Ask Larry: How Should We File For Social Security?

Social Security may be one of your largest assets. What and when you collect will make a huge difference to your lifetime benefits.

Today's Ask Larry column examines the effects of the Earnings Test and other questions.

Larry was on vacation so some of the questions in this week's column have been answered by Jerry Lutz, a former Social Security Technical Expert, Mike O'Connor, our chief Social Security software engineer and John O'Connor, our chief of customer support. You can submit a question by clicking on the link on our homepage at Maximize My Social Security.

Can I Take Divorced Spousal Benefits And Still Work?

Hi Larry, I'll be 66 in January 2017 and I was married for 10 tears and divorced never married. Can I apply for divorce suppose benefits and still continue to work and take my benefits at the highest possible value at age 70. Best, Zeyheb

Hi Zeyheb, (I think tears rather than years is an interesting slip!) Once you reach 66, you can file just for your divorced spousal benefit and earn as much as you want because the Earnings Test goes away after one reaches full retirement age. You can go into the office a few months before hitting 66 and file just for your divorced spousal benefit. You need to write this in the Remarks section of your application. Indicate clearly that you are not filing for your own retirement benefit, just your divorced spousal benefit. Tell your ex, if she was 62 before January 2, 2016 that she can do the same. Best, Larry


Will I Get Hit With the Earnings Test After I Retire at 63?

Hi Larry, I'm 63, working full-time, and am wondering if I retire and file for SS benefits this year on July 1, are my monthly social security benefits reduced during the remainder of the year because of income generated prior to retiring? Cheers, Tom

Hi Tom, If you don't earn anything after you retire, Social Security will apply a monthly earnings test after you start collecting your benefits and you won't be hit by the Earning Test. They have this special monthly earnings test in the first year you start collecting your retirement benefits, which they call your Grace Year. The real question is why not wait till 70 to get a roughly 65 percent higher benefit? Best, Larry


Should I Collect Early To Be Held Harmless?

Larry, I'm now 69 and did the file and suspend with my wife getting her SS as a non-working spouse when she turned 66 in 2013. I pay my Medicare every 3 months by credit card. This year 2016, my Medicare went up because I send in the payments due to the file and suspend, as I await 70. The medicare payment went up for me and not my wife since hers is deducted for her SS payment. As I see now the CPI appears to be low for 2016 and if I wait till my April 2017 birthday (70). I would most likely get another increase on Medicare Payments. Am I ahead or should I file in Nov. to lock in the (hold harmless) amount for Medicare? I thought that I read some where that people will have to repay the difference in this years Medicare amounts. Should I go for my 70 amount or is Medicare payments a mute point? Thanks, Sam

Hi Sam, I think a good answer may (emphasis on may) be to start your retirement benefit as of this November. I believe that will permit you to be held harmless for next year with respect to the Medicare Part B premium increase. This will come at a permanently lower retirement benefit and you'll have wait a year to collect this year's DRCs (because you are taking your retirement benefit before you actually hit 70). I'm presuming you won't be 70 until after November. If you do reach 70 before November, you don't have to worry about this. I recommend running expert software to see what you'll lose in lifetime SS benefits and then thinking through what I believe will just be temporary gains from being held harmless. I.e., my understanding is that those that are held harmless will see smaller SS COLAs down the road until they are paying the same Part B premium as those not held harmless. My best, Larry

Can My Wife Get Reduced Benefits On Her Own And Spousal Benefits Later?

Hello! I have called and emailed the Social Security Administration on several occasions and get conflicting answers. Then I discovered, and have enjoyed reading your book, Get What's Yours - Revised Edition. Yet, I still don't clearly understand the answer to our situation.

My wife will be 62 soon (in July 2016). I am a year younger at 61. I have earned much more than my spouse over the years (est $2,270 from SS @ FRA), but she could have some Social Security on her own work record (est $660 from SS @ FRA). However, she could receive a much higher payment by taking the maximum spouse benefit from me when I retire (est $1,135 from SS). I plan to keep working and not receive Social Security until I am 70, in 9 years (est $3,010 from SS @ age 70). And, I understand my wife would not be able to receive a spousal benefit until I retire. I don't want to jeopardize the higher spousal benefit for my wife. But, is it possible for her to receive the lower benefit on her own record for the next 9 years until I retire and then receive the higher spousal benefit? I see that due to deeming, if my spouse began taking a Social Security benefit on her own record, either now at 62 or at 66, she would have been deemed to have also taken a spousal benefit too - if she's eligible.

However, since I am not yet retired, and there is no spousal benefit available from me yet, how would that work? I read in your book that if she files for her retirement benefit, that she can never take an auxiliary benefit by itself. But, would that later auxiliary benefit really be by itself, since, technically, she would receive her benefit plus the portion of the spousal benefit up to the total spousal benefit? So, my question is: Can she take her own benefit for the next 9 years until I retire, and then begin to receive a higher spousal benefit when I retire? Thanks, Tim

Hi Tim, the answer is a qualified yes, but any reduction she takes on her own record will continue for as long as you are both living. I'll explain using the figures you quote above, and your filing plans.

If your wife files at age 62, her reduced benefit will be about $495 rather than the $660 she'd get if she waited until full retirement age (FRA). She wouldn't be deemed to be filing for spousal benefits until you apply. Since she will be well over FRA at that time, her excess spousal benefit will be unreduced. Her excess spousal benefit will be calculated by dividing your full retirement age benefit (PIA) in half, then subtracting her full retirement age benefit (PIA). Using your figures above, that will work out to an excess spousal benefit of $475 (i.e. $2270/2 - $660). That $475 would then be added to your wife's reduced retirement benefit of $495 to give her a total benefit of $970. Keep in mind that these are only estimates, and the exact amounts will no doubt vary somewhat.

If instead your wife waits until FRA to apply, she would get the $660 initially, then the extra $475 when you file, for a total of $1135, or one-half of your PIA. Note that the spousal benefit is calculated from your PIA, not your actual benefit amount as increased by delayed retirement credits (DRC). But, as a widow, she could convert to your full rate inclusive of any DRCs you earn. This is true whether she files for reduced benefits on her own record, or not. If you haven't already done so, you may wish to run expert software available. That will allow you to run some varied scenarios, and should give you a better idea of the best options available for you and your wife. Best, Jerry

Can I Collect Widow's Benefits from My First Husband?

Exactly 1 day after our 8th wedding anniversary my husband was killed in the line of duty. He was in law-enforcement, I received surviving spouses Social Security benefits until I remarried six years later. I was married for almost 25 years to husband number two. In December of 2015 we were officially divorced. I am nearing my six month before I turn 60, when I turn 60 can I reapply for again my Sosa security due to my first husband's death. I have not earned enough on my own to get My own Social Security benefits. Now that I am divorced from second husband when would I be eligible for his so security disability if I am turning down for first husband's survivors benefit? I hope this makes sense to you. I turn 60 February 1, 2017. Thank, Dee

Dee, yes, you can reapply for widow's benefits off of your first husband's record when you turn 60 years and 1 month, however they will be reduced if you take them before your full retirement age. You can switch to divorced spouse's benefits off of your second husband's record as soon as both of you are age 62 years and 1 month of age. Best, Mike

Shouldn't I File and Suspend before Applying for Spousal Benefits?

On a talk radio, the guy said if you are 62, then I need to come listen to his SS/retirement recommendation. Free dinner of course. He gave an example. Similar to what I had hoped to do with my spouse's and my SS benefits. Basically, when my wife reaches 66 in December 2016, I was going to let her start her SS benefits and I (62) file and suspend my benefits and ask for spousal support. I got the inkling that this may no longer be possible, thus the guest speaker on the radio said people like us should come to his lecture. I hesitate to do that because it comes down to a sales pitch. And they keep hounding you. So, is this no longer possible? Where I file and suspend and ask for spousal benefits when I am 62 and my wife is at FRA drawing her SS benefits? Thanks, Norm

Hi Norm, first you would never have wanted to file for and suspend your retirement benefit before filing for your spousal benefit. If you did, you'd then be eligible only for your excess, not your full, spousal benefit, which could be very small or perhaps more likely, $0. This has always been the case and has nothing to do with the new law. Second, you cannot suspend your retirement benefit until your full retirement age (FRA). Third, you cannot file for just your spousal benefit before your FRA. If you file for your spousal benefit before FRA, you'll be deemed to have also filed for your retirement benefit and both would be permanently reduced. This again has always been the case and has nothing to do with the new law. You can purchase our software for $40 for an annual license and it will not only determine your household's maximized strategy, but will also let you run any number of alternative what-if scenarios to see how they would play out in comparison to the strategy that yields the highest lifetime household benefits. Thanks, John

To learn more about your Social Security options, visit Maximize My Social Security.