Ask Larry: Can My Wife Take Early Social Security Retirement Benefits Before Spousal Benefits? – Forbes

Ask Larry

Economic Security Planning, Inc.

Today’s column addresses questions about taking reduced retirement benefits before later spousal benefits, whether there’s a best time of the year to retirement and the potential availability of spousal benefits after a divorce. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc.

See more Ask Larry answers here.

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

Can My Wife Take Early Social Security Retirement Benefits Before Spousal Benefits?

Hi Larry, I’m planning on taking my Social Security retirement benefit at 70 since my wife is four years younger and this way she’ll have higher survivor benefits if she survives me. My wife does have retirement benefits but they’re less than half of mine. If she takes her retirement benefits before her FRA, can she take the spousal later at her FRA or would she be deemed to be taking both? Thanks, Duncan

Hi Duncan, Since your wife was apparently born after 1/1/1954, she couldn’t file for either her own Social Security retirement benefits or for spousal benefits without being deemed to be filing for both benefits. But she couldn’t actually qualify for spousal benefits until you start drawing your retirement benefits. So if your wife files for her retirement benefits before you start drawing yours, she’ll be deemed to have applied for spousal benefits once you file for your retirement benefits.

Your wife could file for her retirement benefits any time after she reaches 62, but if she starts drawing her benefits prior to her full retirement age (FRA), her benefit rate will be reduced for age. And that reduction will continue for as long as both of you are living even if she later qualifies for spousal benefits.

You and your wife 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

When Would Be The Best Time Of The Year For Me To Retire?

Hi Larry, I am 70 still working and and applied for my Social Security retirement benefits three months before turning 70. I plan to retire in five years. When is the best time of the year for me to retire? On my 75th birthday? Six months into the year or end of the year?

Also, being divorced I was eligible for spousal benefits. After the second year of receiving spousal benefits, SSA informed me that I was overpaid and would have to pay them back. The benefit amount was practically cut in half. I appealed since it was their computation that made the error.

Do I have grounds for such appeal? It’s been two years since I appealed and issue has not been resolved. Thanks, Allan

Hi Allan, As far as Social Security benefits are concerned, it really wouldn’t make much if any difference what time of the year you retire. Since you’re over full retirement age (FRA), you can draw all of your benefits no matter how much you earn, so that’s not a concern. The only possible difference would be if your earnings in the year of your retirement would be high enough to increase your benefit rate.

Social Security retirement benefits are based on an average of a person’s highest 35 years of Social Security covered wage-indexed earnings, so additional years of earnings only increase a person’s benefit rate if they’re higher than one or more of the 35 years currently being used to calculate the person’s benefit rate.

As far as the appeal of your overpayment, there’s no way for me to know why you might have been overpaid. When you appeal an overpayment, though, you’re questioning the fact or amount of the overpayment. So if it’s determined that there was in fact an overpayment, an appeal wouldn’t wipe out your liability for repayment even if you weren’t at fault in causing the overpayment.

The issue of fault is only material when a person asks for waiver (i.e. forgiveness) of an overpayment. But to have your overpayment waived, in addition to being without fault in causing the overpayment, you’d need to either be financially unable to repay the overpayment or recovery of the overpayment would have to be considered against equity and good conscience according to Social Security’s rules.

If you think that you may qualify for waiver of your overpayment, you should probably contact Social Security to discuss your options. Best, Larry

If My Wife And I Get Divorced Or Separate, Will My Wife Still Be Able To Claim Spousal Benefits?

Hi Larry: I will be 70 in September. My wife turns 74 this month. I have not claimed my Social Security retirement benefit yet and my wife has no earning credits on her own so will only be able to claim spousal benefits. We were married in late 2014.

If we get divorced or separate before I turn 70, will my wife be able to claim spousal benefits? If we get divorced or separate after I start collecting my retirement benefit and my wife starts spousal benefits but we then divorce with less than 10 years of marriage, will my wife lose her spousal benefit? Thanks, Liam

Hi Liam, Your wife could still qualify for spousal benefits even if you separate, as long as you don’t get divorced. She would not, however, qualify for spousal benefits if you get divorced, unless your marriage lasts for at least 10 years.

If you get get divorced before you start drawing your benefits, your wife couldn’t qualify for any spousal, divorced spousal or survivor benefits if your marriage lasted for fewer than 10 years. If you divorce after you start drawing your benefits and if your marriage lasts less than 10 years, your wife’s eligibility for benefits on your account would end effective with the month that your divorce is final. Best, Larry