Today’s column addresses whether Social Security will force receipt of a retirement benefit at 62, whether claiming early benefits might be advisable, whether Social Security will suspend widow(er)’s benefits at 62, filing with multiple exes and restricted applications. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, a company that markets Maximize My Social Security and MaxiFi Planner. Both tools maximize lifetime Social Security benefits. MaxiFi also finds retirement account withdrawal strategies and other ways to lower your lifetime taxes and raise your lifetime spending. Most important, it suggests how much to spend and save each year to enjoy a stable living standard through time.
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Ask Larry about Social Security:
Will Social Security Force My Ex To Take Divorced Spousal Benefits At 62?
Hi Larry, I was married for more than 20 years and have now been divorced for a decade. Neither of us has remarried and she has only a negligible earnings record. She has been receiving SSI for perhaps 2-3 years now and also gets some help from me with the rent. I had always assumed that at about 66 she would simply stop getting SSI and get benefits on my record more than twice her present SSI benefit of $600 per month.
Today she heard a comment from someone who stated she would be forced to take benefits on my record at age 62 in a couple years and I assume at a severely reduced amount compared to waiting until 66. Can you please comment on how this type of situation is actually handled? It seemed like she would be given no choice in the matter, even though it means significantly reduced benefits. Thanks, Arthur
Hi Arthur, She can and should wait until her full retirement age (FRA) to take her highest possible divorced spousal benefit. If she takes it at 62, her divorced spousal benefit will be permanently reduced. She will also lose her Supplemental Security Income (SSI) when she switches to her higher divorced spousal benefit, which is another reason to wait till FRA to claim it. Unfortunately, most of what you hear about Social Security, including from Social Security, is dead wrong. Best, Larry
Should My Wife Start Drawing Social Security Now At 62?
Hi Larry, My wife is 62 and has never worked very much and I am 57 years old and still plan to work till 62. Should my wife start drawing Social Security retirement benefit now? Thanks, Bill
Hi Bill, First, your wife would need to have paid into Social Security long enough to be insured for Social Security benefits to be able to draw retirement benefits now. Assuming she did, if your wife elects to file for her Social Security retirement benefits at 62, her benefit rate will be reduced by roughly 26%, and that reduced rate will continue for at least as long as both of you are living. That’s true even if she later qualifies for additional spousal benefits on your record.
For example, say Mindy is eligible for a Primary Insurance Amount (PIA), which is equal to her full retirement age (FRA) retirement benefit amount, of $500, but she instead elects to start her benefits at 62 and receives a reduced rate of $366. Mindy’s husband subsequently files for his benefits five years later, and his PIA is $2,000. Mindy would then become eligible for an additional unreduced spousal benefit that would be calculated by subtracting her PIA from 50% of her husband’s PIA, which in this example would result in a spousal rate of $500 (i.e. $2,000 / 2 – $500). That $500 excess spousal benefit would then be paid in addition to Mindy’s reduced retirement rate of $366 to give her a combined benefit rate of $866.
I don’t have enough information about your and your wife’s options to be able to advise you. You may want to use one of my company’s two tools — Maximize My Social Security or MaxiFi Planner — to help maximize your lifetime Social Security benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care.
Will SSA Really Suspend My Widow’s Benefits When I Reach 62?
Hi Larry, I will be 60 in a few months and have applied for my Social Security divorced widow’s benefit. The representative said that I fall under new regs implemented a few years ago and that I will be contacted a few months prior to turning 62 requesting that I apply for my own Social Security retirement benefit. If I don’t, then my divorced widow’s benefit will be suspended. Will SSA really suspend my benefit at 62? Thanks, Julia
Hi Julia, Assuming that your own retirement benefit rate is higher than your reduced survivor rate, what Social Security (SSA) likely will do once you reach age 62 is notify you that you have the option to switch to a higher benefit amount based on your own work record. Those notices are only informational, though, and your survivor benefits will not be suspended if you elect not to file for retirement benefits on your own account. It may well be that, if your own retirement benefit rate is higher than your reduced survivor rate, your best option would be to delay claiming retirement benefits on your own record until you reach age 70. Best, Larry
Is There Anything I Can Do To Claim My First Or Second Husbands Social Security Benefits?
Hi Larry, I am 55 and I have been married twice. My first husband passed away at 43 after we were married for twelve years. I remarried in October 2003 and divorced my second husband in January 2013. I am uncertain if there is anything I can do to claim benefits on either of their records. I am currently working and plan on working as long as I can as long as I am healthy. Thanks, Kelly
Hi Kelly, You would need to have been married for at least 10 full years to the day in order to ever potentially qualify for benefits on the record of your second husband.
The earliest that you could claim widow’s benefits on your first husband’s record is at 60. However, your benefits would be subject to possible withholding based on the Social Security earnings test until you reach your full retirement age (FRA). Also, if you start drawing widow’s benefits at 60, they will be reduced by 28.5% from the rate you would otherwise get if you waited until FRA to claim them.
It sounds as though your best option would likely be either to file for reduced widow’s benefits at 60 or as soon as your earnings will permit at least some benefits to be paid, then switch to your own record at age 70 or to file for reduced retirement benefits at 62 or as soon as your earnings will permit at least some benefits to be paid, then file for unreduced widow’s benefits at your FRA. You’d typically want to start out drawing the lower benefit first and then switch to the higher record when it reaches its highest potential rate. Best, Larry
Can Either Of Us File Restricted Applications For Spousal Benefits If Neither Of Us Has Filed For Our Retirement Benefits?
Hi Larry, We’re very unclear on restricted application. I will be 66 in October and my husband will be 66 in July. We both plan to start collecting our Social Security retirement benefits at 70. When I turn 66 in October, can I make a restricted application to collect my spousal benefit even though both of us are delaying our retirement benefits till 70? Can he do the same when he turns 66? I have read numerous articles and SSA info on this topic and I am still very confused. Thanks, Angelica
Hi Angelica, The only way that you could qualify for spousal benefits is if your spouse is drawing retirement or disability benefits on their own record.
If both you and your husband wait until 70 to start drawing your retirement benefits, you could file a restricted application for spousal benefits only in the month that your husband turns age 70. You could then switch to your own retirement benefits in the month you reach age 70.
Since both you and your husband were born before 1/2/1954, you have numerous possible filing strategies available to you. You can use one of my company’s two tools — Maximize My Social Security or MaxiFi Planner — to help maximize your lifetime Social Security benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care.
To learn more about your Social Security options, visit Economic Security Planning, Inc.