Spousal Benefits Social Security ?

[Mike Piper]

My reading from the actual Social Security Administration website and the law establishing Social Security is that the spousal benefit is based on the worker's Primary Insurance Amount (PIA)\

Yes, this is correct. SpouseB's benefit as SpouseA's spouse is a function of:
1) Spouse A's primary insurance amount,
2) The date at which SpouseB filed for that spousal benefit.


The date at which SpouseA filed for his/her own retirement benefit is not an input in the calculation.


The calculation can depend on a whole list of other stuff too, potentially. But the calculation before various reductions is as described above. Also note that this is specific to spousal benefits, not survivor benefits.

 

[LateToFIRE]

Yes, this is correct. SpouseB's benefit as SpouseA's spouse is a function of:
1) Spouse A's primary insurance amount,
2) The date at which SpouseB filed for that spousal benefit.


The date at which SpouseA filed for his/her own retirement benefit is not an input in the calculation.


The calculation can depend on a whole list of other stuff too, potentially. But the calculation before various reductions is as described above. Also note that this is specific to spousal benefits, not survivor benefits.

Very clear! Thx

 

[pb4uski]

Mike,

Perhaps I'm not getting it, but what you and others describe above is inconsistent with opensocialsecurity.com results.

I input a hypothetical couple consistent with the scenario described above. Married and both born on 2/1/1962 so both currently 62 years old so their FRA is 67. Husband (lower earning spouse) has PIA of $83 and wife (higher earning spouse) has PIA of $250 (these are 1/12th of the example of PIAs of $1,000 for the husband and $3,000 for the wife so the output is in per month amounts).

I ran 4 alternative claiming strategies. In each case the lower earning spouse, the husband with the $83/month PIA, files in 2/2024 at age 62. The higher earning spouse files at either 62, 65, 67 (FRA) or 70... or 2/2024, 2/2027, 2/2029 or 1/2032.

The results for the wife filing at 67 or 70 are consistent with what you wrote above. The lower earning spouse benefit is $1,200 consisting of $700 benefit based on their own work record (70% of $1,000) and a spousal benefit of $500 [($3,000*50%)-$1,000]. The higher earnings spouse's benefit at their FRA is $3,000 and at age 70 is 124% of their FRA or $3,720. That all makes perfect sense to me.

However, where the higher earning spouse files at 62, then the lower earning spouse's spousal benefit is only $330, so it is discounted from the $500... I presumed because the higher earning spouse filed at 62 rather than their FRA or 67 or later. The $330 is 66% of the $500 spousal benefit if the higher earning spouse files at 67 or later whereas the higher earning spouse's benefit is 70% of their PIA because they filed at 62 vs 67.

If I run a scenario where the higher earning spouse files at age 65 in 2/2027 then the spousal benefit is $420, 84% of the $500 and the higher earning spouse's benefit is $2,600, 86% of their PIA.

I realize that there are a few bucks floating around here and there but it seems that opensocialsecurity.com discounts the lower earning spouse's spousal benefit if the higher earning spouse files before their FRA... hence the confusion. Am I misinterpreting the opensocialsecurity.com's results or is it calculating the spousal benefit inconsistent with what you wrote above?

Below are screenshots of the opensocialsecurity.com output with the higher earning spouse filing at 62 (2/2024), 65 (2/2027), 67/FRA (2/2029) and 70 (1/2032).

 

[Mike Piper]

However, where the higher earning spouse files at 62, then the lower earning spouse's spousal benefit is only $330, so it is discounted from the $500... I presumed because the higher earning spouse filed at 62 rather than their FRA or 67 or later. The $330 is 66% of the $500 spousal benefit if the higher earning spouse files at 67 or later whereas the higher earning spouse's benefit is 70% of their PIA because they filed at 62 vs 67.

In the scenario you have described, with the lower earner filing ASAP for his own retirement benefit, as soon as the higher earner files for her own retirement benefit, the lower earner will be deemed to have filed for a spousal benefit. If the higher earning spouse files for retirement benefits prior to the point at which the lower earner reaches FRA, then the lower earning spouse's spousal benefit starts early and is reduced for early filing.


The higher earner's filing date is not an input in the calculation, but in the scenario you have described, it affects the date on which the lower earner files for spousal benefits, due to deemed filing. And the date on which the spousal benefit is claimed is an input in the calculation.

 

[Mike Piper]

Just adding an example, in case it's illustrative.


Take the same scenario you have outlined, pb4uski, except adjust the wife's (higher earner's) year of birth to 1967.


In this case, by the time the higher earner reaches age 62, the lower earner will have already reached his FRA. So deemed filing will not result in early filing for spousal benefits. And you can see that as you adjust the higher earner's filing age, it has no impact on the lower earner's spousal benefit amount.

 

[pb4uski]

In the scenario you have described, with the lower earner filing ASAP for his own retirement benefit, as soon as the higher earner files for her own retirement benefit, the lower earner will be deemed to have filed for a spousal benefit. If the higher earning spouse files for retirement benefits prior to the point at which the lower earner reaches FRA, then the lower earning spouse's spousal benefit starts early and is reduced for early filing.


The higher earner's filing date is not an input in the calculation, but in the scenario you have described, it affects the date on which the lower earner files for spousal benefits, due to deemed filing. And the date on which the spousal benefit is claimed is an input in the calculation.

Just adding an example, in case it's illustrative.


Take the same scenario you have outlined, pb4uski, except adjust the wife's (higher earner's) year of birth to 1967.


In this case, by the time the higher earner reaches age 62, the lower earner will have already reached his FRA. So deemed filing will not result in early filing for spousal benefits. And you can see that as you adjust the higher earner's filing age, it has no impact on the lower earner's spousal benefit amount.

I get it now.

In other words, going back to the original question of whether the lower earning spouse's spousal benefit is reduced if the higher earning spouse files before FRA I guess the answer is techicnally no, but in some circumstances, effectively yes (like in the examples above where the higher spouse's filing before the lower earning spouse's FRA impacts the lower earning spouse's spousal benefit) and it would depend on the relative ages of the two spouses and when they each file.

In short, it's complicated.

Thanks for your help.

 

[mathjak107]

now i am getting confused .

i thought if the lower spouse has their own record then the fact the spousal is based on half the higher earners fra amount makes when the higher earner filed irrelevant….

only the lower earner gets a reduction on their deemed benefit if they file early but the spousal stays the same .


the higher earner gets reduced because they filed earlier but spousal stays the same .
is this not correct all the time ?

 

[MissMolly]

now i am getting confused .

i thought if the lower spouse has their own record then the fact the spousal is based on half the higher earners fra amount makes when the higher earner filed irrelevant….

only the lower earner gets a reduction on their deemed benefit if they file early but the spousal stays the same .


the higher earner gets reduced because they filed earlier but spousal stays the same .
is this not correct all the time ?

Both spouses are 62. Since they both filed at 62, the lower earning spouse is automatically deemed to have filed for the highest benefit which is their spousal benefit. Since they are only 62, it is reduced from the higher earner's PIA.

 

[pb4uski]

Yes it is confusing.

What happens is that the spousal benefit (the $500 in the running example) can end up discounted if the higher earning spouse files before the lower earning spouse's FRA because when the higher earning spouse files for their own benefit then the lower earning spouse is deemed to have filed for spousal benefits.

Essentially the lower earning spouse's filing for spousal benefits is connected to the higher earning spouse's filing for benefits... the lower earning spouse can't file for spousal benefits before the higher earning spouse files for their benefit nor can they file for spousal benefits after the higher earning spouse files for benefits because of the deemer rule.

For example, if on opensocialsecurity.com I try to have the lower earning spouse file for spousal benefits before the higher earning spouse it says "A person cannot start spousal benefits before the other spouse has filed for his/her own retirement benefit." On the other hand, if I try to have the lower earning spouse file for spousal benefits after the higher earning spouse files it says "Per new deemed filing rules, a person's spousal benefit date must be the later of their own retirement benefit date, or their spouse's retirement benefit date.".

So effectively, the only time that the lower earning spouse can apply for spousal benefits is when the higehr earning spouse applies for their benefit.

 

[mathjak107]

well as far as i know for years a married couple needs the higher earner to have filed first .

in our case my wife filed at 62 and got 800 bucks or so .

mine was about 2800 at fra although i filed before fra so half is 1400.

when i filed they took my 1400 and subtracted her fra amount and added the difference to her early benefit

 

[pb4uski]

...only the lower earner gets a reduction on their deemed benefit if they file early but the spousal stays the same .


the higher earner gets reduced because they filed earlier but spousal stays the same .
is this not correct all the time ?

Yes, this is not correct all the time.

If the lower earning spouse is younger than their FRA when the higher earning spouse applies for their benefit then the lower earning spouse's spousal benefit will be reduced since the lower earning spouse is deemed to have applied for spousal benefits before their FRA. We can see that happening in the results posed above where the couple are the same age. If the higher earning spouse applies for their benefit before the lower earning spouse's FRA then the lower earning spouse's spousal benefit is haircut.

OTOH, if the lower earning spouse is significantly older than the higher earning spouse (like in the 5 year difference that Mike describes) then since the lower earning spouse is at their FRA when the higher earning spouse files then there is no discount to the spousal benefit.

So the real answer is... it depends.

And it pays for the lower earning spouse to be a cougar.

 

[pb4uski]

well as far as i know for years a married couple needs the higher earner to have filed first .

in our case my wife filed at 62 and got 800 bucks or so .

mine was about 2800 at fra although i filed before fra so half is 1400.

when i filed they took my 1400 and subtracted her fra amount and added the difference to her early benefit

But was your wife older than her FRA when you filed? If so then she would get an undiscounted spousal benefit.

 

[Romer]

This is a good discussion

My wife and I are the same age at 62 (almost 63). I am the higher earner and am planning on taking SS somewhere between 66-68.

My wife was not going to file until I did as we thought her spousal benefit would be reduced.

What I think I am getting is that if she were to file at 62 today and collect $727 a month, it would not impact the spousal amount when I file later on. Is that correct? That was different than how I interpreted it.

 

[mathjak107]

But was your wife older than her FRA when you filed? If so then she would get an undiscounted spousal benefit.

yes , in this case she was .so doesn’t apply to us.

i never saw anything else pertaining to not only a cut in benefit for the lower earner plus a cut in spousal if she was under fra taking spousal .

so this is all new to me.

i am no expert and only know what i know but this is the first time i ran in to a double cut so to speak

 

[pb4uski]

yes , in this case she was .so doesn’t apply to us.

i never saw anything else pertaining to not only a cut in benefit for the lower earner plus a cut in spousal if she was under fra taking spousal .

so this is all new to me.

i am no expert and only know what i know but this is the first time i ran in to a double cut so to speak

Yes, new to me too and not applicable to us since DW will be older than her FRA when I file.

It sort of makes sense though since if the lower earning spouse starts receiveing spousal benefits before their FRA then they will be receiving spousal benefits for longer (ignoring possibility of the higher earning spouse's death) so the spousal benefit should be reduced.

It more a haircut to both benefits because the lower earning spouse is starting to receive benefits prior to their FRA than a double cut... in each case their primary benefit and spousal benefits are reduced for life because they are receiving them for more months.

 

[mathjak107]

Yes, new to me too and not applicable to us since DW will be older than her FRA when I file.

It sort of makes sense though since if the lower earning spouse starts receiveing spousal benefits before their FRA then they will be receiving spousal benefits for longer (ignoring possibility of the higher earning spouse's death) so the spousal benefit should be reduced.

it makes sense because there is a page on the ss website that shows spousal and it does show cuts for spousal other. then just the early benefit reduction.

i wrongly assumed that was if the lower earner had no work history of her own so there was more of a spousal cut .

but wow , i never knew there is actually a double cut if the lower earner takes spousal pre fra

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

 

[pb4uski]

This is a good discussion

My wife and I are the same age at 62 (almost 63). I am the higher earner and am planning on taking SS somewhere between 66-68.

My wife was not going to file until I did as we thought her spousal benefit would be reduced.

What I think I am getting is that if she were to file at 62 today and collect $727 a month, it would not impact the spousal amount when I file later on. Is that correct? That was different than how I interpreted it.

Yes, if she files at 62 then her primary benefit will be haircut because she is collecting her primary benefit early and receiving more months of primary benefit.

Since she is deemed to have filed for her spousal benefit when you file for your benefits, if you file before she reaches her FRA then her spousal benefit would be haircut but if you file at or after her FRA then she will get the full spousal benefit.

 

[mathjak107]

Yes, if she files at 62 then her primary benefit will be haircut because she is collecting her primary benefit early and receiving more months of primary benefit.

Since she is deemed to have filed for her spousal benefit when you file for your benefits, if you file before she reaches her FRA then her spousal benefit would be haircut but if you file at or after her FRA then she will get the full spousal benefit.

that is the way i now believe it works too.. boy , it is something new to me

 

[mathjak107]

now is it different if the higher spouse is fra and the lower spouse is pre fra ? is there still this double cut because the spouse is still under fra ?

or is it only if both filed pre fra ?

does divorced change things as far as a double cut if both the ex husband and let’s say ex wife filed pre fra

 

[latexman]

Excellent discussion!

DW just filed in Jan. at 66.5 (she's a July 1957 model), and is expecting her first direct deposit on Feb. 28th. I'm a June 1957 model and plan to wait to 70 to file. Will DW have to file for spousal when I file (June 2027), or will SS automagically do that for her?

 

[Romer]

https://maximizemysocialsecurity.co...age-62-and-then-switch-spousal-benefit-age-67

looking at this example from Ask Larry I am still confused
For example, say Joy files for her Social Security retirement benefits at age 62. Joy's PIA, which is equal to the amount she'd be eligible for if she started drawing her benefits at full retirement age (FRA), is $600. But, Joy's benefit rate is reduced for age to $422 because she's claiming her benefits at age 62. Several years later Joy's spouse applies for his benefits, and his PIA is $2000. Joy's unreduced excess spousal benefit would then be calculated by subtracting her PIA from 50% of her husband's PIA, which in Joy's case amounts to $400 (i.e. $2000/2 - $600). If Joy is at least FRA when she becomes eligible for her excess spousal benefit, she would then be paid the full unreduced excess spousal amount of $400 in addition to her own reduced rate of $422 to give her a combined rate of $822. But, if Joy isn't yet FRA when her husband claims his benefit, then her spousal amount would also be reduced for age based on Joy's age at the time her husband claims his benefits.

If we both waited until 67 in this example, her spousal would be $1000. Here the spousal ends up being $822. This is due to the excess spousal being calculated at her FRA vs what she is actually paying. Still different than I thought earlier, but not exactly what I was getting from this discussion. I saw lots of confused and conflicting responses on this topic across the internet so not a simple topic

 

[mathjak107]

i am glad it no longer applies to us ..it just got very confusing

 

[pb4uski]

https://maximizemysocialsecurity.co...age-62-and-then-switch-spousal-benefit-age-67

looking at this example from Ask Larry I am still confused
For example, say Joy files for her Social Security retirement benefits at age 62. Joy's PIA, which is equal to the amount she'd be eligible for if she started drawing her benefits at full retirement age (FRA), is $600. But, Joy's benefit rate is reduced for age to $422 because she's claiming her benefits at age 62. Several years later Joy's spouse applies for his benefits, and his PIA is $2000. Joy's unreduced excess spousal benefit would then be calculated by subtracting her PIA from 50% of her husband's PIA, which in Joy's case amounts to $400 (i.e. $2000/2 - $600). If Joy is at least FRA when she becomes eligible for her excess spousal benefit, she would then be paid the full unreduced excess spousal amount of $400 in addition to her own reduced rate of $422 to give her a combined rate of $822. But, if Joy isn't yet FRA when her husband claims his benefit, then her spousal amount would also be reduced for age based on Joy's age at the time her husband claims his benefits.

If we both waited until 67 in this example, her spousal would be $1000. Here the spousal ends up being $822. This is due to the excess spousal being calculated at her FRA vs what she is actually paying. Still different than I thought earlier, but not exactly what I was getting from this discussion. I saw lots of confused and conflicting responses on this topic across the internet so not a simple topic

The example is spot on with my understanding.

If Joy is 67/FRA when her husband files then her spousal benefit would be the full $400 and her total benefit wold increase from $422 to $822 ($422+$400).

If Joy is younger than 67/FRA when her husband files then the $400 will be haircut based on Joy's age at that time. The reason for the haircut is that Joy will be collecting more spousal benefits because she is starting earlier the same reasoning for the haircut of her primary benefit from $600 to $422, but less of a haircut because her spousal benefit is starting later than 62 but before her FRA.

 

[mathjak107]

what about ex spouses , do the same pre fra rules apply ?

 

[Romer]

The example is spot on with my understanding.

If Joy is 67/FRA when her husband files then her spousal benefit would be the full $400 and her total benefit wold increase from $422 to $822 ($422+$400).

If Joy is younger than 67/FRA when her husband files then the $400 will be haircut based on Joy's age at that time. The reason for the haircut is that Joy will be collecting more spousal benefits because she is starting earlier the same reasoning for the haircut of her primary benefit from $600 to $422, but less of a haircut because her spousal benefit is starting later than 62 but before her FRA.

Thanks pb4uski!
I will readjust my thinking accordingly

Love this site