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Spouse filing for spousal benefits question

Posted: Thu May 28, 2020 11:09 am
by URSnshn
My uncle is planning on filing at full retirement age and wants to claim spousal benefits. His wife was 70 when she first claimed her benefits. He wants to know if his benefit will be half of what his wife currently receives (having filed at 70) or will it be half of what his wife would have received had she filed at her FRA?

I have tried to research this question, but didn't come up with anything definitive.

Re: Spouse filing for spousal benefits question

Posted: Thu May 28, 2020 11:24 am
by pshonore
URSnshn wrote: Thu May 28, 2020 11:09 am My uncle is planning on filing at full retirement age and wants to claim spousal benefits. His wife was 70 when she first claimed her benefits. He wants to know if his benefit will be half of what his wife currently receives (having filed at 70) or will it be half of what his wife would have received had she filed at her FRA?

I have tried to research this question, but didn't come up with anything definitive.
As I understand it, spousal benefits do not receive DRCs (delayed retirement credits earned after FRA by the "primary earner"). He will get her FRA benefit plus any COLAs since that date

Re: Spouse filing for spousal benefits question

Posted: Thu May 28, 2020 11:41 am
by ObliviousInvestor
The maximum possible spousal benefit is half of the other person's PIA (PIA = the amount a person would receive as a retirement benefit, if they filed at full retirement age).

So if she filed at 70, he would get less than half of her current monthly benefit.

Re: Spouse filing for spousal benefits question

Posted: Thu May 28, 2020 11:51 am
by URSnshn
ObliviousInvester, you wrote: "The maximum possible spousal benefit is half of the other person's PIA (PIA = the amount a person would receive as a retirement benefit, if they filed at full retirement age).

So if she filed at 70, he would get less than half of her current monthly benefit."


Does this mean that if her benefit was $2000, then his benefit at FRA and claiming spousal benefits would be $999 or ? Or for purposes of estimating how does one figure this out?

Re: Spouse filing for spousal benefits question

Posted: Thu May 28, 2020 12:02 pm
by ObliviousInvestor
URSnshn wrote: Thu May 28, 2020 11:51 am ObliviousInvester, you wrote: "The maximum possible spousal benefit is half of the other person's PIA (PIA = the amount a person would receive as a retirement benefit, if they filed at full retirement age).

So if she filed at 70, he would get less than half of her current monthly benefit."


Does this mean that if her benefit was $2000, then his benefit at FRA and claiming spousal benefits would be $999 or ? Or for purposes of estimating how does one figure this out?
If she filed at 70, she is receiving 132% of her PIA (unless she was born prior to 1943). So we divide her current monthly benefit by 1.32 to find her PIA. Then divide her PIA by two, to calculate his maximum possible spousal benefit as her spouse.

Re: Spouse filing for spousal benefits question

Posted: Thu May 28, 2020 12:30 pm
by ResearchMed
URSnshn wrote: Thu May 28, 2020 11:09 am My uncle is planning on filing at full retirement age and wants to claim spousal benefits. His wife was 70 when she first claimed her benefits. He wants to know if his benefit will be half of what his wife currently receives (having filed at 70) or will it be half of what his wife would have received had she filed at her FRA?

I have tried to research this question, but didn't come up with anything definitive.
How old is your uncle?

RM

Re: Spouse filing for spousal benefits question

Posted: Thu May 28, 2020 12:53 pm
by pshonore
Actually OP stated "My uncle is planning on filing at full retirement age and wants to claim a spousal benefit." If he's turning 66 this year, and therefore was born after Jan 1, 1954 won't he be deemed to be filing for his own benefit as well as a Spousal benefit because of the 2015 revisions?

Re: Spouse filing for spousal benefits question

Posted: Thu May 28, 2020 12:56 pm
by ObliviousInvestor
pshonore wrote: Thu May 28, 2020 12:53 pm Actually OP stated "My uncle is planning on filing at full retirement age and wants to claim a spousal benefit." If he's turning 66 this year, and therefore was born after Jan 1, 1954 won't he be deemed to be filing for his own benefit as well as a Spousal benefit because of the 2015 revisions?
Yes.

(FWIW this is why I have been writing "maximum possible spousal benefit," because it will probably be reduced due to entitlement to a retirement benefit -- unless he has < 40 credits and therefore is ineligible for a retirement benefit.)

Re: Spouse filing for spousal benefits question

Posted: Thu May 28, 2020 1:02 pm
by MrJedi
Something to pay close attention to. There used to be a "trick" to file for spousal benefits but then suspend your own benefits and earn delayed retirement credits for your own benefits. This meant you could start getting spousal benefits earlier while still waiting until age 70 to get the extra credits for your own benefits.

This is no longer an option, when you file it is for both spousal and own benefits. If he was planning on waiting until 70 for the credits on his own benefits, he can't file for the spousal benefits at 67 in the meantime.

Re: Spouse filing for spousal benefits question

Posted: Thu May 28, 2020 1:45 pm
by URSnshn
Everyone! Thank you!

ObliviousInvester - The formula will be very helpful in giving my Uncle an idea of his SS + Spousal Benefit amount. My uncle has greater than 40 credits and so the total he will receive then will be a combination of his SS benefit plus a spousal benefit which together will equal the total in the formula you presented. Do I have this right?

As an ex: If my Aunt's maximum spousal benefit is $2000 and my Uncle's SS benefit at FRA is $1300, my Uncle would receive $1300 for his SS Benefit and $700 as his max spousal benefit as her spouse for a total of $2000. Would that be correct?

Re: Spouse filing for spousal benefits question

Posted: Thu May 28, 2020 1:59 pm
by ObliviousInvestor
URSnshn wrote: Thu May 28, 2020 1:45 pm Everyone! Thank you!

ObliviousInvester - The formula will be very helpful in giving my Uncle an idea of his SS + Spousal Benefit amount. My uncle has greater than 40 credits and so the total he will receive then will be a combination of his SS benefit plus a spousal benefit which together will equal the total in the formula you presented. Do I have this right?

As an ex: If my Aunt's maximum spousal benefit is $2000 and my Uncle's SS benefit at FRA is $1300, my Uncle would receive $1300 for his SS Benefit and $700 as his max spousal benefit as her spouse for a total of $2000. Would that be correct?
If her PIA were $4,000 (i.e., she's currently receiving $5,280 per month), yes, that would be correct as long as he files at or after FRA.

(I don't think it's possible to have a PIA that high, but yes, your example is correct.)

Re: Spouse filing for spousal benefits question

Posted: Thu May 28, 2020 2:50 pm
by URSnshn
Many thanks ObliviousInvestor! The formula and your example and answers will be very helpful in explaining to my Aunt and Uncle.

Re: Spouse filing for spousal benefits question

Posted: Thu May 28, 2020 3:02 pm
by pshonore
Here's an example of a person who reached FRA (66) in 2016. The max benefit for a person retiring that year at FRA was $2639/month. If that person waited until 2020 to retire at age 70, COLAs (.3%, 2.0%, 2.8%,1.5%) would increase that to $2820 . Therefore the maximum spousal benefit would be $1410 in 2020. DRCs would increase the wife's benefit (but not the spousal benefit) to $3822 per month when she started to collect in 2020. And if the wife reached FRA before 2016, the numbers will be slightly higher (because the max benefit for someone retiring in 2015 was $2663)

Re: Spouse filing for spousal benefits question

Posted: Thu May 28, 2020 3:31 pm
by David Jay
ObliviousInvestor wrote: Thu May 28, 2020 1:59 pmIf her PIA were $4,000 (i.e., she's currently receiving $5,280 per month), yes, that would be correct as long as he files at or after FRA.

(I don't think it's possible to have a PIA that high, but yes, your example is correct.)
To confirm, those born in 1956 are the first “class” with a maximum PIA (i.e. 35 years of maximum contribution) greater than $3000 a month (not considering COLA), link: https://bogleheads.org/forum/viewtopic. ... 0&t=230506

Re: Spouse filing for spousal benefits question

Posted: Thu May 28, 2020 8:09 pm
by Lalamimi
He cannot draw his own and half of hers. If he draws spousal, he would get 1/2 of what hers was at her FRA ( I assume it was 65). Its one or the other, if he was not 66 on or before 1/2/2019.