Ask Larry: Is There Any Reason For My Wife To Delay Taking Her Social Security Retirement Benefits?


Today’s column addresses questions about whether delaying filing is always merited, paying back taxes, whether filing early to avoid potential cuts to Social Security makes sense, disability and survivor benefits and filing options during the pandemic. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.

See more Ask Larry answers here.

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

Is There Any Reason For My Wife To Delay Taking Her Social Security Retirement Benefits?

Hi Larry, I took my Social Security retirement benefits a few months after my FRA in 2009. My wife is 62 later this summer and would receive $1,085 then or $1,632 at her FRA. My retirement benefit is approximately 30% more than her FRA retirement benefit amount so she will have the widow’s benefit in the future.

With health insurance as her primary expense until she is eligible for lower cost Medicare, is there any reason to wait for her FRA? It seems like it would take around 8–9 years to recover the IRA withdrawals necessary to allow her to delay. Thanks, Joseph

Hi Joseph, The main downside to taking her retirement benefits early is that your wife would then be stuck with a lower monthly benefit rate for as long as both of you are living. However, if you’re relatively certain that you won’t live past when your wife reaches roughly 78, then a good argument could be made for starting to draw her benefits early. If you die after she reaches full retirement age (FRA), your wife would still be eligible for your higher rate as a survivor instead of her own retirement benefit rate even if she takes her retirement benefits early.

It sounds like you have a good understanding of the issues involved, so the decision on when to apply is really up to your wife. She may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner —  to fully explore all of her options so that she can make the best possible choice. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

Will Social Security Recalculate My Benefit Rate If I Fix My 2016 Tax Obligation?

Hi Larry, I retired 2016 at 62. I have enough credit in yearly estimates that Social Security to get about $800. But I have yet to collect a penny yet. The letter I got is they cannot pay me because I was working 2016 and did not fill tax for that year. That was the only year I missed in over 25 years. So if I fix my 2016 tax obligation, are they going to recalculate my retirement from the year I retired or how are they going to calculate my retirement benefit. Thanks, Cindy

Hi Cindy, If you worked for wages in 2016 then your employer would have been responsible for withholding and paying the required Social Security taxes. As long as that was done Social Security would give you credit for those earnings when calculating your benefit rate even if you didn’t file a tax return.

On the other hand if you were self-employed, then any required Social Security taxes are paid in the form of self-employment taxes paid when you file your tax return. So if your earnings in 2016 were from self-employment and you didn’t file a tax return, then you wouldn’t receive credit for your 2016 self-employment earnings when Social Security calculates your benefit rate.

Self-employment taxes must be paid within 3 years, 3 months and 15 days of the end of the tax year in question in order for the self-employment earnings to be creditable by Social Security. Therefore, you’d have to have to file a tax return and pay self-employment taxes for the year 2016 no later than 4/15/2020 in order to receive Social Security credit for 2016 self-employment earnings. Best, Larry

Is It More Prudent To Start Collecting Benefits This Year To Be Sure I’m On The Social Security Rolls?

Hi Larry, I’m single, never married and will be reaching my full retirement age of 66 this year. Although I do not need the money, I worry that if I wait till 70 to collect, I may not receive the handsome sum that was promised to me all these years if the government is strapped for money. Is it more prudent to start collecting this year to be sure I’m on the Social Security rolls? Thanks, Frank

Hi Frank, I can’t tell the future, but I would not recommend making decisions about when to start drawing benefits based on concerns about the long-term funding of Social Security. Social Security has been paying benefits for more than 80 years now, and I believe that Congress will find a way to fund the program to ensure payment of future benefits as promised. Best, Larry

Can You Help Me Figure Out What To Do?

Hi Larry, My husband died at 66 and was collecting Social Security disability of $958 at death. I was 54 at his death. I am on SSDI at $863 month at 58 now. If I drop my own check and pick up his, it seems like it would only be about thirty dollar difference and so might not really be worth it. What do you think? Thanks, Helen

Hi Helen, I’m sorry for your loss. You wouldn’t want to “drop” your own Social Security disability (SSDI) benefits even if that were allowed. If you only qualified for disabled widow’s benefits (DWB) and not SSDI, your entire payment amount would be reduced by 28.5%. In other words, you’d get less per month if you weren’t drawing SSDI benefits.

SSDI benefits are not reduced for age. If you’re drawing SSDI and you become eligible for DWB, only the DWB benefits are reduced by 28.5%. For example, say Jane is receiving an SSDI benefit of $1,000 per month. Jane’s husband dies and since Jane is between ages 50 and 60, she qualifies for DWB. Jane’s husband’s full benefit rate, or primary insurance amount (PIA), was $2,000, so Jane’s DWB benefit would be calculated by subtracting her SSDI amount from her husband’s PIA and then reducing the difference by 28.5%. In Jane’s case this results in a DWB rate of $715 (i.e. ($2000 – $1000) x .715), which is then paid in addition to Jane’s own SSDI benefit to give her total monthly benefits of $1,715.

In the above example, if Jane wasn’t getting SSDI, her entire DWB payment of $2,000 would be reduced by 28.5%, resulting in a monthly rate of $1,430. Furthermore, there is a little known Social Security regulation that results in the removal of the 28.5% DWB reduction at the widow’s full retirement age (FRA), but only if the widow was drawing SSDI at the time he or she first qualified for DWB.

Suffice to say that if you’re drawing SSDI and if you’re eligible for additional DWB benefits from your husband’s record, you’d want to claim the DWB benefits as soon as possible. Any percentage reduction applied to your DWB benefit will be removed when you reach FRA, so there’s no downside to claiming the DWB benefits now. Furthermore, the fact that your husband’s ex is receiving benefits from his record will not adversely affect the benefits you receive from your husband’s record either now or in the future. Benefits paid to a divorced spouse don’t count toward the family maximum benefit amount. Best, Larry

How Can I Apply For Benefits If I Can’t File Online?

Hi Larry, I reach 70 in a few months and need to file for my Social Security retirement benefits under my own record, having delayed my benefit to receive maximum delayed retirement credits. I am currently receiving spousal benefits only. I understood from a previous question that I can’t apply online, and must either apply in person or by phone. Do you have any information about how those of us who must call to apply are faring during the COVID-19 pandemic? Any words of advice on how to ensure this goes smoothly? Thanks for the great advice that is enabling us to increase our income in our later years. Thanks, Janice

Hi Janice, I’m glad you asked that question. Social Security’s website claims that they are constantly expanding their online services, and filing for retirement benefits after filing for spousal benefits is no longer listed as an exception to filing online. Therefore, you may want to first try filing your application online.

If you’re unable to use online filing, the only good current option is to apply by phone. The problem is that Social Security’s phone system is stressed to the max these days, so hold times are usually quite lengthy. The good news is that you can apply up to 6 months after the month you reach age 70 without suffering any loss of benefits, so there’s no great urgency to get your claim filed. Best, Larry

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