Help understanding Social Security Spousal Benefit

[mathjak107]

the lower benefit of 562.50 gets their primary of 750 subtracted from half the 2k , the other primary .

half the higher primary amount equals 1k which then has 750 subtracted from it . that leaves 250 as an adder to their 562.50 .


that is 562.50 plus 250 which is 812.50 . i never said any such thing as 1562.50

 

[MichaelB]

From what you wrote, you seem to be suggesting they would receive $1,562.50 ... there would be no reduction on spousal.

[-]Perhaps mathjak can use the numbers (amounts and ages) in the OP to show his example. The explanations are a bit confusing, at least to me.[/-]
Cross-posted.

 

[pb4uski]

the lower benefit of 562.50 gets their primary of 750 subtracted from half the 2k , the other primary .

that equals 1k less 750.00 or 250.00 added to their 562.50 .


that is 562.50 plus 250 which is 1312.50 . i never said any such thing as 1562.50

My calculator says that 562.50 plus 250 is 812.50....

Anyway, I did have an error in my calc in post #25, which I have fixed. I think the thing we disagree on is whether the spousal add-on is discounted if the beneficiary takes SS early or not... I think the link that I attached to post #25 indicates clearly that it is.

 

[mathjak107]

i already fixed that , hit the wrong key . lol

 

[mathjak107]

562.50 plus 250 which is 1312.50?

My calculator comes up with 821.50.

to funny 562.50 plus 250 is 812.50 not 821.50 . we both need new calculators . had the early filer waited until fra they would have gotten 1k

 

[mathjak107]

it is like survivor benefits . survivor benefits have 2 targets .

the survivor gets the higher of what the other spouse got or a reduction in the form of a multiplier that avoids a double cut if they both filed early .

in theory if the husband filed at 62 and the surviving wife filed at 60 there would be a drastic double cut . to avoid that you use a discount multiplier chart ss has .

so a wife who files for survivor at 60 gets the husbands FULL primary amount regardless of when the husband filed x.71 as an amount . at 62 it is the primary amount x .81 .

that changes as the wife gets older and waits to take survivor . so once again , regardless of when both file there is only 1 cut

 

[pb4uski]

to funny 562.50 plus 250 is 812.50 not 821.50 . we both need new calculators . had the early filer waited until fra they would have gotten 1k

fixed.

We agree that if the spouse waits until FRA that they will receive $1,000 ($2,000 * 50%). Would you also agree that it the spouse never worked, and took at 62 rather than FRA that they would receive substantially less than $1,000? and that the benefit would be $700 if they were born between 1943-1954?

 

[mathjak107]

yes , because if she never worked she has no early benefit to put the adder on . then it is based on his primary with a reduction .

so then it is cut once because she filed early based on the husbands primary amount . . i have seen situations where the non working wife actually got more than the husband who filed early because spousal is always based on primary and the wife was older .

the closer to fra she is the less the reduction for her so she actually got more than him . . in fact at her fra she would get half his full while he got less for taking it early .

that is why it works the way it does using only primary amounts as a basis regardless of when one files . there will always be only 1 reduction on spousal .

 

[pb4uski]

I don't see how that would work since the most that a non-working spouse can receive would be 50% the working spouse's PIA but the least that the working spouse could receive would be 70% of their PIA (the maximum early discount is 30% and would be between 20-25% for most people)

 

[mathjak107]

you are correct , i realized it was survivor in that case.

but anyway , the formula for spousal adders is very simple and there is no double cut . the only cut is on the amount the lower benefit gets for filing early . the adder is always based on 1/2 the higher primary minus the lower primary and the difference is applied to the lower benefit being received

 

[pb4uski]

.... but anyway , the formula for spousal adders is very simple and there is no double cut . the only cut is on the amount the lower benefit gets for filing early . the adder is always based on 1/2 the higher primary minus the lower primary and the difference is applied to the lower benefit being received

No sir, that is not correct. Both the lower benefit and the adder are cut if someone retires early.

If someone takes early, the benefits that they have earned will be cut up to 30% (depending on the year they were born and how early they claim their benefit) and the adder as you refer to it (the excess of 50% of their spouse's PIA over their PIA) will be cut up to 35% (depending on the year they were born and how early they claim their benefit).

See: https://www.ssa.gov/OACT/quickcalc/earlyretire.html

We sometimes call a retired worker the primary beneficiary, because it is upon his/her primary insurance amount that all dependent and survivor benefits are based. If the primary begins to receive benefits at his/her normal (or full) retirement age, the primary will receive 100 percent of the primary insurance amount. If the spouse of a primary begins to receive benefits at his/her normal retirement age, the spouse will receive 50 percent of the primary's primary insurance amount.

The table below illustrates the effect of early retirement, for both a retired worker and his/her spouse. For our illustration, we have used a $1,000 primary insurance amount. With this primary insurance amount and both primary and spouse retiring at their respective normal retirement ages, the primary would receive $1,000 per month and his/her spouse would receive $500 per month. The table shows that retirement at age 62 results in substantial reductions in monthly benefits. ....

So for example, if someone had no earnings record on their own, their spouse was receiving a PIA of $1,000, they were born in 1960 and claimed at 62 then they would receive $325 ($1,000 PIA * 50% * (1-35% discount factor)).

 

[mathjak107]

nope , i am still correct , it works out to the same thing as the chart .

think about it .

if i am the early filer with the bigger amount i am already cut in my checkso that is cut number 1 for filing early .

if the lower benefit filer collected early their check is reduced already too , like my wife has collected since 62 and is waiting until i file so she gets the adder so her chck is already reduced for cut #2 . .

so the formula for adding spousal on top of the already reduced lower check is calculated just as i said. using both primary amounts .

the way i am explaining it the cuts already happened . so the adder is pretty straight forward the way it is calculated . if you do it from the ss chart that assumes you are not already figuring the reduced amounts and are showing you the total effect which is what my calculation is actually doing but it is simpl to calculate because the reduction already took place .


there is in effect no more reduction on just the adder portion since both checks were already reduced .

 

[pb4uski]

If the discounts for taking early for the benefit based on your own earnings recording​ and the adder were the same then you would be correct... but they are not the same as can clearly be seen in the link... the discount for spousal benefits are consistently 5% higher... so you are wrong.

 

[mathjak107]

https://www.thebalance.com/clearing-spousal-benefits-confusion-2388948

from what i see if the spouse has a record of their own and are collecting their benefit early they get a cut in their amount for filing early .

if the higher earning spouse files early too when that spouse files has no effect on the adder as all adders are computed off pia . they simply get their own reduction in their check too .

it is quite clear that as long as the lower benefit spouse who gets the adder is fra the age their spouse filed even if early has no bearing .

i will try to get something solid as to the math when they are both under fra and one is already collecting their reduced benefit .



the social security site is not clear on this at all as far as the adder on to an existing already reduced check pre fra .
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I’m turning 62 this year and I'm considering claiming my retirement benefits early, since I was just denied disability benefits. If I do, will this lower my wife’s benefits too?
Answer:

to answer your question: If you claim your Social Security retirement benefits early, this will not affect your wife’s dependents benefits, which are also called spousal retirement benefits. As long as your wife waits until her full retirement age to claim her spousal benefits, she can collect the full amount. Because dependents benefits are based on your primary insurance amount (which is based on your earnings record at your full retirement age), whether or not you claim benefits early doesn’t affect the amount of dependents benefits your spouse can collect.
Spousal retirement benefits are half of your primary insurance amount – that is, half of what you would have received if you had waited until full retirement age to claim benefits. However, if your wife claims the spousal retirement benefit before her full retirement age, her spousal benefits will be lowered permanently.

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if collecting an early benefit you always get your own benefit regardless , you just get an adder to it now , you already got cut for filing early

so now we have to see if the adder is dependent on the age the higher spouse took ss. i don't believe it becomes dependent anymore than if the younger spouse was fra . the age the higher spouse took ss is irrelevant when the lower benefit is fra .

i don't believe the adder is effected if she files younger than fra and is already collecting her reduced benefit which gets added to . i will check further ,