Ask Larry

I just have a quick question, if a grandparent has custody of their grandchild and is providing 100% of the childs care and claiming the grandchild as a dependent can the grandparents file a for child benefits and child in care benefits? The child is 13 and they are eligible for social security benefits and make less than the earnings limit. We were told that the child has to be legally adopted for this benefit from the social security office. Is that true?

Hi. A child can only qualify for child's benefits on the account of a grandparent if the child is either a) adopted by the grandparent, or b) if the child's natural parents are both either deceased or disabled (https://www.ssa.gov/OP_Home/handbook/handbook.03/handbook-0325.html).

If a grandchild does qualify for child benefits on a grandparent's account and if the child is under age 16 or is disabled, then the grandparent's spouse could potentially qualify for child in care spousal benefits if they have the eligible child in their care.

Best, Jerry

Hi Larry, with The Bipartisan Budget Act does filing for railroad spousal benefits require me to file for my ss as well. I turn 65 this year and want to file railroad spousal benefits and wait until my full retirement to file for my ss. Thanking you in advance.

Hi. No. You can file for any type of Railroad Retirement benefits without being required to file for Social Security benefits.

Best, Jerry

We are former subscribers and used your software to good effect in our SS decision making. Now that we are past 70 and retired, we need to create a Roth conversion strategy.
The bulk of our assets are in conventional IRAs and a 401k, but we've converted a small amount into Roth IRAs. The question is whether to continue to make conversions (and how much) as we will start receiving RMDs in 2024.
Do you have any recommendations about a) software to help us develop our own Roth conversion strategy or b) what kind of planner or consultant would assist us in developing a strategy?
Thanks,
Malcolm

Hi Malcolm. The 'Ask Larry' forum is intended only for Social Security related questions, so I can't advise you regarding Roth conversions. You may want to consider using our Maxifi planner software to help you with your financial planning. Information about the Maxifi planner software can be found on the following website: https://maxifiplanner.com/.

Best, Jerry

My husband passed away in May. He would've been 65 last November I applied for Social Security widows benefits , are children are grown. I still work, but don't make as much money as he did. I plan to work another couple of years as I am 65 as well. My question is after I applied, I was denied because of the amount of money that I make. It's not a lot of money it's under 75,000 just doesn't seem fair since he worked all his life and now I'm left with out half of. Does this sound right?

Hi. I'm sorry for your loss. More than likely your claim for widow's benefits wasn't denied, but instead your benefits were withheld because of your earnings. Until you reach your full retirement age (FRA), the Social Security earnings test can cause some or all of your benefits to be withheld. Since you were under FRA throughout 2022, Social Security would have needed to withhold $1 of your widow's benefits for each $2 that you earned in excess of $19,560.

Therefore, if you earned roughly $75,000 last year it wouldn't be surprising if all of the widow's benefits that you otherwise would have qualified for last year would need to have been withheld due to the earnings test (https://www.ssa.gov/benefits/retirement/planner/whileworking.html). Whether or not at least some benefits may have been payable, though, depends on your benefit rate and the exact amount of your earnings.

The earnings test exempt amount for people under FRA throughout 2023 is $21,240, so if you'll still be earning around $75,000 this year then roughly $26,880 (i.e. ($75,000 - $21,240) divided by 2) of your 2023 benefits would need to be withheld before you could be paid benefits for this year. However, starting with the month you reach your FRA you can be paid all of the benefits for which you're eligible regardless of how much you earn.

Your best filing strategy depends on how much you'll be earning prior to FRA as well as your own benefit rate and your widow's rate. 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

Good morning Larry, I am 70 years old and been collecting SS for some time. Can you tell me why my medical insurance premium for Part B doubled this month? It went from 170.10 in December 2022 to $329.70 in January 2023. I understand the new medical insurance premium for Part B should be $164.90 no??

Hi. Most likely your Part B premium went up due to the amount of income you reported on your 2020 or 2021 tax returns. The standard monthly Part B premium rate for 2023 is $164.90, but they can be higher than that depending on a person's income level. This is explained on the following Medicare website: https://www.cms.gov/newsroom/fact-sheets/2023-medicare-parts-b-premiums-and-deductibles-2023-medicare-part-d-income-related-monthly.

If your income spiked in a recent year due to what Social Security classifies as a life-changing event (LCE), then you may be able to qualify for a lower Part B premium rate. LCEs are explained on the following Social Security form, which can be used to request a lower premium rate if you qualify: https://www.ssa.gov/forms/ssa-44-ext.pdf.

Best, Jerry

Began Medicare December 2022, Social Security January 2023. Was billed in November $510.30 by CMS for premiums, which I paid. Now I have received letter stating $324.60 is being deducted for past-due premiums plus $164.90 for medical premiums from this payment. What do I do?

Hi. You shouldn't need to do anything. You can't prevent the Part B premiums from being deducted from your Social Security benefits, but any premium overpayment should automatically be refunded to you. In my experience such premium overpayments were normally refunded within 60 days, but some people have recently reported waiting longer than 60 days for their refund.

Best, Jerry

My husband began receiving SSDI benefits at age 64, and those disability benefits automatically converted to retirement benefits at his full retirement age last fall. MaxiFi recommends he suspend his retirement benefit now and reinstate it at age 70. There doesn't appear to be a way to tell MaxiFi that he started his benefits with SSDI. When it comes to the suspension strategy, does that detail matter? That's my first question. My second question is what happens if he dies during the suspension? Our concern is that if he dies while not receiving benefits, there will be no benefits available to me as a widow. Will a survivor benefit be available to me and, if so, at what rate (the amount he's currently receiving, the amount he would have received had he reinstated before death, some other amount altogether)? Thank you!

Hi. No. The fact that your husband started out collecting Social Security disability (SSDI) benefits is irrelevant. Your husband can still be credited with delayed retirement credits (DRC) for every month that he suspends his benefits between his full retirement age (FRA) and age 70. That would raise his benefit rate by roughly 2/3rds of 1% for each month of suspension, and that increase could potentially be passed along to you in the form of widow's benefits.

If your husband dies while his benefits are suspended it won't have any adverse effect on your ability to collect widow's benefits. In the event that your husband dies while his benefits are suspended, your maximum widow's rate would be calculated at 100% of the benefit rate that he would have been due if he had started collecting his benefits effective with his month of death. Any DRCs your husband accrued prior to his month of death would still be credited when calculating your widow's benefit rate.

Best, Jerry

I just received retroactive Social Security benefits as of Jan 2023
Will this be taxed for 2021?

Hi. No. Social Security benefits are taxable for the year in which they are paid, not the year for which the benefits were payable. So, any benefits you receive in 2023 would be reported on your 2023 tax return, regardless of what year the benefits were actually due.

Best, Jerry

my sister lives right now in bosnia and hercegovina and she have social security after 65 and recently they asked her did she work anywhere before US and she said she did send them back paper she reciving about 150$ working 15 years in Bosnia and they cut her ss from 300$ to 180 after she said she worked before,i dont understend why?
thank you so much!Daniela and yes she is US citizen!

Hi. It sounds like your sister's U.S. benefits were reduced due to the Windfall Elimination Provision (WEP). If a person receives a pension that's based on their earnings that weren't subject to U.S. Social Security taxes, WEP can cause their U.S. Social Security retirement or disability benefit rate to be calculated using a less generous computation formula than the one that's normally used (https://www.ssa.gov/pubs/EN-05-10045.pdf).

Therefore, since your sister didn't pay U.S. Social Security taxes on the earnings on which her Bosnian pension is based, that pension is likely the reason that her U.S. benefits were lowered. There is a WEP guarantee provision that limits any reduction in the person's U.S. benefit rate to no more than half of the gross amount of their non-covered pension. I don't have enough information about your sister's benefits to know if her benefit rate has been correctly calculated, but if your sister thinks that the reduction in her benefit rate is incorrect she can file an appeal. The following Social Security website has instructions for how to go about filing an appeal: https://www.ssa.gov/apply/appeal-decision-we-made.

Best, Jerry

I was awarded 47% of my ex husbands pension in our divorce. Will my social security be reduced by wep?

Hi. No. Only pensions that are based on your OWN work and earnings can cause your Social Security benefits to be reduced due to the Windfall Elimination Provision (WEP).

Best, Jerry