Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Social Security Spousal Benefits
Old 05-14-2008, 02:28 PM   #1
Confused about dryer sheets
 
Join Date: Mar 2008
Posts: 7
Social Security Spousal Benefits

Anybody out there have a handle on social security spousal benefits? I recently read an article on the subject - FOXNews.com - Spousal Benefit Another Key To Social Security Decision - Finance | Personal | Business | Personal Finances - and need a reality check on whether I am interpreting it correctly.

My wife and I are both retired and approaching 62. Although our full benefit age is 66, we will very likely choose to begin drawing early social security benefits at 62, with my wife arriving there about 4 months ahead of me.

If I understand this article correctly - At 62, my wife's reduced benefits will be based on her own earnings, as usual. When I reach 62 and begin drawing benefits, she becomes eligible to draw 35% of my FULL retirement age benefit, even though I am alive and drawing a reduced benefit at 62.

That seems strange to me, but I reach the same conclusion every time I read this article. Am I missing something here? Thanks for any and all feedback.
__________________

__________________
ocdude is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-14-2008, 02:39 PM   #2
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,613
Retirement Benefits

My understanding is that when she retires, she is only eligible for benefits based on her earnings. As long as you are not yet collecting SS, spousal benefits don't enter the picture. I believe that once you also start collecting, she would get the greater of her own earned benefit or 35% of your full amount, whichever is greater.
__________________

__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 05-14-2008, 02:49 PM   #3
Thinks s/he gets paid by the post
tryan's Avatar
 
Join Date: Mar 2005
Posts: 2,449
hmmm, so if one SS payment is significantly larger it might make sense to collect the smaller payment ASAP and delay the larger payment as long as possible.

Really no "penalty" for collecting the smaller payment earlier.
__________________
FIRE'd since 2005
tryan is offline   Reply With Quote
Old 05-14-2008, 02:58 PM   #4
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,144
You understand the information correctly. From the FAQ section of SS.gov:

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.


__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 05-14-2008, 03:03 PM   #5
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,144
Quote:
Originally Posted by tryan View Post
hmmm, so if one SS payment is significantly larger it might make sense to collect the smaller payment ASAP and delay the larger payment as long as possible.

Really no "penalty" for collecting the smaller payment earlier.
Correct. The longer the spouse with the larger benefit delays, the larger the monthly benefit for both. Of course the question is - will the spouse with the larger benefit live long enough to recoup what he/she gave up by delaying.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 05-14-2008, 03:07 PM   #6
Thinks s/he gets paid by the post
SteveR's Avatar
 
Join Date: Jul 2005
Posts: 2,803
Quote:
Originally Posted by REWahoo View Post
... Of course the question is - will the spouse with the larger benefit live long enough to recoup what he/she gave up by delaying.
Ah, the question that launched a thousand posts....
__________________
Work? I don't have time to work....I'm retired.
SteveR is offline   Reply With Quote
Old 05-14-2008, 03:32 PM   #7
Full time employment: Posting here.
UncleHoney's Avatar
 
Join Date: Aug 2006
Location: Columbus
Posts: 769
Ok SS gurus, lets turn the tables.

DW is full retirement age and collecting her full SS benefit. As I understand the SS info I (62) could file under her benefit and collect 35% of her benefit and then at my full retirement age (66) I could switch and draw on my record.

Am I understanding this correctly?

Sounds like a no brainer for a little extra beer money each month.
__________________
UncleHoney is offline   Reply With Quote
Old 05-14-2008, 03:44 PM   #8
Full time employment: Posting here.
UncleHoney's Avatar
 
Join Date: Aug 2006
Location: Columbus
Posts: 769
Quote:
Originally Posted by UncleHoney View Post
Ok SS gurus, lets turn the tables.

DW is full retirement age and collecting her full SS benefit. As I understand the SS info I (62) could file under her benefit and collect 35% of her benefit and then at my full retirement age (66) I could switch and draw on my record.

Am I understanding this correctly?

Sounds like a no brainer for a little extra beer money each month.
Here's the kicker.

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.
__________________
UncleHoney is offline   Reply With Quote
Old 05-14-2008, 03:59 PM   #9
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,144
Quote:
Originally Posted by UncleHoney View Post
Here's the kicker.
Talking to yourself is a sign of some sort of minor abnormality. But answering your own questions on a discussion board, now that's really serious!
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 05-14-2008, 04:11 PM   #10
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Here is the skinny, inside out and backwards. But you have to go through the entire thread. Social Security Spousal Benefit
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Old 05-14-2008, 04:27 PM   #11
Confused about dryer sheets
 
Join Date: Mar 2008
Posts: 7
Quote:
Originally Posted by REWahoo View Post
The longer the spouse with the larger benefit delays, the larger the monthly benefit for both...
OK, I'm confused again. Assume I have the larger benefit. I agree that the longer I delay, the larger MY monthly benefit. However, if my spouse is eligible for the spousal benefit, I read it to say her payment is based on a percentage of my FULL, unreduced benefit. If she draws early, the percentage, and thus the monthly amount is reduced. If that's true, whether or not I delay receiving benefits should not have any impact on her monthly payment, only whether or not she delays. Is that wrong?
__________________
ocdude is offline   Reply With Quote
Old 05-14-2008, 04:30 PM   #12
Full time employment: Posting here.
UncleHoney's Avatar
 
Join Date: Aug 2006
Location: Columbus
Posts: 769
Quote:
Originally Posted by REWahoo View Post
Talking to yourself is a sign of some sort of minor abnormality. But answering your own questions on a discussion board, now that's really serious!
That's me.

I wouldn't even qualify as a Wall Street banker.

Guess I'll have to settle for Kool Aid and forget the beer budget.
__________________
UncleHoney is offline   Reply With Quote
Old 05-14-2008, 04:45 PM   #13
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,144
Quote:
Originally Posted by ocdude View Post
OK, I'm confused again. Assume I have the larger benefit. I agree that the longer I delay, the larger MY monthly benefit. However, if my spouse is eligible for the spousal benefit, I read it to say her payment is based on a percentage of my FULL, unreduced benefit. If she draws early, the percentage, and thus the monthly amount is reduced. If that's true, whether or not I delay receiving benefits should not have any impact on her monthly payment, only whether or not she delays. Is that wrong?
As usual, the devil is in the details. You delaying will have a definite impact on the amount your spouse can initially draw assuming you delay and your spouse begins drawing first.

From the SS FAQ I quoted above: "Remember, she cannot receive spouse's benefits until you file for retirement."

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 05-14-2008, 07:07 PM   #14
Confused about dryer sheets
 
Join Date: Mar 2008
Posts: 7
Quote:
Originally Posted by REWahoo View Post
As usual, the devil is in the details...
Ahhh, the light bulb flickers... Thanks, that makes sense.

Thanks to everyone for the excellent info. At least, that's one small step closer to understanding the intricacies of federal gov't. That don't happen every day....
__________________
ocdude is offline   Reply With Quote
Old 05-14-2008, 10:42 PM   #15
Recycles dryer sheets
 
Join Date: Apr 2008
Posts: 191
I have a somewhat related question to the topic at hand. When computing the SS benefit for a future retirement, is the estimate based on today's dollars or will it be based on a dollar amount in the year of retirement? I ask this because my wife and I have a six year age difference, and I was wondering if the COLAs affect the amount of the spousal benefit.
__________________
statsman is offline   Reply With Quote
Old 05-15-2008, 06:26 AM   #16
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,144
Quote:
Originally Posted by statsman View Post
When computing the SS benefit for a future retirement, is the estimate based on today's dollars or will it be based on a dollar amount in the year of retirement? I ask this because my wife and I have a six year age difference, and I was wondering if the COLAs affect the amount of the spousal benefit.
As I understand it, the amount of benefit is always in today's dollars. The benefit amount will then be COLA adjusted each year once your spouse starts drawing.

Note: If your question is in reference to estimating benefits using the SS online calculator you have the option to select either today's dollars or estimated future dollars.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 05-15-2008, 09:10 AM   #17
Recycles dryer sheets
 
Join Date: Feb 2007
Posts: 310
I have a question that I could not find an answer to on the SS web site. I am hoping someone here has encountered this and will share what they know. My husband is a retired career teacher who earned SS in second jobs he has had over the years and is currently employed full time an paying into SS. I do not have enough credits to receive SS on my own and his will be reduced due to WEP. Will I receive half of his benefits before the WEP reduction or half of the amount AFTER the WEP reduction? TIA
__________________
shoe is offline   Reply With Quote
Old 05-15-2008, 09:25 AM   #18
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,144
Shoe, I think you may need to call the SS folks for an answer to that one.

EDIT: I did find this Answer

Question:
If my retirement or disability benefits are computed under the WEP, will the benefits of my dependents and survivors be affected?

Answer:
The Windfall Elimination Provision (WEP) affects the benefits of retired or disabled workers who are also receiving a pension based on work not covered by Social Security. Since dependents' benefits are derived from the worker's benefit, WEP affects dependents' benefits as well.
WEP does not affect benefits paid to survivors of workers who received pensions based on noncovered employment.

EXAMPLE:
A worker and spouse both claim their benefits at full retirement age. Because the worker receives a pension based on work not covered by Social Security, the benefit amount under the WEP benefit formula is $700. Based on the WEP benefit amount, the spouse's benefit is $350 (one-half of the worker's WEP benefit amount).

When the worker dies, the WEP reduction is removed. The surviving spouse's benefit is refigured using the regular benefit formula.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 05-15-2008, 12:06 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,936
Quote:
Originally Posted by REWahoo View Post
As usual, the devil is in the details. You delaying will have a definite impact on the amount your spouse can initially draw assuming you delay and your spouse begins drawing first.

From the SS FAQ I quoted above: "Remember, she cannot receive spouse's benefits until you file for retirement."

Would this "file and suspend" work? Don't know myself.....just asking.


Recordnet.com: Social Security: Check out little known 'file and suspend' option
__________________
kaneohe is offline   Reply With Quote
Old 05-15-2008, 12:33 PM   #20
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,144
Quote:
Originally Posted by kaneohe View Post
Would this "file and suspend" work? Don't know myself.....just asking.

Recordnet.com: Social Security: Check out little known 'file and suspend' option
Ah yes, I had forgotten about the 'file and suspend' option. It looks like that strategy will work - assuming the option is still in place by the time the OP needs it.

BTW, James Mahaney, one of the authors of the paper quoted by Humberto Cruz in your link, posts here occasionally under the name New Thinking.
__________________

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Reply

Tags
social security


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
MOVED: Social Security Spousal Benefit Martha FIRE and Money 0 06-30-2006 08:59 AM
Social Security Spousal Benefit Elderdude FIRE and Money 52 06-30-2006 08:55 AM
Maximizing Social Security Benefits eyenitnoy FIRE and Money 20 06-18-2006 09:29 PM
SS benefits, delay taking Social Security, Scott Burns article landover FIRE and Money 11 11-29-2005 06:58 PM
Social Security Benefits Cut For Early Retirees Michael Other topics 12 01-05-2005 01:45 PM

 

 
All times are GMT -6. The time now is 05:32 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.