Ask Larry: Will This Strategy Maximize Our Survivor’s Benefits?

Today’s column addresses questions about a strategy to maximize a survivor’s benefit, whether SSA recalculates benefit rates due to continued SSA taxed income and whether the WEP applies to pensions based on totalization agreements. 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.

Will This Strategy Leave My Wife The Highest Widow’s Benefits?

Hi Larry, I will be turning 70 later this summer and will file for my Social Security retirement benefit shortly. My wife recently turned 62. I have read that couples can maximize their joint Social Security payouts by having the lower earner sign up as soon as possible at age 62 while the higher earner delays until 70.

As I noted, I’m older than my wife and have a shorter life expectancy, so with this strategy she will get a smaller payout based on her own retirement benefit but she’ll get bumped up to the higher survivor’s benefit when I pass away. Does this sound like the best marital strategy for us to boost our total payout? Thanks, Al


Hi Al, Well, the filing strategy you mention certainly might be your best option, but it largely depends on your and your wife’s relative benefit rates. Also, if your wife is still working then her ability to actually be able to collect benefits now would depend on how much she’s earning.

By the way, you don’t mention what month your wife reached 62 nor which month you will reach 70, but if your wife files for her benefits before you reach 70, you could potentially draw spousal benefits for months prior to the month you reach age 70.

I don’t have sufficient information to give you specific advice, but it sounds like you and your wife might want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to fully analyze the options available to you in order to determine the best possible strategy for maximizing your benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

Does Social Security Recalculate My Benefit Amount To Include Earnings I’ve Had After I Started To Draw Benefits?

Hi Larry, I began receiving Social Security retirement benefits years ago but have continued to earn income subject to Social Security tax for many years after. Does SSA recalculate my benefit to include my earnings in these subsequent years? Thanks, Celia

Hi Celia, Yes Social Security automatically recomputes Social Security retirement benefit rates when a person who’s receiving benefits has an additional year or years of earnings that are high enough to increase their benefit rate.

But 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 only increase a person’s benefit rate if they’re higher than one or more of the 35 years currently being used to calculate the person’s benefit rate. Best, Larry

Does The WEP Apply In My Case?

Hi Larry, I will be eligible for full retirement in early 2022 at which time I will have accrued 21 years with substantial earnings in the US. I have also worked overseas for a period of 18 years without Social Security withholdings and I will be using US credits to get a pension there as well.

My overseas overall pension will be reduced by 30% because of the fact I will also receive US retirement benefits. Does the WEP apply in my case and if so how will my Social Security retirement benefits be affected? Thanks, Sarah

Hi Sarah, The Windfall Elimination Provision (WEP) won’t apply in your case if the only pension you receive in addition to your US Social Security retirement benefit is based on a totalization agreement between the US and a foreign country.

In order for the foreign pension to be excluded from counting for the WEP, it would would need to be true that you wouldn’t qualify for the foreign pension without crediting your US Social Security credits.

Totalization benefits, that is pensions that are based on a combination of Social Security credits earned in the US and another country, are excluded from counting as a non-covered pension for WEP purposes. Best, Larry

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