Spousal Benefits SS Understanding

[BooBoo]

I am trying to understand social security application process.

Here is my situation:

I have not yet claimed social security, and I am now passed FRA. I was planning on waiting until age 70 in June. My wife who is older than me has already started social security at her FRA. She is the lower earner.

According to open social security I should already have filed. I have waited because we are currently in good health and was hoping to maximize her survivor benefits. Hindsight will tell if this is the optimum choice.

I have checked the social security website and plan to contact social security directly via telephone and or in person soon. The clock is ticking and trying to figure out the process in anticipation of turning 70. I figure I have 4 months prior to making a decision on how to proceed.

The scenarios as I see them are:

• 1) Claim at the beginning of the year I turn 69 and a half. Wife would subsequently apply for spousal benefits.
• 2) Claim in March, April, or May prior to age 70 and wife would subsequently apply for spousal benefits in June? (Assumes spousal application process would timely)
• 3) Claim at FRA in June and wife would subsequently apply for spousal benefits
• 4) Claiming now is always on option.

My concern with option 1 is that I would prefer waiting until 70, I waited this long, what is another six months.

My concern with option 2 is that I would prefer not having deferred social security benefits.

My concern with option 3 is that We could lose out some of my wife’s spousal benefits because she cannot file for my benefits until after I file? Would we lose several months of her benefits?

I may have missed it, but it does not appear easy question to answer on social security website (FAQ and SSA blog).

Any insight is greatly appreciated.

Boo

 

[MissMolly]

Personally, I would just wait until 70 so you can maximize your benefit and also your survivor benefit if you predecease your wife.

In regard to your wife filing for spousal, is 1/2 your full retirement age benefit (age 66 benefit, not age 70 benefit) more than she is currently receiving? If no, then there is no spousal benefit available to her. She would already be receiving her maximum benefit.

 

[Time2]

I had trouble following, I can't tell if you are 66 going on 67 or 69 going on 70. You can apply 4 months before you want start SS.
You can apply 4 months before your 70th birthday, you will receive your first check 1 month after your birthday. Is you wife's SS less that 50% of your check, otherwise she would not want to collect on yours before you die.

 

[Koolau]

Personally, I would just wait until 70 so you can maximize your benefit and also your survivor benefit if you predecease your wife.

I

This is primarily why I waited until 70 - to increase DW's survivor benefit.

 

[RetiredHappy]

I had trouble following, I can't tell if you are 66 going on 67 or 69 going on 70. You can apply 4 months before you want start SS.
You can apply 4 months before your 70th birthday, you will receive your first check 1 month after your birthday. Is you wife's SS less that 50% of your check, otherwise she would not want to collect on yours before you die.

The question is not whether wife's SS is less than 50% of OP's check, but rather is it less than half of OP's FRA (66?) PIA amount.

 

[sdawson]

Hi folks,

I too am trying to grok the implications if my wife claims her SS benefit before I claim mine, then later wants to claim via spousal benefits on mine. W


Details.
I am currently 62
Wife is currently 59

My FRA at 67 and my PIA is $3865.
I understand that if my wife waits til she is 67 and claims spousal benefits, she would receive 50% - $1933

I also understand that if she claims earlier, say 64 (when I start claiming) , she would receive reduced spousal benefit of 37.5% of mine, or $1449.

So far so good. But what I don't grok is this scenario.

I want to wait til age 70 so that my SS payment would be $4793.
I understand that if my wife applies for spousal benefits that same year (she will be 67) that her spousal benefit woud be based on my PiA and she would still receive 50% of that ($1933).

But what I don't understand is what happens if she claims SS benefts based on her SS earnings before age 67 (say she starts claiming at 64 for instance). She would have income for three years based on her earnings. But as she started claiming early, it seemed like that would imply that when I retire and she switches to spousal benefits, she woiuld be at the 37.5% ratio ($1449).

Yet when I search for this scenario or ask AI it seems like there is some rule or strategy I do not understand which would allow her to still receive 50% of my benefits, as she will be 67 when she switches from income baed on her SS to spoual income based on my SS income.

 

[RetiredHappy]

Hi folks,

I too am trying to grok the implications if my wife claims her SS benefit before I claim mine, then later wants to claim via spousal benefits on mine. W


Details.
I am currently 62
Wife is currently 59

My FRA at 67 and my PIA is $3865.
I understand that if my wife waits til she is 67 and claims spousal benefits, she would receive 50% - $1933

I also understand that if she claims earlier, say 64 (when I start claiming) , she would receive reduced spousal benefit of 37.5% of mine, or $1449.

So far so good. But what I don't grok is this scenario.

I want to wait til age 70 so that my SS payment would be $4793.
I understand that if my wife applies for spousal benefits that same year (she will be 67) that her spousal benefit woud be based on my PiA and she would still receive 50% of that ($1933).

But what I don't understand is what happens if she claims SS benefts based on her SS earnings before age 67 (say she starts claiming at 64 for instance). She would have income for three years based on her earnings. But as she started claiming early, it seemed like that would imply that when I retire and she switches to spousal benefits, she woiuld be at the 37.5% ratio ($1449).

Yet when I search for this scenario or ask AI it seems like there is some rule or strategy I do not understand which would allow her to still receive 50% of my benefits, as she will be 67 when she switches from income baed on her SS to spoual income based on my SS income.

The moment she claims early, it will be "deemed" that she has also filed for spousal benefits even though she cannot file for spousal benefits yet, hence she will also get a haircut for filing early by the time she switches to spousal benefits at her FRA.

 

[sdawson]

The moment she claims early, it will be "deemed" that she has also filed for spousal benefits even though she cannot file for spousal benefits yet, hence she will also get a haircut for filing early by the time she switches to spousal benefits at her FRA.

Thank you, does that mean she would then receive spousal benefts at the 37.5% rather than 50%. Would she receive $1449 (in total) at that time. That was my original understanding.

I ask as the web and AI answers say something different, which I do not understand.

 

[RetiredHappy]

Thank you, does that mean she would then receive spousal benefts at the 37.5% rather than 50%. Would she receive $1449 (in total) at that time. That was my original understanding.

I ask as the web and AI answers say something different, which I do not understand.

Yes. $1449, presumably her own benefits are lower.

 

[phil1ben]

The moment she claims early, it will be "deemed" that she has also filed for spousal benefits even though she cannot file for spousal benefits yet, hence she will also get a haircut for filing early by the time she switches to spousal benefits at her FRA.

I am confused by this. I just claimed SS at 65. My wife turns 62 in September. My benefits are substantially more than my wife's (her own benefits are about 30% of mine). We were planning on her filing to collect her own at 62 and then collecting her spousal benefits (50% of mine) at her FRA. We thought the decision to collect her own benefits at 62 did not effect the amount of the spousal benefits when she decides to collect those.

Do I have this wrong?

 

[MissMolly]

I am confused by this. I just claimed SS at 65. My wife turns 62 in September. My benefits are substantially more than my wife's (her own benefits are about 30% of mine). We were planning on her filing to collect her own at 62 and then collecting her spousal benefits (50% of mine) at her FRA. We thought the decision to collect her own benefits at 62 did not effect the amount of the spousal benefits when she decides to collect those.

Do I have this wrong?

The change taking away this option was part of the Bipartisan Budget Act of 2015. So it’s been in effect now for 10 years. Once you file for Social Security, you are deemed to be filing for any Social Security benefits you are eligible for. So if her spousal amount is greater than her own benefits, she will be awarded the spousal amount and not her own. Also, if she filed for spousal prior to attaining her full retirement age, it would not be 50% of yours, it would be a reduced amount.

 

[sdawson]

Yes. $1449, presumably her own benefits are lower.

Thank you, that was my original interpretation. And yes, her benefits would be less than 50% of mine, so maximizing that after her FRA is important.

I have read some other threads where folks seem to have another misunderstanding here as well. I have seen some folks state that they plan on delaying applying for social security so that their higher beneft at age 70 will be used when calculating the maximum 50% spousal benefit. I believe that is incorrect.

What I believe is that both the spousal benefit and the survivor benefit are based on the spouses PIA at FRA (67 in my case). My waiting til I am age 70 would increase my SS payments as long as I live, but the delay would not increase either my wife's spousal or survivor benefits. They are keyed to the PIA based on me at age 67 (as long as I wait til I am 67 to apply myself).

As the men in both my wife's family and my family seem to pass 20 years before their wifes, this is a strong consideration as we plan on when to take retirement. At a minimum I need to wait til I am 67 and my wife needs to wait til she is 67 to maximize her benefits both while I live and after I pass. Whether or not I wait til I am age 68 or 69 or 70 is a separate matter that will not impact my wifes' benefits as long as we both wait til 67 at the minmum.

But if I am mistaken any any of the above, please correct me.

 

[MissMolly]

Thank you, that was my original interpretation. And yes, her benefits would be less than 50% of mine, so maximizing that after her FRA is important.

I have read some other threads where folks seem to have another misunderstanding here as well. I have seen some folks state that they plan on delaying applying for social security so that their higher beneft at age 70 will be used when calculating the maximum 50% spousal benefit. I believe that is incorrect.

What I believe is that both the spousal benefit and the survivor benefit are based on the spouses PIA at FRA (67 in my case). My waiting til I am age 70 would increase my SS payments as long as I live, but the delay would not increase either my wife's spousal or survivor benefits. They are keyed to the PIA based on me at age 67 (as long as I wait til I am 67 to apply myself).

As the men in both my wife's family and my family seem to pass 20 years before their wifes, this is a strong consideration as we plan on when to take retirement. At a minimum I need to wait til I am 67 and my wife needs to wait til she is 67 to maximize her benefits both while I live and after I pass. Whether or not I wait til I am age 68 or 69 or 70 is a separate matter that will not impact my wifes' benefits as long as we both wait til 67 at the minmum.

But if I am mistaken any any of the above, please correct me.

As long as your wife has reached full retirement age when she claims Survivor, she will received 100% of your benefits as survivor if you delay until age 70.

 

[Niuatoputapu]

As long as your wife has reached full retirement age when she claims spousal, she will received 100% of your benefits as survivor if you delay until age 70.

MissMolly- I have admired your expertise on matters of Social Security. I wonder if the above statement has a typo. Should it read "As long as your wife has reached full retirement age when she claims SURVIVOR....."

 

[RetiredHappy]

Survivor benefits works a little differently. Spouse would get the last amount that the deceased received as long as spouse files for survivor benefits after reaching (her) FRA.

 

[MissMolly]

MissMolly- I have admired your expertise on matters of Social Security. I wonder if the above statement has a typo. Should it read "As long as your wife has reached full retirement age when she claims SURVIVOR....."

Yes, you are correct. It should indeed be Survivor. Glad you called me out on that

Edit: I was able to go back and fix my error. Again, Thanks!

 

[audreyh1]

It gets us often - the rules for spousal benefits and for survivor benefits are not the same. You need to understand each one.

 

[sdawson]

As long as your wife has reached full retirement age when she claims Survivor, she will received 100% of your benefits as survivor if you delay until age 70.

Survivor benefits works a little differently. Spouse would get the last amount the the deceased received as long as spouse files for survivor benefits after reaching (her) FRA.

Thank you two for that clarification on survivor benefits. I thought they would be based on my PIA at age 67, even if I delayed collectin SS til age 70. But apparently that is not the case.

If I start collecting SS at age 70, and receive $4793 / month. And my wife (who is conveniently 3 years younger) starts collecting that same year at her FRA of 67. Her spousal benefit will be $1933 (1/2 of mine).
If I then pass 3 months later, she would recieve survivor benefts of $4793 (what I had been collecting as I waited til I was 70 to start SS).

The survivor benefit is based on what I was actually receiving when I pass, not what my age FRA PIA was at age 67.

Correct me if that statement is wrong please. You folks are the best.

My spreadsheet both for while I live and when I pass for my wife is getting better all the time.

 

[MissMolly]

Thank you two for that clarification on survivor benefits. I thought they would be based on my PIA at age 67, even if I delayed collectin SS til age 70. But apparently that is not the case.

If I start collecting SS at age 70, and receive $4793 / month. And my wife (who is conveniently 3 years younger) starts collecting that same year at her FRA of 67. Her spousal benefit will be $1933 (1/2 of mine).
If I then pass 3 months later, she would recieve survivor benefts of $4793 (what I had been collecting as I waited til I was 70 to start SS).

The survivor benefit is based on what I was actually receiving when I pass, not what my age FRA PIA was at age 67.

Correct me if that statement is wrong please. You folks are the best.

My spreadsheet both for while I live and when I pass for my wife is getting better all the time.

You are correct But she will need to file for the Survivor benefits. It doesn't happen automatically (to my knowledge).

 

[RetireBy90]

From aarp.org at

Can I Switch From My Social Security Benefit to a Spousal Benefit?

If your mate isn’t yet on Social Security, you can claim your retirement benefit at 62 (or later) and switch to spousal benefits when they do file.

www.aarp.org

Can I file for my Social Security at 62 and switch to spousal benefits later?​

Only if your spouse is not yet receiving retirement benefits. In this case, you can claim your own Social Security beginning at 62 and make the switch to spousal benefits when your husband or wife files. Social Security will not pay the sum of your retirement and spousal benefits; you’ll get a payment equal to the higher of the two benefits.
See article for full response

 

[phil1ben]

The change taking away this option was part of the Bipartisan Budget Act of 2015. So it’s been in effect now for 10 years. Once you file for Social Security, you are deemed to be filing for any Social Security benefits you are eligible for. So if her spousal amount is greater than her own benefits, she will be awarded the spousal amount and not her own. Also, if she filed for spousal prior to attaining her full retirement age, it would not be 50% of yours, it would be a reduced amount.

So the concept of getting "free money" (I know its not free......) by claiming her own benefit no longer exists? What you are saying is that if we now filed for her benefit she would automatically be given the spousal benefit rather than her own simply because the spousal benefit is higher? So please confirm that the ability of a spouse to claim "their own" benefit does not exist if their spousal benefit is greater? Thank you.

 

[MissMolly]

So the concept of getting "free money" (I know its not free......) by claiming her own benefit no longer exists? What you are saying is that if we now filed for her benefit she would automatically be given the spousal benefit rather than her own simply because the spousal benefit is higher? So please confirm that the ability of a spouse to claim "their own" benefit does not exist if their spousal benefit is greater? Thank you.

It no longer exists if the spousal benefit is higher. That option went away for anyone born after Jan 1, 1954. It is referred to as "Deemed Filing". In other words, when you file for SS, you are deemed to be filing for the largest benefit you are eligible for. Deemed Filing

 

[sdawson]

Thank you for that Deemed Filing link. I particularly agree with the concept of fairness stated on that page.

"This change in the law preserves the fairness of the incentives to delay, but it means that you cannot receive one type of benefit while at the same time earning a bonus for delaying the other benefit."

This comment on survivor benefits is also important from the next sentence on that page:

"Deemed filing applies to retirement benefits, not survivor’s benefits. If you are a spouse, you may start your survivor benefit independently of your retirement benefit."

So my reading is that a person who claimed before FRA and received < 50% spousal benefits would still be entitled to 100% of spousal benefits if they claim survivor benefits after reaching FRA.

 

[PlayinwithFIRE]

Sorry that I am so daft at understanding all this. I am currently trying to figure out what this looks like for myself and the wife.

My benefit is larger than the wifes.

We are currently 56 (me) and 55 (wife) .

My PIA (at 67) $3870 ..if i elect at 62 ($2675)
Wifes PIA (at 67) $1139

I think the disparity is large enough that wife will default to spousal benefit?

Is she allowed to take that before I begin my social security ? (for instance, she begins at 62 and I wait till 67?)

thank you,

pwf

 

[RetiredHappy]

Sorry that I am so daft at understanding all this. I am currently trying to figure out what this looks like for myself and the wife.

My benefit is larger than the wifes.

We are currently 56 (me) and 55 (wife) .

My PIA (at 67) $3870 ..if i elect at 62 ($2675)
Wifes PIA (at 67) $1139

I think the disparity is large enough that wife will default to spousal benefit?

Is she allowed to take that before I begin my social security ? (for instance, she begins at 62 and I wait till 67?)

thank you,

pwf

Not with spousal benefits. You need to have filed before she can file to have spousal benefits. But she can certainly file against her own first, and then switch to spousal benefit when you file. But note that by filing early, her benefits is permanently reduced, including spousal benefits.