Today’s column addresses questions about receiving spousal benefits after receiving retirement benefits, whether it’s possible to reduce a benefit amount to remain under a limit and applying for disability benefits while working and receiving survivor’s benefits. 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.
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Can My Wife Switch To Spousal Benefits, And If So, What Does She Need To Do?
Hi Larry, I am 70 and my wife will be 66 in August. My wife applied for Social Security retirement benefits when she was 62 and I collected spousal benefits until I was 70 and then collected my own retirement benefits. I have heard that when my wife turns 66 she can change to spousal benefits from me which would be more than what she is getting now. If this is true, how do we make the switch? We’ve looked on my wife’s account and don’t see where to change that. Thanks, Jordan
Hi Jordan, Once a person files for their own Social Security retirement benefits, they can never subsequently switch to just drawing a different type of benefit, such as spousal or survivor benefits. But if a person is drawing their own retirement benefits and then becomes eligible for a spousal or survivor benefit with a higher rate than their own retirement benefit rate, they can file for a partial, or excess, spousal or survivor benefit that could then be paid in addition to their own benefit rate.
So your wife can’t switch from her own retirement benefits to a spousal benefit, but she could potentially apply for an excess spousal benefit. Since your wife was born after 1/1/1954, when she filed for her own retirement benefits, she was deemed to also be filing for spousal benefits. She couldn’t qualify for spousal benefits though until you started drawing your retirement benefits. Since you’re now drawing your retirement benefits, if your wife was eligible for any additional spousal benefits then Social Security should have asked her to apply for them when you filed for your retirement benefits due to deeming. So either something was overlooked or your wife doesn’t qualify for an excess spousal benefit.
Here’s an example: say Jan files for her Social Security retirement benefits at 62. Jan’s primary insurance amount (PIA), which is equal to her unreduced full retirement age (FRA) rate, is $1,000, but Jan’s rate is reduced for age to $750. When Jan reaches FRA, her husband Bill files for his Social Security retirement benefits. Bill’s PIA is $2,000, but since he waited until 70 to file, he receives an increased rate of $2,640. If Jan files for spousal benefits her excess spousal rate would be calculated by subtracting her PIA from 50% of Bill’s PIA, which in Jan’s case equals $0 (i.e. $2,000 / 2 – $1,000). Therefore, Jan isn’t eligible for spousal benefits.
Your wife will only qualify for spousal benefits if your PIA is more than twice as much as her PIA, and I have no way of knowing whether it is or not. If you think that your wife should qualify, she’ll need to call Social Security to initiate the process of filing an application without more information. My company’s software — Maximize My Social Security or MaxiFi Planner — could calculate these potential benefit rates based on your earnings records and help find or confirm the filing strategy that will maximize your lifetime household benefits as well as let you explore other filing options. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry
Can A Person Reduce Their Benefit Rate Voluntarily Or By Refiling Effective With An Earlier Month?
Hi Larry, I help Medicare beneficiaries apply for Extra Help and Other benefits. Sometimes they are just a few dollars a month over the allowable limits. Is there any way a beneficiary who filed at 63 for instance, can ask SSA to either reduce their monthly benefit or refile at such earlier date that would reduce their monthly benefit so as to qualify for the Extra Help? Thanks, Lindsay
Hi Lindsay, Sorry, but the answer’s no on both counts. If a person chooses to apply for Social Security benefits, they can’t opt to be paid a lower benefit rate than the amount that they’re entitled to. They could voluntarily waive receiving benefits altogether, but I assume that’s not what you had in mind.
And if a person files for Social Security benefits that are reduced for age, they can’t choose to start their benefits any earlier than the month in which they filed their application, or the month that they established a protective filing date to apply. If a person withdrew a previously filed application, repaid benefits received and then reapplied for the benefit, it could only result in a later month of entitlement with either the same benefit rate or a higher rate. Best, Larry
If I Go On Disability Can I Collect My Disability And Still Get Widow’s Benefits?
Hi Larry, I am 64 and collecting my widow’s benefit from my deceased husband’s Social Security record while still working part time. If I were to go on disability due to hearing loss, could I collect my disability and still get my widow’s benefit? Thanks, Alida
Hi Alida, You couldn’t be paid both benefits in full. If a person becomes entitled to Social Security disability (SSDI) benefits after they start receiving widow’s benefits, they can only be paid the higher two benefit rates. If your SSDI rate is higher than your widow’s rate, your widow’s benefits would stop. If your widow’s rate is higher, you’d be paid your SSDI benefits plus a partial widow’s benefit that would add up to your current widow’s rate.
Since you’re before your full retirement age, the earnings test will still apply if you earn above the exempt amount and there’s also a limit to how much you can earn and still receive disability benefits. Best, Larry