a much smaller benefit for your wife should she outlive you.

A better strategy may be for each of you to wait to apply at least until you reach your own full retirement ages (66 1/2 for her, 67 for you).

Your wife would get her own small benefit until you turned 67. At that point, you could “file and suspend.” That means you file so she could get her much-larger spousal benefit, but you would immediately suspend your application so your own benefit could continue to grow.

The “file and suspend” strategy is really helpful for maximizing what married couples can get from Social Security, but the maneuver is available only for those who have reached their full retirement age.

Three years later, when your benefit maxes out at age 70, you can end the suspension and start getting your checks.

It’s especially important for higher-earning spouses to avoid locking themselves into permanently reduced checks. If your wife outlives you, she’ll have to get by on a single check — yours — so you want the amount to be as large as it can be.

Q&A: Social Security survivor benefits

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Dear Liz: I earned more than my wife, who died at age 57 after 18 years of marriage. When I turn 60, can I take survivor Social Security benefits based on her work record and then request my benefit at age 70?

Answer: In a word, yes, and doing so may be smart.

Survivor benefits are different from spousal benefits, which inflict some severe penalties for starting checks early. When you start spousal benefits before your own full retirement age, you’re locked into a permanently smaller check and you can’t later switch to your own benefit, even if it’s larger. The only way to preserve the ability to switch is to file a restricted application for just the spousal benefit at your own full retirement age (which is 66 for people born from 1943 to 1954 and gradually increases to age 67 for people born in 1955 and later). Then you preserve the right to change to your own benefit when it maxes out at age 70.
With survivor benefits, starting early means a reduced check — your widower benefit at 60 would be 30% smaller than if you waited until your full retirement age — but you can switch to your own benefit later. And if you don’t work, starting survivor benefits at 60 is the better course, said economist Laurence Kotlikoff, coauthor of “Getting What’s Yours: The Secrets to Maxing Out Social Security.”

“Getting a reduced benefit for 10 years, from 60 to 70, is better than getting an unreduced benefit for fewer years,” Kotlikoff said.
If you work, however, the math becomes less clear. When you start benefits early, your check is reduced $1 for every $2 you earn over a certain limit, which in 2015 is $15,720. That penalty disappears once you hit your full retirement age.

Online calculators can help you determine the best Social Security claiming strategy. AARP and T. Rowe Price are among the sites that provide free calculators, but they don’t factor in survivor benefits. Consider spending about $40 for one of the more sophisticated calculators, such as Kotlikoff’s MaximizeMySocialSecurity.com, that can include this important benefit.