Will Early Social Security Retirement Benefits Reduce My Wife’s Spousal Benefit?

Today’s Social Security column addresses questions about how early retirement benefits affect later spousal benefits, eligibility for divorced spousal benefits and taking reduced survivor’s benefits before retirement benefits. 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.

Will Early Social Security Retirement Benefits Reduce My Wife’s Spousal Benefit?

Hi Larry, If my wife claims her Social Security retirement benefit early at 62 and then claims spousal benefits at 68 when I file, will her spousal benefit still be 50% of my retirement benefit or a reduced spousal benefit amount because she claimed her retirement benefit at 62? Thanks, Robert

Hi Robert, If your wife starts drawing her own retirement benefits prior to her full retirement age (FRA), she’ll be stuck with the resulting reduction in her benefit rate. Any excess spousal benefit for which she qualifies would not be reduced though, as long as she’s at least FRA when you start drawing your retirement benefits.

An unreduced excess spousal benefit would be added to her reduced retirement benefit rate to make up her total reduced spousal benefit. Her excess spousal benefit would be 50% of your primary insurance amount (PIA) minus 100% of her PIA. A PIA is equal to what a person would get if they waiting till their FRA to file.

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. Best, Larry

Am I Entitled To Spousal Retirement?

Hi Larry, I’m 65 and my ex husband is 74. For years he’s been collecting a disability check but he also worked. After 15 years we divorced in 2012. I was a homemaker and now stay with my daughter. Am I entitled to spousal retirement? Thanks, Skyler

Hi Skyler, It sounds like you can probably qualify for divorced spousal benefits. A person can only qualify for divorced spousal benefits on the account of an ex if their ex’s primary insurance amount (PIA), which is equal to their full retirement age (FRA) retirement benefit amount, is more than twice as much as their own PIA, but if you aren’t eligible for Social Security based on your own work record that wouldn’t be an issue in your case.

If you are at least FRA when you start drawing divorced spousal benefits, you can be paid up to 50% of you ex’s PIA. You could choose to start drawing your divorced spousal benefits now, but if you start drawing any time prior to your FRA your benefit rate will be reduced for age. Best, Larry

Do You Agree With The Advice That I Gave My Friend?

Hi Larry, I have read many of your articles and I am a firm believer of your Social Security advice. My friend is 64. He is not working and his wife passed away many years ago. I advised Dale that he could should apply now for reduced survivor benefits on her work record even though it wouldn’t be very much and then switch to his own retirement benefit at 70 to receive maximum DRCs.

He then got an appointment at the SSA office and they told him he could not do this because the law has changed. They said he could only collect the higher of the two benefits.

Do you agree with my advice for my friend? If so, what should he do about SSA’s incorrect advice? Thanks, Sarah

Hi Sarah, Yes, assuming that your friend is unmarried, it sounds like your advice is probably good. There has been no change in the Social Security law that prevents a person from collecting a lower survivor benefit while waiting until a later age to claim their own retirement benefits.

The Social Security employee is apparently not fully trained, and must be confused by the new deeming rule that applies when a person files for spousal benefits on the record of a living spouse or ex-spouse.

When a person who was born after 1/1/1954 applies for spousal or divorced spousal benefits, they are deemed to be filing for their own retirement benefits at the same time. And in those cases, the person claiming benefits can only be paid essentially the higher of the two benefit rates. But that rule doesn’t apply survivor’s benefits.

Social Security employees can’t refuse to allow someone to apply for benefits regardless of whether or not the employee believes that the person doesn’t qualify. So your friend can insist on filing a claim for widower’s benefits. If Social Security incorrectly handles his case, he would then have appeal rights. Delaying filing an application could result in a loss of benefits, so your friend should probably act quickly. Best, Larry