Ask Larry

Larry - I don't believe the “Spousal Benefits for Current or Former Spouse” section in the “my social security” website is accurate. Per the my social security site, my age 70 delayed monthly benefits are estimated at $4501 (I turn age 70 in August 2023). I believe this amount is fairly accurate. However, the my social security site calculates my wife's monthly spousal benefits at $2171 (when she reaches her FRA (66& 6 months). The $2171 is 50% of the $4342 monthly amount shown for me if i were to start benefits today at age 69 & 5 months.

I have read that max spousal benefits are 50% of their spouses FRA benefit amount. If true the my social security calculator is not accurate in my case and is potentially likely misleading millions of future retirees that rely on this site to plan their retirement.

Would you please look into this. Thanks
John

Hi John. You're correct that the maximum possible spousal benefit rate is equal to 50% of the worker's primary insurance amount (PIA), even if the worker waits past their full retirement age (FRA) to start collecting benefits. A person's PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA). So, I can't explain why the estimated spousal amount shown on your Social Security benefit statement appears to be inaccurate.

You and your wife may want to strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to get accurate benefit estimates and to fully compare and analyze all of your various options so that you can determine the best overall strategy for maximizing your benefits.

Best, Jerry

I make a good salary at a county organization with a governmental pension. Because of pension reform in Illinois it won't be an amazing pension like in the past. I also have 19 "qualified" years of social security (from previous jobs). I believe I'm subject to WEP and understand that I need to get to 30 qualified years in SS to maximize benefits. Should I take a part time job to earn the minimum qualifying salary to accrue 30 year in SS? Is this a waste of effort or am I even understanding the rules correctly? Btw, I love your maxifi software.

Hi. I assume you mean that your salary from your county job is exempt from Social Security taxes and that you'll eventually qualify for a pension based on those earnings. In that case if you don't have at least 30 years of Social Security covered earnings that are at or above the amount that Social Security defines as 'substantial', then your Social Security retirement benefit rate will almost certainly be lowered due to the Windfall Elimination Provision (WEP). How much that reduction would amount to depends on several factors, such as your year of birth and the exact number of substantial earnings years that you do have (https://www.ssa.gov/pubs/EN-05-10045.pdf).

For current retirees, the maximum reduction to a person's monthly Social Security retirement benefit rate that can result from WEP amounts to a bit more than $550. Therefore, reaching at least 30 years of substantial Social Security covered earnings would not only eliminate the WEP reduction, the earnings that you have in those years would also increase your 35 year earnings average on which your Social Security retirement benefit rate is based. And, even if you don't reach 30 years of substantial earnings, each year of substantial earnings that you have in excess of 20 years would lessen the WEP reduction somewhat.

However, working in Social Security covered employment to obtain additional years of substantial earnings would mean paying Social Security and other taxes on those earnings. So, suffice to say that there's no simple answer to your question. In all likelihood, whether or not you would realize a net gain from accruing more years of substantial Social Security covered earnings would depend on how long you live to collect benefits, and whether or not you have family members who could collect benefits on your record before and/or after you die.

Our software (https://maximizemysocialsecurity.com/purchase) allows you to create 'what-if' scenarios, so I would suggest using the software to compare your projected benefit rates with and without additional years of covered earnings and a WEP reduction. That should allow you to make an educated decision on whether or not you'd consider it worth it or not to try to earn more years of substantial earnings.

Best, Jerry

I was born in 1959, don't plan to start receiving ss benefits until I'm 67. I just reviewed my ss benefit statement, and the projected monthly benefit at 70 is the same today (01/19/23) as it was in December 2022. Why didn't the projected monthly benefit increase by the 8.7% COLA? Thanks!

Hi. You'll have to ask Social Security that question. What I can tell you is that your Social Security retirement benefit rate will be credited with the 2023 8.7% Social Security cost of living (COLA) increase regardless of when you start drawing your benefits. Everyone born prior to January 2 1961 will receive the increase, even if they aren't yet receiving benefits.

You may want to strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to get accurate benefit estimates and 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 am 67 years old, I have been in TRS for 33 years, I receive half of my first husbands SS. My question, if I retire from TRS I would loose the SS, my question is if I take a lump sum from TRS would I still get SS from my first husband? My second question is, if my first husband passes, does the SS increase?

Thanks,
Debbie

Hi Debbie. My answer assumes that your TRS pension would be based on your earnings that were exempt from Social Security taxes. In that case, the answer is probably yes. Receiving a pension that's based on your non-Social Security covered earnings from a governmental agency in the U.S. can cause any Social Security spousal, divorced spousal, or survivor benefits that you receive to be reduced by 2/3rds of the amount of your government pension. That's due to the Government Pension Offset (GPO) provision (https://www.ssa.gov/pubs/EN-05-10007.pdf).

Even if you opt for a lump sum in lieu of a pension it will likely result in an offset of your divorced spousal or survivor benefits. Whether or not that would cause your benefits to be reduced to zero depends on the amount of your TRS pension or lump sum and your Social Security divorced spousal or survivor benefit rate. Lump sum amounts received in lieu of a governmental pension are prorated into a monthly rate by Social Security, and if 2/3rds of the prorated amount exceeds the person's Social Security spousal, divorced spousal, or survivor benefit rate, it reduces their benefit rate to zero.

Our software is fully programmed to handle GPO computations, including lump sum prorations, so you should strongly consider using the software (https://maximizemysocialsecurity.com/purchase) to fully compare and analyze all of your options so that you can determine your best strategy for maximizing your benefits.

Best, Jerry

Hi,
I expect to get a divorced spouse pension of about 1000 from US social security. I was married in the US for more than 10 years, I did not work much while I was there. I have been back in Germany since 2008 and I am not newly married. I have dual citizenship and worked in Germany so I expect a German pension around 400 euros. Will this be deducted from the US benefit or can I get my German pension in addition to the expected divorced spouse pension?
Thankyou for yor answer!

Hi. No, your German pension won't have any effect on your U.S. divorced spousal benefit amount. Social Security does have a Government Pension Offset (GPO) provision that can affect divorced spousal benefits, but foreign pensions don't count for purposes of the GPO provision.

Best, Jerry

Hi Larry,
I am 71 and do part time work to stay busy. Maybe 8 to 10 hours a week. Why do you still have to pay into Social security and Medicare ? Seems after paying into for 50 years one could stop.
Thanks
Ted

Hi Ted. The only answer I can give you is that it's part of the Social Security Act that was passed into law by Congress. Regardless of a person's age, their Social Security covered earnings can potentially increase their Social Security retirement benefit rate if they earn more than they did in one of their previous highest 35 years of wage indexed earnings. But, the law requires those taxes to be collected even if a person's earnings aren't high enough to raise their benefit rate. And, the Medicare taxes collected from a person's earnings after they have already met the insured status requirement for Medicare are do nothing to benefit the worker paying the taxes. All I can conclude is that it's one of the 'social' aspects of Social Security, in that the taxes collected from earnings such as yours help to pay for the cost of the program.

Best, Jerry

Hello,

I began taking Social Security at age 63 (about 4 years ago) and at that time my husband (5 years my senior) signed up for a spousal benefit and began collecting half of my payment while deferring his own SS. When he turned 70, he began collecting his own SS, which is more than double my payment. Am I eligible for a spousal SS benefit?

Many thanks!

Hi. I have no way of knowing based on the limited information in your question. What I can tell you is that the only way that you'd be eligible for a spousal benefit is if your husband's primary insurance amount (PIA) is more than twice as much as your own PIA. A person's PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).

If you believe that your husband's PIA is more than twice as much as your PIA, you can apply for spousal benefits in order to get a formal determination of your eligibility from Social Security.

Best, Jerry

Hello,
I was referred to you and your website by Terry Savage.
Due to cash flow requirements, I started drawing my Social Security benefits at age 62 (in 2010) while I was still working. Until I reached retirement age ( I believe it was 66 in 2014), my benefits were reduced as an offset of my earned income. I have read that the monies which were deducted are added back as an adjustment to your benefits when you reach retirement age. However, when I've asked this question to the Social Security customer service people, they are unfamiliar with it, have advanced the question to a supervisor but I haven't heard back from them. Are you familiar with this type of adjustment and if its true, what is your advice about how/who to contact?
If you would like to contact me by phone and there is a fee associated with more personalized advice, please let me know.

Thank you,
Lu

Hi Lu. What you're referring to is an Adjustment of Reduction Factor (ARF). When you apply for benefits prior to full retirement age (FRA), your benefit rate is reduced for age based on the number of months that you claim benefits prior to FRA. If you don't receive benefits for all of those months due to the Social Security earnings test, when you reach FRA you get an ARF to increase your benefit rate that's based on the number of months that your benefits were withheld (https://secure.ssa.gov/poms.nsf/lnx/0300615482).

For example, let's say Amy files for Social Security retirement benefits 3 years prior to when she reaches FRA. Amy's primary insurance amount (PIA), which is equal to her full retirement age rate, would be $2000, but her benefit rate is reduced for age by 5/9ths of 1% for each of the 36 months that she's claiming benefits prior to FRA. That reduces Amy's benefit rate by 20%, or $400 (i.e. 5/9ths of 1% x 36), to $1600.

However, Amy continues working and due to the earnings test 18 months of her benefits are withheld between when she applied and her FRA. In that case, Amy would be due an ARF effective with the month she reaches FRA. The ARF would eliminate the reduction for age applied for the 18 months that Amy ended up not being paid benefits, resulting in a reduction factor of 10% (i.e. 5/9ths of 1% x 18) instead of 20%. That would increase Amy's benefit rate from $1600 to $1800.

Therefore, if some of your benefits were withheld due to the Social Security earnings test, you should have received an ARF to raise your benefit rate effective with the month you reached your FRA. If you don't think you did, you could ask Social Security for a recomputation by submitting a written and signed request on a form SSA-795 (https://www.ssa.gov/forms/ssa-795.pdf). However, ARF processing is automatic, so it's likely that if you were due an ARF you may have received it without realizing the reason for the increase. Social Security should be able tell you whether or not you received an ARF by checking their computer records

Best, Jerry

I am 65 and still working, beneath poverty level. Can I collect from my husband even if he isn't 65. We have been separated for many yrs, still married though

Hi. If you're still married then the earliest that you could potential qualify for spousal benefits is when your spouse starts collecting either Social Security retirement or disability benefits. But, since you were born after January 1 1954, you can't apply for spousal benefits without also being required to apply for your own Social Security retirement benefits at the same time. Therefore, you'll only be able to qualify for spousal benefits if your spousal benefit rate is higher than your own benefit rate.

Spousal benefits are calculated based on 50% of the worker's primary insurance amount (PIA), and a person's PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA). That means that unless your own PIA is less than 50% of your spouse's PIA, you won't be eligible for spousal benefits even if he is drawing his benefits. However, surviving spouses can be paid up to the higher of their own benefit rate or their deceased spouse's full benefit rate, so if your husband's benefit amount is higher than your benefit rate and if he dies before you, you could potentially qualify for survivor benefits even if you don't qualify for spousal benefits while he's living.

Another thing for you to be aware of is that there is an earnings test that limits how much you can earn and still be able to collect Social Security benefits prior to your FRA (https://www.ssa.gov/benefits/retirement/planner/whileworking.html). Therefore, if you apply for benefits prior to your FRA and if you continue working, how much if any of your benefits you could actually be paid depends on how much you're earning.

Your best strategy for claiming benefits depends on many different factors, so you may want to strongly consider using our software (https://maximizemysocialsecurity.com/purchase) to fully compare and analyze all of your options so that you can determine your best strategy for maximizing your benefits.

Best, Jerry

After approval of withdrawal from benefits and i cancel in60 days, am i able to start back benefits? Or wait longer & reapply?

Hi. If you withdraw an application and then cancel the withdrawal within 60 days, it nullifies the withdrawal request. You would then resume your benefits based on the date you chose to start them on your original application. That would include being paid any back pay that you have coming.

But, if you withdraw an application and if you don't cancel the withdrawal request, you'd need to file a new application in order to claim benefits. Your choices with regard to when you could then start your benefits would be limited based on the filing date of your new application. How many months of retroactive benefits, if any, that you might be able to claim based on your new application depends on your age and the type of application involved (https://secure.ssa.gov/apps10/poms.nsf/lnx/0200204030). For example, retroactivity on an application for retirement benefits is limited to no more than 6 months, and no retroactive benefits can be paid if you're applying for benefits that are reduced for age (i.e. filed prior to a person's full retirement age).

Best, Jerry