Ask Larry: Why Can’t My Wife Get Social Security Spousal Benefits?

Today’s column addresses when a person can receive an excess spousal benefit, whether both spouses can be eligible for spousal benefits, spousal benefits after retirement benefits, more on excess spousal benefits and becoming eligible for retirement 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.

Ask Larry about Social Security here.

Why Can’t My Wife Get Social Security Spousal Benefits?

Hi Larry, My wife started collecting Social Security in 2015 at 63. She now collects $11,532. I started collecting in 2012 at 66 and I now collect $27,292. We were told by a financial advisor and an accountant that my wife should qualify for more benefits based on the 50% rule of my benefits being more than double hers. Went to the Social Security office and spent 1/2 day waiting to see someone who said no and showed us a page of numbers that made no sense to me. I thought my calculus class in college made more sense. I beat myself up for not asking for a supervisor who might sit with us and have a clear explanation without an attitude. Wow. And this person gave us a lot of attitude, like they were right and we were wrong. But both our accountant and our financial advisor told us we can? Can you please tell us how we can explain to Social Security that they’re wrong? Thanks, Ken

Hi Ken, Well, Social Security is not wrong on this. Your account and financial advisor however, are wrong. I’ll try to clarify this for you. Unreduced spousal benefits are calculated at 50% of the worker’s Primary Insurance Amount (PIA), which is equal to their full retirement age (FRA) retirement benefit amount). But if the person filing for spousal benefits is already drawing their own Social Security retirement benefits, their own PIA is subtracted from the unreduced spousal rate.

So the only way that your wife would qualify for additional spousal benefits from your record is if 50% of your primary insurance amount (PIA) is more than her PIA. And, based on the benefit rates cited in your question, your wife’s PIA is apparently higher than 50% of your PIA.

Your wife filed for her benefits at 63, so she’s receiving a reduced benefit rate instead of her PIA. When a person starts drawing Social Security retirement benefits three years prior to FRA like you say that your wife did, their benefit rate is reduced by 20%. So, in other words, your wife is apparently being paid roughly 80% of her PIA.

You apparently started drawing your benefits when you reached FRA, so you must be receiving your full PIA. That would make your PIA roughly $2,274 if you’re collecting $27,292 annually. If your wife is collecting $11,532 annually, her reduced monthly benefit rate must be $961. That means her PIA, which is the unreduced rate that she would have drawn if she would have waited until FRA to start drawing, must be approximately $1,201 (i.e. $961/.8).

Thus, 50% of your PIA (i.e. roughly $1,137) appears to be less than your wife’s PIA (i.e. roughly $1,201). And, since subtracting her PIA from 50% of your PIA would apparently result in a negative amount (i.e. $1,137 – $1,201), she likely doesn’t qualify for spousal benefits. Best, Larry

Is There A Strategy That Would Allow One Or Both Of Us To Collect Spousal Benefits Until Age 70 And Then Draw Our Own Benefits?

Hi Larry, My wife and I are both 57. We will both be eligible for the maximum benefit at our full retirement ages of 67. Is there a strategy or strategies we should look at that would allow one or both of us to collect the others spousal benefits until 70 and then collect our own retirement benefits? Thanks, Stan

Hi Stan, Neither you or your wife could ever file for spousal benefits without also being deemed to have filed for your own Social Security retirement benefits at the same time. Only people born prior to 1/2/1954 have that as a possible option. However, if one of you died prior to reaching age 70, the surviving spouse could potentially draw survivor benefits while allowing their own benefit rate to grow until 70.

It may simply be best in your case for both you and your wife to wait until 70 to apply, but you may also want to consider strategies such as one of you filing for benefits at full retirement age (FRA) or earlier while the other waits until age 70 to start drawing. Which strategy would likely work out best in your case depends on your maximum ages of life as well as a number of other factors. You can 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. Best, Larry

Is My Husband Eligible For A Spousal Benefit?

Hi Larry, I began receiving my Social Security benefit at 65 and am 77 now. My husband, 74, receives his Social Security benefit also. My benefit is about $600 more. Is my husband entitled to apply for spousal benefits? Thanks, Katrina

Hi Katrina, There isn’t enough information in your question for me to be able to give you an answer. If your husband applies for spousal benefits, his spousal rate (if any) would be calculated by subtracting his primary insurance amount (PIA) from 50% of your primary insurance amount (PIA). A person’s PIA is the amount of their Social Security retirement benefit if they start drawing at full retirement age (FRA).

For example, say Bob filed for benefits on his own record at FRA and his PIA is $1,200. Bob’s wife files for her benefits at her FRA and her PIA is $1,800. Bob would not be eligible for additional spousal benefits because his own PIA (i.e. $1,200) is more than 50% of his wife’s PIA (i.e. $900, or 50% of $1,800). Best, Larry

Can You Shed Any Light On Whether Or Not My Wife Qualifies For A Spousal Supplement?

Hi Larry, My wife and I are both retired and we were both born in 1948. My wife took Social Security at 64 and I took a spousal benefit based on her account until I was 70 and then I took my full Social Security retirement benefits. I read that she might be able to apply for something called “spousal supplement” (not “spousal benefit”). I don’t know if this would be more than we are now getting. My monthly check is $2,840 and my wife’s check is $1,083. Can you shed any light on any benefit from my wife applying for a “spousal supplement” in addition to her own retirement benefit? Thanks, Victor

Hi Victor, “Spousal supplement” isn’t an actual Social Security benefit type. It’s simply a term used by some people to describe an excess Social Security spousal benefit, which in turn is a descriptive term for the partial spousal benefit that is sometimes payable to the lower earning spouse when both members of a couple are drawing Social Security retirement benefits on their own records. In order for your wife to be eligible for an excess spousal benefit from your record, your primary insurance amount (PIA) would have to be more than twice as much as your wife’s PIA. A person’s PIA is the amount of their Social Security retirement benefit if they start drawing at full retirement age (FRA).

Based on the information in your question, it doesn’t sound like your wife would qualify for an excess spousal benefit. If she filed at 64 and her reduced benefit rate is $1,083, her PIA could be anywhere from $1,159 to $1,250 depending on whether she started drawing right at 64 or sometime between 64 and 65. And if you started drawing your Social Security retirement benefits at 70 and your benefit rate is $2,840, then your PIA must be approximately $2,151 (i.e. $2,840/1.32) since your age 70 rate would be 32% higher than your PIA. Therefore, since your wife’s PIA is apparently more than 50% of your PIA, she probably doesn’t qualify for an excess spousal benefit. Note, however, that I can’t say that for certain because I have only the limited information in your question to go on. Your wife could find out for sure whether or not she qualifies by contacting Social Security and filing an application for spousal benefits. Best, Larry

Will My Wife Be Able To Claim Her Social Security Benefits That Are Due Her In The Coming Months?

Hi Larry, My wife worked 20 or so years as a nurse, all the time paying Social Security taxes on her income. She then became a self-employed real estate agent and did not pay Social Security taxes for 5 or 6 years. Will she still be able to claim her Social Security benefits that are due her in the coming months? Thanks, Andrew

Hi Andrew, You don’t mention your wife’s age, so I don’t know how soon she could potentially qualify for benefits. She would have to be at least age 62 to claim reduced Social Security retirement benefits, and if she files prior to her full retirement age (FRA) her benefits could be subject to withholding if she earns too much.

That said, it certainly sounds like your wife paid into Social Security long enough to be insured for benefits. You only need to earn 40 quarters of coverage, or the equivalent of 10 years of covered work, to be insured for Social Security retirement benefits. However, Social Security retirement benefits are based on an average of a person’s highest 35 years of wage-indexed earnings, and if you have less than 35 years of Social Security covered earnings, then zero earnings years are included in the average. That obviously drags down the average. Also note that Social Security taxes are typically paid on self-employment income. Best, Larry

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