Another Spousal Social Security Benefit Question

[Mike Piper]

But it's a difference without a distinction, right?

Nobody really cares if they get two amounts derived from two different calculations or one amount - as long as the total is the same.

It's a difference with a distinction, in some cases -- specifically, if there are minor children, adult disabled children, or dependent parents involved.

For example, if the family maximum on SpouseA's work record is $2,000 per month, and spouseB is getting a total monthly benefit of $800 per month, it matters whether all $800 is coming from SpouseA's work record or whether part of it is coming from SpouseB's own work record (thereby leaving more for the rest of the family).

Edited to add: It's also important for the sake of communicating with the SSA. If you ask about "my spousal benefit" or if they say something about "your spousal benefit" it's important to recognize that they mean something specific -- and it's not the total amount you're receiving per month (unless you have no retirement benefit of your own).

 

[joeea]

It's a difference with a distinction, in some cases -- specifically, if there are minor children, adult disabled children, or dependent parents involved.

Good point. I was thinking only of the basic cases, and not the edge cases.

Thanks!

 

[ERD50]

But it's a difference without a distinction, right?

Nobody really cares if they get two amounts derived from two different calculations or one amount - as long as the total is the same.

DW did. When I was explaining that she would end up getting half of "my" SS (half the amount of mine, to be more accurate), she was perturbed that she wouldn't be getting all the SS that she worked for ( "her" SS).

So I explained that actually, she gets all of "hers", and then gets an amount that brings it up to half of mine. That seemed to make her feel better.

She 'got it', but I still think she likes the second description better. And actually, the numbers are so close, she might actually have more than half 'mine' at this point.

Ahh, I saw some follow up posts - good points that i is best to stick to that terminology when talking to SS. It could very well be confusing to them, as it was pointed out it can make a difference in some cases, so SS is probably used to talking in those separate terms.

-ERD50

 

[skipro33]

Does this mean one check was for her and the other check was for her spouse?

No, one payment based on her earned benefits, the other based on her eligibility for up to 50% spousal benefits. The spousal benefit is the difference between her earned benefit and 50% of spousal benefit.

 

[joeea]

No, one payment based on her earned benefits, the other based on her eligibility for up to 50% spousal benefits. The spousal benefit is the difference between her earned benefit and 50% of spousal benefit.

And it arrived in two physical checks?
I've never heard of that.

 

[Mike Piper]

They're separate checks because they're coming from separate trust funds. The spousal benefit is being paid from the disability trust fund, whereas her retirement benefit is being paid from the "old age and survivor" trust fund.

 

[joeea]

They're separate checks because they're coming from separate trust funds. The spousal benefit is being paid from the disability trust fund, whereas her retirement benefit is being paid from the "old age and survivor" trust fund.

Why would the spousal benefit come from the disability trust fund?

 

[homestead]

My wife and I did this. Same age difference as OP. She filed at her FRA the year before I turned 62. The next year I filed for my benefits at 62. She immediately got increased benefits totaling 50% of my FRA amount. Only one deposit for her benefit not two. When she turns 70 her own benefit is still lower than 50% of mine so she won't be switching back to her own benefit.

 

[Mike Piper]

No, one payment based on her earned benefits, the other based on her eligibility for up to 50% spousal benefits. The spousal benefit is the difference between her earned benefit and 50% of spousal benefit.

Why would the spousal benefit come from the disability trust fund?

Based on the statement below, it sounds as if skipro33's brother is receiving a disability benefit rather than a retirement benefit. Spousal benefits are paid from whichever fund is paying the worker's benefit.

I'm referencing my brother and SIL's experience. When she got two checks, she asked me to check into it. (My brother has Alzheimers and isn't able to) The SS office told us this is the reason two checks.

 

[joeea]

Based on the statement below, it sounds as if skipro33's brother is receiving a disability benefit rather than a retirement benefit. Spousal benefits are paid from whichever fund is paying the worker's benefit.

Hmm, perhaps. It doesn't actually specify. Perhaps it was early-onset Alzheimer's.

I thought that upon reaching FRA folks no longer got disability benefits, but instead received regular Social Security benefits?

At what age does disability end?

 

[Mike Piper]

Hmm, perhaps. It doesn't actually specify. Perhaps it was early-onset Alzheimer's.

I thought that upon reaching FRA folks no longer got disability benefits, but instead received regular Social Security benefits?

At what age does disability end?

Yes, you are correct that disability benefits convert to retirement benefits at FRA. (Amount stays the same, but it's now technically a retirement benefit.)

So either:
1) This is early-onset Alzheimer's,
2) The brother's benefit was not properly converted to a retirement benefit at his FRA, or
3) The SIL's benefit was not properly converted to a spousal-based-on-retirement benefit rather than spousal-based-on-disability benefit.

I'm simply basing my statement on what skipro33 wrote (i.e., the Alzheimer's being the reason for the separate checks).

 

[ceciledian]

Question, can a surviving spouse claim 100% of the deceased spouse's benefit? I know it's 50% while living.

 

[pb4uski]

A surviving spouse gets the greater of their benefit or their deceased spouse's benefit.

So if Jack gets $2k/month and Jill receives $1k/month and Jack dies, then Jill starts receiving $2k/month for the rest of her life.

 

[MissMolly]

A surviving spouse gets the greater of their benefit or their deceased spouse's benefit.

So if Jack gets $2k/month and Jill receives $1k/month and Jack dies, then Jill starts receiving $2k/month for the rest of her life.

***Depends upon her age when she files for survivor benefits. If filing before she is FRA, she gets a reduced amount.***

 

[HI Bill]

Me: Planning to take SS at age 62. I'm the higher income but Spouse still has a good SS pension at FRA.

Spouse: 5 yrs older. Planning to take SS at age 70.

What I think we can do. I file for SS at age 62 (my FRA is 67). Spouse files for spousal benefits at age 67. Spouse files for her own SS benefit at age 70.'

If you take SS at 62, the spousal benefits will be half of that number; the spousal benefit maxes out only if you start taking at FRA or later (the spousal benefit would then 50% of your FRA benefit). I'd try to wait till 67 to start, if you're trying to maximize your spousal benefits. Just a thought...I did not run a calculator.

 

[skipro33]

If you take SS at 62, the spousal benefits will be half of that number; the spousal benefit maxes out only if you start taking at FRA or later (the spousal benefit would then 50% of your 55 benefit). I'd try to wait till 67 to start, if you're trying to maximize your spousal benefits. Just a thought...I did not run a calculator.

I'm not sure that's correct. My understanding is that the spousal benefit at FRA is 50% of the other spouse's FRA even though he/she may have taken SS earlier. The premise is that the spouse's SS is based on his/her age using the spouse's FRA as a basis.

In my case, I'm projected to get $2,032 at age 62 (I turn 62 this year) and $2,755 at 66 and 4 months. If I take SS this year and DW waits to her own FRA, (she is 4 months younger than me) then her SS is based on 50% of $2,755 (my FRA poential). Why would she be penalized for her SS if I started drawing mine early?

I draw this conclusion based on SS website info;

As a spouse, you can claim a Social Security benefit based on your own earnings record, or you can collect a spousal benefit that will provide you 50 percent of the amount of your spouse's Social Security benefit as calculated at their full retirement age (FRA)

It doesn't say the spouse had to draw SS at FRA, just that their SS is calculated based on their full retirement age.

I also find confirmation of my understanding on other websites. For example;
http://www.wiserwomen.org/index.php?id=686

A full spousal benefit is worth 50% of the non-claiming spouse's retirement benefit at their full retirement age (known as the "primary insurance amount", or PIA). It does not matter when the non-claiming spouse actually filed for their own retirement benefit. Therefore, even if your current or former spouse is receiving a reduced benefit as a result of early claiming, your spousal benefit will not be affected.

There is one limitation about spousal benefits I learned; a spouse can not start spousal benefits if the spouse themselves haven't started taking SS yet. I would guess that would mean the primary wage earning spouse couldn't wait to 70, say, to take SS if the couple was planning on the other spouse to draw spousal benefits at their own FRA.

 

[HI Bill]

If you take SS at 62, the spousal benefits will be half of that number; the spousal benefit maxes out only if you start taking at FRA or later (the spousal benefit would then 50% of your FRA benefit). I'd try to wait till 67 to start, if you're trying to maximize your spousal benefits. Just a thought...I did not run a calculator.

Sorry, I stand corrected...my wife is younger than me, so I never fully researched this option. It seems too good to be true!

 

[gwraigty]

I'm not sure that's correct. My understanding is that the spousal benefit at FRA is 50% of the other spouse's FRA even though he/she may have taken SS earlier. The premise is that the spouse's SS is based on his/her age using the spouse's FRA as a basis.

In my case, I'm projected to get $2,032 at age 62 (I turn 62 this year) and $2,755 at 66 and 4 months. If I take SS this year and DW waits to her own FRA, (she is 4 months younger than me) then her SS is based on 50% of $2,755 (my FRA poential). Why would she be penalized for her SS if I started drawing mine early?

I draw this conclusion based on SS website info;
It doesn't say the spouse had to draw SS at FRA, just that their SS is calculated based on their full retirement age.

I also find confirmation of my understanding on other websites. For example;
WISER Women - Your Guide to Understanding Social Security Spousal Benefits

There is one limitation about spousal benefits I learned; a spouse can not start spousal benefits if the spouse themselves haven't started taking SS yet. I would guess that would mean the primary wage earning spouse couldn't wait to 70, say, to take SS if the couple was planning on the other spouse to draw spousal benefits at their own FRA.

No, the spousal benefit is not 50% of the other spouse's FRA if the other spouse collected their benefits earlier than their FRA. From the SS website (bolding mine):

"Benefits for Spouses

Early retirement reduces benefits

A spouse can choose to retire as early as age 62, but doing so may result in a benefit as little as 32.5 percent of the worker's primary insurance amount. A spousal benefit is reduced 25/36 of one percent for each month before normal retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of one percent per month.

For a spouse who is not entitled to benefits on his or her own earnings record, this reduction factor is applied to the base spousal benefit, which is 50 percent of the worker's primary insurance amount. For example, if the worker's primary insurance amount is $1,600 and the worker's spouse chooses to begin receiving benefits 36 months before his or her normal retirement age, we first take 50 percent of $1,600 to get an $800 base spousal benefit. Then we compute the reduction factor, which is 36 times 25/36 of one percent, or 25 percent. Applying a 25 percent reduction to the $800 amount gives a spousal benefit of $600. Thus, in this case, the final spousal benefit is 37.5 percent of the primary insurance amount."

https://www.ssa.gov/oact/quickcalc/spouse.html

 

[MissMolly]

No, the spousal benefit is not 50% of the other spouse's FRA if the other spouse collected their benefits earlier than their FRA. From the SS website (bolding mine):

"Benefits for Spouses

Early retirement reduces benefits

A spouse can choose to retire as early as age 62, but doing so may result in a benefit as little as 32.5 percent of the worker's primary insurance amount. A spousal benefit is reduced 25/36 of one percent for each month before normal retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of one percent per month.

For a spouse who is not entitled to benefits on his or her own earnings record, this reduction factor is applied to the base spousal benefit, which is 50 percent of the worker's primary insurance amount. For example, if the worker's primary insurance amount is $1,600 and the worker's spouse chooses to begin receiving benefits 36 months before his or her normal retirement age, we first take 50 percent of $1,600 to get an $800 base spousal benefit. Then we compute the reduction factor, which is 36 times 25/36 of one percent, or 25 percent. Applying a 25 percent reduction to the $800 amount gives a spousal benefit of $600. Thus, in this case, the final spousal benefit is 37.5 percent of the primary insurance amount."

https://www.ssa.gov/oact/quickcalc/spouse.html

Everything you have quoted is in reference to the age of the person filing for spousal benefits. Skipro33 is correct. As long as the person filing for spousal benefits is full retirement age, they collect 50% of the primary beneficiary's full retirement amount (PIA) regardless of when the primary beneficiary retired.

 

[gwraigty]

Everything you have quoted is in reference to the age of the person filing for spousal benefits. Skipro33 is correct. As long as the person filing for spousal benefits is full retirement age, they collect 50% of the primary beneficiary's full retirement amount (PIA) regardless of when the primary beneficiary retired.

If so, then I stand corrected.

It seems incredible to me that they wouldn't also reduce the spousal benefit if the primary worker collects early.

I always learn something new here.

 

[HI Bill]

If so, then I stand corrected.

It seems incredible to me that they wouldn't also reduce the spousal benefit if the primary worker collects early.

I always learn something new here.

Yes, and me, too! And by the way, this is part of the reason SS is soon to be lacking in funding...

 

[skipro33]

Funding for a spouse, based on the primary earner's benefit always seemed to me to be a pretty generous offering. I'm not so sure it's part of the reason SS is soon to be lacking funding. I would have assumed that SS had factored in that benefit into their formula for funding the program before just willy-nilly giving away that benefit. Maybe the powers-that-be didn't factor in spousal benefits when it was established. I just don't know and I wouldn't know where to research that bit of info.

In any case, I will plan to take my benefit at 62 and capture my $2,032 in early benefit, wait 4 years, 8 months and have DW apply for her's at 50% of my PIA(FRA) for $1,377 (half my FRA of $2,754) and then start taking RMD on my IRA (which I won't have touched previously as I have a COLA'd pension that caps at 5% a year based on inflation) 3 years and 3 months after that at age 70.5. (About another $2,000 a month).

Then, if we are lucky to live so long, DW can apply for her earned SS based on her income when it tops the spousal benefit. (If ever). I consider these my built in pay raises spaced about every 4/5 years from my original retirement date.

I have no idea what I'll do with the windfall income, but I'm sure we'll find a way to enjoy it!!

 

[HI Bill]

I'm not so sure it's part of the reason SS is soon to be lacking funding. I would have assumed that SS had factored in that benefit into their formula for funding the program before just willy-nilly giving away that benefit. Maybe the powers-that-be didn't factor in spousal benefits when it was established. I just don't know and I wouldn't know where to research that bit of info.

https://www.ssa.gov/history/reports/crsleghist2.html has a history of SS, and it looks like dependents benefits were initially added in the 1939 amendments, just 4 years after it was started. The 1960 amendments added disabled workers. Earnings tests, taxation, etc., have changed many times. The history is fascinating, but it makes it very apparent that rather than a well-defined, well-planned system, SS, has been through at least 29 major amendments...that appear reactive, rather than proactive!

 

[Crabby Mike]

Then, if we are lucky to live so long, DW can apply for her earned SS based on her income when it tops the spousal benefit. (If ever). I consider these my built in pay raises spaced about every 4/5 years from my original retirement date.

From your description, it sounds like your wife is less than 64 today? If so (if she was born after 1/2/54), she will not be able to collect spousal, then switch to her own later. When she first files, she will be "deemed" to have filed for her own as well as spousal. Only those born before that date are grandfathered into the "file and restrict" loophole.

 

[skipro33]

From your description, it sounds like your wife is less than 64 today? If so (if she was born after 1/2/54), she will not be able to collect spousal, then switch to her own later. When she first files, she will be "deemed" to have filed for her own as well as spousal. Only those born before that date are grandfathered into the "file and restrict" loophole.

Thanks for that little inconvenient truth. As I understand it, DW is eligible for a spousal benefit on my record as well as her own. DW must file for both benefits. She can no longer file only for the spousal benefit and delay filing for her own retirement. She will receive a combination of the two benefits that equals the higher amount.