Married and on social security? PSA
10I finally called SSA about collecting on spousal benefits yesterday.
Brian (husband) heard from a neighbor that one spouse can draw on another’s account, well, not take from the account, but can have their benefits upgraded to half as much of the spouse, should that spouse have higher benefits (does that make any sense?).
So, say Brian gets $3500 a month and I get $1100 a month (I haven’t drawn a paycheck since 1988, even though I do work).
As a spouse, I can be receiving half of that $3500, so $1750 instead of $1100. They’d bump up my payment to $1750. And it wouldn’t affect what Brian’s getting at all.
Neat, huh?
The only drawback? He has to be getting social security first, which he doesn’t plan to do until he reaches the age of 70 (April 2027) when he’d draw the full amount, not a percentage.
He was disappointed when I explained this to him.
So, if you’re married and both getting social security and didn’t know about this, check it out.
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(Brian could get full retirement now, but is opting for the delayed benefits at 70 which is quite a bit more.)
@lisaviolet Yep, we’re doing the same (and my wife is in a similar position - she quit her full time job when we had children, so her benefit is lower). I’m holding off collecting for a couple more years to get the max payout.
The tricky part is that they calculate the monthly benefits vs. your remaining life expectancy such that your total lifetime payout pencils out to the same amount either way (ie., more monthly benefit for a calculated shorter remaining time vs. lower monthly benefit for more years.) Could break either way, I guess.
@macromeh It’s nice. I’m glad the neighbor told him about it. I had no idea this was a thing.
@lisaviolet
yep, each year is an 8% bump to your SSA payment base. 3 yrs is 24%… that’s significant.
That being said… this is what we learned for our situation (me 69 as of Tuesday, wife 66 last May)
~ Your “50% benefit” will be based on the amount your spouse would have collected at full retirement age (66 and 6 months if born in 1957)
~ YOU will not get a bump to half his max (at age 70) no matter how long you wait.
~ you will lose a percentage of that amount (the 50%) if YOU are not full retirement age when YOU start to collect.
I was doing the same (waiting) but decided to start collecting this past Jan. for a few reasons.
#1 Since I am over my full retirement age (66 and 2 months) I can work as much as I want and it doesn’t cause me to lose some of my SSA benefit check. Up to that point you can lose $1 for every $2 you make over a certain threshold.($ 22,320 this year) ($1` for every $3 the year you hit the full threshold)
#2 Makes paying for Medicare a lot easier since you don’t have to pay ‘out of pocket’ every 3 months.
#3 There is a good chance SSA will have to start cutting back benefits in the not-too-distant future (like 10-15 yrs). If I collect that money now I can invest it and (hopefully) offset that last 8% bump)
As always, YMMV.
@chienfou @lisaviolet One more wrinkle: true that the spouse doesn’t get a bump in their 50% of their partner’s boosted benefit. But (if I understand correctly) if the higher SS benefit spouse dies, the survivor has the option to get some fraction of the boosted benefit if it is higher than their own benefit.
@lisaviolet It is worth while for Brian to do some calculations on optimal time to begin collecting. While the amount received does increase overtime there does become a point where you actually come out behind not claiming because the gains in the monthly payments do not reach what you earn by receiving a check at a certain point in time.
I do not recall the exact tipping point but it generally falls between 6 months and 1.5 years prior to “full retirement age”. While there is substantial growth, if possible, it is worth waiting. Eventually at $2476 check for multiple months is worth far more then the gains of waiting 9 months to claim for $24 more a month. There are tables out there with what should be the exact payment amounts based on claim date to assist, generally a worth while little exercise that can give a boost.
@Raider @macromeh @chienfou
After explaining to him that what I draw from his account is based on what he’d be getting at 67, no matter how much longer he waits to sign up, he’s been running the numbers in his head.
We hope to have the house paid off next year and probably won’t be spending as much on critters as we do now (aging out - meds and special food).
Since the month off after his kidney removal earlier this year, which is the longest period without working since his teen years, he’s looking forward to semi-retirement.
@lisaviolet @macromeh @Raider
if you haven’t already done so I would suggest you start a ‘my social security’ account. It has several good planning tools and information that can help make choosing when to retire a bit easier.
@chienfou @macromeh @Raider Done a few years ago when I signed up.
@lisaviolet @macromeh @Raider
check for the tools that will estimate your payouts so you can see where your break even is. Mine basically is in my mid-to late 80’s on just the cash I would collect (not counting any interest etc.)
@chienfou @macromeh @Raider Thanks. I’ll get this up on Brian’s PC and let him play with it.
I’m sure he’ll enjoy the process more than I would.
@lisaviolet @Raider Generally if married the individual payout matters less because the survivor benefit - whoever lives longer gets the largest of the two individual benefits.
The SSA office likely will not tell you about this, you will probably have to ask for them to do it. OTOH, if you find out later like we did, you can request a back payment for the difference from the date the larger benefit person began collecting SSA payments. My wife got a substantial one-time check.
Also remember to estimate the taxes and have an appropriate amount withheld to avoid owing a lot on tax day and the possibility of a penalty.
My experience was that the website is difficult and cumbersome, and although the SSA office people can help you and answer your questions, you will need to know what questions to ask. They were not forthcoming with extra information that may be helpful to you.
Good luck, y’all!
@2many2no Thanks. The man I spoke with spent a fair amount of time with me looking for answers.
I really appreciated that.
@2many2no @lisaviolet There is a limit to the look back period, it was 6 months in the past unless changed in the last few years.
Also those working and getting SS remember that your medicare B and D costs are income dependent this year for what you got 2 years ago. If your situation changed (eg get less money now so that you are in a lower tier for those costs now that what you would be paying based on what you earned 2 years ago) you can file a change of circumstances form so you are not paying a higher amount when you are getting less money.
@Kidsandliz I did not know that. When he retires, we will definitely take a financial hit. Hopefully, the house will be paid off by then.
@lisaviolet Well at least now you know to file the change of circumstances form after he retires and in advance of the premiums going up so that they won’t.
I am sure there is HUGE variance in the caliber of help you can get from your local office, but ours has been super helpful. We set up a telephone appt to discuss my SSA start date as well as questions about spousal benefits etc and they were very knowledgeable and seemingly accurate. Entire process was pretty painless.
That being said, it behooves you to do your due diligence beforehand to have some idea of what you are even going to ask them. The aforementioned My Social Security site will have a lot of info and tools to help guide you at your leisure.
You paid into the Ponzi scheme so it makes sense for you to try to get all the benefits you have earned.
Oh and an extra ‘wrinkle’ … many states don’t tax your SSA income… So you can figure in a couple of months payment to use as your IRA income offset for the Fed part as an instant (your state tax bracket here) % gain (double that for filing jointly). You could also up your 401k pay-in (if you have one) on your income by the amount you will get from your SSA checks to save the state tax amount, get any available match from your employer, and grow your retirement account.
So much to consider…
Starting again in 2026 any student loan amount discharged for any reason (except veterans who have theirs discharged for permanent and total disability and those in the 10 year public service and teach programs; it applies to everyone else, even those disabled) will be considered “ordinary income” (You get a 1099-C) and be taxable income. As a result you need to plan for the extra taxes and for those who are 63 plus when this happens itwill affect your medicare B and D premiums two years after the loan is discharged. Those old enough to get medicare will also will need to file a change of circumstances so that two years after this happens you will not be paying a higher rate (if the amount discharged is high enough).
For that to change a law needs passed that student loan write offs are not considered taxable income (that is how that money is not taxed right now - it’s part of the pandemic law that expires the end of 2025 so the tax will start up again in 2026). If you, for example, have 100K written off you are screwed if all you get is social security. Since interest has been capitalized until this year many people find they owe far more than they originally borrowed or even if they have already paid back more than they have borrowed. Usually forbearances are what gets people the fix of balances skyrocketing like that - especially if they were early in their payback period on loans in the 20 or 25 year plan when they got the forbearance. Often all that is paid initially is interest and nothing or almost nothing goes to the principal. Then the interest was added to the principle which then means the next payment what is owed in interest is even higher… and it can spiral out of control.
One additional thing that’s worth noting is that you do not need to be currently married to someone to claim against their benefits. The rules are that
If you meet all three of those qualifications, you can file for benefits against those of someone who is no longer your spouse.
Note that this is absolutely no help to anyone who first became married to their last ex less than 10 years ago, and there is a huge pool of people who could not get married to their significant other prior to 2015.
@werehatrack
not sure what the ‘toast’ reference is… or where you found that info…
You can start collecting once THEY start no matter what their age.
You can collect before THEY retire.
Depending on your age there will be reductions based on when you start, and you will only get the greater of yours or X% of your ex’s.
From the SSA website:
You can apply for benefits on your former spouse’s record even if he or she hasn’t retired, as long as you divorced at least two years before applying. If, however, you decide to wait until full retirement age to apply as a divorced spouse, your benefit will be equal to half of your ex-spouse’s full retirement amount or disability benefit. The same rules apply for a deceased former spouse.
@chienfou When I went to inquire about filing against my ex’s benefits, I was explicitly told that if she did not start collecting benefits at 65, I had to wait until she had filed - because unless she was deceased, the amount of her benefits that were being collected would determine the amount of mine. No collection, but not deceased, means no benefits. Perhaps the rules have been changed, but that’s what they said five years ago. (The agent also may have misunderstood the rules, or may have willfully misrepresented them. I can’t address that.)
@chienfou @werehatrack Like i can’t draw on Brian’s because he isn’t drawing yet, even though he is past the full benefit age.
@werehatrack
yeah, it’s a bit of a moving target (both SSA and the tax code) That’s why I quoted the SSA site and didn’t assume it was static. I have run in to that too many times (for instance, at one time if you were still full time employed you had to use the available employer supplied insurance as your primary even if you were over 65 and could get Medicare. That has now changed and you can use Medicare and drop the employer coverage).
@lisaviolet
Actually your situation is a bit different since you are still married. You have to wait, but wouldn’t if you were divorced.
@chienfou Interesting.
@chienfou @lisaviolet @werehatrack somehow this popped up on my insta feed
https://www.instagram.com/reel/C7IIHsKSfXi/?igsh=NDJtdjU0MGowZHZh
These folks charge $50 for a year of use for a household, but I’ve heard it’s well worth it from consumer advocate Clark Howard. I plan to use them as I prepare to retire. https://maximizemysocialsecurity.com/calculate-your-highest-benefits