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Question on SS numbers
Old 02-13-2015, 12:41 PM   #1
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Question on SS numbers

I'm using a program that optimizes SS and I don't understand something its doing.

It says I should take SS at age 70. I get that. That amount is $40,200/yr in today's dollars and it matches the SS estimate.

It says my spouse should take hers 2 years later when she's 67. Her amount is $12,768/yr. That matches her SS estimate.

But then it says she gets something called a "spousal benefit" at that same time of $3,665/yr.

I don't get that. Is that a real thing?
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Old 02-13-2015, 12:44 PM   #2
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No. She cannot take her SS and the spousal benefit too. It has to be one or the other. She can take either her SS benefit or half of your FRA benefit (not half of what you get at age 70).
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Old 02-13-2015, 12:59 PM   #3
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I've noticed that some sites mistakenly claim that you can collect spousal and your regular payment at the same time. Walt is correct.
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Old 02-13-2015, 01:15 PM   #4
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thanks guys
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Old 02-13-2015, 02:00 PM   #5
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No. She cannot take her SS and the spousal benefit too. It has to be one or the other. She can take either her SS benefit or half of your FRA benefit (not half of what you get at age 70).
Hey Walt, is it which ever is greater?
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Old 02-13-2015, 02:01 PM   #6
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Hey Walt, is it which ever is greater?
Yes.
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Old 02-13-2015, 02:03 PM   #7
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Hey Walt, is it which ever is greater?
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Yes.
Well, I guess she could take the smaller amount but I've never heard of anyone doing that.
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Old 02-13-2015, 02:05 PM   #8
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Well, I guess she could take the smaller amount but I've never heard of anyone doing that.
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Old 02-13-2015, 02:10 PM   #9
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But if I add her two numbers together, I get $16,433/yr and that's only 40% of my full benefit. Is that because she is taking it when she's only 67?
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Old 02-13-2015, 02:18 PM   #10
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You lost me - why are you adding her two numbers together?
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Old 02-13-2015, 02:37 PM   #11
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I have similar plan.

Here is what I think best for you and your wife:

1. You take yours at 70, for $40K/yr
2. Your wife at her 67, take 1/2 of your FRA benefit (say, $30K), so her spousal benefit should be $15K. This is higher than her own $12K.
3. When you expire, she switch to take your $40K/yr
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Old 02-13-2015, 02:45 PM   #12
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I have similar plan.

Here is what I think best for you and your wife:

1. You take yours at 70, for $40K/yr
2. Your wife at her 67, take 1/2 of your FRA benefit (say, $30K), so her spousal benefit should be $15K. This is higher than her own $12K.
3. When you expire, she switch to take your $40K/yr
Ok, but still lost on the numbers. If my SS is $40k, then shouldn't hers be $20k? Why is it only $15k?
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Old 02-13-2015, 02:47 PM   #13
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I think I get it now. She gets 1/2 of my FRA which is when I'm 67, not 70.
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Old 02-13-2015, 02:50 PM   #14
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Bingo!
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Old 02-13-2015, 03:00 PM   #15
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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 own retirement benefits, you will get a combination of benefits equaling the higher spouse benefit.
So yes, your spouse can get her own Social Security benefit amount paid out, and if it is less that half of yours, she will also receive a spousal benefit to bring the total up to half of yours.
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Old 02-13-2015, 10:33 PM   #16
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Quote:
Originally Posted by bulbar View Post
I'm using a program that optimizes SS and I don't understand something its doing.

It says I should take SS at age 70. I get that. That amount is $40,200/yr in today's dollars and it matches the SS estimate.

It says my spouse should take hers 2 years later when she's 67. Her amount is $12,768/yr. That matches her SS estimate.

But then it says she gets something called a "spousal benefit" at that same time of $3,665/yr.

I don't get that. Is that a real thing?
Yes, it is. The spousal benefit tops up her benefit so it is equal to half of your FRA benefit (assuming that she doesn't start her benefits early).

As I recall, technically the spousal benefit is the excess of 50% of your FRA benefit over her benefit. I'm guessing that your FRA benefit is ~$32,419 ($40,200/1.24) assuming that your FRA is 67. 50% of your FRA is then $16,210 and her spousal benefit would be $3,442 (a little different from your $3,665... not sure why).

So her benefit of $16,433 is comprised of $12,768 of her benefit + $3,665 of a spousal benefit.
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Old 02-13-2015, 10:39 PM   #17
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No. She cannot take her SS and the spousal benefit too. It has to be one or the other. She can take either her SS benefit or half of your FRA benefit (not half of what you get at age 70).
While I agree that we commonly think of it this way for convenience sake, technically she gets her benefit plus an add-on spousal benefit to increase her benefit to 50% of the spouse's FRA benefit.
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Old 02-13-2015, 10:52 PM   #18
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While I agree that we commonly think of it this way for convenience sake, technically she gets her benefit plus an add-on spousal benefit to increase her benefit to 50% of the spouse's FRA benefit.
I think you are correct!
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