Ask Larry

I am 65yr old and have not claimed SS yet. Significant other is 59 with a short work history and a PIA less than half mine. She has an ex spouse from a greater than 10 year marriage, with a suspected higher PIA than mine. Are there financial advantages for her in waiting until after she turns 60 to remarry, or to remarry at all?. She suspects with her ex's lifestyle and habits, his demise will predate mine. His age is 61.
Thanks. Very confused

Hi. If your significant other remarries, she wouldn't be able to qualify for divorced spousal benefits from the record of a living former spouse for as long as the remarriage lasts. That's true regardless of how old she is when she gets remarried. But, if her ex-spouse dies, your significant other could potentially qualify for surviving divorced spousal benefits even if she is remarried, but only if the remarriage occurs when she is age 60 or older.

If your significant other remains unmarried, the earliest that she could potentially qualify for divorced spousal benefits on her living ex's record is when she reaches age 62. However, if the two of you don't get married, she'll never be able to qualify for spousal or survivor benefits from your Social Security account.

It sounds like the two of you should strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully compare and analyze all of your various options so that you can determine your best strategy for maximizing your benefits.

Best, Jerry

I'm 63 years old and a retired public school teacher. How can I determine my Social Security benefits if I currently have an STRS pension? It is my understanding that due to STRS, I will only receive a portion of my earned benefits.

Hi. It sounds like your Social Security retirement benefit rate will likely be reduced due to the Windfall Elimination Provision (WEP). WEP can cause a person's Social Security retirement or disability benefit rate to be lowered if they receive a pension that's based on their earnings that weren't subject to Social Security taxes (https://www.ssa.gov/pubs/EN-05-10045.pdf). Calculating a person's benefit rate with or without a WEP reduction is complex, so you may want to strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to do the calculations.

Here's how it works. Social Security calculates a person's Social Security retirement benefit rate based on their average monthly earnings during their highest 35 years of Social Security covered wage-indexed earnings. The average earnings are then separated into three tiers based on the year the person reaches age 62, and a different percentage return is applied to each tier. The normal percentage return on the first tier is 90%, the percentage return on the second tier is 32%, and the percentage return on third tier is 15%. The resulting sum of the three tiers is determines the person's primary insurance amount (PIA), which is the amount they would receive if they start drawing benefits at full retirement age (FRA).

For example, for a worker who turns 62 in 2022, the first $1,024 of their average monthly earnings is multiplied by 90%; earnings between $1,024 and $6,172 are multiplied by 32%; and the balance by 15%. The sum of the three amounts equals the PIA, which is then decreased or increased depending on whether the worker starts benefits before or after full retirement age (FRA).

The Windfall Elimination Provision (WEP) modifies the normal Social Security benefit formula by reducing the percentage return on the first tier from 90% to as low as 40%. For a person reaching age 62 in 2022, that can result in a PIA reduction of as much as $512 (i.e. $1024 x 50%). However, there is a WEP guarantee provision that limits the amount that a person's benefit can be reduced by WEP to no more than half of the person's non-covered pension amount.

Our software is programmed to handle all of the above described calculations in order to give you an accurate estimate of your benefit rate. The software would also allow you to fully compare and analyze all of your filing options so that you can determine your best strategy for maximizing your benefits.

Best, Jerry

I have decided to wait until ago 70 to file for SS benefits, mostly because of the 8% increase gained every year for delayed filing. As the Full Retirement Age gets pushed farther out (mine is 66 and two months) it leaves fewer and fewer years between FRA and age 70.
Does that mean smaller benefits for me compared to those born several years earlier, who have a FRA of 65, who have an additional year of the 8% gain?

Hi. Not necessarily. For one thing, the last people whose full retirement age (FRA) was 65 were people born prior to 1938, and when they reached FRA in 2002 delayed retirement credits (DRC) only amounted to 6.5% per year. The 8% annual increase for DRCs first applied to people who reached their FRA at age 66 in 2009 or later.

Although it's true that people born after 1954 won't be able to earn as much as the 32% increase from DRCs that could be accrued by people born prior to 1955, that doesn't necessarily mean that their benefit rate will be smaller. The primary insurance amounts (PIA) to which DRC increases are added are calculated using different wage indexing factors for each calendar year of birth (https://www.ssa.gov/oact/cola/awifactors.html). As a result, you can't conclude that a person's benefit rate will be smaller than another person's benefit rate simply based on the number of DRCs they can earn. Too many different variables are involved in the benefit calculation process to be able to draw such conclusions.

That said, though, based on current law the maximum 32% DRC increase that can be earned by someone with a FRA of age 66 will gradually be reduced to 24% for people whose FRA is age 67.

Best, Jerry

Dear Larry,.

I turn 70 on June 20th 2023

Today, February 12, I began but did not complete, sign and date the application to receive my full Social; Security benefits at the 70 year old level of benefits. The website suggested however, that today , February 12th , the day I started the application, "may" be the Date of the application.
Does that mean I will considered to have applied 8 days shy of 4 months prior to my 70th birthday, And therefore, my benefits will fall short of the 70 year old level, OR...
Can I SUBMIT it four months prior to by birthday, on or after February 20th and qualify for the FULL benefits?
What are the accurate legal details?

Hi. Not to worry. You can submit applications up to 4 months prior to the MONTH you want to start your benefits. It doesn't matter what day you were born in the month you want your benefits to start. So, regardless of what DAY you were born, if you want to claim benefits effective with June 2023 you can submit your application to Social Security as early as February 1 2023. And, if you turn age 70 on June 20 2023, starting your benefits effective with June 2023 will result in you receiving your maximum possible monthly Social Security retirement benefit rate.

Just an FYI, though, Social Security pays benefits a month behind, so your benefit payment for June will be scheduled for payment in July.

Best, Jerry

Just discovered craziness in WEP and GPO. It's bad enough that it's there, but it's slightly worse than I thought. Did you know that WEP and GPO use a different actuarial values for converting a lump sum payment to a monthly payment amount?

Just crazy - I was trying to figure out why when my wife filed for spousal benefit (when I started my SS) the GPO offset was higher than I was calculating. It turns out and age 66 lump sum paid in 2022 uses 174.6 as the divisor to calculate WEP monthly pension amount BUT the GPO monthly pension amount uses 140.1 as the divisor.

That's just wrong!

Since her lump sum was relatively small, it's only a extra $20 reduction of spousal benefit, but actuarial values of the POMS GN 02608.400 for GPO (effective 6/21/2016 to present) should be updated to the POMS RS 00605.364 for WEP (effective 11/12/2020).

Hi. Yes, we're aware of the discrepant actuarial charts listed in the Social Security operations manual sections that you cite in your question. However, we don't know whether or not the discrepant charts are intentional. Given the unexplained discrepancy, anyone whose benefits are reduced due to the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO) that is based on a lump sum proration may want to consider filing an appeal if they believe that their benefit rate has been miscalculated.

Best, Jerry

As representative payee for my disabled daughter, where do I send the funds I saved for her in a savings account. She fell under DAC classification when her father went on permanent disability. He passed away in 2011. My daughter passed away on September 23, 2020. So far I have not received any instructions from SS.

Hi. I'm sorry for your loss. According to Social Security's guide for representative payees (https://www.ssa.gov/pubs/EN-05-10076.pdf), if a beneficiary for whom you were the representative payee dies, "you must give any saved benefits to the legal representative of the estate. Otherwise, the savings must be managed according to state law. If you need information about state law, contact the probate court or an attorney".

Best, Jerry

I receive SSI, and have been offered the chance to participate on a televised game show with the possibility of winning a million dollars as the top prize. If I win any sum of money (say, $25,000), what will happen with my benefits?

Hi. If what you receive is Supplemental Security Income (SSI), then winning a large amount on a game show would almost certainly stop your SSI payments at least temporarily. Any income that you win on a game show would offset your monthly SSI payment amount for that month basically dollar for dollar, and you couldn't resume being paid SSI benefits for as long as you have a total of more than $2000 in countable assets.

However, winning money on a game show would not affect a person's Social Security benefits. Unlike SSI payments, Social Security benefits are not needs based.

Best, Jerry

applying for DAC, Can SSA see how much I earned in any given month in the past? or just for the whole year ? even though I cant cant remember or or see on my SSA statement . just earnings for the whole year. how is the SGA in any given month determined ? if the earnings after turning 22 divided up by 12 months in the year do are much less than SGA. how is the SGA in any given month determined ? and if they ask me the last time I worked until and I don't really remember , what should I tell them ? thanks Larry !

Hi. No. The only earnings information that Social Security automatically receives are the annual earnings amounts reported on W-2 forms and self-employment tax returns. However, Social Security can and does frequently request a monthly earnings breakdown from employers when a person applies for or is collecting disability benefits. So, if you apply for disabled adult child's (DAC) benefits, Social Security may contact your former employer(s) for any earnings information that's needed in order to make a determination on your claim.

Social Security bases their substantial gainful activity (SGA) determinations on a person's average monthly earnings over the period that they worked. So, for example, if you earned $6000 in a calendar year but you only worked from January through April, then your average monthly earnings for SGA purposes would be $1500 (i.e. $6000/4).

If you don't remember the exact dates that you worked for an employer, you can simply report that on the application and supplemental forms that Social Security asks you to complete as part of the application process.

Best, Jerry

I receive ssi and my husband works. I got my benefits before we got married in 2021. I started getting my benefits in 2019. Last year he didn't put me on his taxes because we weren't sure how to do it. This year we want to do it right. So do we file jointly or how do we do this?

Hi. When you say you're receiving 'SSI', I don't know whether you're referring to Supplemental Security Income or Social Security benefits. Supplemental Security Income (SSI) is a needs based benefit administered by Social Security, whereas Social Security benefits are based on Social Security taxes that people pay on their earnings.

If you're receiving Supplemental Security Income payments, then be sure to notify Social Security of your marriage. Since SSI is needs based, a spouse's income and assets can affect the SSI payments for which a person is eligible.

Regardless of what type of benefits you're receiving, though, I am not able to answer questions about income tax rules. My expertise is limited to Social Security benefits. You may want to refer to the following information from the IRS's website: https://www.irs.gov/forms-pubs/about-publication-915.

Best, Jerry

When can Social Security deduct a person's WEP? I retired from my local school system, after working as a school custodian for 9 years, at the age of 69 in November 2015. When I retired I received a small School Employees Retirement System (SERS) pension. Social Security deducted the WEP penalty in February 2008 when I turned 62. I was not eligible to participate in the SERS program until November of 2011. They claim the WEP must be deducted before COLA or any other credits are calculated. This caused my earn cola (Dec. 2008 to Dec..2014) and earned credit for working past my retirement age of 66 (Feb 2012 to April 2015) to be reduced

Hi. The first month that your Social Security retirement or disability benefit rate can be reduced due to the Windfall Elimination Provision (WEP) is effective with the first month that you were entitled to both your Social Security benefit AND your non-Social Security covered pension. Being 'entitled' to a benefit means that you have applied for the benefit and have proven your right to benefits for a given period.

Therefore, I don't know of any reason why Social Security should have reduced your Social Security retirement benefit rate for any months prior to the first month you became entitled to your SERS pension. But, if your SERS plan is a defined benefit plan as opposed to being a traditional monthly pension plan, then the WEP definition of 'entitlement' could be earlier than when you actually started receiving the SERS payments. When a defined benefit plan is involved, 'entitlement' for WEP purposes can be as soon as the month that a person becomes eligible to receive disbursements from the plan, even if they don't actually elect to start receiving disbursements until sometime later.

If you think that Social Security misapplied WEP in your case, it sounds like it may be too late to pursue a formal appeal (https://www.ssa.gov/apply/appeal-decision-we-made). Unless good cause for late filing is involved, appeal requests must be filed within 60 days of the date that a person is notified of Social Security's determination. Even if you're not able to pursue a formal appeal, though, you could try submitting a written and signed request for a recalculation of your benefit rate to Social Security using a form SSA-795 (https://www.ssa.gov/forms/ssa-795.pdf). If that doesn't work, you might want to try contacting the offices of either your U.S. congressional representative or one of your U.S. senators to ask them to submit an inquiry to Social Security on your behalf.

Best, Jerry