I hate writing columns that are critical of some of my former colleagues who are still working for the Social Security Administration. But doggone it, if they are going to keep handing out bad advice, someone’s got to take them to task — and give the right answers to people who are seeking help about their Social Security situation. Here are some recent emails I’ve received from my readers.
Q: I waited until I was 70 to start my benefits. My Social Security check is $3,600 per month. My wife is about to turn 62. She is due much less from Social Security — $2,200 if she waits until her full retirement age or about $1,600 if she files now. We called the SSA national number to talk about this. The phone rep told us that if my wife filed for reduced retirement benefits now, her future widow’s benefits will also be reduced, so we decided not to have my wife file now. But I read something in one of your columns that seemed to contradict what we were told. Can you help us out?
A: You got some bum advice from that SSA rep. If your wife takes reduced retirement benefits now, that will not reduce any widow’s benefits she would be due on your record later on. In your case, there is only one factor that will determine what she would get in widow’s benefits, and that is her age at the time she becomes a widow and files for those benefits. If she is over her full retirement age (age 67 in her case) when you die, she is going to get a 100% widow’s rate. If she is under 67 when you die, that widow’s rate would be reduced by about one-half of 1% for each month she is under age 67. But if you do die before she reaches FRA, she could choose to continue to receive her reduced retirement benefits until age 67, when she could switch to full widow’s benefits.
Q: I was planning to wait until age 70 — in July 2023 — to file for my Social Security. I was doing this in part to guarantee that my wife will get the highest widow’s benefit possible after I die. (Her Social Security benefit will be much smaller than mine.) I was talking to an SSA representative about this and imagine my surprise when he told me my wife’s widow’s benefit will be based on my full retirement age benefit rate. This threw a big monkey wrench into my planning. Can you verify that what he told me is correct?
A: Actually, I can verify that what he told you is dead wrong! Assuming you die before your wife, her eventual widow’s benefit will be based on your age 70 benefit rate. The SSA rep was probably mixed up because the spousal benefit paid to a wife (with a living husband) is indeed based on the husband’s full retirement age benefit rate. But the rate paid to a widow is based on the husband’s total amount, including any augmented benefits he got for delaying his retirement beyond full retirement age. Or to put that another way, a wife doesn’t share in the so-called “delayed retirement credits,” but a widow does.
This next question involves a situation where a guy didn’t get wrong answers from an SSA representative, but he didn’t get right answers either.
Q: I called the Social Security Administration twice, talking to two different representatives, and I got two different answers. Here is the story. I am 69 years old, and I filed for my Social Security benefits in January. But after doing so, it dawned on me that I won’t be filing my tax return for 2022 until early April 2023. I wanted those 2022 earnings to be added into my Social Security benefit, so I called the SSA back. The first agent I talked to told me that I should withdraw my claim, and then wait until I file my 2022 tax return and then file a new claim, bringing in my 2022 tax return so that they can add my 2022 earnings into my benefit rate. She said the benefits would be paid retroactively until January. I wasn’t sure about that answer, so I called again and talked to another rep. This lady told me that I didn’t have to withdraw my claim and that my earnings would eventually be factored into my benefit rate and that this would occur sometime in 2024. So, who is right?
A: Well, neither one is totally wrong, but neither one is totally right, either. Here is how it will work. As you surmised, your initial benefit rate will not include your 2022 income (because that income hasn’t been reported to the government yet). But sometime later in 2023, once you file your tax return and the IRS turns over its data to the SSA, then the SSA will refigure your benefit and you’ll get an increase (if you’re due one — more about that in a minute). This usually happens by about October, and it will be retroactive until January 2023. This is a normal, routine procedure that happens all the time.
You could do what the first phone rep suggested, but it sure isn’t worth the hassle. I mean, why bother going through the mess of withdrawing your current claim and refiling a new claim later just to end up where the procedure I outlined above will take you automatically?
The second rep was right to tell you that you don’t have to withdraw your current claim. But she was wrong to tell you that you would have to wait until 2024 to get your benefit refigured.
And speaking of your benefit being refigured, earlier I mentioned that your 2022 income may or may not increase your benefit rate. But explaining this is way too complicated to squeeze into this column. I suggest you spend ten bucks and go to Amazon.com and get my little Social Security guidebook called “Social Security: Simple and Smart.” One of the chapters in the book explains how benefits are figured. It will tell you why any earnings you have after age 60 may or may not increase your benefit check.
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