Ask Larry: Shouldn’t My Spousal Benefit Be 50% Of My Husband’s Social Security Retirement Benefit?

Today’s column addresses questions about whether spousal benefits are always half of the other spouse’s retirement benefit, divorced survivor benefits before a retirement benefit at 70 and how totalization agreements with other countries can affect retirement and 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.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.

Shouldn’t My Spousal Benefit Be 50% Of My Husband’s Social Security Retirement Benefit?

Hi Larry, I was born in October 1939. I took my Social Security retirement at 62. My husband and I married in 2018. He was also born in 1939 and took his Social Security retirement at 62 as well. My husband’s PIA is greater than mine. I applied for spousal benefits after we married and was awarded spousal benefits beginning November 2019 but it’s higher than 50% of his retirement benefit. Shouldn’t my spousal benefit be 50% of his retirement benefit rate? We don’t want to have to repay any overpayment at some point. Thanks, Jeanie

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Hi Jeanie, Any reduction for age applied to a person’s Social Security benefits is calculated independently based on their age when they start drawing the benefit.

For example, say June, who was born in 1939, filed for her Social Security retirement benefits at 62. June’s full retirement age rate (FRA), or primary insurance amount (PIA), is currently $800, but her actual rate is reduced to $630 because she started drawing her benefits at 62. In 2018, June got married to Ward, who was also born in 1939. Ward’s current PIA is $2,000, but he also started drawing his benefits at 62 so his benefit rate is reduced to $1,575.

When June files for spousal benefits, her unreduced spousal rate would be calculated by subtracting her PIA from 50% of Ward’s PIA, which in this example is $200 (i.e. $2,000 / 2 – $800). June’s spousal rate would not be reduced for age since she’s already over FRA when she becomes entitled to spousal benefits. Therefore, June would be paid her own reduced retirement benefit of $630 plus her unreduced spousal rate of $200. So in this example, June’s total benefit amount of $830 is more than 50% of Ward’s benefit rate of $1,575, even though she’s receiving spousal benefits. Best, Larry

Can I Claim On My Deceased Ex-Husband’s Record And Defer My Social Security Retirement Benefits Until 70?

Hi Larry, I am divorced and 62. My former husband of 13 years passed in February. As a divorced widow, can I claim a benefit on his record now and delay my own retirement benefit until I’m 70? My retirement benefit would be higher than any benefit on his record at that point. Does income play into the equation? Thanks, Sally

Hi Sally, Yes, you can, but only if you’re currently unmarried or if your current marriage occurred when you were 60 or older. But if you’re working, your benefits could be partially or fully withheld until you reach full retirement age (FRA) depending on how much you earn.

If you’re correct that your retirement benefit rate would be higher than your ex’s rate, you may want to claim survivor benefits either now or as soon as your earnings would allow at least some benefits to be paid, then switch to your own higher benefit rate when you reach 70.

My company’s software — Maximize My Social Security or MaxiFi Planner — could analyze your situation and help you determine your optimal filing strategy, so you may want to use it, especially if you’ll be working between now and your FRA. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

Can I Draw My Own Totalized Social Security Benefits And Claim Spousal Benefits?

HI Larry, I am 62 and eligible for the regular German retirement pension when I turn 66. It will be limited as I haven’t paid in since spring 2003, when I moved to the US. I am a US citizen now. My American husband retired from the military and will do so from his civilian job in a few years. Can I draw my own totalized Social Security with minor US credits and claim a US Social Security spousal benefit? Will the spousal benefits be reduced? Is there a threshold till which I am allowed to claim both? Thanks, Almut

Hi Almut, You could only receive a totalization benefit from the US if you have at least six and fewer than 40 quarters of Social Security coverage (QC). If you have at least 40 QCs, you’ll qualify for regular Social Security retirement benefits, but your benefit rate will likely be reduced due to the Windfall Elimination Provision (WEP). However, any WEP reduction applied to your benefit rate wouldn’t start until you actually start receiving a pension based on your earnings that weren’t subject to US Social Security taxes, such as your German pension.

If what you receive is a totalization benefit though, no WEP reduction would apply. But a completely different benefit computation formula is used to compute totalization benefits as opposed to the formula used to calculate regular Social Security retirement benefits. And regardless of the computation method used, your benefit rate will be reduced for age if you start drawing prior to your full retirement age (FRA).

You couldn’t be eligible to collect spousal benefits at least until your husband starts drawing his retirement benefits. And you’ll only be eligible for spousal benefits if 50% of your husband’s primary insurance amount (PIA) is more than your own PIA. A person’s PIA is equal to the amount of their Social Security retirement benefit if they start drawing at FRA. If you do qualify for spousal benefits though, those benefits would not be reduced by either WEP nor the Government Pension Offset (GPO) provision. WEP can only apply to Social Security retirement or disability benefits based on a person’s own earnings history, and foreign pensions are excluded from counting as a government pension for purposes of the GPO provision. Best, Larry

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