Tricky Social Security Questions Answered

This is a Special Report by Elaine Floyd at horsesmouth.

Suspending benefits before full retirement age
Survivor benefits on a first marriage
Going back to work after starting Social Security
How will the recession effect Social Security benefits?

If a husband and wife are both 62, can the husband file and suspend so the wife can start her spousal benefit?

No. If he files before full retirement age, he may not suspend his benefit. This can only be done after FRA.

If the wife is already receiving her benefit, can the husband apply for his spousal benefit at 62?No. Before full retirement age, a person does not have a choice about which benefit to receive. He will be given his own benefit because it is higher. And then he can’t earn delayed credits.

Can a wife start her spousal benefit at 62 and then switch to her own full benefit at FRA?

Not if her own benefit is higher at the time she applies. I’ll say it again. If a person applies before full retirement age, they don’t have a choice about which benefit to receive.

If a husband starts his benefit at 62 and his wife files for her spousal benefit at 66, does she get 50% of his reduced benefit or 50% of his PIA?

She gets 50% of his PIA, not 50% of his reduced benefit.

What if he starts his benefit at 70? Does she get 50% of the higher benefit?

No. She still gets 50% of his PIA. The spousal benefit is always based on the PIA. The actual amount of the spousal benefit depends on when she applies. If she applies at full retirement age, it’s 50% of his PIA. If she applies at 62, it’s 35% of his PIA.

My client tried to file for his spousal benefit at FRA and the Social Security worker told him he couldn’t do it because his own benefit was higher. What now?

Ask to speak to a supervisor. Many reps aren’t familiar with the “claim now, claim more later” strategy, but it’s actually on the Social Security website now, so you may have to send clients back to their Social Security offices with citations in hand.

What if the husband is delaying benefits to age 70 and he dies before then?

The survivor benefit will include any delayed credits he has accumulated up until his death.

If a widow remarries after age 60 and that marriage ends, can she receive survivor benefits based on husband #1’s work record?


What happens if a person goes back to work after starting Social Security?

If the person is under FRA, the earnings test applies. $1 in benefits will be withheld for every $2 earned over $14,160. If the person is over FRA, no benefits will be withheld.

If a person does a do-over by filing SSA Form 521, do spousal benefits have to be repaid as well as the primary worker’s benefits?


Can a surviving spouse do a do-over? Let’s say she applied at 60 and wishes she had waited until 66.


Does a divorced spouse have to wait until her ex-husband files for benefits before she can file for her divorced-spouse benefit? How will she know, if she doesn’t keep in touch?

If they’ve been divorced at least 2 years, he only needs to be 62. He does not need to have filed for benefits.

Are unclaimed benefits increased by COLAs?


If a retiree has minor children, can the children also receive Social Security?

Yes, until they turn 18. Part of the breakeven analysis for a retiree with minor children is the addition of the children’s benefits. In some cases it might make sense for him to apply for early benefits so the kids can get theirs. But you have to balance this against the lower survivor benefit his wife would get.

What happens if a person is on disability when they reach full retirement age?

At FRA they switch over to their retirement benefit and the benefit amount doesn’t change.

How does the Government Pension Offset (GPO) work if the “pension” is in a defined contribution plan?

That’s a good question. It will probably be treated as if it were being paid out as an annuity. The only thing clients can do is be honest about whatever retirement accounts they have from non-Social Security covered jobs and let the Social Security people figure it out.

Has the recession worsened Social Security’s financial position?

Somewhat, but it seems to be temporary. In 2009, the OASDI trust fund still took in more than it paid out, but it did have to draw upon the interest, which wasn’t expected to happen until 2016. However, by 2013, payroll taxes should once again exceed benefit payments. High unemployment has caused some people to claim benefits earlier than expected, while dwindling retirement accounts have caused others to keep working longer than expected. We’ll have to see how it all balances out.

You say baby boomers are turning 62 at the rate of 10,000 per day. Where’s the best place to find them?

The best place is the workplace. Some of our advisors have had success giving lunchtime seminars. Another good place is through CPAs and other centers of influence. Social Security is a hot topic these days, so it is not really difficult to find people who are interested in learning more about it.

I hope these questions gave you a taste of the complexity of Social Security. By committing to the Savvy Social Security Planning for Boomers program, you’re covering yourself on an important topic.


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