Ask Larry: Should My Spouse File Early So I Can Take Social Security Spousal Benefits At 66?

Today’s column addresses questions about early filing and restricted applications, retroactive spousal benefits, choosing which ex’s record to file on and potential effects of foreign pensions on divorced spousal benefits. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.

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Should My Spouse File Early So I Can Take Social Security Spousal Benefits At 66?

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Hi Larry, I was born in 1953, and my spouse was born in 1955. I am still working and making about $200,000 a year and will work past 70. My spouse is not currently working and does not intend to do so in the future. Neither of us have started taking Social Security retirement benefits. My Social Security retirement benefit If I took it now at full retirement age would be $2,700, and my spouse’s at full retirement age is projected to be $1,600.

Would a way to maximize joint benefits be for me to file a restricted application for my spousal benefits now under my spouse’s record and let my benefit grow until I reach 70, and then switch to my retirement benefit?

Also, if I do this, will there be any impact to my spousal benefit when I am still working and making above the earnings test threshold? Thanks, Doug

Hi Doug, Though it’s not possible to say for sure without more details, the strategy you propose could be a good way to maximize your benefits. But in order for you to be able to claim spousal benefits, your spouse would have to claim their Social Security retirement benefits. And if they claim their benefits prior to their full retirement age (FRA), their benefit rate will be reduced for age and that reduction will continue for as long as both of you are living. That’s not to say that your spouse shouldn’t claim their benefits early so that you can claim spousal benefits though, and it largely depends on whether the amount that you could collect in spousal benefits would more than offset your spouse receiving a lower monthly rate.

If you do claim spousal benefits, your earnings would not prevent you from collecting the spousal benefits. There is no limit on the amount that a person is allowed to earn and draw benefits once they reach FRA.

My company’s software — Maximize My Social Security or MaxiFi Planner — is designed to analyze situations like the one you describe so that people can fully compare their options and choose the strategy that they believe best addresses their individual needs. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

Can A 67 Year Old Get Any Retroactiive Spousal Benefits If Their Spouse Isn’t Drawing Benefits?

Hi Larry, If a just turned 67-year-old who has not started taking his Social Security benefits files a restricted application to start taking spousal benefits under his 65 year old spouse’s record, who has not yet started taking benefits, can the 67 year old spouse get any retroactive spousal benefits since it seems, under the restricted rules, he could have filed a restricted application for spousal benefits when he turned 66 a year ago? Thanks, Paul

Hi Paul, This would not be possible unless the younger spouse files for and is awarded retroactive Social Security disability (SSDI) benefits. A person born prior to 1/2/1954 is allowed to file a restricted application to claim spousal benefits as early as the month they reach full retirement age (FRA), but they can’t claim spousal benefits any earlier than the first month that their spouse becomes entitled to either Social Security retirement or disability benefits. So in order for the 67 year old in your question to be able to claim spousal benefits, their spouse would have to be drawing either Social Security retirement or disability benefits.

The spouse of this 67 year old hasn’t yet reached FRA, so the earliest they could claim their retirement benefits is the month in which their application is filed. No retroactivity is permitted for Social Security retirement benefits if they are claimed prior to FRA. However, SSDI benefits can be paid up to 12 months retroactively from the disabled person’s month of filing. Therefore, the only way that the 67 year old in your question could claim spousal benefits retroactively is if their spouse was awarded retroactive SSDI benefits. Best, Larry

Would I Be Prudent To File On The Record Of Whichever Of My Husbands Had Larger Earnings?

Hi Larry, My husband recently passed away. We were married for more than ten years. He took retirement at 65. I also had a former marriage for more than ten years before we divorced. He may have taken early retirement benefits. I took early retirement at 62.

I am not sure which husband had the larger earnings. I presume it would be prudent to choose the one with the larger earnings. If that turns out to be my former husband, would that reduce his benefits in any way? What would be the best to do now, and are there other options that I should keep in mind for the future? My former husband is alive, and past 70. I turn 70 at the end of 2020. Thanks, Ruth

Hi Ruth, I’m sorry for your loss.

Since you’re over full retirement age (FRA), you would want to claim benefits as soon as possible on the record of whichever husband would provide you with the highest benefit rate. However, since your first husband is living, the most that you could qualify for on his record is 50% of his primary insurance amount (PIA) minus your own PIA. A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing at FRA. If you are able to collect benefits on your first husband’s record, it would not reduce his benefit rate.

Widow’s benefits, on the other hand, can be paid at up to 100% of the deceased worker’s benefit rate, but you could only be paid the higher of your own benefit rate or your deceased husband’s rate. So the only way that you’d currently be able to draw benefits on your first husband’s record is if 50% of his PIA is more than your PIA, and more than the full amount that your deceased husband was drawing.

It sounds like you should contact Social Security to see about filing for benefits on whichever of your husbands’ records would give you the highest benefit rate. There’s also a one time death benefit of $255 that you’re probably eligible for on your deceased husband’s record. Best, Larry

Is It Still True That WEP Doesn’t Apply To Social Security Divorced Spousal Benefits?

Hi Larry, I have read on your website that WEP does not apply to Social Security divorced spousal benefits, which I am eligible for. Is that still the case now?

If I get Social Security benefits from working in a European country, will the WEP apply to my US Social Security divorced spousal benefits? Can I file for US Social Security divorced spousal benefits this year and continue working at my job in Europe for another year? I will retire next year 2021. Or will I be penalized? Thanks, Linda

Hi Linda, Yes, that’s still true. The Windfall Elimination Provision (WEP) can only affect Social Security retirement and disability benefits payable based on a person’s own earnings history. Just to be clear, though, if a person receives divorced spousal benefits on the record of a worker whose Social Security retirement or disability benefits are reduced due to WEP, then their divorced spousal benefits would be indirectly affected by WEP. Unreduced divorced spousal benefits are calculated based on 50% of the primary insurance amount (PIA) of the worker on whose record the benefits are paid. So if a worker’s PIA is reduced due to WEP, then any auxiliary benefits (e.g. spousal, divorced spousal) payable on that record are also lowered.

If you receive a pension based on your work in a foreign country, or benefits from another country’s Social Security program, it wouldn’t affect your divorced spousal benefits from the US Social Security program. However, there is a foreign work test that applies until you reach full retirement age (FRA). If you file for Social Security benefits prior to FRA and if you’re working in a foreign country, you couldn’t be paid for any month in which you work more than 45 hours. You don’t mention your age, so I can’t tell you whether or not the foreign work test would affect you. Best, Larry

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