Spousal social security question

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SGM
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Spousal social security question

Post by SGM » Fri Oct 12, 2012 2:29 pm

Husband is higher earner and will take SS at 66. Wife will be taking a spousal benefit at 64. She has not worked outside of the home. Will she get half the husband's benefit if she takes a spousal benefit at 64 or is it reduced to 41.7% of the husband's benefit. I did review a SS table and I interpreted it as meaning the spousal benefit is reduced if the spouse is not at full retirement age even though the husband is at FRA. My friend and his advisor looked at the same table and feel that the spouse will get 50% of the husband's benefit if she is age 62 or older and he is at FRA. In other words the spousal benefit is only reduced if the husband takes SS prior to his FRA. The table is open to both interpretations and is at the following web site:
http://www.socialsecurity.gov/retirement/1943.html
Thanks in advance.
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ObliviousInvestor
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Re: Spousal social security question

Post by ObliviousInvestor » Fri Oct 12, 2012 2:38 pm

By claiming two years prior to her FRA (assuming an FRA of 66), she will receive 83.33% of 50% of the husband's "primary insurance amount" (PIA). The husband's primary insurance amount is the amount that he would receive per month if he claims his own retirement benefit at full retirement age.

The age at which the husband claims his retirement benefit does not affect the amount that the wife receives as a spousal benefit. (It would, however, affect her widow's benefit if she outlives him.)
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sscritic
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Re: Spousal social security question

Post by sscritic » Fri Oct 12, 2012 2:40 pm

SS is an annuity. The earlier you take it, the less you get, but you get it for more years. It depends on your age, not anyone else's.

Starting as a wife at 64 is earlier than starting as a wife at 66. As a wife, you would get less.
If you start receiving benefits as a spouse at your full retirement age, you will get 50% of the monthly benefit your spouse would receive if his or her benefits started at full retirement age. If you start receiving benefits at

age 62, you will get 35% of the monthly benefit instead of 50% because you will be getting benefits for an additional 48 months.
age 65, you will get 45.8% of the monthly benefit instead of 50% because you will be getting benefits for an additional 12 months.
Your link

I don't see anything confusing about that. Where do you see 50% at age 64?

You is you the wife, not the wage earner.

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Re: Spousal social security question

Post by sscritic » Fri Oct 12, 2012 3:08 pm

Note also the column headings:
If you start getting benefits at age*

And you are the . . .

Spouse, the Retirement Benefit you will receive is reduced to
All you have to do is figure out who you is. [There is only one you, not two.]

john94549
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Re: Spousal social security question

Post by john94549 » Fri Oct 12, 2012 4:07 pm

My wife and I are both 65. I started collecting at 62. She intends to start collecting spousal benefits next year, at her FRA.

One question. As I read the SS website, she should get 50% of what I would have received had I waited until my FRA, but maybe I'm in error. Is it 50% of what I would have received, or 50% of what I am receiving?

Always been puzzled about that.

Thanks much.

PS: the comment by "oblivious" was my understanding, to wit, "The age at which the husband claims his retirement benefit does not affect the amount that the wife receives as a spousal benefit. (It would, however, affect her widow's benefit if she outlives him.)"
Last edited by john94549 on Fri Oct 12, 2012 4:15 pm, edited 1 time in total.

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Re: Spousal social security question

Post by ObliviousInvestor » Fri Oct 12, 2012 4:14 pm

john94549 wrote:My wife and I are both 65. I started collecting at 62. She intends to start collecting spousal benefits next year, at her FRA.

One question. As I read the SS website, she should get 50% of what I would have received had I waited until my FRA, but maybe I'm in error. Is it 50% of what I would have received, or 50% of what I am receiving?

Always been puzzled about that.

Thanks much.
Assuming she is not collecting any retirement benefit of her own, her spousal benefit, if she claims it after reaching her FRA, would be 50% of your primary insurance amount -- your primary insurance amount being the retirement benefit you would have received if you had claimed your retirement benefit at your FRA.
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Re: Spousal social security question

Post by john94549 » Fri Oct 12, 2012 4:17 pm

Thanks, Mike. That's what I thought.

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Re: Spousal social security question

Post by sscritic » Fri Oct 12, 2012 4:20 pm

john94549 wrote:As I read the SS website, she should get 50% of what I would have received had I waited until my FRA
You read well. Repeating from the linked web page
If you start receiving benefits as a spouse at your full retirement age, you will get 50% of the monthly benefit your spouse would receive if his or her benefits started at full retirement age.

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SGM
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Re: Spousal social security question

Post by SGM » Fri Oct 12, 2012 6:05 pm

Thanks for your replies. You are in agreement with what I thought originally. However an attorney friend and his advisor stated I was wrong. This is for my attorney friend and I wanted to double check so as to not give him the wrong information. Rereading the titles it is obvious that it depends on the age when the spouse takes SS.
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Re: Spousal social security question

Post by blacklab » Fri Oct 12, 2012 6:58 pm

Assuming similar situation as that of the OP, but higher earning spouse plans to hold off claiming benefits beyond age 66. If the spousal benefit never grows beyond 50% of the age 66 amount, is it the case that spouse should not delay beyond 66 even if the benefit will continue to grow for higher earning spouse?

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Re: Spousal social security question

Post by ObliviousInvestor » Fri Oct 12, 2012 7:46 pm

blacklab wrote:Assuming similar situation as that of the OP, but higher earning spouse plans to hold off claiming benefits beyond age 66. If the spousal benefit never grows beyond 50% of the age 66 amount, is it the case that spouse should not delay beyond 66 even if the benefit will continue to grow for higher earning spouse?
I've lost track of which spouse is which. :)

Perhaps the following will help:
a) Spousal benefits do not grow as a result of waiting beyond full retirement age to claim them. So, for a person intending to claim spousal benefits at some point, there's no reason to wait any further after reaching FRA (assuming, that is, that you're eligible to claim them at that point).
b) Retirement benefits do grow as a result of waiting beyond FRA, so in some cases it makes sense to wait past FRA to claim retirement benefits.

If that didn't answer your question, perhaps try again with something like "Spouse A is the higher earning spouse. Does it make sense for Spouse A to do ____? What about for Spouse B to do ____?"
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Re: Spousal social security question

Post by sscritic » Fri Oct 12, 2012 7:49 pm

ObliviousInvestor wrote: If that didn't answer your question, perhaps try again with something like "Spouse A is the higher earning spouse. Does it make sense for Spouse A to do ____? What about for Spouse B to do ____?"
I like wife and husband. I can usually tell them apart.

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Re: Spousal social security question

Post by ObliviousInvestor » Fri Oct 12, 2012 7:56 pm

sscritic wrote:
ObliviousInvestor wrote: If that didn't answer your question, perhaps try again with something like "Spouse A is the higher earning spouse. Does it make sense for Spouse A to do ____? What about for Spouse B to do ____?"
I like wife and husband. I can usually tell them apart.
Or that. :)
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Re: Spousal social security question

Post by blacklab » Fri Oct 12, 2012 8:29 pm

Sorry for the confusion, but I think you did decipher and answer my question. That is, no advantage for the lower earning (wife) to delay claiming a spousal benefit past her FRA of 66 in anticipation of husband's higher final benefit (by virtue of his claiming some time after 66) ? Is that correct ?

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Re: Spousal social security question

Post by ObliviousInvestor » Fri Oct 12, 2012 8:36 pm

blacklab wrote:Sorry for the confusion, but I think you did decipher and answer my question. That is, no advantage for the lower earning (wife) to delay claiming a spousal benefit past her FRA of 66 in anticipation of husband's higher final benefit (by virtue of his claiming some time after 66) ? Is that correct ?
Correct. Her spousal benefit does not continue growing as a result of waiting later than FRA to claim it. So no sense in waiting any later than FRA to do so. (At least, I can't think of any reasons...)

Note that in order for the wife to be able to claim her benefit as a spouse, the husband has to have filed for his own retirement benefit. If he doesn't actually want to be taking his retirement benefit yet, and he has reached his own FRA, he can use the "file and suspend" strategy that you often hear about. That is, he files for his own retirement benefit (thereby allowing the wife to claim her spousal benefit) and he immediately asks to have his payments suspended (thereby allowing them to continue growing as if he had not yet claimed them).
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Re: Spousal social security question

Post by blacklab » Fri Oct 12, 2012 8:40 pm

Got it! Thanks.

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