Q: Does a spouse who is under 65 and applying
for their own benefit have to apply for the spousal if the other spouse is
already collecting? This question comes from this; Had a conversation with a
client last night who explained to me that he had claimed his SS at age 64 (he
is now 73). His wife who is younger than he (second marriage for both and
married after age 60), claimed her benefit at her age 63 (and after they had
married—she is 65 now). Client explained that she has been collecting off her
benefit and he off his. The wife went to apply for her spousal benefit recently
and the SS office told her that should have been collecting her spousal when
she applied for hers and her husband was collecting his. Make a long story
short, the client tells me SS is going to pay the wife $13,000 or $14,000 for
the years missed.
—Dan S.
A: It is true that if a person applies for Social Security before full retirement age, she is deemed to be applying for all the benefits she is entitled to. I believe it was SSA's mistake not to have noticed that she was entitled to a spousal benefit at the time she applied for her own benefit. That's why she's getting the lump sum. Nice.
Q. The client a female—will turn 62 in April 2014. She is currently married to her 3rd husband (a high-earning litigation attorney). Her second husband died unexpectedly several years ago. Her (original) ex-husband is still living. Her second husband was a very high-income earner (investment banking). How long would she have to have been married to her second husband to claim survivor benefits on his Social Security? Is that the smart move for her? She is adamant about starting her Social Security benefits when she turns 62.
—John B.
A. This is pretty complicated, so follow it carefully. The first question is this: How old was she when she married husband #3? If she was under age 60 at the time of the marriage, she is not entitled to a survivor benefit from husband #2. If she did remarry before age 60 and she really wants a survivor benefit from husband #2, she can only get it if she divorces husband #3.
Second, was she married to husband #2 when he died? If so, she only needs to have been married to husband #2 for 9 months. However, if she and husband #2 were divorced and he died after the divorce, that marriage must have lasted at least ten years in order for her to qualify for survivor benefits. But again, this is assuming she remarried husband #3 after age 60 or she divorces him if she married him before age 60.
If she does qualify for a survivor benefit from husband #2, she could file for it now (eligibility for survivor benefits starts at age 60 for a reduced benefit). If she doesn't, the only benefits available to her will be her own retirement benefit based on her own work record and a spousal benefit based on her current husband's work record. However, she may not get that spousal benefit until he files for his benefit. If he wants to delay his own benefit to maximize it, he can file and suspend. This will entitle her to her spousal benefit, but not until he turns 66. If she is adamant about starting Social Security at 62, and if she qualifies for benefits on her own work record, she can file at 62 and receive 75% of her PIA as her permanent retirement benefit. When her husband files for his benefit, she can file for a spousal benefit, which will be the difference between her PIA and one-half of his PIA, added to her existing reduced benefit.
Please
remember our upcoming “Social Security Planning for Women” educational event on
Saturday, January 4th.
