I've gotten quite a few emails from readers who have questions about an article on Social Security benefits for spouses that recently ran in an issue of the AARP Bulletin. Some of you thought the answers they gave were incorrect. But they were not. Let's review some of them in today's column.
And one caveat before I go on: In order to avoid a lot of awkward "he/she" or "him/her" pronouns, I am going to assume the person applying for spousal benefits is a woman. Even though Social Security rules are gender neutral, statistics show that 95% of all spousal benefits are paid to women. Having said that, if you happen to be part of a married couple in which the wife earned more money than the husband, just reverse gender references as you read this column.
Anyway, one of the AARP questions asked: "Will I get a smaller spousal benefit because my husband retired early?" AARP answered: "No." But this comment from one reader echoed the thoughts of several others. He said, "I thought if I took reduced retirement benefits, my wife's spousal benefit also would be reduced."
But the fact is a wife's spousal rate is always based on her husband's full retirement age benefit, even if he took a reduced early retirement rate. And the percentage she gets depends only on her age when she files.
However, the rules are different for widows, and maybe AARP should have pointed that out. If a guy takes reduced retirement benefits, that reduction will carry over to his widow.
Let's follow this example. Jack's full retirement age rate is $2,000. But he files at age 62 and starts getting a reduced rate of 75%, or $1,500. His wife, Jill, files for spousal benefits a couple of years later when she turns 62. At 62, the spousal rate is about 35%. And she is going to get around 35% of Jack's $2,000 full retirement age rate. So she is going to get about $700.
Then, 20 years later, at age 82, Jack dies. (To keep my math and the example simple, I'm not going to adjust the rates for inflation or cost of living increases.) As I said, a widow's rate IS affected by whether or not her husband took reduced retirement benefits. So now Jill's widows rate is based on Jack's reduced retirement benefit of $1,500. Because she is over age 66, her widows rate is 100%. But again, it is not 100% of Jack's full retirement age benefit. It is 100% of his reduced retirement rate of $1,500. So, normally, I would tell you that Jill would get 100% of Jack's $1,500 benefit. But there is one more little twist. There is a rule that says a widow over age 66 can't get less than 82% of her husband's full retirement age rate. So instead of getting $1,500, she is going to get $1,640.
Another of the AARP questions asked this: "I'm divorced. Can I get spousal benefits even though my ex has not retired?" And they answered: "Yes. If you are single and at least age 62, you can get benefits as long as your ex also is 62, but he does not have to be getting benefits."
Many readers wrote to tell me that they were sure that a wife could not get spousal benefits on her husband's record until he had actually filed for Social Security himself.
And that is true if the couple is currently married. But that rule does NOT apply to divorced couples. And I'm sure many of you may wonder why that is. Let me explain.
To grasp the thinking behind these laws, you have to understand that benefits to spouses have always been classified as "dependent" benefits. In other words, a wife must be considered financially dependent on her husband in order to qualify for spousal benefits on his record. Once you get that in your head — that dependency is the key to eligibility for spousal benefits — you will understand why the rules are different for divorced women.
If a couple is currently married, the law assumes that a husband, whose wife is potentially due spousal benefits on his record, is financially supporting that wife. In other words, if he is still working and not yet getting Social Security benefits, the law assumes she doesn't need Social Security benefits on his account until he is also getting such benefits. But the law can't make that assumption for divorced couples. So the rules allow a divorced woman to access her ex's Social Security account even if he hasn't yet filed for benefits himself.
That covers readers' questions about the recent AARP article. I still have room to answer another question from a reader about spousal benefits — more specifically, survivor benefits for spouses.
Q: I know you've covered this topic before, but I'm still confused about what each of us might get if the other one dies. Here are the particulars. We are both in our 80s. We both started our Social Security at 65. I get $2,150. My wife gets $1,875. If I die first, what will my wife get? And if she dies first, what will I get?
A: If you die first, your wife will keep getting her own $1,875, and she will get an extra $275 in widows benefits to take her up to your $2,150 level. If your wife dies first, you won't get anything extra. You'll just keep getting your $2,150 retirement check.
The reason why you don't get any widower's benefits goes back to that "dependency" business I mentioned earlier. To collect spousal or widow(er)s benefits, the law says you must prove that you were financially dependent on your wife.
SSA planners knew that it would be a logistical nightmare to make members of a married couple bring in evidence to prove dependency (pay stubs, bank statements, etc.) So they decided to just make this assumption: The spouse with the lower Social Security benefit is automatically considered to be financially dependent on the spouse with the higher benefit. Thus, your wife is deemed to be financially dependent on you, so she gets widows benefits. Conversely, you cannot be deemed to be financially dependent on her, so you can't get widowers benefits.
If you have a Social Security question, Tom Margenau has the answer. Contact him at [email protected] To find out more about Tom Margenau and to read past columns and see features from other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
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