Whether you are married or divorced, you can potentially collect spousal benefits. Photo by William Thomas Cain/Getty Images.
Larry Kotlikoff’s Social Security original 34 “secrets”, his additional secrets, his Social Security “mistakes” and his Social Security gotchas have prompted so many of you to write in that we now feature “Ask Larry” every Monday. We are determined to continue it until the queries stop or we run through the particular problems of all 78 million Baby Boomers, whichever comes first. Kotlikoff’s state-of-the-art retirement software is available here, for free, in its “basic” version
Joe F — Portland, Ore.: You speak a lot about Social Security and couples. Here’s a question I think a few people would like to know the answer to: What are the Social Security guidelines divorced, widowed or single elders should know about dating and marriage at this stage in their life? Like collecting on an ex’s after re-marrying?
Maureen Henry — Tampa, Fla.: I’m 67, work full-time and pay Social Security on $79,000. I intended to wait til age 70 to collect my own benefits but thanks to your advice I applied at age 66 and receive $998 in ex-spousal benefits.
Two questions: First, do I have to apply for and defer my own Social Security or do I just apply for it at age 70? Second, do my current contributions accrue to my own future Social Security income? I went to the Social Security Administration website to estimate future payments but it said I’m already collecting. Have I lost the right to my own benefits? It’s so easy to make a fatal mistake with this agency!
Larry: You just need to apply for your own retirement benefit at 70. Yes, your current contributions are included in your earnings record and may suffice to raise the benefit to which you’ll be eligible. You can use our program at www.maximizemysocialsecurity.com (it costs $40) to see what more earnings will mean for your future benefits.
Emily Ann — Downers Grove, Ill.: My husband and I separated in 1995 after 20 years of marriage (10 unmarried but living together and 10 years married). We are not legally separated yet. He is 63 and plans to file for early retirement. I’ve just found out he wants to put me down on the file because we are still legally married. He has not supported me at all since our separation and has not supported his child. Obviously he will get more money if he puts me on the application. What can I do to stop him from doing this? I am in the process of legally separating from him.
Larry: He can, potentially, collect spousal benefits off of your earnings record whether you are married or divorced. If he is collecting his benefits at 63 and you are already collecting your retirement benefit and if he was the high earner, he’ll receive no spousal benefit based on your earnings record. And if you were the high earner but if you aren’t collecting and wait, say, until 70 to collect your spousal benefit, he won’t qualify for a spousal benefit until you are 70. And chances are he won’t realize he’s become eligible.
Furthermore, you can collect spousal benefits off of his earnings record as of your full retirement age by filing an application just for spousal benefits. So by not filing and suspending for your retirement benefit when you reach your full retirement age (probably 66 in your case) and waiting till 70 to collect a retirement benefit, you’ll keep him from getting a spousal benefit for the next seven years if — and this is a big if — he actually qualifies for a spousal benefit.
For him to qualify, his full retirement benefit must be less than half of yours. And, this is the sweet part because he is taking his retirement benefit early, you can, to repeat, collect a spousal benefit — half of his full retirement benefit — starting at your full retirement age.
Diana Wade — Germantown, Tenn.: My husband and I are 63. He is the higher lifetime earner and when we file for benefits, I will file as a spouse. If he files early now at 63 and I choose to wait until full retirement age, would I receive half of his reduced amount or half of what his benefit would have been if he had waited until full retirement age?
Larry: You’ll receive half of what his benefit would have been had he waited until full retirement age. If you do this, you maximize your spousal benefit and then you can wait until 70 to take your own retirement benefit when it will be as large as possible.
Anne — Southbury, Conn.: I am a widow with a low income, and I really need to start collecting survivor benefits so I don’t continue to spend down my nest egg. Can I collect Survivor benefits at age 60 (which will be in six months), and then also collect on my own small Social Security benefit when I turn 66?
Larry: Yes, but you may want to go the other way, namely take your own retirement benefit at 62 (the earliest age you can collect it) and then go for your survivor benefit at full retirement age, 66, when it will not be permanently reduced. My company’s $40 program at www.maximizemysocialsecurity.com can tell you which is best. You’ll need your husband’s earnings history as well as your own. Social Security should, I believe, make this available to you.
Justine Green — Lititz, Pa.: I have been collecting Social Security since 62. How much can I earn without affecting my benefits?
Larry: After you reach full retirement age, there is no earnings test. So you can earn as much as you want without affecting your benefits.
This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions