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Can this be true? (SS question)
Old 10-08-2009, 03:37 PM   #1
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Can this be true? (SS question)

A friend of my wife's said she ran across this:

A spouse can start drawing SS at 62 under the other spouses account (they are older). Then when they turn 66, they can start drawing under their own account at the higher rate instead of the lower rate that they would have received if they had taken early withdrawals under their account.

Sorry if I made that sound complicated.
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Old 10-08-2009, 04:09 PM   #2
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There are a number of interesting things a couple can do to maximize social security benefits. Muddy area, with the SSA information not always clear. We have many threads here on spousal benefits and there is Bogleheads poster (sscritic) who seems to know a lot about all the things you can do to maximize benefits. However, when you apply at age 62 you automatically are applying for everything you are entitled to at that time, including your own benefits. This is from the SSA website at www.ssa.gov:

One of the provisions of the Social Security Act provides that whenever an individual files for reduced retirement or spouse's benefits, that individual is "deemed" to have filed for the other benefit as well. Essentially, this means that if an individual is eligible for both retirement and spouse's benefits in the initial month of entitlement, then he/she must be awarded both benefits. An individual cannot restrict the application to only one benefit when the deemed filing provision of the law applies.


So your situation will not result in a higher benefit. However, there may be other ways to maximize the family's total benefit.
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Old 10-08-2009, 04:27 PM   #3
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I did run across this at the SSA website:

Spouse’s benefits
A spouse who has not worked or who has low earnings can be entitled to as much as one-half of the retired worker’s full benefit. If you are eligible for both your own retirement benefits and for benefits as a spouse, we always pay your own benefits first. If your benefits as a spouse are higher than your retirement benefits, you will get a combination of benefits equaling the higher spouse benefit.

If you have reached your full retirement age, and are eligible for a spouse’s or ex-spouse’s benefit and your own retirement benefit, you may choose to receive only spouse’s benefits and continue accruing delayed retirement credits on your own Social Security record. You may then file for benefits at a later date and receive a higher monthly benefit based on the effect of delayed retirement credits.

If you are receiving a pension based on work where you did not pay Social Security taxes, your spouse’s benefit may be reduced. Additional information on pensions from work not covered by Social Security can be found in Pensions from work not covered by Social Security

If spouses want to get Social Security retirement benefits before they reach full retirement age, the amount of the benefit is reduced permanently. The amount of reduction depends on when the person reaches full retirement age.

For example:

If full retirement age is 65, a spouse can get 37.5 percent of the worker’s unreduced benefit at age 62;

If full retirement age is 66, a spouse can get 35 percent of the worker’s unreduced benefit at age 62;

If full retirement age is 67, a spouse can get 32.5 percent of the worker’s unreduced benefit at age 62.

The amount of the benefit increases at later ages up to the maximum of 50 percent at full retirement age. If full retirement age is other than those shown here the amount of the benefit will fall between 32.5 percent and 37.5 percent at age 62.
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Old 10-08-2009, 05:36 PM   #4
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We have frequently cited this as well from the SSA when talking about taking your own benefits early and a spousal benefit later:

Question
Can my spouse collect benefits at age 62 from her work and earnings and then receive a combined total up to 50 per cent from my account when I start receiving benefits at age 65?

Answer
Your wife can start receiving reduced retirement benefits on her own record at age 62. If the amount she receives on her own record is less than what she would be entitled to as a spouse, she would receive a higher spouse's benefit when you start receiving benefits. However, because she began receiving Social Security before reaching full retirement age, she will receive a reduced benefit rate that is less than the full 50 percent amount for as long as she remains entitled to spouse's benefits.
When your spouse applies for reduced retirement benefits, we will check to see if she is eligible for both her own retirement benefits and for benefits as a spouse. If she is eligible for both, we will pay her own benefits first. If she is due additional benefits, she will get a combination of benefits equaling the higher spouse's benefit. If she is not eligible for both because you are not yet entitled, but is due a higher amount when you start receiving Social Security benefits, then the higher spouse's benefit is payable to her when you apply for retirement benefits. Remember, she cannot receive spouse's benefits until you file for retirement.


Answer

This is the opposite of what you mention. However, I do not know of a way to not apply for both benefits if you are eligible for both. However, you do have a very interesting quote from the SSA:

If you have reached your full retirement age, and are eligible for a spouse’s or ex-spouse’s benefit and your own retirement benefit, you may choose to receive only spouse’s benefits and continue accruing delayed retirement credits on your own Social Security record. You may then file for benefits at a later date and receive a higher monthly benefit based on the effect of delayed retirement credits.

I haven't seen this before, do you have a link? This assumes though you are at full retirement age.

You might also post you question to sscritic at Bogleheads :: View Forum - Personal Finance (Not Investing) who I mentioned knows a lot about this stuff. If you do, it would be great if you posted back here what you learn.
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Old 10-08-2009, 05:51 PM   #5
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Ok, I learned something new from the SSA website at Retirement Planner: Benefits for your spouse




If your spouse has reached full retirement age and is eligible for a spouse's benefit and his or her own retirement benefit, he or she has a choice. Your spouse can choose to receive only the spouse's benefit now and delay receiving retirement benefits until a later date. If retirement benefits are delayed, a higher benefit may be received at a later date based on the effect of delayed retirement credits.




Note that the spouse has to reach full retirement age to be able to do this, so if she applies at age 62 it doesn't work.
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