Immediately’s column addresses questions on eligibility for spousal advantages, what being born after 1/1/1954 means for spousal profit eligibility and dealing whereas receiving incapacity advantages. Larry Kotlikoff is a Professor of Economics at Boston College and the founder and president of Financial Security Planning, Inc.
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Can My Spouse Take Social Security Spousal Advantages Now Whereas I Delay Until 70?
Hello Larry, After receiving what looks like totally different responses throughout varied calls to SSA, I’m writing you within the hope you may present some steering. I used to be born in January 1952 and my spouse was born in September 1951. Neither of us has claimed Social Security retirement advantages. I’m not working; my spouse nonetheless works, incomes above the knowledgeable quantity. My estimated profit at 70 is about $3,900 and my spouse’s profit at 70 is about $1,600.
My spouse was advised that she may at the moment file to gather 50% of the profit I’d have acquired at 66 with out my having filed. Is that appropriate? Assuming sure, and on condition that she has gone on document with the SSA for a protected submitting, is it appropriate that she will be able to declare that profit going again six months? She was advised that when she reaches 70, she may both proceed to obtain her spousal profit or her personal retirement profit, whichever is increased. Is that appropriate?
Can my spouse is then change over to taking a brand new spousal profit of fifty% of my month-to-month quantity I’ll get at 70 after I begin amassing?
Lastly, can I now get spousal advantages for the 4 months earlier than I flip 70 even when on the identical time she’s getting her personal spousal profit? And will I then change to my retirement profit after I flip 70?
Do I’ve any of this proper? Thanks, Patrick
Hello Patrick, Your spouse cannot qualify for spousal advantages at the very least till you begin drawing your retirement advantages. Essentially the most that your spouse could possibly be paid is her personal profit charge or 50% of your main insurance coverage quantity (PIA). An individual’s PIA is the same as their Social Security retirement profit charge if they begin drawing their advantages at full retirement age (FRA).
Once more, although, your spouse cannot qualify for spousal advantages at the very least till you begin drawing your retirement advantages, and even then she may solely be paid as much as the upper of her personal quantity or 50% of your PIA, not 50% of your age 70 charge.
Nor may you acquire spousal advantages out of your spouse’s account until she is drawing her personal advantages. Based mostly on the profit charges in your query, it feels like your spouse ought to most likely have filed for her advantages at her FRA. You could possibly have then collected spousal advantages beginning at your FRA after which switched to drawing your retirement advantages at 70. And your spouse may then file for an extra spousal profit while you begin drawing by yourself document.
Sadly, an individual can solely declare advantages retroactively for as much as six months from the date of their software. So your spouse may file for her personal advantages now and declare six months of retroactive advantages, and you may then declare spousal advantages retroactively for a similar 6 months. Whenever you file in your retirement profit, your spouse may take her spousal profit.
Earlier than submitting although, You and your spouse might need to use my firm’s software program — Maximize My Social Security or MaxiFi Planner — to ensure that your figures are correct and to ensure that the technique I outlined above is the truth is the best choice. Social Security calculators supplied by different firms or non-profits might present correct solutions in the event that they had been constructed with excessive care. Greatest, Larry
Does What I Learn On Social Security’s Web site Imply That Since I Was Born In 1955, I Cannot Delay My Retirement Advantages And Take Simply My Spousal Profit?
Hello Larry, In researching our plan to request Social Security advantages I ran throughout the assertion on the social security administration’s web site:
“In case your partner’s birthday is January 2, 1954 or later, the choice to take just one profit at full retirement age not exists. In case your partner recordsdata for one profit, they are going to be successfully submitting for all retirement or spousal advantages.”
Does this imply that since I used to be born in 1955, that I can’t delay my retirement advantages whereas receiving my spousal advantages? He shall be 70 in October of this 12 months and he plans to file for his advantages then. What about submitting and suspending? Thanks, Kelly
Hello Lisa. Sure, Congress amended the Social Security regulation in 2015 to stop individuals born after January 1 1954 from amassing spousal advantages whereas permitting their very own profit charge to develop till 70, also called restoring your software to your spousal advantages solely.
Because you had been born after 1/1/1954, while you apply for both your retirement advantages or for spousal advantages, you may be deemed to be submitting for each. In that case, you may solely be paid basically the upper of the 2 charges and your charge shall be diminished for age should you begin drawing previous to your full retirement age (FRA).
Whereas everybody can nonetheless droop their retirement profit at or after their FRA and there are numerous causes to take action if somebody filed early, the file and droop technique is not viable for these born after 1/1/1954 as a result of nobody can obtain advantages on the document of somebody who suspended their advantages.
And word that even when it was nonetheless viable, it will have been your husband who filed for and suspended his retirement advantages, not you. You’ll have merely delayed your retirement advantages and filed for simply spousal advantages. However as I famous, this isn’t an possibility for you sadly. Greatest, Larry
Will I Be Ready To Earn Extra Once I Flip 62 With out Being Penalized?
Hello Larry, I’v been on SSDI since 2015 and am turning 62 quickly. My present profit is about $2,175. I’ve been in a position to work throughout the tips, making solely $15,000 free lancing remotely. But it surely’s very tough to stay on this quantity. Once I flip 62, can earn extra with out being penalized? Thanks, Allen
Hello Allen, Turning age 62 would not allow you to earn extra and nonetheless qualify for Social Security incapacity (SSDI) advantages.
To proceed to qualify for SSDI advantages, which is able to routinely convert to common Social Security retirement advantages while you attain full retirement age (FRA), you may’t work and earn in extra of what Social Security defines as substantial gainful exercise (SGA). The present month-to-month SGA restrict for non-blind people is $1,310. That quantity would not enhance just because an individual turns age 62, or every other age previous to FRA.
In idea, you may decide to change to drawing Social Security retirement advantages as a substitute of SSDI while you attain 62. In that case, you’ll be topic to the common Social Security earnings take a look at quite than the SGA take a look at. The common Social Security earnings take a look at exempts the primary $18,960 that an individual earns in 2021 earlier than withholding $1 of their advantages for every $2 that they earn in extra of $18,960.
Nonetheless, should you change to drawing retirement advantages at 62, your profit charge shall be diminished for age. SSDI advantages aren’t diminished for age, so that they’re paid at 100% of your main insurance coverage quantity (PIA). In the event you opted to change to retirement advantages at 62, your month-to-month profit charge would successfully be minimize by roughly 29%.
Relying in your present SSDI month-to-month profit charge, that loss in your month-to-month profit quantity might be greater than sufficient to offset the extra quantity that you just’d be allowed to earn should you change from SSDI to retirement advantages. Greatest, Larry