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SS Spousal Benefit Strategy
Old 04-17-2014, 07:19 PM   #1
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SS Spousal Benefit Strategy

Was reading money advice column from Portland Oregonian and got a surprise when I read that Social Security allows only one spousal benefit per couple. At least that is what the columnist stated here: Switching social security; be wary of loans to family (money talk Q&A) | OregonLive.com

The link above gives the complete story but short version is writer had filed and suspended so her husband could collect a spousal benefit on her earnings (higher earning spouse) . He later shifted to his own benefit as he got close to 70 and she tried to then claim a spousal benefit on his earnings. NO GO!!. I had never understood you could not rotate spouses claiming the spousal benefit from the other.
Does the columnist have it right??
Nwsteve
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Old 04-17-2014, 07:22 PM   #2
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That seems to ring a bell with me.
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Old 04-18-2014, 07:58 AM   #3
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The article is correct.
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Old 04-18-2014, 08:10 AM   #4
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a divorced couple can get 2 spousal benefits but married couples only one.
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Will this be a problem?
Old 04-18-2014, 09:33 AM   #5
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Will this be a problem?

My wife is 5.5 years younger to me. I'm a higher earner and my wife stopped working after 15 years of employment to raise a family. My plan is following:

1) When my wife turns 62, she claims her benefits…about 800/month
2) I claim spousal benefits with her…..about 400/month…My full retirement age is 67(will be 67.5 at that time)
3) I then switch to my own benefits @ 70…..about 2500/month
4) Wife does not switch and stays on her benefits
5) When I pass away, my wife will get my benefits

Any gotchha here?
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Old 04-18-2014, 09:54 AM   #6
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I thought the rule was only one spousal benefit at a time. I have even seen so called experts show examples of this. ? so I am surprised ?
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Old 04-18-2014, 10:13 AM   #7
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Quote:
Originally Posted by retire2020 View Post
My wife is 5.5 years younger to me. I'm a higher earner and my wife stopped working after 15 years of employment to raise a family. My plan is following:

1) When my wife turns 62, she claims her benefits…about 800/month
2) I claim spousal benefits with her…..about 400/month…My full retirement age is 67(will be 67.5 at that time)
3) I then switch to my own benefits @ 70…..about 2500/month
4) Wife does not switch and stays on her benefits
5) When I pass away, my wife will get my benefits

Any gotchha here?
As I recall, when she turns 62 you would file and suspend. She can then apply for benefits and as I recall she will get 50% of your FRA benefit haircut for taking it at 62, which would likely exceed her benefits at age 62 based on her work record as you have described the situation. Then when your turn 70 you start your own benefits. If you pass first then she gets your benefit.

Keep in mind, I'm no expert on SS claiming strategies but what you outlined isn't consistent with my understanding. It would be the double dipping that we are saying isn't allowed.

When I get toward 62 I plan to had sssolutions.com of someone else expert in this complicated area help me understand our best claiming strategy.
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Old 04-18-2014, 10:44 AM   #8
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Thanks pb4…I thought she had to be 67 to get 50% of my benefits but if she claims spousal at 62, it'll be substantiously reduced and may be less than her own benefits if she claims at 62… I remember reading it somewhere but not 100% sure
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Old 04-18-2014, 10:54 AM   #9
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As I recall at her FRA she would get 50% of your FRA benefit. If she starts receiving benefits before her FRA then they would be discounted whether they are her own or 50% of yours.

Luckily DW and I are only 9 moths apart in age so it makes things a bit easier for us.
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Old 04-19-2014, 09:59 AM   #10
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Here is an example that shows both husband and wife getting spousal benefits but at different times. ??so I am not sure??


Spousal Benefits and Social Security Strategies for Married Couples


The ‘Waiting for the Switch’ Strategy

There is also another scenario that may work for spouse who prefers to wait on benefits until they are of age. If the husband plans on waiting until age 70 to collect benefits and the wife is eligible for her own benefits, technically the wife could sign up to collect her benefits allowing her husband to receive spousal benefits. The husband could continue to collect on spousal benefits until he has reached the age of 70. When that time comes, he can make the change to the higher benefit with his wife filing for spousal benefits if the amount would be higher.
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Old 04-19-2014, 12:21 PM   #11
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Here is an example that shows both husband and wife getting spousal benefits but at different times. ??so I am not sure??


Spousal Benefits and Social Security Strategies for Married Couples


The ‘Waiting for the Switch’ Strategy

There is also another scenario that may work for spouse who prefers to wait on benefits until they are of age. If the husband plans on waiting until age 70 to collect benefits and the wife is eligible for her own benefits, technically the wife could sign up to collect her benefits allowing her husband to receive spousal benefits. The husband could continue to collect on spousal benefits until he has reached the age of 70. When that time comes, he can make the change to the higher benefit with his wife filing for spousal benefits if the amount would be higher.
This is exactly the understanding that lead to me asking the original question. At the present it is our strategy. I am drawing a spousal benefit on my DW's (lower earner) SS benefit while waiting to file at 70. Originally the plan was to have her then file for a spousal benefit on my earnings.
Now, not clear that last step is still available.
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Old 04-19-2014, 12:44 PM   #12
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The most commonly asked Social Security question

This suggests no. The author is a recognized SS expert. I have no idea what Moolanony is or how knowledgable they are.

Also see Retirement Planner: Benefits For Your Spouse
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Old 04-19-2014, 01:18 PM   #13
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Originally Posted by retire2020 View Post
My wife is 5.5 years younger to me. I'm a higher earner and my wife stopped working after 15 years of employment to raise a family. My plan is following:

1) When my wife turns 62, she claims her benefits…about 800/month
2) I claim spousal benefits with her…..about 400/month…My full retirement age is 67(will be 67.5 at that time)
3) I then switch to my own benefits @ 70…..about 2500/month
4) Wife does not switch and stays on her benefits
5) When I pass away, my wife will get my benefits

Any gotchha here?
it will depend on how much younger than fra she is when she takes survivor benefits. for every year under her own fra she files she gets money clipped.

she could take her own benefit to fra and then take your full benefit.

https://www.socialsecuritytiming.com...nd=sst&xor=sst
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Old 04-19-2014, 07:09 PM   #14
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Originally Posted by ducky911 View Post
Here is an example that shows both husband and wife getting spousal benefits but at different times. ??so I am not sure??


Spousal Benefits and Social Security Strategies for Married Couples


The ‘Waiting for the Switch’ Strategy

There is also another scenario that may work for spouse who prefers to wait on benefits until they are of age. If the husband plans on waiting until age 70 to collect benefits and the wife is eligible for her own benefits, technically the wife could sign up to collect her benefits allowing her husband to receive spousal benefits. The husband could continue to collect on spousal benefits until he has reached the age of 70. When that time comes, he can make the change to the higher benefit with his wife filing for spousal benefits if the amount would be higher.

This is exactly what we have done. This is not file and suspend and is often called the 62/70 strategy. The key thing is that my wife's benefit at age 62 is greater than half my benefit at 70. There was and is no reason for her to claim spousal. The only claim on my benefit would be survivor benefits.
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Old 04-20-2014, 11:58 AM   #15
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I'll sure consult experts when my time comes, but 2nd strategy looks more beneficial in my case…I'm 5.5 years older than my wife.

How Married Couples May Increase Their Social Security Retirement Income By Choosing A Spousal Subsidy | Lawyer For Seniors

Q: I am approaching age 66 and my wife is almost 62. Each of us has a work record, although my earnings are greater. I heard that there may be a way for us to receive a larger Social Security retirement income by my opting for only a Spousal Benefit now based upon her work record. If so, how does that work?

A. Yes, you are correct. The key is for at least one of you to opt only for a Spousal Benefit on the other’s work record now, and for the other to delay beginning his/her own retirement, up to age 70 if possible. This approach generates an interim monthly Spousal Benefit “subsidy” for one of you, while permitting additional retirement credits to build up for the other, thereby increasing the amount of your later retirement income(s). The strategy is not well known, but derives out of the “Senior Citizen Freedom to Work Act of 2000″, apparently to courage delayed retirement. There are basically 2 techniques:

(1) “Claim Now, and Claim More Later“ (aka the “62/70 strategy”): here, your wife chooses Early Retirement benefits now at age 62 on her own account, and you then choose only a Spousal Benefit on her account but delay claiming on your own account until age 70. The amount of your Spousal Benefit would be equal to 50% of what your wife would have received as her own retirement benefit if she had waited to age 66 to start. For example: if she were eligible to receive $1,200 per month now, but $1,600 if she waited until her age 66, then your Spousal Benefit now would be $800. So, in this example she will now receive an Early Retirement benefit of $1,200 and you will receive a Spousal Benefit of $800 per month, for a combined total of $2,000 per month. This approach creates some retirement income for each of you now, while permitting you to claim a higher retirement when you turn age 70. However, your wife’s benefit will be permanently fixed at her start level, modified only by Cost-Of-Living Adjustments (“COLA’s”) over time.

(2) “File and Suspend“: here, you essentially both defer starting benefits on your own accounts. However, you employ the following procedural technique to enable your wife to claim a Spousal Benefit now on your account, as you are the higher earner: you first make a formal claim for benefits on your own account; next, your wife claims Spousal Benefits on your account; and, finally, you immediately request that your own benefits on your own account be suspended. By way of example, if you would be eligible to receive $2,000 per month now at age 66, then by using this strategy your wife could receive a Spousal Benefit of $700 per month now, representing 50% of your age 66 benefit amount, reduced by another 30% for her early start at age 62. Thereafter, your wife would receive the monthly Spousal Benefit, up to her age 70 if she chooses. When each of you becomes age 70, each then starts full benefits on his/her own account. By the delay to age 70, your own benefit will then be 32% greater than if you had started at age 66 ($2,640 in our example).
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Old 12-05-2015, 10:31 PM   #16
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Has anyone researched the updated rules?

Understanding "Free Spousal" Benefits | Social Security Choices

This will adversely affect my wife and I.
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Old 12-06-2015, 06:17 AM   #17
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Has anyone researched the updated rules?

Understanding "Free Spousal" Benefits | Social Security Choices

This will adversely affect my wife and I.
This has been discussed in a couple of threads. Here's one social security changes

This thread covers the change around the 300th post (give or take) until it gets closed Laurence Kotlikoff - Maximize my SS.com
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