Mon. Dec 4th, 2023

Today’s column addresses questions about ‘switching’ from a retirement benefit to a spousal benefit, filing retroactively and then immediately suspending and what benefits might be available on records of ex spouses. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.

How Does My Wife Switch From Social Security Retirement Benefits To Spousal Benefits?

Hi Larry, Four years ago, when we were both age 67, my wife claimed her retirement benefit and I claimed my spousal benefit so I could earn credits to age 70 for my own retirement benefit.

It’s now time to change to me claiming my own retirement benefit and my wife changing from her retirement benefit to her spousal benefit to maximize our total benefit. I understand that I must file an application to claim my retirement benefit but what does my wife need to do to change from her retirement benefit to her spousal benefit? Thanks, Ken

Hi Ken, Your wife will need to file an application in order to become entitled to spousal benefits. Just to clarify, though, your wife can’t “switch” from drawing her own retirement benefits to drawing spousal benefits instead.

What she would be applying for is a partial, or excess, spousal benefit to be paid in addition to her retirement benefit.

Your wife will only qualify for an excess spousal benefit if 50% of your primary insurance amount (PIA) is higher than her own PIA, and she can’t qualify for spousal benefits at least until you start drawing your benefits. A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).

Social Security’s website claims that they are constantly expanding their online services, but people currently can’t apply for spousal benefits online if they’re already drawing their own retirement benefits. So when you apply for your retirement benefits, your wife will likely need to apply for spousal benefits by phone, or in person if Social Security’s offices have reopened by then. Best, Larry

Can I File For Social Security, Take A Six Month Retroactive Payout, And Suspend Payments?

Hi Larry, I am 69 and need to file for Social Security. Can you file for Social Security, take six months retroactive payout and suspend payments? If the retroactive pay sets the rate back six months, how long can the benefits be suspended? Thanks, Emmet

Hi Emmet, You could elect to receive up to six months of retroactive benefits when you apply for your Social Security retirement benefits, but you couldn’t voluntarily suspend your benefits any sooner than the month after the month you make your request.

So, for example, if you apply for benefits in July 2021 you could choose a start date for payment of your benefits as early as January 2021, but the earliest you could voluntarily suspend your benefits would be August 2021.

If you voluntarily suspend your benefits between full retirement age (FRA) and 70, Social Security will automatically start paying your benefits for the month you reach 70 unless you ask to reinstate them before then.

Benefits can’t be voluntarily suspended beyond 70 because you cannot earn delayed retirement credits (DRCs) for months after the month you reach age 70. Once benefits are suspended, the earliest that they can be reinstated is for the month following the month that you request reinstatement.

You may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to fully analyze the options available to you in order to determine your best strategy for maximizing your benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

Am I Entitled To Any Spousal Benefits?

Hi Larry, I began receiving my reduced Social Security retirement benefits a couple of years ago. I am now 66. I had two previous marriages of 10 years or longer and I am not currently married. Both my ex husbands are receiving their respective benefits.

Am I entitled to any spousal benefits or is it too late to apply since Im already receiving mine? Thanks, Shannon

Hi Shannon, It’s not too late to apply for divorced spousal benefits, but you’ll only be eligible if one or both of their primary insurance amounts (PIA) are more than twice as much as your own PIA. A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).

If you qualify for divorced spousal benefits in addition to your own benefit, your unreduced divorced spousal rate would be calculated by subtracting your PIA from 50% of your ex’s PIA. However, if your entitlement to divorced spousal benefits starts before you reach full retirement age (FRA), your divorced spousal rate will also be reduced for age.

You also may be eligible for divorced widow’s benefits at some point, which would equal what the ex was receiving at the time of their passing. It sounds like you should probably contact Social Security to see whether or not you may be eligible for additional benefits. Best, Larry

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