Today’s column addresses questions about spouse benefits, return to work after disability benefits, retirement benefits before survivor benefits, and the decrease in what is considered substantial covered earnings due to the closing of the coronavirus. Larry Kotlikoff is a professor of economics at Boston University and founder and president of Economic Security Planning, Inc., which markets Maximize My Social Security and MaxiFi Planner.
See more answers to Ask Larry here.
Do you have your own Social Security questions that you would like answered? Ask Larry about Social Security here.
Can I collect Social Security spouse’s benefits on my wife’s record?
Hi Larry, I just retired at 62 after working for the Postal Service under the Civil Service Retirement System. I have 39 quarters under Social Security and am working part time to secure my final and necessary quarter. I realize that my Social Security benefit will be reduced by the provision of windfall earnings and also by government pension compensation. Now I can collect $ 500 per month under my work record, which will drop to approximately $ 250. Later I will be unscathed when I take Medicare Part B. Can I collect under my wife’s work record or is that where the Government Pension Compensation? And since my pension is higher than your SSA benefit, would you get nothing from your record? She is 60 years old and still working. Thanks Gene
Hello Gene, just to clarify, the Unexpected Elimination Provision (WEP) only affects Social Security retirement and disability benefits paid based on a person’s Social Security income history. Government Pension Compensation (GPO), on the other hand, only affects ancillary or marital benefits payable on someone else’s record, such as spouse or survivor benefits. The GPO reduces spouse and survivor benefits by 2/3 of a person’s uncovered government pension amount.
You would not be able to apply for spousal benefits until your wife begins receiving your benefits, and if you are already receiving your CSRS pension at that time, it appears that your spouse rate would surely drop to zero.
Your own Social Security retirement benefit rate is likely to drop because WEP assumes you are already withdrawing your CSRS pension, but neither the WEP nor the GPO is effective until you actually start collecting your non-covered pension. Social Security. However, WEP never reduces a person’s Social Security benefit rate to zero, so as long as you have at least 40 quarters of income covered by Social Security, you will be able to get at least some Social Security retirement benefits .
My company’s software, Maximize My Social Security or MaxiFi Planner, is fully programmed to handle calculations involving both WEP and GPO, so you may want us to help you with your Social Security planning. Social Security calculators provided by other companies or nonprofits can provide adequate suggestions if they were built with extreme care. Better, Larry
If I go back to work and stop collecting SSDI, can I delay my retirement benefits until I am 70?
Hi Larry, I’m 58 and have been collecting SSDI since the age of 50. My total retirement age is 67. If I go back to work and stop collecting SSDI, am I eligible to delay my social security retirement benefits to 70? Thanks Bob
Hi Bob, yes. If your right to Social Security disability benefits (SSDI) ends before your full retirement age (FRA), you will be free to apply for your Social Security retirement benefits at any time.
However, even if your SSDI does not end and is converted to regular Social Security retirement benefits in FRA, you can voluntarily suspend your benefits at that time to obtain deferred retirement credits (DRC). If you voluntarily suspended your benefits for the full 3 years between your FRA of 67 and 70, your benefit rate would be 24% higher when your payments resume at age 70. Better, Larry
Can I apply for my own benefits at age 60 and then switch to widower benefits at age 62?
Hi Larry, my wife, born in 1952, passed away in 2011. She was nine years older than me. I will turn 60 in January 2021. My Social Security is less than yours. I wonder if I can draw on mine at 60 and then switch and draw on his after turning 62. Thanks Arthur
Hi Arthur, I’m sorry for your loss.
The earliest you could collect your own Social Security retirement benefits is at age 62. The only way you could get benefits on your own record sooner is if you are disabled and qualify for Social Security disability benefits (SSDI).
Depending on how much you will earn if you are working, and how much less your own benefit rate compares to the potential widower rate, your best filing strategy is almost certainly to apply for reduced widow benefits at 60 or as soon as possible. your winnings will allow at least some benefits to be paid, then switch to your own record at 70; or to apply for reduced retirement benefits on your own record at age 62 or as soon as your earnings allow at least some benefits to be paid, then apply for Non-Retirement Widowhood Benefits (FRA). Better, Larry
Has anyone at the federal level considered reducing the amount of substantial profits this year given the current economy?
Hi Larry, I’m still working, I have a small monthly pension from a state retirement fund and I’m collecting Social Security benefits. My monthly SSA benefit checks are reduced a little with the WEP based on my state retirement pension.
I have been reducing that WEP deduction each year by continuing to work and I have currently recorded 27 years of substantial earnings, with three before that WEP deduction is completely removed. I see the published Substantial Earnings (SE) minimum for 2020 is $ 25,575. Due to coronavirus closings, I will be out of work for at least three months during 2020. That forced downtime will make reaching that SE minimum problematic this year. I am sure I am not the only one in this situation. Has anyone at the federal level considered that minimum and considered reducing it? I think it is only fair that those without jobs be considered who will have more difficulties in meeting the SE requirements established before closure at the national level. Thanks Carl
Hi Carl, your point is well taken, but I would be surprised to see a change in the substantial amount of earnings currently set for 2020. It would require an act of Congress to change the amount, and I suppose Congress has its pretty hands full right now. . I suppose they would consider amending the amount of substantial earnings as quite low on their priority list, but I really don’t know if a change is being considered or not. You can try presenting your proposal to your representative at the congress, or at least to someone in your office. Better, Larry