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Ask Larry: Will My Wife’s Social Security Widow’s Benefit Include My Delayed Retirement Credits?

Today’s column addresses questions about whether survivor benefits include delayed retirement credits (DRCs), potential effects of a public pension on spousal benefits, filing retroactively for Social Security retirement benefits and whether caring for parents might affect disability benefits. 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.

Will My Wife’s Social Security Widow’s Benefit Include My Delayed Retirement Credits?

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Hi Larry, I’m the higher earner and I will delay my Social Security retirement benefit till 70 to get the maximum amount of delayed retirement credits. I’ll have four full years of the 8% annual increases so my retirement benefit will be 32% larger than it would be if I filed when I turned 66. I’m also five years older and my health and family history make it likely that I’ll die before my wife does. She filed for her retirement benefit at 62 after earning moderate income working part time outside the house in addition to doing much of the work at home and with the kids.

She took her moderate Social Security retirement benefit at 62 so it’s of course reduced since she took it before her full retirement age. But what about her widow’s benefit based on my record? Assuming I pass first, what will she get? Even my benefit at 66 would have been larger than her benefit at 62 so my increased benefit at 70 is quite a bit larger than her reduced age 62 benefit. Assuming I live past 70, will my wife receive the delayed retirement benefits I earned as part of her widow’s benefit or will it be smaller that what I’ll get at 70 because she filed early or for some other reason? Thanks, Ted

Hi Ted, Yes, if your wife qualifies for widow’s benefits her benefit rate would include credit for any delayed retirement credits (DRCs) that you earned by waiting past your full retirement age (FRA) to start drawing your benefits. However, if your wife starts drawing widow’s benefits prior to her FRA, her widow’s rate would be reduced for age. The fact that she started drawing her own retirement benefits prior to FRA would not cause her to receive a lower widow’s rate though. So as long as she files at her FRA and you live to at least 70 and delay filing for your retirement until then, her widow’s benefit will be equal to your age 70 benefit.

If you were born before 1/2/1954, you may be able to receive spousal benefits based on your wife’s record before you file for your retirement benefit at 70. My company’s software — Maximize My Social Security or MaxiFi Planner — can help you and your wife sort through your options. You can also model different maximum ages for each of you to see what benefits the survivor could get. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

Will I Be Able To Collect Part Of My Wife’s Social Security If I’m Collecting A Civil Service Pension?

I am collecting a civil service pension. My wife will be retiring at 66. Will I be able to collect based on the Social Security taxes she paid? Thanks, Bill

Hi Bill, The answer to your question depends on a number of factors. If you didn’t pay taxes on your earnings while you worked for the government, then any Social Security spousal or survivor benefits for which you’d otherwise qualify would almost certainly be offset by 2/3rds of the amount of your civil service pension. If that’s the case, then you’d only be able to draw benefits from your wife’s Social Security record if your civil service benefit rate is less than 150% of the amount of your potential spousal or survivor rate. The reason for the offset described above is the Government Pension Offset (GPO) provision. The Windfall Elimination Provision (WEP) reduced benefits claimed on your record while the GPO reduces benefits you claim based on your wife’s record. Best, Larry

Can My Wife Apply In September 2020 And Choose April 2020 As Her Retirement Date?

Hi Larry, My spouse turned 66 in April 2020. We initially decided to wait until September 2020 for her to file for retirement benefits but now we’re reconsidering that decision and wondering if she should have filed in April. Can she choose April 2020 as the start date and will Social Security pay her benefit back to April or are we now stuck with her filing now? Not sure how that works. Thanks, Jack

Hi Jack, Yes, your wife could file her application as late as six months after the month she reaches full retirement age (FRA) and claim her benefits retroactive to the month that she reached FRA. For example, if your wife reached FRA in 4/2020 ,she could apply as late as 10/31/2020 and still claim benefits effective with 4/2020. Social Security would then pay her back pay for her retroactive months of entitlement.

You and your wife may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to analyze your various options in order to determine the best filing strategy to maximize your benefits. As I noted above, Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

If My Parents Pay My Brother For Taking Care Of Them, Would It Interfere With His Disability Check?

Hi Larry, My brother is collecting his Social Security disability benefits. He has moved in with our parents who are 85 and 78. Our mother has dementia and our father has heart problems so he moved in to help take care of them. He has not been accepting any income for his assistance though my father is willing to pay him. My brother is unsure of the rules about accepting money on the side and is of course concerned that it does not interfere with his disability check. Can you explain to me how this works and what are the limits of additional monthly pay? Thanks, Kerry

Hi Kerry, Money that your parents give your brother for taking care of them would not have any adverse effect on your brother’s Social Security disability (SSDI) benefits. It would, however, likely reduce his payments if he’s receiving Supplemental Security Income (SSI), which is the needs based program administered by Social Security.

If your brother went to work for wages of if he was self-employed, he could generally earn up to $1,260 per month without affecting his SSDI benefits. But acting as a caregiver for your parents in their home would not be classified as either wages or self-employment as long as it’s not done in the course of a trade or business and so wouldn’t affect his SSDI. Best, Larry

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