Yet another social security question

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bluesky50
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Yet another social security question

Post by bluesky50 »

I have a question about social security benefit that is applicable in our case.

Husband:
63, PIA: 2199 (2022 dollar) in full retirement, 2756 in 70
Wife:
56, PIA: 2622 (2022 dollar) in full retirement, 3252 in 70

When I run https://opensocialsecurity.com/, it recommends that husband starts SSA at age 67 and 10 months, wife starts at age 70 and 0 months. That is what we would plan to do.

But it does not say or account for whether I am eligible for spouse benefit when I am 67 (or even earlier with reduced amount) before I start my SSA at 70.

Am I eligible for spouse benefit when I am 62 or 67 based on my husband SSA? If I am, how much is the spouse benefit at age 62 and 67?

Thanks!
Topic Author
bluesky50
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Re: Yet another social security question

Post by bluesky50 »

I forgot to mention in OP that the PIA amount is with husband already retired and wife retiring in the next a few months.
billfromct
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Re: Yet another social security question

Post by billfromct »

I believe that if you were born after 1/1/1954, when you apply for SS you will get spousal or your own SS benefit whichever is higher.

I also think that you can apply for survivor SS benefits if your spouse passes away then apply for your own SS benefit at a later date if higher. If you apply for SS survivor benefits before your full retirement age, your SS survivor benefit will be reduced, as you mentioned.

I’m not a SS expert so maybe someone with more SS knowledge will chime in.

bill
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bluesky50
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Re: Yet another social security question

Post by bluesky50 »

billfromct wrote: Fri Aug 05, 2022 10:05 pm I believe that if you were born after 1/1/1954, when you apply for SS you will get spousal or your own SS benefit whichever is higher.

I also think that you can apply for survivor SS benefits if your spouse passes away then apply for your own SS benefit at a later date if higher. If you apply for SS survivor benefits before your full retirement age, your SS survivor benefit will be reduced, as you mentioned.

I’m not a SS expert so maybe someone with more SS knowledge will chime in.

bill
Thanks for your comments, Bill!

I believe our case is a little different. I am delaying my SSA until 70 in case my husband survives me and he can claim mine after I die before him.

What I would like to know is whether I am eligible to claim the spouse benefit when I am 62/67 on my husband SSA before I claim mine at 70. When I am 62/67, my husband already starts his SSA.

I hope SS experts on this board can explain this to me.
marcopolo
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Re: Yet another social security question

Post by marcopolo »

bluesky50 wrote: Fri Aug 05, 2022 10:26 pm
billfromct wrote: Fri Aug 05, 2022 10:05 pm I believe that if you were born after 1/1/1954, when you apply for SS you will get spousal or your own SS benefit whichever is higher.

I also think that you can apply for survivor SS benefits if your spouse passes away then apply for your own SS benefit at a later date if higher. If you apply for SS survivor benefits before your full retirement age, your SS survivor benefit will be reduced, as you mentioned.

I’m not a SS expert so maybe someone with more SS knowledge will chime in.

bill
Thanks for your comments, Bill!

I believe our case is a little different. I am delaying my SSA until 70 in case my husband survives me and he can claim mine after I die before him.

What I would like to know is whether I am eligible to claim the spouse benefit when I am 62/67 on my husband SSA before I claim mine at 70. When I am 62/67, my husband already starts his SSA.

I hope SS experts on this board can explain this to me.
What you are referring to was called a "restricted application". Meaning you were restricting your application to just the spousal benefit, without claiming your own.

Tax law changes a few years ago eliminated this option for people born after Jan 1, 1954.
Once in a while you get shown the light, in the strangest of places if you look at it right.
Topic Author
bluesky50
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Re: Yet another social security question

Post by bluesky50 »

marcopolo wrote: Fri Aug 05, 2022 10:37 pm
What you are referring to was called a "restricted application". Meaning you were restricting your application to just the spousal benefit, without claiming your own.

Tax law changes a few years ago eliminated this option for people born after Jan 1, 1954.
Thank you very much, marcopolo!

That answers my question!
retireIn2020
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Re: Yet another social security question

Post by retireIn2020 »

"The longer the spouse with the higher benefit waits to start collecting, the higher benefits will be for both spouses. Delaying the higher earning spouse's benefits could also eventually increase the other spouse's"
https://investor.vanguard.com/investor- ... ed-couples
Retired as of July 2020
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FiveK
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Re: Yet another social security question

Post by FiveK »

bluesky50 wrote: Fri Aug 05, 2022 9:50 pm When I run https://opensocialsecurity.com/, it recommends that husband starts SSA at age 67 and 10 months, wife starts at age 70 and 0 months. That is what we would plan to do.
Also look at the "color-coded graph" OSS generates. It may show that husband delaying a year or two or more years doesn't affect things much from only the SS perspective, so if Roth conversions will be important for you delaying his SS could be correct.
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oldcomputerguy
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Re: Yet another social security question

Post by oldcomputerguy »

This topic is now in the Personal Finance forum.
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JoeRetire
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Re: Yet another social security question

Post by JoeRetire »

bluesky50 wrote: Fri Aug 05, 2022 9:50 pm But it does not say or account for whether I am eligible for spouse benefit when I am 67 (or even earlier with reduced amount) before I start my SSA at 70.
Yes it does. It takes all of that into account when calculating the optimal strategy.
Look further down in the "Year-by-Year Benefit Amounts" section.

If you still think you want to try a different strategy, look in the "Test an alternative claiming strategy" section.
This is gonna be my time. Time to taste the fruits and let the juices drip down my chin. I proclaim this: The Summer of George!
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JoeRetire
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Re: Yet another social security question

Post by JoeRetire »

bluesky50 wrote: Fri Aug 05, 2022 10:26 pm What I would like to know is whether I am eligible to claim the spouse benefit when I am 62/67 on my husband SSA before I claim mine at 70. When I am 62/67, my husband already starts his SSA.
Yes, you are eligible to claim spousal benefits once you turn 62, if your husband has already started his own benefits. You will be deemed to be filing for all of your eligible benefits at that time.

And that will reduce the expected lifetime benefits below what https://opensocialsecurity.com/ calculates for you. That's why the tool suggests you wait until 70 and maximize your lifetime benefits.
This is gonna be my time. Time to taste the fruits and let the juices drip down my chin. I proclaim this: The Summer of George!
marcopolo
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Re: Yet another social security question

Post by marcopolo »

JoeRetire wrote: Sat Aug 06, 2022 7:09 am
bluesky50 wrote: Fri Aug 05, 2022 10:26 pm What I would like to know is whether I am eligible to claim the spouse benefit when I am 62/67 on my husband SSA before I claim mine at 70. When I am 62/67, my husband already starts his SSA.
Yes, you are eligible to claim spousal benefits once you turn 62, if your husband has already started his own benefits. You will be deemed to be filing for all of your eligible benefits at that time.

And that will reduce the expected lifetime benefits below what https://opensocialsecurity.com/ calculates for you. That's why the tool suggests you wait until 70 and maximize your lifetime benefits.
I think the OP was asking about starting the spousal benefit without taking their own. The old "restricted application" that is no longer allowed for people born after Jan 1, 1954.

Since they have a significantly higher PIA, I suspect there would not be any spousal benefit available in addition to their own if they filed earlier and are deemed to have filed for their own.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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bluesky50
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Re: Yet another social security question

Post by bluesky50 »

Thank you all for your comments!

After seeing marcopolo mentioning on "restricted application" a few posts above, I did some google search to learn more about it.
https://www.kiplinger.com/article/retir ... gy-is.html
It is also mentioned in the Vanguard link retireIn2020 provided.

"...
To restrict an application to spousal benefits only, you must have been born before January 2, 1954. Anyone born on or after that date is out of luck when it comes to this particular strategy.
..."

Since we are born after 1954, we can not do restricted application any more.

FiveK, we are definitely planning to do Roth conversion, we just have not figured out how yet. Roth conversion is one of topics that we will be looking into next. And because of Roth conversion, we might delay husband SSA to 70 as well.
Duzz78
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Re: Yet another social security question

Post by Duzz78 »

bluesky50 wrote: Fri Aug 05, 2022 9:50 pm I have a question about social security benefit that is applicable in our case.

Husband:
63, PIA: 2199 (2022 dollar) in full retirement, 2756 in 70
Wife:
56, PIA: 2622 (2022 dollar) in full retirement, 3252 in 70

When I run https://opensocialsecurity.com/, it recommends that husband starts SSA at age 67 and 10 months, wife starts at age 70 and 0 months. That is what we would plan to do.

But it does not say or account for whether I am eligible for spouse benefit when I am 67 (or even earlier with reduced amount) before I start my SSA at 70.

Am I eligible for spouse benefit when I am 62 or 67 based on my husband SSA? If I am, how much is the spouse benefit at age 62 and 67?

Thanks!
Duzz78
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Re: Yet another social security question

Post by Duzz78 »

bluesky50 wrote: Fri Aug 05, 2022 9:50 pm Husband:
63, PIA: 2199 (2022 dollar) in full retirement, 2756 in 70
Wife:
56, PIA: 2622 (2022 dollar) in full retirement, 3252 in 70

But it does not say or account for whether I am eligible for spouse benefit when I am 67 (or even earlier with reduced amount) before I start my SSA at 70.

Am I eligible for spouse benefit when I am 62 or 67 based on my husband SSA? If I am, how much is the spouse benefit at age 62 and 67?

Thanks!
[/quote)]

If your spouse is not receiving benefits, you cannot collect spousal benefits. You will just be filing for your own benefits.

If your spouse is receiving benefits, then you can file for spousal benefits at any age. In the latter scenario, SSA will automatically calculate both your benefits and the spousal benefit. SSA will pay the greater of the two benefits.

You will get the maximum spousal benefit if you claim benefits at your FRA. If you file early, the spousal benefit is reduced permanently.
Even if you file earlier, before your FRA, for your benefits then switch to spousal benefits later, your payment will be less than half of your spouse's PIA.

https://www.ssa.gov/oact/quickcalc/spouse.html
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David Jay
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Re: Yet another social security question

Post by David Jay »

FiveK wrote: Sat Aug 06, 2022 1:59 am
bluesky50 wrote: Fri Aug 05, 2022 9:50 pm When I run https://opensocialsecurity.com/, it recommends that husband starts SSA at age 67 and 10 months, wife starts at age 70 and 0 months. That is what we would plan to do.
Also look at the "color-coded graph" OSS generates. It may show that husband delaying a year or two or more years doesn't affect things much from only the SS perspective, so if Roth conversions will be important for you delaying his SS could be correct.
I agree with this. Many people use opensocialsecurity but fail to scroll down to the color coded graph. Note the 99% range for example. It may well make only a tiny difference in lifetime benefits for your husband to claim earlier and you end up with a lot of cash flow during those years.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
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FiveK
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Re: Yet another social security question

Post by FiveK »

David Jay wrote: Sun Aug 07, 2022 9:04 pm
FiveK wrote: Sat Aug 06, 2022 1:59 am ...delaying his SS could be correct.
...husband to claim earlier....
Yes, either way might be better. :?
bluesky50, you'll know in hindsight. :wink:
marcopolo
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Re: Yet another social security question

Post by marcopolo »

FiveK wrote: Sat Aug 06, 2022 1:59 am
bluesky50 wrote: Fri Aug 05, 2022 9:50 pm When I run https://opensocialsecurity.com/, it recommends that husband starts SSA at age 67 and 10 months, wife starts at age 70 and 0 months. That is what we would plan to do.
Also look at the "color-coded graph" OSS generates. It may show that husband delaying a year or two or more years doesn't affect things much from only the SS perspective, so if Roth conversions will be important for you delaying his SS could be correct.
Does OSS have the ability to take ACA credits into account?
The impact of those might make it more worthwhile for even the lower benefit spouse to delay, at least until Medicare age.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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FiveK
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Re: Yet another social security question

Post by FiveK »

marcopolo wrote: Sun Aug 07, 2022 9:26 pm Does OSS have the ability to take ACA credits into account?
The impact of those might make it more worthwhile for even the lower benefit spouse to delay, at least until Medicare age.
No. OSS does an excellent job of evaluating SS start dates, but only from the perspective of discounted SS benefits.

Commercial tax software would include ACA effects. The Tax estimation tools wiki indicates that only the two spreadsheets among the free tools listed there (see the additional taxes section) include ACA effects.
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David Jay
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Re: Yet another social security question

Post by David Jay »

FiveK wrote: Sun Aug 07, 2022 9:11 pm
David Jay wrote: Sun Aug 07, 2022 9:04 pm
FiveK wrote: Sat Aug 06, 2022 1:59 am ...delaying his SS could be correct.
...husband to claim earlier....
Yes, either way might be better. :?
bluesky50, you'll know in hindsight. :wink:
I'm not sure about the "either way", in that the benefit amount of the spouse with the larger benefit (typically the higher earning spouse) will become the amount of survivor's benefit regardless of which spouse passes first.

This means that the larger benefit is evaluated on the basis of "second-to-pass" whereas the smaller benefit is evaluated on the basis of "first-to-pass". Actuarially, this makes a huge difference because there is a good likelihood that one spouse will live into their late 90s or beyond. Delaying the "first-to-pass" benefit is rarely actuarially sound.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
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FiveK
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Re: Yet another social security question

Post by FiveK »

David Jay wrote: Sun Aug 07, 2022 10:57 pm I'm not sure about the "either way", in that the benefit amount of the spouse with the larger benefit (typically the higher earning spouse) will become the amount of survivor's benefit regardless of which spouse passes first.

This means that the larger benefit is evaluated on the basis of "second-to-pass" whereas the smaller benefit is evaluated on the basis of "first-to-pass". Actuarially, this makes a huge difference because there is a good likelihood that one spouse will live into their late 90s or beyond.
No disagreement on that: in the OP's case, the wife has the larger benefit.
Delaying the "first-to-pass" benefit is rarely actuarially sound.
Agreed if looking at SS only. The question is how much extra tax would be paid while doing Roth conversions with the lower earner's SS present vs. without the lower earner's SS present, and if that extra tax is enough to overcome the slightly smaller NPV that OSS calculates for delaying the lower earner's SS start.
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