Spousal Social Security Benefit

[horrnsfan]

I need some help and guidance from any social security experts. Below is my situation and question.


My wife started taking her social security benefit at age 65 and shortly thereafter retired (June, 2020) from her job in public education. She worked in a Texas school district which does not take out Social Security (she had earned her quarters previously working with various different companies) and began receiving her TRS retirement pension benefit in July. Because of Social Security rules pertaining to working for public entities which don't withhold Social Security, her Social Security benefit was essentially cut in half. After Medicare is taken out she is now making $350/month.


I may begin taking my Social Security benefit next January and according to the information on my account I will receive a benefit of just under $3,000 per month. Here are my questions.


1. Will my wife be eligible to take half of my benefit in place of her current benefit?


2. If the answer to number 1 is yes, will that amount (approximately $1500 per month) be reduced because of the reduction associated with her being employed by a public entity that did not withhold Social Security.


3. Will my wife need to file for her new benefit or does Social Security automatically recognize the spousal relationship and make the change to her benefit accordingly.


Thanks for any information you may provide. Its possible I may not take by benefit until Jan,2006 which is my full retirement age, but I want to know my situation regarding my wife before I begin taking my benefit.

 

[Exchme]

I don't know anything about the TRS system, sounds like whatever SS would give will get cut in half, but just guessing. I suspect Google could tell you.

Concentrating on SS benefits, the spousal portion is based on your and her ages when you claim and her age when she claims spousal benefits, your and her full retirement ages, the benefit each of you would have gotten at your full retirement age. We need the benefits before any Medicare deductions. Post those numbers and folks here can walk you through the calculation. Without the numbers, it's confusing.

 

[MissMolly]

She would eligible for spousal once you file, HOWEVER, her spousal will not be the full 50% of your PIA because she filed for her own benefit before she reached her full retirement age. Also, her spousal benefits will still be affected by WEP. She will need to contact SS to switch over to Spousal, it's not usually automatic. The exception being if you do your filing over the phone they can then process both at the same time. First you file for yours, then hand the phone to her and she switches over to spousal.

 

[horrnsfan]

Here are more details which hopefully will provide the needed information to answer my questions.


I was born May 31, 1958 making me 64 and 9 months at the end of February. If I take my Social Security benefit effective January 1, 2024 I will be 65 and 8 months. According to my Social Security record the current benefit for me on that date would be $2,982. If I wait until full retirement age which would be 66 and 8 months, my benefit would be $3,195


My wife was born November 27, 1955 making her 67 and 3 months at the end of February. She began taking her Social Security benefit in July, 2021 which was $912. She was 65 and 8 months at that time. Her full retirement age was 66 and 6 months and she would have made $1008 per month had she waited until such time. KEEP IN MIND HER ACTUAL BENEFIT IS REDUCED BY ROUGHLY 50% because of the IRS rules associated with public entities which do not withhold Social Security. All of that is explained in a bit more detail in my first post.


Again, I am trying to determine whether 1) she would be eligible for half of my benefit, 2) if so whether that her new benefit would also be cut in half because of her TRS pension and 3) whether she would need to formally file for such requested change with Social Security or if Social Security recognizes the relationship and makes the change accordingly.

 

[ivinsfan]

You are going to need to call in for either a phone or in person appointment to get the exact answers to all your questions... your question actually sounds a like a test for someone trying to train for a position at SS.... IOW it's complicated.... but an age reduction follows you forever...the benefit number they would start with is 1/2 of your FRA benefit..that's where its caps...the WEP number you need to get from SS.





Good luck..

 

[pb4uski]

Here are more details which hopefully will provide the needed information to answer my questions.


I was born May 31, 1958 making me 64 and 9 months at the end of February. If I take my Social Security benefit effective January 1, 2024 I will be 65 and 8 months. According to my Social Security record the current benefit for me on that date would be $2,982. If I wait until full retirement age which would be 66 and 8 months, my benefit would be $3,195


My wife was born November 27, 1955 making her 67 and 3 months at the end of February. She began taking her Social Security benefit in July, 2021 which was $912. She was 65 and 8 months at that time. Her full retirement age was 66 and 6 months and she would have made $1008 per month had she waited until such time. KEEP IN MIND HER ACTUAL BENEFIT IS REDUCED BY ROUGHLY 50% because of the IRS rules associated with public entities which do not withhold Social Security. All of that is explained in a bit more detail in my first post.


Again, I am trying to determine whether 1) she would be eligible for half of my benefit, 2) if so whether that her new benefit would also be cut in half because of her TRS pension and 3) whether she would need to formally file for such requested change with Social Security or if Social Security recognizes the relationship and makes the change accordingly.

Putting WEP aside for now, your DW would get a bump once you file. Since she started 65/8, just 8 months before her FRA of 66/2 I'm guessing that she will get $1,502 before any WEP adjustments.

If you both took at your FRA, I think that she would have received her own PIA of $1,008 plus a $590 spousal benefit for the excess of 50% of your PIA of $1,598 and her PIA $1,008. However, since she started early, I think she will get the $912 plus $590 or $1,502. YMMV.

You may want to visit opensocialsecurity.com and input your particulars and it should tell you.

Of course, WEP reductions would be made on top of the amounts above.

 

[MissMolly]

Here are more details which hopefully will provide the needed information to answer my questions.


I was born May 31, 1958 making me 64 and 9 months at the end of February. If I take my Social Security benefit effective January 1, 2024 I will be 65 and 8 months. According to my Social Security record the current benefit for me on that date would be $2,982. If I wait until full retirement age which would be 66 and 8 months, my benefit would be $3,195


My wife was born November 27, 1955 making her 67 and 3 months at the end of February. She began taking her Social Security benefit in July, 2021 which was $912. She was 65 and 8 months at that time. Her full retirement age was 66 and 6 months and she would have made $1008 per month had she waited until such time. KEEP IN MIND HER ACTUAL BENEFIT IS REDUCED BY ROUGHLY 50% because of the IRS rules associated with public entities which do not withhold Social Security. All of that is explained in a bit more detail in my first post.


Again, I am trying to determine whether 1) she would be eligible for half of my benefit, 2) if so whether that her new benefit would also be cut in half because of her TRS pension and 3) whether she would need to formally file for such requested change with Social Security or if Social Security recognizes the relationship and makes the change accordingly.

Please see my post right above yours where I answered all these questions.

 

[Sunset]

OP - Do as Miss Molly said.

The basic point to know is, she will get more by applying for the spousal benefit, even after WEP (as WEP is limited by the non-SS pension amount, meaning it won't go up).

You will need to apply first and she will need to contact SS to add the spousal benefit.

 

[ivinsfan]

OP - The basic point to know is, she will get more by applying for the spousal benefit, even after WEP (as WEP is limited by the non-SS pension amount, meaning it won't go up).

You will need to apply first and she will need to contact SS to add the spousal benefit.

Based on this depending on the amount of increase your wife receives it might be worth your while to start collecting now instead of later. The increased amount of your wife's check may be more than you would gain by waiting to collect your benefit. Call the SS number and see what they say...

 

[Dreamer]

You definitely need to check with social security to see what her amounts would be if you file. She is affected by WEP on her own social security record and she is affected by GPO (Government Pension Offset) on your record as a spouse.

I am in the same situation. My social security does not cover my Medicare premium, so they hold all of my social security checks and then I send them a check for the rest of my premium for the year. I do not receive anything as a spouse from my DH's social security, due to GPO.

 

[Philliefan33]

Technically, your wife's spousal benefit will be reduced by GPO (government pension offset). The WEP adjusts a person’s Social Security worker benefit, and the GPO adjusts a person’s spouse or survivor benefit.

The GPO is 2/3 of her non-covered pension; for example if her pension (from work where she did not pay into SS) is $1000 per month, her spousal SS will be reduced by $667 per month.

(Sorry, I see Dreamer already posted similar)

 

[MissMolly]

The Windfall Elimination Provision may apply if you receive both a non-covered pension and Social Security retirement benefits. The WEP can reduce your benefit payment by as much as half the amount of your pension.

The Government Pension Offset applies if you get a government pension plus spousal or survivor benefits from Social Security. Your benefits will be reduced by up to two-thirds of your pension amount.

 

[Sunset]

The Windfall Elimination Provision may apply if you receive both a non-covered pension and Social Security retirement benefits. The WEP can reduce your benefit payment by as much as half the amount of your pension.

The Government Pension Offset applies if you get a government pension plus spousal or survivor benefits from Social Security. Your benefits will be reduced by up to two-thirds of your pension amount.

I get a CPP, which is considered a WEP candidate, so my SS will be reduced by 1/2 of my CPP (as I understand it).

If I applied for my spousal SS, do I only get affected by WEP and not GPO, as I don't get a USA Gov't Pension ?

 

[Gumby]

Most of the posts above are correct - the WEP reduces (but can never eliminate) her own Social Security benefit. The GPO reduces (and can entirely eliminate) any spousal or survivor benefit. This is the case with the young wife and me. She has insufficient non-teacher work to get social security on her own record and her teacher pension is sufficient to entirely eliminate any spousal or survivor benefit based on mine. Which means that she gets no spousal benefit now, and if I predecease her (which is likely since she is younger and female) then the social security income goes away entirely because she will get no survivor benefit. I have a paid up whole life insurance policy to cover that shortfall, but I needed to start paying for that 17 years before we retired. This also totally changes the calculation for when to take social security. In our case, it made the most sense for me to take SS at 62 and preserve the portfolio for her use after I'm taking the dirt nap.

If I could give one piece of financial advice to teachers, it would be to know the WEP and GPO provisions in detail well before retirement, because it is a difficult and unique situation not usually covered in retirement planning articles and calculators.

These two posts are not accurate.

She would eligible for spousal once you file, HOWEVER, her spousal will not be the full 50% of your PIA because she filed for her own benefit before she reached her full retirement age. Also, her spousal benefits will still be affected by WEP. She will need to contact SS to switch over to Spousal, it's not usually automatic. The exception being if you do your filing over the phone they can then process both at the same time. First you file for yours, then hand the phone to her and she switches over to spousal.

OP - Do as Miss Molly said.

The basic point to know is, she will get more by applying for the spousal benefit, even after WEP (as WEP is limited by the non-SS pension amount, meaning it won't go up).

You will need to apply first and she will need to contact SS to add the spousal benefit.

No, the WEP affects only her own benefit and has already gone into effect. GPO affects only spousal or survivor benefits. It is worse. In fact, you could be eligible for ZERO spousal or survivor benefit due to the GPO. You could ask the local Social Security office, but you can also calculate the GPO reduction here. https://www.ssa.gov/benefits/retirement/planner/gpo-calc.html

 

[Sunset]

Most of the posts above are correct - the WEP reduces (but can never eliminate) her own Social Security benefit. The GPO reduces (and can entirely eliminate) any spousal or survivor benefit. This is the case with the young wife and me. She has insufficient non-teacher work to get social security on her own record and her teacher pension is sufficient to entirely eliminate any spousal or survivor benefit based on mine. Which means that she gets no spousal benefit now, and if I predecease her (which is likely since she is younger and female) then the social security income goes away entirely because she will get no survivor benefit. I have a paid up whole life insurance policy to cover that shortfall, but I needed to start paying for that 17 years before we retired. This also totally changes the calculation for when to take social security. In our case, it made the most sense for me to take SS at 62 and preserve the portfolio for her use after I'm taking the dirt nap.

If I could give one piece of financial advice to teachers, it would be to know the WEP and GPO provisions in detail well before retirement, because it is a difficult and unique situation not usually covered in retirement planning articles and calculators.

These two posts are not accurate.
...................

No, the WEP affects only her own benefit and has already gone into effect. GPO affects only spousal or survivor benefits. It is worse. In fact, you could be eligible for ZERO spousal or survivor benefit due to the GPO. You could ask the local Social Security office, but you can also calculate the GPO reduction here. https://www.ssa.gov/benefits/retirement/planner/gpo-calc.html

Thank you for educating me

I just learned some bad news... I already get WEP'd because I worked in Canada.
Had I sat on my arse instead of working before moving to the USA, I'd get more SS than I'm going to get.

Now I just learned, If I live longer and get Survivor SS, the amount of SS reduced is increased under the GPO rules, because taking away the WEP amount alone is not enough

 

[Telly]

WEP and GPO can create some odd effects.

DW initially paid into SS many years ago. But the majority of her employed years are covered by a governmental pension, no SS withheld.
When she reached her FRA, I encouraged her to file for SS, as she can get SS non-WEP'd in the interim (when she starts her gov pension, then WEP takes hold).

I then filed a restricted application (I'm old enough to do it) on hers for spousal. So I get 1/2 equivalent of her SS. It's small, covered my Medicare Part B premium and left me a few bucks. But hitting IRMAA Tier 1 in 2022 it wouldn't cover Part B and the IRMAA charges for my Part B & D. I had to pay a one-timer for the year to SSA to fill in for Part B IRMAA. And Medicare charged me for the Part D IRMAA.

When she takes her pension, then WEP kicks in on her SS. And when I file at age 70 on my own SS record, if it was a regular SS situation, she would get as spouse 1/2 of my FRA amount.

But she will get no spousal from my account due to GPO. If I predecease her, she will get a small amount via survivor on my account (still GPO'd). As the years go by (after I'm dead), her SS survivor from my account will slowly grow, because SS is inflation-adjusted, and her gov. pension is not, so it will slowly creep up.

The astute student will notice that the course I am taking does not yield the maximum combined amount of $ from SS. We would have received more if I filed on my own account, rather than waiting till 70, since DW won't be getting any $ from my account when I'm alive, and little when I'm dead. But hey, it gives some room for ROTH conversions!
The situation slowly changed as the years went by, as her gov. pension amount increased with each additional year worked. So GPO went from a reduction, to an elimination.

 

[Sunset]

WEP and GPO can create some odd effects.

.....
When she reached her FRA, I encouraged her to file for SS, as she can get SS non-WEP'd in the interim (when she starts her gov pension, then WEP takes hold).

.....

I have done the opposite, I took my Canada Pension early and of course get less. If I delayed it to let it grow, every year of growth, also grows the WEP by 50% of the growth.

Example: if CPP went up 8%, my WEP goes up 4% meaning delaying CPP to allow it to grow is much less beneficial than normal.

So I took it early, and get the full amount, while I delay SS and let it grow.
The other thing factoring in was SS is larger than CPP so I'm letting the bigger number grow.

 

[Chuckanut]

If I could give one piece of financial advice to teachers, it would be to know the WEP and GPO provisions in detail well before retirement, because it is a difficult and unique situation not usually covered in retirement planning articles and calculators.

+1 I am constantly surprised when I hear of teachers and other public workers who are shocked that the above two provisions are taking a chunk out of their SS payments.

FWIW, many teachers pay into SS just like others do. I paid regular SS taxes on every dollar of my earnings during 20+ years of teaching. And I am glad I did. Having a diversified source of pension and pension-like retirement income helps me sleep well at night. No WEP or GPO to worry about.

 

[horrnsfan]

Thanks to everyone for your comments and ideas. After all was discussed, I think that I'm in for that long hold on the telephone waiting for the Social Security representative....and then praying you have one that is competent.



Thankfully our financial situation is very secure without any social security, but the way we handle the money is......her money (including social security) is hers to spend and my money is spent by both of us. I'm hoping that whatever happens when I file results in her getting a little bit more money for her spending.


Thanks again. Invest in short term CD's and other similar liquid (and safe) investments and wait for the next giant pull back. Dow down 28,000, S&P down to 3400. Happy investing!

 

[youbet]

FWIW, many teachers pay into SS just like others do.

Yes, but it's not a choice the teachers make. Their state policy dictates whether they are part of SS or not.

You were fortunate in your situation in Missouri Chuckanut!

 

[youbet]

Thanks to everyone for your comments and ideas. After all was discussed, I think that I'm in for that long hold on the telephone waiting for the Social Security representative....and then praying you have one that is competent.

Before you call, be absolutely sure to Google and read about WEP and GPO. There are many well done explanations available including on the SS web site. They are not hard policies to understand but for some reason many folks just refuse to take an hour or two and dig in.

Several posters have given well done, basic explanations on this thread, but invest just a bit more time. You won't regret it.

 

[Chuckanut]

Here’s one explanation of WEP and GPO that might help:

https://www.ncnewsonline.com/news/l...cle_6ff0b46a-dc33-11ec-81a1-dfa557e701e4.html

“Folks who spend the bulk of their careers in jobs not covered by Social Security are potentially subject to a couple of offsets that impact either their own Social Security benefit (based on Social Security-covered work they did outside of their regular job) or any benefits they potentially might be due from their spouse’s Social Security record. There always has been a great deal of confusion and an awful lot of misinformation about those offsets.”

 

[Irishgirlyc58]

Yes, but it's not a choice the teachers make. Their state policy dictates whether they are part of SS or not.

You were fortunate in your situation in Missouri Chuckanut!

Actually in California it’s based on each school district’s participation or non participation in social security.

I am subject to WEP. I used the detailed calculator on the my social security site specific for WEP. It was quite accurate.
I also did a manual calculation based on the formula for WEP- came up with the same figure.
GPO is slightly different but I’m not married so never looked at it.
But I believe there is a pretty straightforward calculation for it as well.

I encourage anyone who is subject to WEP and/or GPO to look at all of the information available on the social security site and use the detailed calculations to determine the impact.
My impact wasn’t too bad based on my individual circumstances.
My last 16 years of working at my highest earnings for a local government agency that participated in SS made a difference.
Had I listened to other people on how it impacted them I’d probably still be working. [emoji23]

 

[horrnsfan]

I checked out the referenced SS calculator and think I have my answer. At present my wife's ss benefit is being reduced because of WEP. When I file she will be eligible for a spousal benefit, but be subject to the GPO. My ss benefit will be approximately $3,000 per month. Her current TRS monthly benefit is approximately $1,200 per month. When I entered the numbers into the calculator it arrived at a month spousal benefit of $733 per month. Without GPO she would have received a spousal benefit of $1,500 per month. This seems to make sense, although I don't necessarily agree with the penalty since she had previously earned her quarters.....so be it.


If my math looks way off let me know, otherwise thanks to all that offered advice.