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? on SS Spousal File-and-Suspend when one spouse doesn't have SS-able earnings
Old 07-11-2014, 11:13 PM   #1
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? on SS Spousal File-and-Suspend when one spouse doesn't have SS-able earnings

I have not seen this particular variation referenced anywhere. Maybe it's not doable?

The setup:
Spouse A and Spouse B, both age 66, their FRA.
Spouse A has many years of earnings that paid into SS.
Spouse B fell short on the number of earnings quarters paying into SS, not eligible on their own record.

At 66, Spouse A files for SS, eligible for X $/month, but suspends benefit.
Then Spouse B, also 66, files against record of Spouse A, gets .5X $/month as benefit.

Question #1 - So far, so good?

Question #2 - I assume that for the next few years, the benefit that Spouse B receives remains as .5X, increased only by COLAs, if there are any. Is this correct?

Question #3 - At age 70, Spouse A has the benefit suspension lifted, and now receives a greater benefit Y, due to waiting till age 70 to actually receive benefits.
What happens to the benefit that Spouse B receives then? Does it stay at the old .5X + COLAs? Or does it increase to the new .5Y + any COLAs?
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Old 07-11-2014, 11:17 PM   #2
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It stays at the old .5X + COLAs.
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Old 07-12-2014, 08:40 AM   #3
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We are in a spousal benefit too, and from lots of reading here and other places doesn't the spousal benefit freeze at the FRA of the spouse with the earnings..does not rise from that point on. So the 2nd spouse would be age adjusted at the 50% mark.

Anybody know for certain if this is correct?
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Old 07-12-2014, 09:48 AM   #4
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Originally Posted by ivinsfan View Post
We are in a spousal benefit too, and from lots of reading here and other places doesn't the spousal benefit freeze at the FRA of the spouse with the earnings..does not rise from that point on. So the 2nd spouse would be age adjusted at the 50% mark.

Anybody know for certain if this is correct?
I'm not sure of your wording.

If A has the earnings record and B does not, the most B can get is 50% of A's Primary Insurance Amount (i.e. the amount that A would get if A started benefits at his/her FRA).
B's benefit depends on when B starts benefits relative to B's FRA.

Quote:
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.
Benefits for Spouses
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Old 07-12-2014, 10:39 AM   #5
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Sorry if I was unclear. A lot of the SS verbiage use the words, the working spouse's FRA.. for most of us it's 66. After looking at several websites and SS pages, I take this to mean that the spousal benefit does not rise with the primary's benefit after the primary reaches 66 or FRA. In your quote they use the word primary instead of benefit at FRA.

Not at lot of clarity in the terms, which is what is confusing to me. In other words, if I wait until my husband is 68, will I get half of his 68 year check, reduced for MY age. Or will I get half of his 66 year old benefit, reduced for MY age. Your comment seems to confirm my thinking. Thanks for answering.
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Old 07-12-2014, 11:49 AM   #6
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Spousal is based/calculated from the other parties PIA (Primary Insurance Amount). PIA is the amount received at full retirement age. (around 66 depending on your age)

PIA is PIA, your husband taking benefits at 68 is receiving his PIA plus a increase percentage for having delayed. No effect on spousal as his PIA is still the same.
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Old 07-12-2014, 12:34 PM   #7
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That's my understanding of the number too. It makes the decision on the spousal benefit a little more involved, because it doesn't rise after the 50% of FRA, so only the age I take it really matters. That's fair enough, as I do appreciate getting any check at all. In our case my DH will turn 66 shortly before my 62nd b-day.

What would you all think is the best strategy in that situation.I'm leaning toward having him either claim his own or him doing a file and suspend, so I would take mine as soon as possible. Bearing in mind we only get 2 checks until one of us is gone.
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Old 07-12-2014, 08:00 PM   #8
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Originally Posted by ivinsfan View Post
That's my understanding of the number too. It makes the decision on the spousal benefit a little more involved, because it doesn't rise after the 50% of FRA, so only the age I take it really matters. That's fair enough, as I do appreciate getting any check at all. In our case my DH will turn 66 shortly before my 62nd b-day.

What would you all think is the best strategy in that situation.I'm leaning toward having him either claim his own or him doing a file and suspend, so I would take mine as soon as possible. Bearing in mind we only get 2 checks until one of us is gone.
Have your DH file and suspend and wait until he's 70 to start taking benefits. Odds are you will survive him (since you are younger and I assume female) and start receiving his larger benefit, so you want it as big as possible. You can take spousal at 62, but with a permanently reduced benefit. If you wait until your FRA you will get the full spousal benefit.

In our very similar case, DW will take spousal for 4 years or so and then her own benefit at age 70. By waiting until her FRA to take spousal benefits, she is eligible for her full age 70 benefit when the time comes. With that extra spousal kick it should be better than taking her regular benefit at 62.

Assuming this stuff still exists in a few years.
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Old 07-12-2014, 08:10 PM   #9
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Have your DH file and suspend and wait until he's 70 to start taking benefits. Odds are you will survive him (since you are younger and I assume female) and start receiving his larger benefit, so you want it as big as possible. You can take spousal at 62, but with a permanently reduced benefit. If you wait until your FRA you will get the full spousal benefit.

In our very similar case, DW will take spousal for 4 years or so and then her own benefit at age 70. By waiting until her FRA to take spousal benefits, she is eligible for her full age 70 benefit when the time comes. With that extra spousal kick it should be better than taking her regular benefit at 62.

Assuming this stuff still exists in a few years.
That's what we plan to do as my DH still has W2 income and isn't really interested in stopping work any time soon. We'll rethink that if he decides to retire at any point before 70.
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Old 07-13-2014, 10:43 PM   #10
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Thanks for the info MissMolly, Independent and springnr!

I had not realized that the PIA itself does not increase beyond FRA!

So now it all makes sense that the answer to the situation in my Question #3 is:
Quote:
It stays at the old .5X + COLAs.
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Old 07-14-2014, 08:37 AM   #11
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Originally Posted by ivinsfan View Post
That's my understanding of the number too. It makes the decision on the spousal benefit a little more involved, because it doesn't rise after the 50% of FRA, so only the age I take it really matters. That's fair enough, as I do appreciate getting any check at all. In our case my DH will turn 66 shortly before my 62nd b-day.

What would you all think is the best strategy in that situation.I'm leaning toward having him either claim his own or him doing a file and suspend, so I would take mine as soon as possible. Bearing in mind we only get 2 checks until one of us is gone.
We're in this situation, except that we are much closer in age.

I think the bold is important. If A had the income, and B's benefit is based solely on A's work record, then B's benefit will be paid until the first death, and A's benefit will be paid until the second death (because B will step into A's shoes if A dies first).

So, when people do "break even" type calculations, it's likely that it makes more sense for B to claim "early" and A to claim "late".
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Old 07-14-2014, 11:20 AM   #12
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This was discussed many times in this forum but I never got it until this thread. I was missing the info on PIA. Unless the law is changed later, my strategy (same situation as the OP) is set for now. Thanks, Telly and others.
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