Ask Larry: What Will My Wife’s Spousal Rate Be If I Take Social Security Retirement Benefits At FRA?

Today’s Social Security column addresses questions about how timing of the record holder’s retirement benefit can affect their spouse’s benefit drawn on their record, survivor benefits and the earnings test and informing SSA of a divorce. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.

What Will My Wife’s Spousal Rate Be If I Take Social Security Retirement Benefits At FRA?

Hi Larry, My wife took Social Security at 62 with FRA at 66 years and eight months. Her initial monthly payment was about $700 with a PIA at that time of of about $1,000. My FRA is 66 and six months. I expect to wait to draw my retirement benefit at my FRA. What will my wife’s spousal benefit be at that time? My Social Security online projects my PIA to be about $3,000. Would it be different if I waited for her to reach her FRA two months later? Thanks, Stan

Hi Stan, Since your wife was born after 1/1/1954, when she filed for her benefits she was also deemed to be filing for spousal benefits. What that means is that she’ll be required to start drawing spousal benefits as soon as you start drawing your retirement benefits, even if that’s before she reaches full retirement age (FRA). And, in that event, her spousal rate will be reduced for age.

Your wife’s spousal rate wouldn’t be reduced for age if you don’t start drawing your benefits before she reaches FRA, but she’ll still be stuck with the reduction on her own retirement benefit amount for as long as she gets spousal benefits.

Another thing for you to consider is that the earlier you start drawing your benefits, the lower your spouse’s potential monthly survivor benefit rate will be. Surviving spouses can be paid up to their deceased spouse’s full monthly benefit amount, so starting your benefit any time prior to 70 will lower the potential survivor rate that your wife could be paid should you predecease her.

You may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to ensure your household receives the highest lifetime benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

Am I Entitled To Survivor’s Benefits?

Hi Larry, I earn well over the exempt amount and am 61. My wife recently died and was receiving her retirement benefits. Am I entitled to survivor’s benefits? Thanks, Barney

Hi Barney, I’m sorry for your loss. It sounds like you would probably meet the requirements for widower’s benefits, but due to your earnings you almost certainly couldn’t actually be paid any benefits.

Based on Social Security earnings test, $1 of your benefits would need to be withheld for each $2 that you earn in excess of $19,560 this year. That would almost certainly require withholding of all of your benefits unless you stop working or reduce your earnings substantially.

The exempt amount is higher in the year you reach full retirement age (FRA), and it goes away altogether once you do reach FRA. So you’ll want to look into the possibility of collecting benefits when you get closer to your FRA or if you reduce your work. Best, Larry

Do I Need To Tell Social Security That I Got Divorced, And Will It Affect My Payment?

Hi Larry, I claimed my Social Security retirement benefit at 62. When my husband later retired, I began receiving spousal benefits. We were married for 38 years before we divorced. Do I have to inform Social Security about our divorce and will it impact my payment? We have been divorced seven years and I am 81. Thanks, Lynda

Hi Lynda, The divorce won’t affect your benefit amount since you were married for more than 10 years, but yes you should notify Social Security. They would need to update your records to reflect the fact that you’re now entitled as a divorced spouse rather than a spouse. Any potential divorced widow’s benefit for you would similarly be the same as it would if you hadn’t divorced. Best, Larry

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