Ask Larry: Will My Wife’s Social Security Retirement Benefit Be Reduced If She Stops Working At 62?

Today’s column addresses questions about whether stopping work years before filing will reduce retirement benefits, effects of an ex filing on a spouse’s record, disability benefits converting to retirement benefit and the Government Pension Offset. 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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Will My Wife’s Social Security Retirement Benefit Be Reduced If She Stops Working At 62?

Hi Larry, My wife has worked for the airlines for 35 years. She is currently 62 and may be forced to retiree. She’s concerned that if she retires now and doesn’t file for her Social Security retirement benefit until her full retirement age of 66 and 8 months without earning income until then, her retirement benefits as listed today will be reduced. Because she will not have worked for 4–5 years before filing at 66 and 8 months, will her benefits be reduced? Thanks, Norm

Hi Norm, Your wife’s benefit rate would not go down if she stops working. But if the estimated benefit rate that you are referring to includes future year earnings that don’t materialize because she quits working, then her benefit rate may not be as high as the estimate indicated.


Social Security retirement benefits are based on an average of a person’s highest 35 years of Social Security covered wage-indexed earnings. If you calculate your wife’s benefit rate based on her highest 35 years up to now, that rate won’t go down if she stops working. Stopping work would simply mean that she wouldn’t have the potential to increase her rate by replacing lower earnings years that are currently included in her 35 year average with higher earnings years.

The benefit estimates provided by Social Security on the statements they issue generally assume that a person will continue working at their current earnings level until the age of the estimated benefit rate. So your wife’s estimate on her Social Security statement may be higher than her rate actually ends up at if the projected future earnings they used in the estimate don’t materialize.

You and your wife may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to do your Social Security planning. The software can provide your wife with an accurate estimate of her benefit rate with and without future earnings so that she can gauge what difference, if any, stopping work would have on her benefit rate. It will also allow you both to fully analyze the filing options available to her in order to determine her best strategy for claiming benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

How Much Is My Husband’s Ex Entitled To On His Record?

Hi Larry, I have been married to my husband for 13 years. His ex was married to to him for 12 years before they divorced. I am 67 and she is either 59 or 60. My husband mentioned to me that it is possible that she can be entitled to benefits on his record at least when he passes away and maybe before. How much is she entitled to? Does it matter that I have been married longer to him or she has not remarried? Thank, Aimee

Hi Aimee, Your husband’s ex’s potential benefit rate as a divorced wife or surviving divorced wife would be calculated the same as your potential spousal or widow’s rate would be. If your husband’s ex is someday able to collect benefits on your husband’s Social Security record though, it will have no adverse effect on your benefit rate as a spouse or widow.

Both you and your husband’s ex could potentially be paid up to the full amount of your husband’s benefit rate as survivors, and your benefit rates would not be affected by the fact that both of you are collecting benefits on his record. Incidentally, this would be true even if your husband had more than just one ex. Best, Larry

Do I Need To Contact Social Security Or Does My SSDI Convert To Retirement Benefits Automatically?

Hi Larry, I am on SSDI and work part time. My FRA will be May 2021. If I can still continue working , do I contact Social Security or does my SSDI convert automatically to a retirement benefit? Thanks, David

Hi David, As long as you continue to qualify for Social Security disability (SSDI) benefits until you reach full retirement age (FRA), your SSDI will automatically convert to regular retirement benefits effective the month you reach FRA.

Once you reach FRA, there will be no limit on the amount that you can earn and still collect your benefits. However, whether or not you can be paid SSDI benefits prior to FRA depends on the amount of your earnings and whether or not you’ve completed your trial work period. Best, Larry

Will My Survivor Benefits Be Reduced Due To The Windfall Tax?

Hi Larry, I am collecting my Social Security retirement benefit but it is lower because I receive a pension from working in the school system where I didn’t pay Social Security taxes on my income. I am now eligible for a survivor’s benefit from my ex husband’s record. Will my widow’s benefit be reduced because of windfall tax. Thanks, Betsy

Hi Betsy, Your widow’s benefits wouldn’t be reduced due to the Windfall Elimination Provision (WEP), which is not a tax by the way. But it sounds like your survivor benefits would likely be subject to at least a partial offset due to the Government Pension Offset (GPO) provision.

The GPO can cause a person’s survivor benefits to be offset by 2/3rds of the amount of any government pensions that they receive which are based on their earnings from any level of government work in the US where they were exempt from paying Social Security taxes. So if you didn’t pay Social Security taxes on your earnings from the school system from which you receive a pension, any survivor benefits that you could otherwise qualify for will likely be at least partially offset. Best, Larry

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