Soc. Security question

[steady saver]

Thinking ahead here...Can you help me get clear on something?

DH and I are both 60, both retired.
My understanding is that we each pick a date and I take my SS, DH takes his, BUT upon his death I then can forgo mine and elect to take 50% of his. Is that correct? Mine is pretty small so whether I take it at 65 or 67 is pretty irrelevant.

Thank you.

 

[Jerry1]

Do your research but my understanding is that you’d get 100% of his SS. However, there are conditions. If you take your SS early, when he passes, the amount you get will be reduced - because you elected to take it early. So, when you take it is not irrelevant at all.

 

[steady saver]

Do your research but my understanding is that you’d get 100% of his SS. However, there are conditions. If you take your SS early, when he passes, the amount you get will be reduced - because you elected to take it early. So, when you take it is not irrelevant at all.

Thank you Jerry. So where does the part about me being able to claim 50% of his SS come in? I simply can't remember what that applies to.

 

[Jerry1]

I think it comes from a benefit of low wage earning spouses. I think you can get your benefit or half of your spouses benefit, which ever is larger. Please don’t rely on me, I’m no expert but I have been looking into this myself as I work to figure out my own situation.

 

[steady saver]

Okay, yes, that was my understanding. But then I realized I didn't know WHEN that applied. I thought I did, but I don't.

Still digging.

 

[Jerry1]

Okay, yes, that was my understanding. But then I realized I didn't know WHEN that applied. I thought I did, but I don't.

Still digging.

Read this.

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

 

[steady saver]

Thanks Jerry!

I had just found this as well:

"A dually entitled woman—who is eligible for benefits based on her own and on her spouse's lifetime earnings—receives her retired-worker benefit supplemented by the difference between that amount and the spousal benefit amount. If the wife's own retired-worker benefit is higher than her spousal benefit, she receives only her retired-worker benefit (Iams and Tamborini 2012; SSA, n.d.)."

So it sounds like if I wait until FRA, then I can file for 50% of my spouse's benefit, which is substantially more than mine. I appreciate that benefit since I worked very part-time in my profession while homeschooling our sons.

 

[Rianne]

I wonder why opensocialsecurity.com encourages the lesser-earner spouse to take SS earlier than FRA as the best benefit strategy.

 

[steady saver]

That's a good question, Rianne. It could vary based on personal needs perhaps? My understanding is if the lower earning spouse takes it earlier than FRA, then his/her 50% benefit is reduced by the amount already received.

 

[Morgan22]

Steady Saver, please look at https://opensocialsecurity.com/ and input your and your husband's PIA's. I think you'll see to maximize your benefits, you can claim at 62 and your husband at 70. When you turn 70, then you claim spousal to get 50% of his benefit. Then if your husband passes before you, you get 100% of his benefit.

Of course, you may not want to claim early if you want to keep your income low because you are relying on ACA credits or doing Roth conversions.

 

[steady saver]

Thank you Morgan; I'll look at that. We had both just assumed we'd take it at 67 but that may not make the most sense. He has a pension that will be offset by SS so we need to get a better understanding of how that impacts things. And I confess, I need to refocus my brain and understand Roth conversions and their impact.

 

[steady saver]

Thank you Rianne and Morgan22 for the open social security link and info. I ran my numbers and I can see now how I can use that resource to figure out how to maximize our benefits. I do still need to get clear on how our pension is reduced by taking SS and how to factor that in with the calculations.

Many thanks to you both and to you too, Jerry.

 

[Jerry1]

I have a number of friends who are auto workers and they have pensions tied to SS. In talking to them, their pension gets reduced by their SS at age 62 whether they take it or not. So, for them to take SS later, they have to handle the reduction in their pension during the “gap” period.

 

[MissMolly]

Do your research but my understanding is that you’d get 100% of his SS. However, there are conditions. If you take your SS early, when he passes, the amount you get will be reduced - because you elected to take it early. So, when you take it is not irrelevant at all.

This is not entirely correct. If she takes her own early it has no impact on Survivor benefits. Survivor benefits/your own benefits/Spousal benefits all have different rules.

She can take her own at anytime beginning at age 60, but if taken before FRA will be a reduced amount and if she waits until 70 will be a larger amount.

If she take Spousal prior to her FRA it will be an amount that is less than 50% of husband's PIA.

However, the percentage of Survivor benefits depends on her age when she files for Survivor. She can file for Survivor as early as age 60, but it will be a reduced amount. She can start drawing her own as early as 62 and as long as she waits until she is FRA to claim Survivor she will receive 100% of what her spouse was receiving/was entitled to receive as of the date if his death.

 

[Jerry1]

This is not entirely correct. If she takes her own early it has no impact on Survivor benefits. Survivor benefits/your own benefits/Spousal benefits all have different rules.

She can take her own at anytime beginning at age 60, but if taken before FRA will be a reduced amount and if she waits until 70 will be a larger amount.

If she take Spousal prior to her FRA it will be an amount that is less than 50% of husband's PIA.

However, the percentage of Survivor benefits depends on her age when she files for Survivor. She can file for Survivor as early as age 60, but it will be a reduced amount. She can start drawing her own as early as 62 and as long as she waits until she is FRA to claim Survivor she will receive 100% of what her spouse was receiving/was entitled to receive as of the date if his death.

Thank you for the detailed clarification.

 

[Spock]

I'm not an expert as I have questions myself, but what I'm reading in this thread contradicts info discussed in other threads.
Spousal Benefit (both still alive): UP TO 50% of the higher earners PIA. Thats up to 50% of the amount the higher earner gets at FRA. If the higher earner waits until 70, the spousal benefit is still based on the PIA and not the age 70 benefit.
I'm emphasizing UP TO because the spousal benefit is less than 50% if benefits are started before FRA.
https://www.ssa.gov/OACT/quickcalc/spouse.html
Also, you can not start spousal benefits until the higher earner starts their benefit.
Death benefit: Surviving spouse gets the greater of the their own or their spouses benefit.

https://www.ssa.gov/benefits/survivors/ifyou.html#h6
There are some corner cases where if the high earner spouse started benefits way early the survivor gets a minimum 85% of the high earner benefit but that case is still gray for me.

Re: opensocialsecurity.com It's a great tool. But I've found discrepancies between what it says and what I get from the SSA website. So use it to get a ballpark. "Trust but verify".

I suggest you login to ssa.gov and diddle with the estimated benefit statements and tools. It does not do a great job at spousal benefits because your and your spouses accounts are separate. But your spouses benefit estimate will clear state what you with receive as a death benefit.

 

[pb4uski]

Thinking ahead here...Can you help me get clear on something?

DH and I are both 60, both retired.
My understanding is that we each pick a date and I take my SS, DH takes his, BUT upon his death I then can forgo mine and elect to take 50% of his. Is that correct? Mine is pretty small so whether I take it at 65 or 67 is pretty irrelevant.

Thank you.

No, not even close, but you are wise to learn about this before you turn 62.

We have similar situation... I was the main breadwinner and DW was a SAHM so my PIA is more than 3x her PIA. We have the same birth year.

When she filed at her FRA of 66/2, she was collecting her PIA. When I file at 70, she will get a bump in her benefits to 50% of my PIA and since she waited until her FRA and I will get 131% of my benefit since I waited until I was 70.

If I predecease her then her benefit goes away and she will collect an amount equal to my age 70 benefit as long as she lives and the same if she predeceases me.

I highly suggest that you visit opensocialsecurity.com and be sure to check the little checkbox near the top of the page.

 

[Jerry1]

Re: opensocialsecurity.com It's a great tool. But I've found discrepancies between what it says and what I get from the SSA website. So use it to get a ballpark. "Trust but verify".

I agree. Like many tools, even if they give you the correct answer, they do not provide authoritative support. I like to get my information directly from SS but that’s not the easiest thing to do.

 

[MissMolly]

***

I'm not an expert as I have questions myself, but what I'm reading in this thread contradicts info discussed in other threads.
Spousal Benefit (both still alive): UP TO 50% of the higher earners PIA. Thats up to 50% of the amount the higher earner gets at FRA. If the higher earner waits until 70, the spousal benefit is still based on the PIA and not the age 70 benefit.
I'm emphasizing UP TO because the spousal benefit is less than 50% if benefits are started before FRA.
https://www.ssa.gov/OACT/quickcalc/spouse.html
Also, you can not start spousal benefits until the higher earner starts their benefit.
Death benefit: Surviving spouse gets the greater of the their own or their spouses benefit. This is called Survivor benefit, not death benefit. The survivor will only received 100% of the deceased spouse's benefit if the survivor waits until their FRA to claim the Survivor benefit. If they claim prior to their FRA it will be a reduced amount.

https://www.ssa.gov/benefits/survivors/ifyou.html#h6
There are some corner cases where if the high earner spouse started benefits way early the survivor gets a minimum 85% of the high earner benefit but that case is still gray for me.

Re: opensocialsecurity.com It's a great tool. But I've found discrepancies between what it says and what I get from the SSA website. So use it to get a ballpark. "Trust but verify".

I suggest you login to ssa.gov and diddle with the estimated benefit statements and tools. It does not do a great job at spousal benefits because your and your spouses accounts are separate. But your spouses benefit estimate will clear state what you with receive as a death benefit.

 

[pb4uski]

I wonder why opensocialsecurity.com encourages the lesser-earner spouse to take SS earlier than FRA as the best benefit strategy.

I think it is because of joint mortality. Check out https://www.longevityillustrator.org/

So for us, my life span is 86 and DW is 87 based on our birthdates, gender and average health, but it is likely that one or the other of us will life to be 91.

So if I predecease DW at 86 then she'll collect my bigger check for another 5 years.

We chose not to start her SS at 62 to give us more headroom for low tax cost Roth conversions but once she reached her FRA there was no benefit to waiting.

 

[fh2000]

No, not even close, but you are wise to learn about this before you turn 62.

We have similar situation... I was the main breadwinner and DW was a SAHM so my PIA is more than 3x her PIA. We have the same birth year.

When she filed at her FRA of 66/2, she was collecting her PIA. When I file at 70, she will get a bump in her benefits to 50% of my PIA and since she waited until her FRA and I will get 131% of my benefit since I waited until I was 70.

If I predecease her then her benefit goes away and she will collect an amount equal to my age 70 benefit as long as she lives and the same if she predeceases me.

I highly suggest that you visit opensocialsecurity.com and be sure to check the little checkbox near the top of the page.

I believe if the surviving spouse has started their own benefit, they can receive the full amount of the deceased spouse's benefit, even if the surviving spouse started benefit below FRA.

At least this is how I read from Opensocialsecurity report. It recommends that I wait until 70, and DW starts at 62 + 1month. If DW outlives me after I start mine at 70, she will get exactly the same benefit when I start at 70.

 

[MissMolly]

I believe if the surviving spouse has started their own benefit, they can receive the full amount of the deceased spouse's benefit, even if the surviving spouse started benefit below FRA.

At least this is how I read from Opensocialsecurity report. It recommends that I wait until 70, and DW starts at 62 + 1month. If DW outlives me after I start mine at 70, she will get exactly the same benefit when I start at 70.

Survivor benefits are completely separate from other benefits. The controlling factor is the age of the surviving spouse when they file for the Survivor benefits. It makes no difference what age they filed for their own or even if they filed for their own. As long as they are FRA when they file for Survivor they will receive 100%. If they file for Survivor prior to reaching FRA they will receive a reduced amount.

 

[pb4uski]

I believe if the surviving spouse has started their own benefit, they can receive the full amount of the deceased spouse's benefit, even if the surviving spouse started benefit below FRA.



At least this is how I read from Opensocialsecurity report. It recommends that I wait until 70, and DW starts at 62 + 1month. If DW outlives me after I start mine at 70, she will get exactly the same benefit when I start at 70.

What did I say that was different from what you wrote?

 

[steady saver]

Gosh, so much good info! Thank you everyone.

I will check with DH's company's benefits office to understand our date that the SS offset starts with our pension.

I'm surprised that opensocialsecurity is recommending that I start taking SS so early - at 62. Neither of us had planned to start SS until our FRA at 67. DH is only 2 months older than I am. So I'm trying to wrap my mind around that.

 

[MissMolly]

Survivors Benefit Amount
We base your survivors benefit amount on the earnings of the person who died. The more they paid into Social Security, the higher your benefits would be.

These are examples of the benefits that survivors may receive:

Surviving spouse, full retirement age or older — 100% of the deceased worker's benefit amount.
Surviving spouse, age 60 — through full retirement age — 71½ to 99% of the deceased worker's basic amount.
Surviving spouse with a disability aged 50 through 59 — 71½%.

You can read about it here. But you can see it states you must be FRA when claiming to get the full 100% https://www.ssa.gov/benefits/survivors/ifyou.html#:~:text=Survivors%20Benefit%20Amount,-We%20base%20your&text=Surviving%20spouse%2C%20full%20retirement%20age,50%20through%2059%20—%2071½%25.