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Periodic Contributor

Spousal Benefits confustion

Hello -

 

My wife is 66 and drawing her SSA benefits at $360 per month. I will be retiring at FRA in 2 years and expect my SSA to be about $2600 per month based on current data.

I don't understand the whole spousal benefits area. Does she see a change in her benefits when I retire? Does our entire monthly amount still come out to the sum of her and my benefits, or about $2960?

 

Thanks in advance

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Honored Social Butterfly

@JonC850620 

 

When your wife filed for her SS Retirement Benefit based on her own work record, she was deemed to be filing also for her Spousal Benefit when you file for your benefits. 

 

When you file for your Social Security retirement benefits, she can file for her Spousal benefits.

 

However,  Social Security will not pay the sum of her retirement + her spousal benefits; she will get a payment equal to the higher of the two benefits.  On paper, it will be a blending of the two benefits that will equal the higher of the two benefits.

 

AARP: 10/10/2018 - Can I collect spousal benefits if I earned my own Social Security benefit? 

It's Always Something . . . . Roseanna Roseannadanna
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Gail,

I have a similar question with a twist.

I'm not able to determine based on the SSA documentation, nor from the SSA help line either chat or live support person, the answer to this question.

Here's the scenario. My wife's FRA is 66y 4m in Nov 2022.  My FRA was 66y 2m in Oct 2021. Both of us are not receiving SS benefits yet.

I want to delay my benefit until age 70 Oct 2025 which will increase my benefit from ~3300/m to ~4400/m, but my wife wants to begin at her FRA Nov 2022.  She also wants to take advantage of the Spousal Benefit, which will increase her benefit from ~$300/m to ~$1700/m.

Here's the question.

Is my wife eligible for the Spousal Benefit if I delay my SS benefit start until Oct 2025 (age 70)?

Thank you,

Pete

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Bronze Conversationalist

@PeterD699268 Just read your posting (October 14, 2022) and agree with Gail's reply of the same date. With regard to another plan, have you calculated the amount of SS Benefits you and your spouse will initially forgo should you elect to delay to age 70? Based on the info you provided and the 3 year delay, you will be forgoing $5,000/month ($3,300 + $1,700) for 36 months or $180,000 to receive $1,100 more per month at age 70. It will take you 13 years 8 months to recoup the  $180,000. If you factor in a rate of return, you may be closer to $200,000 and 15 years to recoup. If you are using other monies to live on, you need to also factor in the loss of return on those monies that are used. Something to think about.

 

With regard to paying your spouse compensation for homemaker jobs, I understand the concept. However, it is cumbersome to run payroll and file/pay appropriate FICA taxes. Homemaker is a legitimate job in the Federal rules/regs and earn on average $20,000 to $35,000 annually depending upon how many different jobs the Homemaker performs (i.e. groceries, cooking, washing clothes, child care, etc.) In certain High Cost of Living areas (i.e., Manhattan, etc.), Homemakers may earn significantly more. At a minimum, folks should, at least, take advantage of funding a  Spousal IRA ; and, if not eligible, other tax deferred approaches such as Savings Bonds or deferred annuities. You still have time to fund a Spousal IRA  for 2022, if otherwise eligible. Good Luck with your plan.  

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Thank you Gail. Very helpful.

For the record, I retired in July this year.

My wife worked briefly early in our marriage, but decided to dedicate her efforts managing a family from home.  Maybe I should have contracted her and payed the SS insurance benefits? 😊

Honored Social Butterfly

Think you are gonna have to make another plan - The SSA has all the bases covered and says it often - the (3) links all say about the same thing.

 

You can very well suspend your retirement benefits and get the delayed retirement credits until age 70.  BUT anybody that has benefits coming from your suspended benefit also get cut off unless they are a divorced spouse.

 

So if you don't want to start benefits until 70, your wife cannot receive spousal benefits off your record now.

 

SSA.gov - Suspending Your Retirement Benefit Payments

 

. . . . . If you voluntarily suspend your retirement benefit and you have others who receive benefits on your record, they will not be able to receive benefits for the same period that your benefits are suspended. However, a divorced spouse will be able to continue receiving benefits.

 

Benefits Planner: Retirement | Filing Rules for Retirement and Spouses Benefits | SSA

 

  • During a voluntary suspension, other benefits payable on your record, such as benefits to your spouse, are also suspended.

There are some exceptions. If you are a divorced spouse, you can continue receiving a divorced spousal benefit even if your ex-spouse voluntarily suspends his or her retirement benefit.

 

What is the reason for this change? It makes it fair to delay payments for the workers spouse, and dependents if the worker has not retired or is in suspense. Couples can no longer simultaneously receive a benefit and get a bonus for delaying to file.

 

SSA.gov FAQ 10/07/2022 - What are the rules for voluntary suspension?

 
If you could get your spouse to wait until you begin your benefits at 70 - she would then be able to file for both her benefits and spousal benefit and receive the higher spousal benefit = $1700 and you with your DRC = $4400 - That's NICE
 
Why is your wife's benefit (her own) so low? 
 
 
It's Always Something . . . . Roseanna Roseannadanna
Periodic Contributor

Thank you for this info! So, if I'm understanding correctly, her benefit will change from $360 to $1300, bringing our total monthly to $3900

 

 

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Honored Social Butterfly

IF your figures are correct.  You can always sign up for a Social Security.gov - mysocialsecurity account sign up and figure it and so can she, I believe.

It's Always Something . . . . Roseanna Roseannadanna
Newbie

@GailL1 - I can't seem to find the info anywhere.  I have applied for SS at mu full retirement age with the date starting Jan 2023. My wife is at full retirement age but has NOT applied. WHEN? should she apply for spousal benefits?

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Honored Social Butterfly

A spouse can only apply when the primary beneficiary is already receiving benefits or they can apply at the same time too.

 

SSA.gov FAQ Spousal Benefits

SSA.gov FAQ - Which benefit my own or spousal

SSA.gov Benefits for Spouses

 

When she files for her benefits, SSA will look at all the benefits for which she qualifies - and the amount she receives will be the higher of the amount - which could be a blend of her (2) benefits - her own record benefits and her spousal benefit.

 

It's Always Something . . . . Roseanna Roseannadanna
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I'm in a similar situation.  I have created mysocialsecurity accounts for both of us.  But when I model/estimate her benefits, it does not give the option of factoring in my benefits.  Does this make sense??  How can I estimate what her benefits would be when she files assuming 50% of my benefits will be higher than her full benefit?

 

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Honored Social Butterfly

@MichaelR730316 

I couldn't remember if the mysocialsecurity account gave the option of computing Spousal Benefits or not cause the spouse does have to have filed for benefits before spousal benefits are applicable- But this is a general SS - Spousal benefit calculator that lets you put in the info.

Social Security.gov - Benefits for Spouses 

Hope this helps.

It's Always Something . . . . Roseanna Roseannadanna
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