Social Security - Nonworking Spouse

[Craig]

I need some clarification here. As I understand it, my wife, who has spent most of her life caring for our children, can collect a benefit equal to 1/2 of my benefit when we begin collecting SS. So, if my benefit is $2,000, she could collect $1,000 ... total of $3,000, correct?

She'll begin work soon as a paralegal, but running the numbers, it appears that her SS from the earnings on that job will not exceed the benefit she would collect based upon my earnings alone ... her benefit from the earnings on that job appears to be $750.

So ... do they use the higher of the two, or does her SS actually go down because she will work for a few years before SS kicks in?

Thanks.

 

[charlie]

Charles,

Your wife will collect 1/2 of what your SS income is or
whatever she has coming in her own name ... whichever
is greater.

If the amount in her own name is less than 1/2 of
your income, the SSA will "disguise" the issue by
saying she is getting "her" SS income plus an
extra amount needed to bring it up to 1/2 of
yours. If you die first, she will get your full amount
but not a drop from what she earned.

Cheers,

Charlie

 

[Craig]

Thank you, Charlie ... appreciate the clarification.

One more question ... any downside to her taking a federal, state or municipal job with related pension?

 

[charlie]

I don't know if you can collect both a federal pension
and SS income at the same time, but I am pretty
sure state or municipal pensions won't affect SS
income .... it's called double dipping and is done
all the time.

Cheers,

Charlie

 

[Janie]

Charlie,

Federal employees used to be covered under CSRS and did not receive full SS benefits (some of these older employees are still working). New employees are covered by FERS, which provides a modest pension (1% of high-3 salary x number of years worked), plus a matching 401K contribution and full SS benefits.

Janie

 

[Hyperborea]

I don't know if you can collect both a federal pension
and SS income at the same time

You apparently can but there are rules to calculate out how much SS you get called "windfall elimination provision" - search the SSA site. This is the same set of rules for anybody with a pension or retirement system income earned while not paying SS (e.g. those with say SS equivalent earned in Canada or Europe).

 

[Patrick]

Thank you, Charlie ... appreciate the clarification.

One more question ... any downside to her taking a federal, state or municipal job with related pension?

Not only is there the "Windfall Elimination Provision," there is also the "Government Pension Offset." This one reduces your Social Security spouse's or widow(er)'s benefits by 2/3rds of the amount of your government pension. In other words, if you get a monthly civil service pension of $600, 2/3rds of that, or $400, must be used to offset your SS spouse's or widow(er)'s benefits.

See http://www.socialsecurity.gov/pubs/10007.html

Gotta love the Feds!

 

[Janie]

The Windfall elimination provision only apply to fed employees covered under CSRS... not more recent (hired within last 10-15 years) employees. SS offset actually supplements, not reduces, one's pension if you retire before age 62 and have >30 years of service!

For example, my husband is a fed employee hired 15 years ago. If he retires at age 56, he will receive a FERS pension of 1% of his high 3 salaries X number of years of service. At age 62, he can elect to begin SS benefits, and these have absolutely no effect on his pension. He won't receive the SS offset from age 56-62 because he doesn't have 30 years of service

 

[newellcr]

Janie,

If your husband has more than 20 years of credit before 62 and is retired, he may be able to collect the suppliment. You might want to look here, http://www.opm.gov/fers_election/ri_90/f_bbp.htm#srs. You are correct that a true FERS retiree can have no reduction to his SS. I suppose this could be more complicated if the FERS retiree was married to a CSRS retiree and there was a large difference in pay between them. Ouch, this isn't even worth thinking about.

Cheers,

Chris