Today’s column address whether to take retroactive benefits at 70, spousal benefits before retirement benefits, divorced spousal benefits with a public pension, when spousal benefits become available and filing early to allow spousal benefits. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, a company that markets Maximize My Social Security and MaxiFi Planner.
See more Ask Larry answers here.
Should My Working Husband File Early For Social Security Children’s Benefits?
Hi Larry, My husband turns 62 next month. I just turned 40 and we have 2 healthy kids under the age of 6. My husband owns several businesses and we are self-employed. My husband definitely doesn’t plan to stop making money, but we obviously want to figure the best time and strategy when to start taking benefits. What do you suggest? Thanks, Kelly
Hi Kelly, The answer to your question depends on how much your husband will be earning between ages 62 and his full retirement age (FRA) of 66 & 6 months, and which filing strategy you believe would be best for your family in the long term. If your husband starts drawing his benefits at age 62 it could mean that he, you and your children could receive benefits sooner, but at the cost of a lower benefit rate for your husband. Furthermore, if your husband opts to take reduced benefits it could also result in you receiving a lower widow’s benefit rate if your husband dies before you.
You and your husband use one of my company’s two tools — Maximize My Social Security or MaxiFi Planner — to fully explore and compare all of your various options in order to determine which filing strategy would likely best serve your family’s needs. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care.
When Should I File For Benefits?
HI Larry, I’ll turn 70 December and my wife is 65 as of April. When should I file for benefits? Should my wife file for spousal benefits next April? Thanks, Mitch
Hi Mitch, Assuming that you want your benefits to begin the month you turn 70, you’ll want to choose December 2019 as your month of election to begin benefits. Your first payment (i.e. for December 2019), would then be due in January 2020. You can apply for benefits up to 4 months in advance, so you could file as early as today.
Since your wife was born after 1/1/1954, when she applies for spousal benefits she’ll be deemed to also be applying for her own Social Security retirement benefits. She’ll then receive essentially only the higher of those two rates, and her benefit amount will be reduced if she starts drawing her benefits prior to full retirement age (FRA). Her best filing strategy largely depends in large part on your relative benefit rates. Best, Larry
How Many Months In Advance Can I Submit A Request To Reinstate My Benefits?
Hi Larry, At 66 in 2017, I voluntarily suspended my Social Security benefits. I was on Social Security Disability until 66. Next March, I want to start receiving benefits again. How many months in advance can I arrange for this? Do I call to make a phone appointment in advance? Thanks, Ben
Hi Ben, There’s not a specific limit on how far in advance that you can request reinstatement of your benefits, but since you suspended your benefits after 4/1/2016, you must request reinstatement no later that the month prior to the month that you want your benefits reinstated.
You don’t need to make an appointment to reinstate your benefits, nor do I think Social Security would let you make an appointment for that purpose. A request for reinstatement can be submitted orally or in writing, so you could request reinstatement by phone if you so choose. However, a written request would probably be preferable in order to establish a paper trail. Best, Larry
When Is The First Month That I Could Collect Social Security Benefits?
Hi Larry, I was born on 1/1/1957. When is the first month I can collect Social Security benefits? Thanks, Michelle
Hi Michelle, I assume you’re referring to drawing Social Security retirement benefits based on your own work record. In that case, you’re old enough to draw reduced benefits right away, but you would need to have the required number of Social Security work credits in order to qualify. And if you’re still working your earnings could prevent you from drawing benefits prior to your full retirement age depending on how much you earn. If you apply for benefits this year, Social Security would need to withhold $1 of your benefits for each $2 that you earn in excess of $17,640 for the calendar year 2019. However, you could still be paid for any month in which you earn $1470 or less.
You would have been old enough to qualify for reduced retirement benefits starting with the first month that you were age 62 for a whole month, which based on the date of birth you listed would be January 2019. However, you can’t claim reduced benefits for any months prior to the month in which you file your application for benefits. So, if you apply this month then October 2019 is the earliest month that you could claim benefits. Best, Larry
How Can A Sibling’s Marriage Mess Up Another Sibling’s Benefits?
Hi Larry, My brother got married five years ago. We are both disabled and were getting benefits from my father’s record. He was always receiving SSI while I have always received SSDI. My brother got married in 2014 and his benefits stopped. My benefits continued as they have been, but my brother always received more of a benefit than I did, I am guessing because he received SSI. Social Security now claims that they reduced the monthly benefit starting the month he was married and now they want me to pay back thousands of dollars. How can a sibling’s marriage mess up the other sibling’s benefit if they received the same benefit all along? Thanks, Steve
Hi Steve, I can’t be sure without more information, but from your description my best guess is that your brother’s childhood disability benefits (CDBs), formerly known as disabled adult child’s (DAC) benefits, weren’t stopped in a timely manner when he married. If he didn’t repay the resulting overpayment, then Social Security can pursue collection of the overpayment from anyone else who is receiving benefits on the same record. That is referred to as contingent liability.
The above explanation wouldn’t apply if you’re receiving Social Security disability (SSDI) benefits based on your own work record, but if you’re receiving CDBs on the same parent’s record on which your brother was overpaid then Social Security could propose to collect your brother’s overpayment by withholding your benefits. If that’s the case, you may want to consider filing for a waiver of your liability for the overpayment. Best, Larry
To learn more about your Social Security options, visit Economic Security Planning, Inc.