Curious SS questions?

[Rustic23]

Here are two situations, both hypothetical about SS. I have browsed some of the references for SS and don't quite get an answer. As I really don't need an answer to either, I don't want to bother call SS and waiting on the phone for an answer.

a. both husband and wife are 66
b. Husband SS 20,000 at 66 wife spousal 10,000
c. at age 70 Husband SS 30,000 wife spousal 15,000 (these numbers are made up but for the two scenario it makes no difference)

Scenario 1.
Husband dies and 66 and neither wife nor husband have taken SS. Wife waits till 70 to file for spousal. How much will she get, 20 or 30?

Scenario 2.
Husband takes SS at 66 but wifes waits till 70? Does she get 1/2 of 20 or 1/2 of 30? In this case the question is weather she is entitled to the 8% per year by delaying SS.

While I am not contemplating either of these, especially #1, I could qualify for either, but the question is one mors of curiosity than anything.

 

[REWahoo]

As I understand it*, the amount in both scenarios would be based on 20. The reason is that spouse benefits are based on the higher earning spouse's "full benefit" amount, the amount at age 66.

* NOTE: The accuracy of my understanding can be suspect.

 

[Rustic23]

Just for clarity, if the husband had waited until 70 to take SS, and wife waited also, wife would get 30, if husband died at say 71. (I think that is right, but not a SS expert!)

 

[REWahoo]

Just for clarity, if the husband had waited until 70 to take SS, and wife waited also, wife would get 30, if husband died at say 71. (I think that is right, but not a SS expert!)

As I understand it, if the husband's SS check is larger and he dies, his spouse would get an additional amount added to her amount so that it would total his amount. IOW, the surviving spouse gets an amount equal to the larger of the two SS amounts they received prior to the death of one spouse.

That is what happened to my SIL's SS when my brother died last year.

 

[Robert the Red]

A far better place to ask this question is at
Bogleheads where poster 'sscritic' seems to know more about SS than anyone else on Earth.

Also, once the husband dies, his wife does not receive the wife's benefit, but the widow's benefit, for which the rules are different.

 

[A Visitor]

SS spousal benefit

If the spouse's FRA (full retirement age) is 66, the spousal benefit ceases to grow at that age. Since the spouse cannot collect a spousal benefit until the primary beneficiary files to collect, a same-age couple should not delay past 66. The rules are hazy but it may be possible for both to file at 66, then have only the primary beneficiary "abandon" and delay further up to 70.

But you should also take into account the MFB (maximum family benefit) that caps benefits paid on one earnings record - for all but the lowest AMIE (average monthly indexed earnings) earners the MFB is 1.75 X PIA (Primary Insurance Amount - the primary beneficiary's benefit at FRA). For example, if same age and both collect at FRA of 66, they will receive 1.5 x PIA. If primary waits until 70, that benefit would be 1.32 x PIA plus the spouse's 0.5 x PIA would total 1.82 x PIA, exceeding the MFB.

When one spouse dies, the other continues to receive the higher of the two benefit amounts.

The SSA.gov benefit calculators will give you some of this info, but they don't address spousal benefits...

 

[Robert the Red]

If the spouse's FRA (full retirement age) is 66, the spousal benefit ceases to grow at that age. Since the spouse cannot collect a spousal benefit until the primary beneficiary files to collect, a same-age couple should not delay past 66. The rules are hazy but it may be possible for both to file at 66, then have only the primary beneficiary "abandon" and delay further up to 70.

See sscritic's reply under the thread Bogleheads :: View topic - Spouses and Soc Security Benefits -- the correct term is "file and suspend benefits", which the husband can do after age 66 (Full Retirement Age = FRA), and then the wife can file for spousal benefits only at her FRA. The rules are complicated (to allow for diverse situations), and sscritic does a good job of explaining them in plain language.

 

[Martha]

See sscritic's reply under the thread Bogleheads :: View topic - Spouses and Soc Security Benefits -- the correct term is "file and suspend benefits", which the husband can do after age 66 (Full Retirement Age = FRA), and then the wife can file for spousal benefits only at her FRA. The rules are complicated (to allow for diverse situations), and sscritic does a good job of explaining them in plain language.

This is an excellent thread at Bogleheads. I recommend reading it to get a feel for all the different situations where a person may want to file and suspend benefits. What I never had thought about was the ability to take benefits for a while and then suspend. He describes one scenario where the spouse with the lower benefits is older than the spouse with the higher benefits. The lower benefit spouse wants to get spousal benefits off the younger spouse's record. He has a clever way to maximize benefits for both of these parties, which involves the younger of the two taking benefits for a couple of years, along with the spouse who is at full retirement age and thus entiled to half of the younger spouse's full benefit, and then suspending the younger spouse's benefits until he or she is 70, to get a bump up in benefits for the younger spouse.

He also talks about issues regarding the maximum family benefit and possible ways to maximize benefits keeping this issue in mind.

Anyway, I recommend reading the thread. It is good and it is clear and sources are cited. And he even does the math.

 

[A Visitor]

SS spousal benefit

Oops - I'm not sure how I came up with "abandon" rather than the correct term "suspend".

There is also useful info at the SS section of Bud Hebeler's analyzenow.com site...

 

[Finance Dave]

Wow, that was interesting and the rules complex. When I get closer to that age, I'll have to give sscritic a call.