I am one of the admins for the Facebook page “Social Security Intelligence” with over 16,000 members including retired SSA employees and some Certified Financial Planners. I found some of the statements in this article were misleading or downright wrong. Pardon the long post but I will address these.
> Newlyweds aren’t eligible.
In order to claim the spousal benefit, they must be at least 62 years old and their spouse must have filed for their SS benefit (exceptions for ex-spouse I’ll talk about later). So if one spouse is 61 ½ when they marry, they must wait until 62 ½ to claim the spousal benefit on this spouse. In addition, if they had been divorced after a marriage of 10 years or more and had been collecting the spousal benefit based on their ex-spouse, they will no longer be eligible for that benefit. The only SS benefit they would be entitled to during this 12 month period is on their own SS record.
****
> the spousal benefit is equal to half of the higher earning spouse’s benefit.
> The spousal benefit is an option, but certainly not mandatory.
This is not correct. I know it was detailed further on but how many would stop reading at this point?
The spousal benefit is 50% of their spouse’s SS benefit at Full Retirement Age (FRA). This does not change whether their spouse files for a much reduced amount at age 62 or holds out for the highest possible amount at age 70.
If someone has a spouse who has already filed for SS, when they file, they are considered to be “deemed filing” and will get the higher of the spousal benefit or their own. They cannot choose which benefit to get. If their spouse had not filed, then they would be eligible for SS based on their own SS record only and can go to the spousal benefit (if higher) whenever their spouse files.
The spousal benefit is actually composed of two parts – their own SS benefit amount and a “topper” equal to the difference between their own benefit at their FRA and their spouse’s benefit at FRA.
For example. If their own benefit at FRA is $1,000 and their spouse’s benefit at FRA is $3,000, the spousal benefit would be $1,500 – ($1,000 plus $500). But if they file before their FRA, their benefit would be reduced. Let’s say when they filed, the reduced benefit equaled $700. Then if their spouse had already filed (or when their spouse files), their spousal benefit would be $1,300 ($700 plus $500).
*****
> To claim a spousal benefit, your spouse must have already claimed his or her own benefit.
Yes, this is true. There are different rules in the case of an ex-spouse though. If the marriage lasted at least 10 years, they do not have to wait for their ex-spouse to file for SS before they can file for their own/spousal benefits. This was done to prevent spiteful ex’s from delaying SS in order to hurt their ex. BUT their ex must be at least 62 to file for the spousal benefit based on their record AND they must have been divorced for at least 2 years (if they got the spousal benefit before the divorce, this is not affected).
So John age 67 has a SS benefit of $1,000/month. But his younger ex-spouse Lee, age 55, has an estimated FRA SS benefit of $3,000. John will not be eligible to file for the higher spousal benefit (~$1,500) until Lee is 62.
Or Jane has an estimated $1,000 SS benefit (but has not filed for SS) and her spouse Lyn has a $3,000 SS benefit (same age). Then they get divorced at 67 before Jane has filed for SS. Jane can get a $1,000 benefit but must wait 2 years to get the higher spousal benefit of $1,500.
****
> The timing of spousal benefits should be coordinated carefully.
Yes, I agree with this. The general guideline is for the lower earning spouse to file first and the higher earner to hold out as long as possible (hopefully until age 70. This ensures when one spouse dies, the surviving spouse will have the highest SS amount possible for the rest of their life. But this depends on many factors including their health, other sources of income, if there are any minor/disabled children, and if they are still getting earned income.
Some people also delay SS to allow more time to withdraw overfunded pre-tax retirement account funds to avoid higher income taxes and Medicare premiums (IRMAA) later on, especially after one spouse dies.
****
> There’s one other exception to the new restricted application rule. If you’re widowed, you’re allowed to employ the restricted application strategy,
Okay. This is really where this article is wrong. He has confused the spousal benefit with the “Surviving Spouse” benefit. These are completely separate benefits.
The spousal benefit is always 50% of their spouse’s FRA amount, no matter when they filed/but the “surviving spouse” benefit is always equal to whatever their SS benefit was when their spouse died (if they had not reached their FRA and had not filed, it is the FRA amount).
In the case of the “Surviving Spouse” benefit, they can still file a restricted application, which will let their own benefit continue to grow until age 70. But the order of filing (and why) would double the length of my reply. This comes up several times a week in our FB group and we explain the options for maximizing their SS benefits for their lifetime.
There are other rules for eligibility including length of the marriage before a current spouse would be eligible for the “Surviving Spouse” benefit plus rules for ex-spouses who remarry. And to make it more fun, if they couple is in a common law marriage in certain states, they may also be eligible for the spousal benefit and Surviving spouse benefit in certain situations.
****
So in the Johnny Carson example: Joan "Jody" Morrill Wolcott (B 1926) – Eligible for the spousal benefit at 62, if higher than her own, and after his death for the “Surviving Spouse” benefit since she married and then divorced her next spouse.
Joanne Copeland. - No SS benefit
Joanna Holland (maiden name Johanna C. Ulrich) (b 1940). - Eligible for the spousal benefit at 62 and after his death for the “Surviving Spouse” benefit. She was not eligible for benefits from her former husband because that marriage only lasted 6 years. Since she has a successful career after her divorce (meaning her own benefit would be higher than the spousal benefit) the strategy for a “restricted application” for the “Surviving Spouse” benefit and later on her own at age 70 probably gave her more long term SS benefit.
Alexis Maas.(b 1952) - Eligible for the spousal benefit and for the “Surviving Spouse” benefit. But she was 53 when he died so she would have to wait until age 62 to file for any benefit. Her strategy would be to file for her own/spousal benefit at age 62 and then the “surviving spouse” benefit at her FRA..
But if her own benefit at age 70 would be higher than the “surviving spouse” benefit, then she would do the reverse by filing a “restricted application” for the surviving spouse benefit. This would let her own benefit continue to grow until is surpasses that benefit and then she claims her own once if it is higher and she needs the extra money or at age 70 when it has reached the highest amount possible.
****
>Because of the spousal benefit rules, two of Carson’s wives received partial benefits, one received a substantial benefit and one received no benefit at all.
This is not true. Wives #1, #3, and his last wife #4 were all eligible for the same Social Security benefits based on his SS record – spousal benefit equal to 50% of his SS benefit at his FRA., if it was higher than their own SS benefit, or the separate “Surviving Spouse” benefit equal to the SS benefit he was receiving.
Comments
I am one of the admins for the Facebook page “Social Security Intelligence” with over 16,000 members including retired SSA employees and some Certified Financial Planners. I found some of the statements in this article were misleading or downright wrong. Pardon the long post but I will address these. > Newlyweds aren’t eligible. In order to claim the spousal benefit, they must be at least 62 years old and their spouse must have filed for their SS benefit (exceptions for ex-spouse I’ll talk about later). So if one spouse is 61 ½ when they marry, they must wait until 62 ½ to claim the spousal benefit on this spouse. In addition, if they had been divorced after a marriage of 10 years or more and had been collecting the spousal benefit based on their ex-spouse, they will no longer be eligible for that benefit. The only SS benefit they would be entitled to during this 12 month period is on their own SS record. **** > the spousal benefit is equal to half of the higher earning spouse’s benefit. > The spousal benefit is an option, but certainly not mandatory. This is not correct. I know it was detailed further on but how many would stop reading at this point? The spousal benefit is 50% of their spouse’s SS benefit at Full Retirement Age (FRA). This does not change whether their spouse files for a much reduced amount at age 62 or holds out for the highest possible amount at age 70. If someone has a spouse who has already filed for SS, when they file, they are considered to be “deemed filing” and will get the higher of the spousal benefit or their own. They cannot choose which benefit to get. If their spouse had not filed, then they would be eligible for SS based on their own SS record only and can go to the spousal benefit (if higher) whenever their spouse files. The spousal benefit is actually composed of two parts – their own SS benefit amount and a “topper” equal to the difference between their own benefit at their FRA and their spouse’s benefit at FRA. For example. If their own benefit at FRA is $1,000 and their spouse’s benefit at FRA is $3,000, the spousal benefit would be $1,500 – ($1,000 plus $500). But if they file before their FRA, their benefit would be reduced. Let’s say when they filed, the reduced benefit equaled $700. Then if their spouse had already filed (or when their spouse files), their spousal benefit would be $1,300 ($700 plus $500). ***** > To claim a spousal benefit, your spouse must have already claimed his or her own benefit. Yes, this is true. There are different rules in the case of an ex-spouse though. If the marriage lasted at least 10 years, they do not have to wait for their ex-spouse to file for SS before they can file for their own/spousal benefits. This was done to prevent spiteful ex’s from delaying SS in order to hurt their ex. BUT their ex must be at least 62 to file for the spousal benefit based on their record AND they must have been divorced for at least 2 years (if they got the spousal benefit before the divorce, this is not affected). So John age 67 has a SS benefit of $1,000/month. But his younger ex-spouse Lee, age 55, has an estimated FRA SS benefit of $3,000. John will not be eligible to file for the higher spousal benefit (~$1,500) until Lee is 62. Or Jane has an estimated $1,000 SS benefit (but has not filed for SS) and her spouse Lyn has a $3,000 SS benefit (same age). Then they get divorced at 67 before Jane has filed for SS. Jane can get a $1,000 benefit but must wait 2 years to get the higher spousal benefit of $1,500. **** > The timing of spousal benefits should be coordinated carefully. Yes, I agree with this. The general guideline is for the lower earning spouse to file first and the higher earner to hold out as long as possible (hopefully until age 70. This ensures when one spouse dies, the surviving spouse will have the highest SS amount possible for the rest of their life. But this depends on many factors including their health, other sources of income, if there are any minor/disabled children, and if they are still getting earned income. Some people also delay SS to allow more time to withdraw overfunded pre-tax retirement account funds to avoid higher income taxes and Medicare premiums (IRMAA) later on, especially after one spouse dies. **** > There’s one other exception to the new restricted application rule. If you’re widowed, you’re allowed to employ the restricted application strategy, Okay. This is really where this article is wrong. He has confused the spousal benefit with the “Surviving Spouse” benefit. These are completely separate benefits. The spousal benefit is always 50% of their spouse’s FRA amount, no matter when they filed/but the “surviving spouse” benefit is always equal to whatever their SS benefit was when their spouse died (if they had not reached their FRA and had not filed, it is the FRA amount). In the case of the “Surviving Spouse” benefit, they can still file a restricted application, which will let their own benefit continue to grow until age 70. But the order of filing (and why) would double the length of my reply. This comes up several times a week in our FB group and we explain the options for maximizing their SS benefits for their lifetime. There are other rules for eligibility including length of the marriage before a current spouse would be eligible for the “Surviving Spouse” benefit plus rules for ex-spouses who remarry. And to make it more fun, if they couple is in a common law marriage in certain states, they may also be eligible for the spousal benefit and Surviving spouse benefit in certain situations. **** So in the Johnny Carson example: Joan "Jody" Morrill Wolcott (B 1926) – Eligible for the spousal benefit at 62, if higher than her own, and after his death for the “Surviving Spouse” benefit since she married and then divorced her next spouse. Joanne Copeland. - No SS benefit Joanna Holland (maiden name Johanna C. Ulrich) (b 1940). - Eligible for the spousal benefit at 62 and after his death for the “Surviving Spouse” benefit. She was not eligible for benefits from her former husband because that marriage only lasted 6 years. Since she has a successful career after her divorce (meaning her own benefit would be higher than the spousal benefit) the strategy for a “restricted application” for the “Surviving Spouse” benefit and later on her own at age 70 probably gave her more long term SS benefit. Alexis Maas.(b 1952) - Eligible for the spousal benefit and for the “Surviving Spouse” benefit. But she was 53 when he died so she would have to wait until age 62 to file for any benefit. Her strategy would be to file for her own/spousal benefit at age 62 and then the “surviving spouse” benefit at her FRA.. But if her own benefit at age 70 would be higher than the “surviving spouse” benefit, then she would do the reverse by filing a “restricted application” for the surviving spouse benefit. This would let her own benefit continue to grow until is surpasses that benefit and then she claims her own once if it is higher and she needs the extra money or at age 70 when it has reached the highest amount possible. **** >Because of the spousal benefit rules, two of Carson’s wives received partial benefits, one received a substantial benefit and one received no benefit at all. This is not true. Wives #1, #3, and his last wife #4 were all eligible for the same Social Security benefits based on his SS record – spousal benefit equal to 50% of his SS benefit at his FRA., if it was higher than their own SS benefit, or the separate “Surviving Spouse” benefit equal to the SS benefit he was receiving.
Post: Wedding Gift
Link to comment from August 7, 2021