Larry Kotlikoff, professor of economics at Boston University, says maximizing your benefits can be simplified into three basic rules: Delay your Social Security benefits, take spousal/survivor/mother and father/child benefits, and make sure one of these two rules doesn't undermine the other. The best choice when it comes to when to cash in on your Social Security ultimately comes down to personal circumstances, but waiting to collect higher benefits through the delayed retirement credit can be a huge advantage.
These guidelines are a good starting point, but a lot of the finer details can be confusing, especially when it comes to spousal benefits. Since the most complex rules can be the most lucrative, it's worth some investigation. The problem is most Americans are unaware of the finer points of Social Security and don't know where to turn for help. Social security offices are dwindling and phone wait times are getting longer, so the smartest course of action is to arm yourself with information as early as possible. Even the Social Security Administration (SSA) is known for spreading misinformation, so double-check and triple-check your information before making a big decision about your retirement.
On PBS NewsHour's Making Sen$e, Kotlikoff compiled a list of 34 social security secrets people should know, as well as some additional rules in a follow-up article. His findings are particularly useful if you're looking for explanations of the many highly nuanced rules for collecting spousal benefits. Bear in mind his list was compiled back in 2012, but Kotlikoff continues to report on Social Security and work to demystify the finer details. You can even write in and ask him a question regarding your situation.
Spousal benefits are the most overlooked Social Security benefits, according to Kotlikoff, and $10 billion in spousal benefits go unclaimed in America every year. In what can be called loopholes for married couples, Americans can collect more in Social Security by employing strategies like "file and suspend," in which one partner suspends retirement benefits so the other can collect spousal benefits. Later, the couple can cash in on the delayed retirement credit.
Taxpayers are essentially walking away from money they are entitled to if they don't take advantage of all the Social Security rules that could help them. Here are ten more little-known Social Security rules that could help you maximize your benefits, sourced from Kotlikoff's list as well as others.
1. You can suspend your benefits temporarily and see rewards later
Once you are at or over full retirement age, you can suspend further Social Security benefits and then restart them later. The " start-stop-start" strategy refers to starting your benefits prior to full retirement age, stopping them at full retirement age, and starting them up again at age 70 when they will be 32% larger due to the delayed retirement credit.
2. You can withdraw and repay Social Security, then collect more later
As long as you repay all the benefits you received, you can withdraw your Social Security claim and then reapply at a later date (when you will get higher benefits based on your age). The SSA used to allow claim withdrawals at any time, but after it became more common, the rules were changed. Now you can only withdraw your claim within 12 months of receiving benefits, and you can only withdraw a claim once in your lifetime.
3. In some states, you can collect unemployment and Social Security at the same time
Americans can be both unemployed and retired in certain states. If you collect checks from both agencies, you just have to report the income of both. Receiving unemployment benefits won't affect your Social Security payments, but in some states, collecting Social Security can reduce your unemployment checks.
4. You can shop around for the best deal
You can go to several Social Security offices and receive different benefit estimates. This is because Social Security staff have differing interpretations of the rules, although there is only one that is correct. But just as you may be able to shop around for the best estimate, make sure a social security office isn't erroneously denying you a legal benefit, such as the right to file and suspend.
5. Delaying your divorce can lead to more benefits
If you're divorced but were married for at least 10 years, you can collect spousal benefits. So if you're getting divorced after about 9 and a half years, it would be wise to delay your divorce, since it will mean a payout for both you and your ex. You have to wait to collect until your ex is 62, but if you aren't 62 yet you can still get benefits at a reduced rate.
6. Survivors can file and suspend before full retirement age
A widow/widower can begin benefits based on his or her own earnings record and later switch to survivors benefits or, conversely, begin with survivors benefits and later switch to their own benefits—even if the surviving spouse is filing before full retirement age. With spousal benefits, on the other hand, you cannot file and suspend before full retirement age.
7. There's no advantage to delaying spousal/survivor benefits after full retirement age
It does not benefit you to delay collecting either your spousal or survivor benefits past your full retirement age. Your own retirement benefits will grow if you delay, but there's no reason to wait so long to collect spousal or survivor benefits.
8. In some cases, you won't be penalized for working
If you take retirement, spousal, or widow/widower benefits early and lose some or all of them as a result of Social Security's earnings test, don't worry too much. The SSA will actually give you credit for the money they've docked in the form of permanently higher benefits once you reach full retirement age. Be advised, however, that in the case of mother and father benefits, if you earn too much money, you lose the docked money for good.
9. Widows and widowers can get benefits for children under age 16
Father and mother benefits are available to widows and widowers who have a child under age 16 (of the deceased worker). These benefits are available regardless of the survivor's age and they will never be reduced. It's important to note that survivor benefits are reduced if you take them before full retirement age, but mother/father benefits are not, so it's often wise to take the mother/father benefit first.
10. If you are collecting retirement, your children could get benefits too
If you still have young children when you retire, perhaps because you adopted or had children later in life, they can collect child benefits through and including age 17 (or age 19 if they are still in secondary school). These child benefits are available only if you or your spouse or ex-spouse are collecting retirement benefits.
Larry is sometimes wrong but rarely in doubt, and all of his answers to your Social Security questions are reviewed for accuracy by a former Social Security Administration technical expert. Know, too, that he has worked for many years to fine-tune retirement software — ESPlanner — that is widely considered the gold standard in the online world. We’ve long linked to the basic free version of ESPlanner from this page. Know also that Larry is my own personal Social Security adviser. His advice to apply for a dependent spousal benefit while my wife and I put off full retirement benefits until age 70 has been a boon, and so impressed the woman with whom I spoke at Social Security, that she thanked me for informing her of it and said she’d advise callers about this option henceforth. Note that many of Larry’s “secrets” involve the dependent spouse benefit. Be advised that the folks at Social Security with whom I’ve dealt have been uniformly courteous, responsive and efficient.
Editor’s Note | A version of this post originally ran July 3, 2012, on Forbes.com.
34 Social Security ‘Secrets’ All Baby Boomers and Millions of Current Recipients Need to Know
By Laurence Kotlikoff
The Social Security Handbook has 2,728 separate rules governing its benefits. And it has thousands upon thousands of explanations of those rules in its Program Operating Manual System, called the POMS, which provides guidance on implementing the 2,728 rules. Talk about a user’s nightmare!
MORE FROM LARRY KOTLIKOFF Why Social Security lowballs benefit estimates
As a young economist, I did a fair amount of academic research on saving and insurance adequacy. At the time, I thought I had a very good handle on the rules. Then I started a financial planning software company, which makes suggestions about what benefits to take from Social Security and when to take them to get the best overall deal. (See, in this regard, www.maximizemysocialsecurity.com and www.esplanner.com.)
At that point, I realized I needed to quadruple check my understanding of Social Security’s provisions. To do this, I established contacts with experts at Social Security’s Office of the Actuary. I also hired a specialist whose only job is to audit my company’s Social Security, Medicare premium, and federal and state income tax code.
The problem with this strategy is you can only check on things you know about. Over the years, I discovered things I had never heard of. I would then check with the Social Security actuaries who would say, “Oh yes, that’s covered in the POMS section GN 03101.073!”
GOT SOCIAL SECURITY QUESTIONS? Pose Your Questions to Larry Here
Mind you, a large share of the rules in the Social Security Handbook are indecipherable to mortal men, and the POMS is often worse. But thanks to patience on the part of the actuaries, I’ve learned things that almost no current or prospective Social Security recipient knows, but which almost all should know.
The reason is that taking the right Social Security benefits at the right time can make a huge difference to a retiree’s living standard.
Unfortunately, Social Security has some very nasty “gottcha” provisions, so if you take the wrong benefits at the wrong time, you can end up getting the wrong, as in smaller, benefits forever.
Also, the folks at the local Social Security offices routinely tell people things that aren’t correct, including about what benefits they can and can’t receive and when they can receive them. Taking Social Security benefits — the right ones at the right time — is one of the biggest financial decisions you’ll ever make, so you need to get it right.
Getting it right on your own, however, is neigh impossible. One of my engineers and I calculated that for an age-62 couple there are over 100 million combinations of months for each of the two spouses to take retirement benefits, spousal benefits and decided whether or not to file and suspend one’s retirement benefits. There are also start-stop-start strategies to consider. Each combination needs to be considered to figure out what choices will produce the highest benefits when valued in the present (measured in present value). For some couples who are very different in age, survivor benefits also come into play. In that case, the number of combinations can exceed 10 billion!
Fortunately, www.maximizemysocialsecurity.com can help you find the right answer generally within a matter of seconds. It does exhaustive searches of all combinations of months in which you can take actions, but thanks to modern computing power and careful programming, our Maximize My Social Security program can run through millions upon millions of combinations of decisions incredibly fast.
Whether or not you use our software, it’s important to have as full a handle on Social Security’s provisions as possible. Listed below are 34 things I’ve learned over the years that you may not fully know. (The list started at 25, but I’ve been learning some new secrets and recalling some others.)
If you are already collecting your retirement benefit and are at or over full retirement age, you can tell Social Security you want to suspend further benefits and then ask them to restart your benefits at a later date, say age 70. Social Security will then apply its Delayed Retirement Credit to your existing benefit once you start collecting again. Hence, this is a means by which current Social Security recipients who aren’t yet 70 can collect higher benefits, albeit at the cost of giving up their check for a while. But this trade off will, on net, often be very advantageous. For example, if you started collecting at 62 and are now at your full retirement age, i.e., 66, you can suspend benefits until 70 and then start collecting 32 percent higher benefits for the rest of your life. This benefit collection strategy can be called Start Stop Start. We are in the process of rolling out a new update of www.maximizemysocialsecurity.com, which incorporates Start Stop Start.
If you aren’t now collecting and wait until 70 to collect your retirement benefit, your retirement benefit starting at 70 can be as much as 76 percent higher than your age-62 retirement benefit, adjusted for inflation. The reason is that your benefit is not reduced due to Social Security’s Early Retirement Reduction; moreover, it’s increased due to Social Security’s Delayed Retirement Credit. For many people, the increase in the retirement benefit can be even higher if they continue to earn money after age 62 thanks to Social Security’s Re-computation of Benefits.
But if you are married or divorced, waiting to collect your retirement benefit may be the wrong move. If you are the low-earning spouse, it may be better to take your retirement benefit starting at age 62 and then switch to the spousal benefit you can collect on your current or ex-spouse’s account starting at your full retirement age. But beware of the Gottcha in item 5.
If you’re married, you or your spouse, but not both, can receive spousal benefits after reaching full retirement age while deferring taking your retirement benefits and, thereby, letting them grow. This may require having one spouse file for retirement benefits, but suspend their collection. This is called the File and Suspend strategy.
Be careful! If you take your own retirement benefit early and are below full retirement age, you will be forced to take your spousal benefit early and at a permanently reduced level if your spouse collects his/her his/her retirement benefit before or in the month in which you apply to collect your retirement benefit. If your spouse is not collecting a retirement benefit when you apply for an early retirement benefit, you will not be deemed to be applying for your spousal benefit. Hence, you can start collecting your spousal benefit later. (See item 33)
Start Stop Start may also make sense for married workers who aren’t already collecting and whose age differences are such they they can’t take advantage of File and Suspend. Take, for example, a 62 year-old high earner, named Sally, with a 66-year old low earner spouse, named Joe. By starting retirement benefits early, Sally permits Joe to start collecting a spousal benefit immediately. The reason is that spouses aren’t eligible to collect spousal benefits unless the worker is either collecting a retirement benefit or has filed for a retirement benefit, but suspended its collection. If Sally starts her retirement benefit at 62, Joe can apply just for his spousal benefit at 66 and then wait until 70 to collect his own retirement benefit, which will be at its highest possible value thanks to Social Security’s Delayed Retirement Credit. As for Sally, she can suspend her retirement benefit at 66, when she reaches full retirement, and then restart it at 70, at which point her benefits will be 32 percent higher than what she was collecting. Even singles workers may opt for Start Stop Start to help with their cash flow problems.
If your primary insurance amount (your retirement benefit available if you wait until full retirement) is less than half that of your spouse and you take your own retirement benefit early, but are able to wait until full retirement age to collect your spousal benefit, your total check, for the rest of your life, will be less than one half of your spouse’s primary insurance amount. Nonetheless, this may still be the best strategy. This reflects another Gotcha explained in 8.
On its website, Social Security states, “your spouse can receive a benefit equal to one-half of your full retirement benefit amount if they start receiving benefits at their full retirement age.” This is true only if your spouse isn’t collecting his/her own retirement benefit. If your spouse is collecting her own retirement benefit, his/her spousal benefit is calculated differently. Rather than equaling one half of your full retirement benefit, it’s calculated as half of your full retirement benefit less your spouse’s full retirement benefit. This difference is called the excess spousal benefit. The total benefit your spouse will receive is her retirement benefit, inclusive of any reduction, due to taking benefits early, or increment, due to taking benefits late, plus the excess spousal benefit. The excess spousal benefit can’t be negative; i.e., its smallest value is zero.
Take Sue and Sam. Suppose they are both 62 and a) Sue opts to take her retirement benefit early and b) Sam opts to file and suspend at full retirement and take his retirement benefit at 70. Between ages 62 and 66 (their full retirement age), Sue collects a reduced retirement benefit, but is not forced to take her spousal benefit (which would be reduced) because Sam isn’t collecting a retirement benefit during the years that Sue is 62 to 66. Now when Sue reaches age 66, she starts to collect an unreduced spousal benefit because Sam has qualified her to do so by filing and suspending for his retirement benefit. OK, but her unreduced spousal benefit is calculated as 1/2 x Sam’s full retirement benefit less Sue’s full retirement benefit. Sue ends up getting a total benefit equal to her own reduced retirement benefit plus her unreduced excess spousal benefit. This total is less than half of Sam’s full retirement benefit. To see this note that the total equals half of Sam’s full retirement benefit plus Sue’s reduced retirement benefit minus Sue’s full retirement benefit. The last two terms add to something negative.
Are there are two different formulas for spousal benefits depending on whether the spouse is collecting his/her own retirement benefit? It sure seems that way because when the spouse is collecting a retirement benefit, the excess spousal benefit (potentially reduced for taking spousal benefits early) comes into play. And when the spouse isn’t collecting a retirement benefit, the spousal benefit equals half of the worker’s full retirement benefit. (Note, the spouse has to collect a retirement benefit before full retirement age if she applies for her spousal benefit.) The answer, in fact, is no. There is only one formula. The formula for the spousal benefit is always the excess benefit formula. But here’s what happens to the application of that formula if the spouse is not collecting a retirement benefit. In that case, the spouse’s full retirement benefit (also called the Primary Insurance Amount) is set to zero in calculating the excess spousal benefit. The reason, according to Social Security, is that a worker’s Primary Insurance does not exist (i.e., equals zero) if the worker has not applied for a retirement benefit (and either suspended its collection or started to receive it). In other words, your Primary Insurance Amount is viewed as non-existant until you apply for a retirement benefit. This construct – the primary insurance amount doesn’t exist until it’s triggered by a retirement benefit application — lets Social Security claim to have one formula for spousal benefits. But there are, in effect, two spousal benefit formulas and which one you — the person who will collect a spousal benefit — faces will depend on whether or not you take your retirement benefit early.
If you are divorced, both you and your ex can collect spousal benefits (on each others work histories) after full retirement age while still postponing taking your own retirement benefits until, say, age 70, when they are as high as can be. This is an advantage for divorcees. But there’s also a disadvantage. A divorcee who applies for spousal benefits before full retirement age will automatically be forced to apply for retirement benefits even if her/his ex isn’t collecting retirement benefits.
There is no advantage to waiting to start collecting spousal benefits after you reach your full retirement age.
There is no advantage to waiting to start collecting survivor benefits after you reach your full retirement age.
If you started collecting Social Security retirement benefits within the last year and decide it wasn’t the right move, you can repay all the benefits received, including spousal and child benefits, and reapply for potentially higher benefits at a future date.
If you wait to collect your retirement benefit after you reach your full retirement age, but before you hit age 70, you have to wait until the next January to see your full delayed retirement credit show up in your monthly check.
Millions of Baby Boomers can significantly raise their retirement benefits by continuing to work in their sixties. This may also significantly raise the spousal, child, and mother and father benefits their relatives collect.
If you take retirement, spousal, or widow/widower benefits early and lose some or all of them because of Social Security’s earnings test, Social Security will actuarially increase your benefits (under the Adjustment of Reduction Factor) starting at your full retirement age based on the number of months of benefits you forfeited. This is true whether the loss in benefits due to the earnings test reflects benefits based on your own work record or based on your spouse’s work record. Consequently, you should not be too concerned about working too much and losing your benefits if you elected to take them early.
When it comes to possibly paying federal income taxes on your Social Security benefits, withdrawals from Roth IRAs aren’t counted, but withdrawals from 401(k), 403(b), regular IRAs, and other tax-deferred accounts are. So there may be a significant advantage in a) withdrawing from your tax-deferred accounts after you retire, but before you start collecting Social Security, b) using up your tax-deferred accounts before you withdraw from your Roth accounts, and c) converting your tax-deferred accounts to Roth IRA holdings after or even before you retire, but before you start collecting Social Security.
Social Security’s online benefit calculators either don’t handle or don’t adequately handle spousal, divorcee, child, mother, father, widow or widower benefits, or file and suspend options.
The default assumptions used in Social Security’s online retirement benefit calculators is that the economy will experience no economy-wide real wage growth and no inflation going forward. This produces benefit estimates that can, for younger people, be significantly less than what they are most likely to receive.
Some widows/widowers may do better taking their survivor benefits starting at 60 and their retirement benefits at or after full retirement. Others may do better taking their retirement benefits starting at 62 and taking their widow/widowers benefits starting at full retirement age.
If you’re below full retirement age and are collecting a spousal benefit and your spouse is below full retirement age and is collecting a retirement benefit, your spousal benefit can be reduced if your spouse earns beyond the Earnings Test’s exempt amount. And it can also be reduced if you earn beyond the Earnings Test’s exempt amount.
The Windfall Elimination Provision affects how the amount of your retirement or disability benefit is calculated if you receive a pension from work where Social Security taxes were not taken out of your pay, such as a government agency or an employer in another country, and you also worked in other jobs long enough to qualify for a Social Security retirement or disability benefit. A modified formula is used to calculate your benefit amount, resulting in a lower Social Security benefit than you otherwise would receive.
Based on the Government Pension Offset provision, if you receive a pension from a federal, state or local government based on work where you did not pay Social Security taxes, your Social Security spouse’s or widow’s or widower’s benefits may be reduced.
If you have children, because you started having children late or adopted young children later in life, they can collect child benefits through and including age 17 (or age 19 if they are still in secondary school) if you or your spouse or you ex spouse are collecting retirement benefits.
If you have children who are eligible to collect benefits because your spouse or ex spouse is collecting retirement benefits, you can collect mother or father benefits until your child reaches age 16.
Your children can receive survivor benefits if your spouse or ex-spouse died and they are under age 18 (or age 19 if they are still in secondary school).
You can collect mother or father benefits if you spouse or ex-spouse died and you have children of your spouse or your ex-spouse who are under age 16.
There is a maximum family benefit that applies to the total benefits to you, your spouse, and your children that can be received on your earnings record.
If you choose to file and suspend in order to enable your spouse to collect a spousal benefit on your earnings record while you delay taking your benefit in order to collect a higher one later, make sure you pay your Medicare Part B premiums out of your own pocket (i.e., you need to send Social Security a check each month). If you don’t, Social Security will pay it for you and treat you as waving (i.e., not suspending) your benefit apart from the premium and, get this, you won’t get the Delayed Retirement Credit applied to your benefit. In other words, if you don’t pay the Part B premiums directly, your benefit when you ask for it in the future will be NO LARGER than when you suspended its receipt. This is a really nasty Gotcha, which I just learned, by accident, from one of Social Security’s top actuaries.
If you are collecting a disability benefit and your spouse tries to collect just his/her Social Security benefit early, she will be deemed to be filing for her spousal benefits as well. I.e., if your spouse takes his/her retirement benefit early, he/she won’t be able to delay taking a spousal benefit early, which means both her retirement and spousal benefits will be permanently reduced thanks to the early retirement benefit and early spousal benefit reduction factors.
When inflation is low, like it is now, there is a disadvantage to delaying until, say 70, collecting one’s retirement benefit. The disadvantage arises with respect to Medicare Part B premiums. If you collecting benefits (actually were collecting them last year), the increase in the Medicare premium this year will be limited to the increase in your Social Security check. This is referred to as being “held harmless.” Hence, when inflation is low, the increase in your check due to the cost of living adjustment will be small, meaning the increase in your Medicare Part B premium will be limited. But, if you aren’t collecting a benefit because you are waiting to collect a higher benefit later, tough noogies. You’re Medicare Part B premium increase won’t be limited. And that increase will be locked into every future year’s Medicare Part B premium that you have to pay. You can wait to join Medicare until, say, age 70, but if you aren’t working for a large employer, the premiums you’ll pay starting at 70 will be higher and stay higher forever. So much for helping the government limit its Medicare spending!
Hold harmless — the provision that your increase in Medicare Part B premium cannot exceed the increase in your Social Security check due to Social Security’s Cost of Living Adjustment — does not apply if you have high income and are paying income-related Medicare Part B premiums.
The thresholds beyond which first 50 percent and then 85 percent of your Social Security benefits are subject to federal income taxation are explicitly NOT indexed for inflation. Hence, eventually all Social Security recipients will be tax on 85 percent of their Social Security benefits.
If you take your retirement benefit early and your spouse takes his/her retirement benefit any time that is a month or more after you take your retirement benefit, you will NOT be deemed, at that point (when your spouse starts collecting his/her retirement benefit) to be applying for a spousal benefit. In other words, you can, in this situation, wait until your full retirement age to start collecting your unreduced excess spousal benefit. The retirement benefit collection status of your spouse in the month you file for early retirement benefits determines whether you are deemed to be also be applying for spousal benefits. This means that you should think twice about applying for retirement benefits in the same month as your spouse if one or both of you are applying early.
If you take your spousal benefit before full retirement age, you will be forced to take your retirement benefit as well. But both will be smaller than if you waited until full retirement age. If, however, you’re caring for one or more of your spouse’s children under age 16, you can take the spousal benefit but you aren’t forced to take your retirement benefit. Moreover, your spousal benefit will be as large as it would be at full retirement age, i.e., will not be “reduced.” The problem is, once all the kids reach 16, Social Security will stop sending you any spousal benefit at all. Unless, that is, you file a “certificate of election for reduced spousal benefits.” This will permit you to continue to receive spousal benefits. But, if you are still below full retirement age, you will automatically be deemed to be applying for early retirement benefits as well and both benefits will be reduced.
If you’re divorced, but were married for at least 10 years, you can collect spousal benefits based on the earnings record of your ex-spouse. You have to wait until your ex has reached age 62, however. But suppose you are 62 or older and your ex hasn’t reached 62 yet. In that case you can collect your retirement benefit early (although of course at the reduced level) and wait until you reach FULL retirement age to take your UNreduced spousal benefit, even if you ex reaches age 62 before you reach full retirement age.
You need to have been married for 10 years in order to collect both spousal and survivor benefits from your ex-spouse if you get divorced. It’s amazing how many people get divorced just shy of 10 years. Yes, you’re fed up with each other. Yes, your spouse is the worst of the worst. But stick it out for the extra time if possible. There’s potentially a lot of money, which you both can share, if you just show some patience (and the ability to negotiate). By the way: no one at Social Security checks as to whether or not you are living together, let alone engaging in something more intimate.
If you get divorced and then remarry, you will not be able to receive a spousal benefit based on your ex. You also won’t be able to receive survivor benefits based on your ex-spouse if you remarry and your ex-spouse dies –UNLESS, it turns out, you wait to remarry until after you reach the age of 60! As for benefits from your new spouse, you need to stick it out with him or her (stay married) for 10 years to receive any spousal benefits. As for survivor benefits, there’s a much shorter time limit.
“Father” and “mother” benefits are available to surviving spouses who have a child under age 16 (of the deceased worker). The benefits are available regardless of the survivor’s age and are never reduced. Now imagine you are the surviving spouse. Here’s an important warning: If your spouse buys the farm after you reach 60, take the father or mother benefit; do NOT apply for the SURVIVOR benefit which becomes available at that age. That’s because survivor benefits are reduced if you take them before FULL retirement age, but mother/father benefits are not.
In the original list of secrets, I told you not to worry about the “earnings test” if you take retirement benefits before your full retirement age. Yes, Social Security docks your benefits if you take them early and make too much money. But, as I pointed out, they actually give you CREDIT for the money they’ve docked you in the form of permanently higher benefits once you reach full retirement age. HOWEVER, in the case of mother and fatherbenefits, if you earn too much money, the money is docked, and you never get it back. Sorry.
Meanwhile, speaking of taking your retirement benefit early (before full retirement age), there IS one great danger: that you kick the can. In that case, your spouse’s survivor benefit will equal the reduced benefit you were receiving.
Furthermore, if your spouse takes the survivor benefit before he or shereaches full retirement age, the reduced survivor benefit will be reduced yet again. So this is a double whammy.
Finally, some potentially good news. Say you were a “non-covered” employee with a pension outside the Social Security system — a teacher in Massachusetts, for example. And you were married to someone within the SS system. In that case, there’s something you might hate called the Government Pension Offset provision (see Secret #23). It reduces your SS spousal and survivor benefits, based on a formula that depends on the amount you’re getting from your pension. So it would seem that you might lose your SS spousal or survivor benefits entirely. But if your pension is not fully indexed for inflation, as SS is, then the pension offset declines over time. The greater the inflation adjustment, the smaller the pension offset. So if you were getting no spousal or survivor benefit from SS, you might eventually getsome. If you were getting some, you might eventually get more. |
