Ask Larry: When Should My Wife File To Maximize Her Social Security Spousal And Widow’s Benefits?

Today’s Social Security column addresses questions about when to file to maximize spousal and survivor benefits, when continued earnings do and do not increase benefit rates and whether benefits can be withheld to pay off back taxes. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc.

See more Ask Larry answers here.

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


What Is The Best Time For My Wife To Start Social Security Benefits?

Hi Larry, My wife is currently 60 and we are trying to make the smartest choice on when she should start collecting her Social Security. We are both retired. She was primarily a stay at home mom so her benefit is relatively small. Our main goal is that we don’t want her decision on whether to start at 62 or wait until 67 to adversely affect her eventual spousal benefits and possibly widow’s benefits.

I was the primary breadwinner. I am currently 52 and want to make sure she gets the maximum possible benefits in the event that she outlives me as she has longevity in her family and lives a very healthy lifestyle.

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What is the best time for her to file for her smaller retirement benefit? Also, when is the best time for me to start my retirement benefits to ensure she gets the best possible spousal and survivor’s benefits? Lastly, since she is 8 years older, can I get a spousal benefit before I turn 62 and then stop collecting when I become eligible for my Social Security? retirement benefit Thanks, Hank

Hi Hank, Your wife could start drawing as early as 62, but her benefit rate would then be reduced for age. And she’ll keep any resulting reduction in her own benefit rate for as long as both of you are living. However, even if your wife claims her benefits early, she could still receive unreduced widow’s benefits as long as she’s at least full retirement age (FRA) when she starts drawing the widow’s benefits.

If you want your wife to get the highest possible survivor benefit in the event of your death, you would want to wait until 70 to claim your retirement benefits. A surviving spouse can collect up to 100% of what their deceased spouse was collecting, so if you wait until 70 to start drawing your benefits, your wife could end up with your full age 70 rate as a widow.

However, keep in mind that your wife can’t collect spousal benefits while you are living until you start drawing your benefits. So, your best overall strategy will depend largely on what you feel is best for you and your wife. You and your wife may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to ensure your household receives the highest lifetime benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care.

Also, you would never be able to collect spousal benefits. Only people born prior to 1/2/1954 can claim spousal benefits without being required to claim their own benefits at the same time. So if you were to apply for spousal benefits, you would have to claim your own retirement benefits at the same time and you could then only be paid the higher of the two benefit rates. Best, Larry


Why Aren’t My Part Time Earnings Causing My Benefit Rate To Increase?

Hi Larry, I started collecting social security at 64. Throughout my more than 40 working years, I always paid the maximum FICA each year. After retiring from my full time job at 64 and starting to collect at that time, I worked part time with FICA taken out.

Why are these FICA contributions not adding to my retirement benefit? Can I opt out of paying FICA if I get no additional benefit from paying into it? Thanks, Scott

Hi Scott, Social Security retirement benefits are based on an average of a person’s highest 35 years of Social Security covered wage-indexed earnings, so additional years of earnings that a person has after they start drawing benefits only increases their benefit rate if the earnings higher than in one or more of the 35 years currently being used to calculate the person’s benefit rate.

And no, you can’t opt out of paying FICA/Social Security taxes on your earnings even if those earnings won’t increase your benefit rate. Best, Larry


Is My Mother Eligible For Survivor Benefits Now Or Not Until Her Back Taxes Are Paid?

Hi Larry, my father recently passed away and was a self employed laborer. My mother was a lifelong homemaker and is now left with no income and is wanting to collect her survivor benefits on my father’s work record as he does have the 40 points required. However my parents do owe back taxes. Is my mother entitled to any survivor benefits now or not till the back taxes are paid in full? Thanks, Louise

Hi Louise, I’m sorry for your loss. It sounds like your mother could potentially qualify for survivor benefits if she’s at least 60 or if she’s at least 50 and is disabled, or if she has an eligible child in her care who is under age 16 or is disabled. Assuming that your mother doesn’t have an eligible child in her care, if your mother starts drawing widow’s benefits prior to her full retirement age (FRA), her benefit rate will be reduced for age.

The IRS can assess a levy against Social Security benefits to collect delinquent taxes, but the amount they can take is generally limited to no more than 15% of a person’s Social Security benefit amount. Therefore, as long as your mother meets the requirements for survivor benefits she should be able to draw most of her benefit payment even if she owes back taxes. Best, Larry

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