Age for determining spousal benefit

[RussellM651976]

If my spouse retires at age 62 and receives a reduced benefit on her own record, and I retire at my FRA when she is 65, which of her ages is used to determine her spousal benefit?  62 or 65?

[GailL1]

SSA will use the same age reduction factor when she switches to spousal benefit from her own reduced benefit.  After all she has already filed for her benefits - she is just switching if spousal is higher.

I assume that is what you are asking.

[RussellM651976]

I totally understand the spouse's benefit on his/her own record is reduced when they file early.  My question is what age is used to compute the reduction in the spousal portion of the benefit when spouse A later adds the spousal benefit when spouse B retires?  Is it the age when originally receiving or the age of spouse A at the time of spouse B's retirement?  By the way, the open social security calculator seems to calculate using the later age 

[GailL1]

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@RussellM651976 wrote:

.  My question is what age is used to compute the reduction in the spousal portion of the benefit when spouse A later adds the spousal benefit when spouse B retires?  Is it the age when originally receiving or the age of spouse

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As a beneficiary you only get one age of retirement even if you have access to other retirement benefits.  And that age and any reduction to which it is connected follows the retiree when switching benefits.

[fffred]

@RussellM651976  
@GailL1 

Russell, thanks for pointing to the Open Social Security calculator (a really great -free- tool). He points out, under certain combinations of inputs a note "Per new deemed filing rules, a person's spousal benefit date must be the later of their own retirement benefit date, or their spouse's retirement benefit date".

It's been a few years now since those "new" Deemed rules have come in; prior to that one could "file and suspend" to gain more marital benefits, but anyway now we are in the new rules.

So that supports GailL's points (she is very knowledgeable on the SS rules). But there is the point made in the software's message, that the spousal benefit date should be the later of their own benefit date or their spouse's (and it occurs to me now that this is just "the date" of benefits, not the age-reduction, if any, to be considered). And with a different combination of input ages and dates the deemed aspect may go away, as per that AARP article.

The AARP article you provided sounds very informative. It does make a salient point that if "your" spouse is not receiving benefits when you apply for benefits then you are not subject to the deemed filing rule, otherwise you are subject to that rule. I would think that the age reduction should differ in the two cases then. But more research is needed...

[RussellM651976]

Another link that says spousal benefit is determined by age when spousal benefit is actually applied for.

https://www.cityofvancouver.us/messenger/page/crunch-numbers-determine-when-start-social-security%E2...

[fffred]

@RussellM651976 

Russell, You can see that this issue is pretty much clear as mud with references going either way. I would not even trust a reply from a SSA representative unless it was backed up with reference to the specific POMS.

I'll read your Vancouver article when I have more time but it did prompt me to refer to a pretty intense reference book that I have.

From:

"THE NATIONAL UNDERWRITER COMPANY a division of ALM Media, LLC 2019 SOCIAL SECURITY & MEDICARE FACTS Michael D. Thomas, J.D., AuthorMarc Kiner, CPA, NSSA, and Jim Blair, NSSA, Contributing Authors 2019 Social Security & Medicare Facts is a one-stop guide for attorneys, CPAs, and retirement and financial planning professionals to advise on tax and policy changes affecting Social Security and Medicare. Organized in a unique and convenient Q&A format, this book helps professionals find exactly what they’re looking for quickly and easily to solve clients’ important planning issues in a timely manner"

The text says   (without reference to the POMS!):

255. How are benefits figured if a beneficiary starts receiving a reduced retirement benefit and later becomes entitled to a larger spouse’s benefit?

The beneficiary will continue to receive the retirement benefit reduced in the regular manner. (See Q 251.) When he becomes entitled to the larger spouse’s benefit, he will receive, in addition, a partial spouse’s benefit. This benefit will be based on the difference between a spouse’s full benefit (1/2 of his spouse’s PIA) and the beneficiary’s PIA. If he becomes entitled to the spouse’s benefits at or after full retirement age, the spouse’s benefit will equal this difference (Meaning they get an unreduced spousal benefit even though they've been getting their own benefit, reduced for taking prior to their FRA). If he becomes entitled to the spouse’s benefit before full retirement age, this difference must be reduced by 25/36 of 1 percent (1/144) for each of the first thirty-six months that he is under full retirement age when the spouse’s benefits commence, and 5/12 of 1 percent (1/240) for each month in excess of thirty-six.

I made a comment in the parentheses and I underlined some portions. So this reply, in a text intended for lawyers, et al, is that the age considered when applying for "early" spousal benefit is "when the spouse's benefits commence". Now this is a few years old (2019) but is after the new laws about deemed filing came in. I would feel more comfortable finding this explicitly in the POMS, which will take some time (which this retired guy doesn't have much of!)

[RussellM651976]

I found the following in POMS

 GN00204.035 Deemed Filing:

4. Deemed filing date

When applying deemed filing, the MOET for the deemed filer’s claim must be the first month he or she is eligible for the second benefit. When adjudicating the claim, MCS may generate an adjudicative edit message because the month of election does not correspond with the filing date. In this situation, use the deemed filing date as the protective filing date for processing purposes. The deemed filing date is the first day of the MOET. For example, if the MOET is 05/2016, the deemed filing date would be 05/01/2016. For more information on adjudicative messages, see MCS 001.007D. For information on using the protective filing date in MCS, see9 MCS 009.013 Decision Input (DECI) and MCS 009.014 File Date Determination Screen (FDDS).

[RussellM651976]

This article states it is the age when the entitlement is available, I e. different ages used for reduction of own benefit and reduction in spousal benefit.

https://www.socialsecurityintelligence.com/social-security-spousal-benefits/

[GailL1]

The only thing that now is used from the deeming is

• that NO spousal benefits can be filed for unless the primary insured is already retired
• and that when somebody files now that they are deeded to be filing for all their benefits.  
• But if the primary insured is not retired yet - the only thing that a spouse can file for is their own benefit but then they can change later when the primary insured retires.

[fffred]

Interesting point, Gail. Thank you  @GailL1 

Can you provide a reference at SSA? I would like to review. 

What about the case I described myself, that a spouse (who doesn't have her/his own retirement benefits) take spousal at 62, then the older spouse dies several years later but before the survivor is at their FRA? The application for survivor benefits itself seems to be an entirely new and different application.

[GailL1]

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@fffred wrote:

Interesting point, Gail. Thank you  @GailL1 

Can you provide a reference at SSA? I would like to review. 

What about the case I described myself, that a spouse (who doesn't have her/his own retirement benefits) take spousal at 62, then the older spouse dies several years later but before the survivor is at their FRA? The application for survivor benefits itself seems to be an entirely new and different application.

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One has to keep the [specific] benefits straight because they are different

• Old Age Retirement includes Spousal benefits - that's now why a member of the couple cannot file for spousal benefits until the actual benefit owner is already retired.  Or they could do it at the same time.
• Survivor Benefits are different in rules and who can get them and when.  There are different eligibility requirements for Survivor Benefits depending on who they are - widow/widower/ parent with dependent child, disabled, dependent adult child, parents

SSA.gov Survivor Benefits - SSA.gov Social Security Matters blog

For the widow/widower

If you are a widow (or your ex-spouse died), you may be eligible to receive benefits on your late spouse’s, or ex-spouse’s, Social Security record. How much you receive will depend on your age, the amount of benefits you may receive on your own record, and whether you have dependent children.

You may be entitled to receive a survivor’s benefit under the following circumstances:

• At age 50 if you have a disability.
• At age 60 (the benefit amount will be reduced).
• At any age if you have a child under your care who is under age 16 or who became disabled before age 22.
• If you were widowed and remarried after age 60.

If you’re entitled to retirement benefits – but haven’t applied yet – you have an option. You can decide to apply for either the retirement or survivors benefits first. You can switch to the other (higher) benefit later.

Here is the rule on Spousal benefits and how it is figured if the person has already been drawing benefits on their own record and wants to switch.  Remember the benefit owner HAS to be already retired or they can do it at the same time.

SSA.gov Social Security Matters- Understanding Spouse’s Benefits updated 05/25/2021

From the link:

Your full spouse’s benefit could be up to 50 percent of your spouse’s full retirement age amount if you are full retirement age when you take it. If you qualify for your own retirement benefit and a spouse’s benefit, we always pay your own benefit first.  You cannot receive spouse’s benefits unless your spouse is receiving his or her retirement benefits (except for divorced spouses). If you took your reduced retirement first while waiting for your spouse to reach retirement age, when you add spouse’s benefits later, your own retirement portion remains reduced which causes the total retirement and spouses benefit together to total less than 50 percent of the worker’s amount. You can find out more on our website.

For Spousal benefits, it is worked out in the way they pay the spousal benefit.  

1.  They get their own reduced benefit

2.  They get another portion as the Spousal benefit

3.  added together it will represent no more than 50% of the benefit owner - reduced by the same reduction % that was used in their own benefit.

Let's say (my brain needed simple figures)

• the benefit owner files and will be getting a benefit of $ 2400 per month
• the spouse has been getting her early retirement and gets a computed FULL retirement benefit of $ 1000 per month;  but is reduced by 25% because she/he files to get her own benefit early (less than FRA) - so the benefit that he/she is receiving is $ 750 per month under her own work record.
• the spouse files for spousal benefits at the same time the benefit owner does - his/her spousal benefit will be no more than (50% of benefit owners) or $ 1200 per month - $ 750 from his/her own record and $450 from the benefit owner but then this is further reduced by the early reduction factor or ( $ 450.00 X .25 = 112.50 ) So the spousal benefit would be a total of ($ 750 + $337.50 = $1087.50 (SSA would round it to $1088 - I round up don't remember how SSA does it)

This page at the bottom covers it:  see the heading of Early retirement reduces benefits at the bottom

SSA.gov Benefits for Spouses - 

Came back yo edit the math 

[fffred]

@GailL1 

Gail, an interesting corollary to this is the case where a worker collects their own benefit early, at 62. Then at their FRA they apply for spousal benefits. They are then subject to the same reduction in benefit as if this occurred when they were 62? 

[GailL1]

Here is one of the SS POMS - there are probably others but too tired to look now.

https://secure.ssa.gov/poms.nsf/lnx/0300202020 

1.  Spouse

The amount of a spouse’s benefit is as follows:

If only one spouse is entitled, he or she receives one-half the PIA of the NH subject to the normal rules on adjustment for the maximum and the rounding of benefits, and subject to reduction for age.

5. Reduced Benefits 

Benefits to a spouse or divorced spouse are normally reduced if the MOET is before FRA. If reduced, the benefit generally remains permanently reduced by the same reduction factor unless the beneficiary is eligible for a reduction factor adjustment (ARF) at FRA (see RS 00615.482)

[GailL1]

Yes that is right but less direct than what you have outlined in your few sentences - I think i answered it all in my last (long) post to you.  

[fffred]

@RussellM651976 

That is a good question. One that I have thought of myself, although for the slightly different situation that, say, my wife takes her spousal at 62, then I die when she is still below her FRA (67), ...say when she is 66, then what age is considered by SSA for her survivor's benefit: 62 or 66? I am confident based on research into this that her survivor's benefit gets the age reduction for "66" rather than "62".

So for your scenario, I assume your wife's spousal benefit will be treated as kicking in at her age 65. With the consequence that her spousal benefit will get reduced by the factor applicable for her combo of FRA and actually getting her spousal benefit.

I wish I could direct you explicitly to the governing rules of the SSA for this situation. These are available on the internet but you may have hunt for them. Look for the SSA "POMS", Program Operations Manual System. In fact, here is a lead-in to them https://secure.ssa.gov/apps10/

I'm sure you know that she won't get both benefits simultaneously. Her total payment will consist of her own benefit first. And if her spousal (reduced for age) benefit is greater than her own benefit, then she will get a portion of that spousal benefit such that the sum of the two components (her own plus spousal) equals that greater amount. This all comes out the same to the recipient but I guess the SSA likes to keep track of whose pocket it's coming out of, lol.

[RussellM651976]

Thank you @fffred.  From most of what I've read I am "pretty sure" it would be 65, but I've seen it answered as the earlier age on here several times, although I've never seen it asked directly.  I did ask same question to SSA and all I received were pages and pages of FAQ none of which gave a real answer.

[fffred]

hi Russell (@RussellM651976 ) I'm surprised you've seen this point mentioned in this AARP forum, I don't recall this myself. It'd be interesting to read such posts. Bear in mind that due to the informal nature of this non-professional forum that some misinformation may be spread. On the other hand, there are a few posters here who are very knowledgeable about SS, in my experience. And based on my own experience speaking with front-line SSA representatives they can be misinformed as well (otherwise, on the whole, I have a lot of respect for the SSA. But the front-line staff are overworked, underpaid, undertrained, and there's a huge attrition of experienced people).

I was actually reviewing those POMS after I replied to you. Still at it.

(see https://www.ssa.gov/OP_Home/handbook/handbook.03/handbook-0320.html
https://www.ssa.gov/OP_Home/handbook/handbook.07/handbook-0723.html

https://www.ssa.gov/OP_Home/handbook/handbook.07/handbook-0724.html)

It further occurred to me that one rationale for splitting a spouse's benefits between their own work record (and benefit) and their spousal benefit, as described in my first post, is that it makes it simple to consider the different ages at which these benefits are taken.

Another source of information, if you are inclined, is the "Ask Larry" column from Prof. Laurence Kotlikoff. He's had spots with this on national major news media (PBS, NBC, etc) as well as in major print media (including Forbes and even AARP). He's collected all this ongoing resources at https://maximizemysocialsecurity.com/ask-larry-topics. You might consider reading through the topics and may find your question answered there.

A last (?) resort is to visit the Social Security discussion forum at Reddit (it's like the AARP forums), that group is frequented by some SSA personnel who seem to know what they are doing (as well as some that I have my doubts about). See https://www.reddit.com/r/SocialSecurity/

Good luck!

[RussellM651976]

This article implies the spousal benefit is reduced based on the original filing date, regardless of when the spousal benefit is available.

https://www.aarp.org/retirement/social-security/questions-answers/switch-social-security-spousal.htm...

[GailL1]

That’s right -

from your link

That includes if you file early for your retirement benefit — say, at 62, as in this scenario — and switch to spousal benefits later. Even if you are at full retirement age when you file for spousal benefits, your total monthly payment will be less than half of your spouse’s primary insurance amount, reflecting the fact that your initial Social Security claim came early.

The spousal benefit is made up of (2) figures - if they have both

1.  The amount which they are already getting from their own record (already reduced because of early retirement)

2.  The remaining amount that represents no more than 50% of the primary insured - also reduced by the same % as initially used for the spouses own benefit when he/she filed early.