If the spousal benefit recipient file at the same time as the spouse and at 62. Both her benefit and the spousal benefit get reduced. Also, the reduction schedules are slightly different. So if her FRA is 67 and FRA benefit is 800, and she starts her benefit at 62, she will receive 560 (563, your number) and also receive $65 as her spousal benefit. But if her husband waits till she is FRA to file, she will get the 100% of the $100. If she waits till after FRA to file, I think she still gets 100% of spousal benefit. even though the total is more than 50% of his benefit. Value of maximum benefit is based upon FRA values and not on actual filing date. After FRA value of spousal benefit does not get increased but her benefit does continue to increase. Before FRA, the value gets reduced.
The choice is a balance between getting the most benefits out of Social Security as possible, and also a hedge against needing more income later for longer. Optimal Social Security strategies usually need to be made only when looking at your financial plan as a whole. What are you most at risk for? What concerns do we need to hedge? If you can begin SS benefits early and know you will be ok later on with other assets, that can be fine. Thanks for watching and for the comment.
Good video. However, at 9:46 I don't see the breakeven in this example as being ~71. * ($563/mo * 5yr * 12mo/yr) ~ $33,780 (Early-file advantage) * ($33,780/$237-per-mo) ~ 143months ~ 11.9yr ~ 12yr (Years to breakeven with age-67 filing, thus age 79 breakeven).
Thanks for watching and for the comment Ed! I should have been more clear, the breakeven referenced also factored in the spouse's starting strategy as well. There would be several scenarios to compare together, and that age 71 was just one. Here's the numbers I used for that age 71 example: arnoldmotewealthmanagement.com/wp-content/uploads/2023/01/71-breakeven.png
Mistake #1 slide is wrong, I think. Since she filed a claim at 62, the spousal benefit, $100 (at FRA), is also reduced to $63 or something, not $100 even when her spouse files a claim at her FRA
Hi Jacob, thanks for watching and for the comment. The calculation for that scenario is correct. There could be further reductions as you describe if both spouses begin early, for example. But for the assumptions we used in that example, $100 would be the correct spousal benefit received.
@@ArnoldMoteWealthManagement I think your case is a wife files at 62, but a husband waits until 67. So, when she becomes eligible for a spousal benefit at 67, she is deemed to file at 62 and gets a reduced $63. Am I misunderstanding anything here?
@@jacobkowski7705 If she begins at age 62 and the husband has not filed yet, she is not eligible for any spousal benefit, so she will just receive the benefit on her record, which is reduced. When he begins his benefits, her spousal will then kick in and be reduced because of her age 62 benefit reduction. I am not sure I understand where deemed filing rules are applicable here since she is starting her own benefits first. But let me know if I am misunderstanding. www.ssa.gov/benefits/retirement/planner/claiming.html Your $63 number is correct if both spouses began at 62. In our example the higher earning spouse delayed until FRA, leaving the spouse with the full $100 spousal benefit.
@@ArnoldMoteWealthManagement I thought if the higher earning spouse delays until FRA, she still get only $63, not $100, at FRA because her own benefit started at 62, and she deemed to file a spousal benefit at 62. I thought that was a part of deemed filing policy. Again, her spousal benefit depends on when she filed her own benefit, not on when her husband files his own benefit.
According to the ssa.gov spousal benefit calculator it is even worse than you thought. A spouse claiming 60 months early will be entitled to 32.71% of the higher earner's FRA - which is about $589 in this case.
Thank you for explaining some of the complexities that may arise on applying for spousal benefits and the benefits for higher earning spouse. I have a question the term FRA. My FRA is 66 +2. Currently I am at 68. Let’s say my benefit is 2000 if I would have applied at my FRA (66+2). Suppose if I wait to apply for the SS benefits until I become 70 then my amount benefit is 3000. For the calculation of spousal (my wife) benefit, is it 50% of 2000 or 50% of 3000. She is currently 62 and wants to wait until her FRA of 67. Her own benefit is estimated to be around 600 at her 67.
Thanks for watching and for the comment. If your wife waits to claim until her FRA, her total benefit she receives will be 50% of your age 66+2 benefit, so $1,000. Or said another way, if she waits until 67 to claim, she will receive her $600 per month, plus $400 per month in spousal benefit.
Hi Kenneth, thanks for watching and for the question. When both spouses have similar PIA, they simply will get their own benefit and nothing more. The reason you see these high and low examples is because spousal benefits only kick in when one spouses benefit is less than half of the others. Does that help answer your question?
Would you please talk about the plan when the wife is older by 4 to 5 years and has retired at 62 but the husband will continue to work until FRA which is 67. What do each do? At 62 she'd get 699, and at FRA 1108. At 67 he'd get 2924.
Hi Frank thanks for watching and for the comment. It is tough to give specific numbers, but in general - If the wife claims at 62 she will obviously receive more benefits early on, but it will have a permanent reduction on spousal benefits. In the long run there will be a breakeven for the wife delaying - probably around the wife's age of 80-82. Because spousal benefits don't start until he claims, and because of the age difference, there could be less reason for him to delay past FRA. Technically, him delaying to 70 has a breakeven, but it would be out into the wife's age of 87-89 or so. However, this would also guarantee the surviving spouse a higher benefit once one spouse passes, since he would keep, or she would inherit, his age 70 benefit. Like everything in financial planning, there's a level of risk you need to be comfortable with and a lot of other variables. Do you have other savings to rely on for living expenses to allow you to delay? Are you more concerned about longevity, or spending early in the plan? Etc. Thanks for the question!
Hi! I have a question about Social Security Surviving Spouse benefits. I will be turning 60 next August. I have been a widow since 2017 and my late husband was collecting Social Security starting at age 62. Recently I visited my local Social Security office to ask questions about Social Security Surviving spouse benefits. I know the annual working income limit for 2024 is $22,320 and it is $1,860 monthly. I know that it is $1 taken out for every $2 over that limit. I told him I earned close to $50,000 this year of 2023. When I do the Math I will get a little bit each month. Not much though. I was told not to apply because my income is too high. He suggested that I start working part time and in the future I can apply for benefits with a lower income.. Nowhere on the SSA website did I read that there is an absolute maximum income limit before you should not bother to even apply for benefits. He wouldn't do any calculations to see if I am eligible for anything. Was I given the correct information? Thanks.
Hello, thanks for watching and for the question. From our experience, contacting your Social Security office for questions on your benefits is usually the best way since they can pull up your account and actual amounts. With the info provided we can't give you an exact answer on the benefit you'd receive, but since you are working and earning about $50,000, it is true that your benefit will be reduced by about $1,150 per month. The recommendation you received is subjective, and is not based on a hard limit. There is no absolute maximum limit, it would just depend on your spousal benefit and your income to know what amount of benefit is withheld. If you are in doubt and were not happy with your prior experience with contact SSA, you can always call again to talk with someone else who can pull up your account and give a second opinion.
Nicely explained video. Based on the spreadsheet example, they are the same age and Anne's spouse is not currently receiving benefits. I think that your spousal benefit calculation is not correct for the scenario shown. If I understand the SSA documentation and calculators, in calculating the MaxSP, the total would be reduced by the same percentage as Anne's early benefit amount (29.7%) because of deemed filing, so the MaxSP in this case would be $70.30 not $100, resulting in a total payment to Anne when her spouse files of $563+$70.3=$633.7. Am I mistaken?
Hi Rob, thank for watching and for the comment. If I'm understanding you correctly, I think the confusion is around there are potentially separate reduction factors for Anne's personal benefit and then the spousal benefit. You would be correct in an example of both spouses began around age 62, for example. Thanks again for watching and for your comment!
Yes, the reduction will depend on age. Section 723 and 724 of the Social Security handbook detail the reduction amounts. Thanks again for watching and for the comments!
IF- primary files before FRA and spouse takes spousal benefit at 62, if primary then dies, can the spouse remain on just the spousal benefit until FRA and then switch to survivor benefit which would be a higher benefit than survivor benefit taken earlier than 67? Or, is there no choice in the matter as to when the spousal benefit shifts to survivor? Thanks.
Hi Tracey, thanks for watching and for the question. It is our understanding that there is no choice in the matter and Social Security will automatically make the switch. Here's what Social Security says: " - If you already receive benefits as a spouse, your benefit will automatically convert to survivors benefits after we receive the report of death. - If you are also eligible for retirement benefits, but haven't applied yet, you have an additional option. You can apply for retirement or survivors benefits now and switch to the other (higher) benefit later. - For those already receiving retirement benefits, you can only apply for benefits as a surviving spouse if the retirement benefit you receive is less than the benefits you would receive as a survivor."
When you and your spouse are both on full retirement age. Can you claim spousal benefit now at age 67 then claim your own benefit at age 70? By initially claiming spousal benefit at age 67, Will you get the step up benefit (delayed retirement credit) for waiting to claim your own benefit until age 70?
Thanks for watching and for the question. That strategy used to be an option, but is no longer allowed. Now you can not just claim spousal benefit while delaying your own. In order to receive spousal benefits, you must first claim on your own benefits.
Thank you for the content. I have a question with a scenario I'm a little unclear on. I'm the higher earner and want to take early SSA benefit at 62 and NOT FRA. But my wife stopped working at 35. Will it be beneficial for her to wait till FRA 67 to file for spousal benefit? Does this mean she will be claiming 50% of my FRA benefit and not just 50% of my early 62 benefit? Thank you for your help in advance.
Thank you for watching and for the comment. She will receive a higher benefit if she waits until FRA. If she waits until her FRA she will receive 50% of your FRA benefit. Hope that helps. Thank you again for watching!
@@ArnoldMoteWealthManagement This rule does not apply to a divorced couple - the waiting till FRA? I turn 62 this year and my ex-husband is 70. Granted he took his benefit at 62 (we've been divorced for 7 years), my benefit on my ex's social security (which is higher) will be calculated on the amount at his full retirement age of 70 (at my age of claiming, 62)
@@ruthmedford5582 Thanks for watching and for the question. Ex spouse benefits have different requirements to be aware of: www.ssa.gov/benefits/retirement/planner/applying7.html But, based on your age, if you file for spousal benefits at age 62 your benefit received will be reduced compared to what it would be if you waited to file until FRA.
Hi Jerald, thanks for watching and for the comment. Although this was just an example, you are right that Social Security alone is not enough for a lot of retirees. While optimizing Social Security can be a big benefit, oOther savings or income will also be needed for sure.
Is it Social Security going to be gone by the time we reach there in a little over 10 -12 years? If you’re making over 90,000 a year doesn’t it put you in a higher percentage to 2- 3000 a month
So if my wife starts taking benefits at age 62 of $700 a month and I wait until 65 and get $1900, we were both born in 1963, how much will she get then if she switched to spousal benefits?
Hello, thanks for watching and for the question. As a general disclaimer, these numbers can change based on wages earned between now and retirement, inflation, etc. But for some approximate numbers, your wife would get an additional $80 per month in spousal benefits once you begin your benefits. She would receive $700 per month for a few years, and then once you begin your benefits at age 65 she will be bumped up to approximately $780.
Hi Dave, thanks for watching and for the question. The higher earnings spouse's timing does not have an impact. What matters is the lower earnings spouses timing of beginning benefits. In our example, as long as the lower earning spouse waits until FRA, they will receive $800 + $100 in monthly Social Security benefits. This $900/mo. is the same whether the higher earning spouse begins at 62 or 70.
Thank you very much.
I have watched 4 videos on this subject and your video was the only one that explained it well
Thank you for watching and for the comment. We are glad you found this helpful.
Outstanding! After watching several videos, now I am clear what we will do for SS. You are amazing!Thanks
Thank you for the comment. Happy to hear it was helpful!
If the spousal benefit recipient file at the same time as the spouse and at 62. Both her benefit and the spousal benefit get reduced. Also, the reduction schedules are slightly different. So if her FRA is 67 and FRA benefit is 800, and she starts her benefit at 62, she will receive 560 (563, your number) and also receive $65 as her spousal benefit. But if her husband waits till she is FRA to file, she will get the 100% of the $100. If she waits till after FRA to file, I think she still gets 100% of spousal benefit. even though the total is more than 50% of his benefit. Value of maximum benefit is based upon FRA values and not on actual filing date. After FRA value of spousal benefit does not get increased but her benefit does continue to increase. Before FRA, the value gets reduced.
Hi Ralph, thanks for watching and for the comment!
The
Excellent Video - Thank You!
Hi Randall - Thank you so much for watching and for the comment. Glad you enjoyed!
The odds that I’m gonna live to 70 or slim to none I can just feel it
The choice is a balance between getting the most benefits out of Social Security as possible, and also a hedge against needing more income later for longer. Optimal Social Security strategies usually need to be made only when looking at your financial plan as a whole. What are you most at risk for? What concerns do we need to hedge? If you can begin SS benefits early and know you will be ok later on with other assets, that can be fine.
Thanks for watching and for the comment.
Good video. However, at 9:46 I don't see the breakeven in this example as being ~71.
* ($563/mo * 5yr * 12mo/yr) ~ $33,780 (Early-file advantage)
* ($33,780/$237-per-mo) ~ 143months ~ 11.9yr ~ 12yr (Years to breakeven with age-67 filing, thus age 79 breakeven).
Thanks for watching and for the comment Ed! I should have been more clear, the breakeven referenced also factored in the spouse's starting strategy as well. There would be several scenarios to compare together, and that age 71 was just one. Here's the numbers I used for that age 71 example: arnoldmotewealthmanagement.com/wp-content/uploads/2023/01/71-breakeven.png
@@ArnoldMoteWealthManagement OK. Thanks for the reply.
Mistake #1 slide is wrong, I think. Since she filed a claim at 62, the spousal benefit, $100 (at FRA), is also reduced to $63 or something, not $100 even when her spouse files a claim at her FRA
Hi Jacob, thanks for watching and for the comment. The calculation for that scenario is correct. There could be further reductions as you describe if both spouses begin early, for example. But for the assumptions we used in that example, $100 would be the correct spousal benefit received.
@@ArnoldMoteWealthManagement I think your case is a wife files at 62, but a husband waits until 67. So, when she becomes eligible for a spousal benefit at 67, she is deemed to file at 62 and gets a reduced $63. Am I misunderstanding anything here?
@@jacobkowski7705 If she begins at age 62 and the husband has not filed yet, she is not eligible for any spousal benefit, so she will just receive the benefit on her record, which is reduced. When he begins his benefits, her spousal will then kick in and be reduced because of her age 62 benefit reduction.
I am not sure I understand where deemed filing rules are applicable here since she is starting her own benefits first. But let me know if I am misunderstanding. www.ssa.gov/benefits/retirement/planner/claiming.html
Your $63 number is correct if both spouses began at 62. In our example the higher earning spouse delayed until FRA, leaving the spouse with the full $100 spousal benefit.
@@ArnoldMoteWealthManagement I thought if the higher earning spouse delays until FRA, she still get only $63, not $100, at FRA because her own benefit started at 62, and she deemed to file a spousal benefit at 62. I thought that was a part of deemed filing policy. Again, her spousal benefit depends on when she filed her own benefit, not on when her husband files his own benefit.
According to the ssa.gov spousal benefit calculator it is even worse than you thought. A spouse claiming 60 months early will be entitled to 32.71% of the higher earner's FRA - which is about $589 in this case.
Thank you for explaining some of the complexities that may arise on applying for spousal benefits and the benefits for higher earning spouse. I have a question the term FRA. My FRA is 66 +2. Currently I am at 68. Let’s say my benefit is 2000 if I would have applied at my FRA (66+2). Suppose if I wait to apply for the SS benefits until I become 70 then my amount benefit is 3000. For the calculation of spousal (my wife) benefit, is it 50% of 2000 or 50% of 3000. She is currently 62 and wants to wait until her FRA of 67. Her own benefit is estimated to be around 600 at her 67.
Thanks for watching and for the comment. If your wife waits to claim until her FRA, her total benefit she receives will be 50% of your age 66+2 benefit, so $1,000.
Or said another way, if she waits until 67 to claim, she will receive her $600 per month, plus $400 per month in spousal benefit.
I always see these high and low examples. What if both spouses have nearly the same PIA? Like, say each are $2500?
Hi Kenneth, thanks for watching and for the question.
When both spouses have similar PIA, they simply will get their own benefit and nothing more.
The reason you see these high and low examples is because spousal benefits only kick in when one spouses benefit is less than half of the others.
Does that help answer your question?
@@ArnoldMoteWealthManagement Thank you!
Would you please talk about the plan when the wife is older by 4 to 5 years and has retired at 62 but the husband will continue to work until FRA which is 67. What do each do? At 62 she'd get 699, and at FRA 1108. At 67 he'd get 2924.
Hi Frank thanks for watching and for the comment. It is tough to give specific numbers, but in general - If the wife claims at 62 she will obviously receive more benefits early on, but it will have a permanent reduction on spousal benefits. In the long run there will be a breakeven for the wife delaying - probably around the wife's age of 80-82. Because spousal benefits don't start until he claims, and because of the age difference, there could be less reason for him to delay past FRA.
Technically, him delaying to 70 has a breakeven, but it would be out into the wife's age of 87-89 or so. However, this would also guarantee the surviving spouse a higher benefit once one spouse passes, since he would keep, or she would inherit, his age 70 benefit.
Like everything in financial planning, there's a level of risk you need to be comfortable with and a lot of other variables. Do you have other savings to rely on for living expenses to allow you to delay? Are you more concerned about longevity, or spending early in the plan? Etc.
Thanks for the question!
@@ArnoldMoteWealthManagement Thank you for your time and detail in that answer. I appreciate that very much.
@@FrankBatistaElJibaro Of course, thank you Frank!
Hi! I have a question about Social Security Surviving Spouse benefits. I will be turning 60 next August. I have been a widow since 2017 and my late husband was collecting Social Security starting at age 62. Recently I visited my local Social Security office to ask questions about Social Security Surviving spouse benefits. I know the annual working income limit for 2024 is $22,320 and it is $1,860 monthly. I know that it is $1 taken out for every $2 over that limit. I told him I earned close to $50,000 this year of 2023. When I do the Math I will get a little bit each month. Not much though. I was told not to apply because my income is too high. He suggested that I start working part time and in the future I can apply for benefits with a lower income.. Nowhere on the SSA website did I read that there is an absolute maximum income limit before you should not bother to even apply for benefits. He wouldn't do any calculations to see if I am eligible for anything. Was I given the correct information? Thanks.
Hello, thanks for watching and for the question.
From our experience, contacting your Social Security office for questions on your benefits is usually the best way since they can pull up your account and actual amounts. With the info provided we can't give you an exact answer on the benefit you'd receive, but since you are working and earning about $50,000, it is true that your benefit will be reduced by about $1,150 per month.
The recommendation you received is subjective, and is not based on a hard limit. There is no absolute maximum limit, it would just depend on your spousal benefit and your income to know what amount of benefit is withheld.
If you are in doubt and were not happy with your prior experience with contact SSA, you can always call again to talk with someone else who can pull up your account and give a second opinion.
Nicely explained video. Based on the spreadsheet example, they are the same age and Anne's spouse is not currently receiving benefits. I think that your spousal benefit calculation is not correct for the scenario shown. If I understand the SSA documentation and calculators, in calculating the MaxSP, the total would be reduced by the same percentage as Anne's early benefit amount (29.7%) because of deemed filing, so the MaxSP in this case would be $70.30 not $100, resulting in a total payment to Anne when her spouse files of $563+$70.3=$633.7. Am I mistaken?
Hi Rob, thank for watching and for the comment. If I'm understanding you correctly, I think the confusion is around there are potentially separate reduction factors for Anne's personal benefit and then the spousal benefit. You would be correct in an example of both spouses began around age 62, for example.
Thanks again for watching and for your comment!
@@ArnoldMoteWealthManagement Thank you. Does entitlement age affect the reductions?
Yes, the reduction will depend on age. Section 723 and 724 of the Social Security handbook detail the reduction amounts.
Thanks again for watching and for the comments!
IF- primary files before FRA and spouse takes spousal benefit at 62, if primary then dies, can the spouse remain on just the spousal benefit until FRA and then switch to survivor benefit which would be a higher benefit than survivor benefit taken earlier than 67? Or, is there no choice in the matter as to when the spousal benefit shifts to survivor? Thanks.
Hi Tracey, thanks for watching and for the question. It is our understanding that there is no choice in the matter and Social Security will automatically make the switch.
Here's what Social Security says:
" - If you already receive benefits as a spouse, your benefit will automatically convert to survivors benefits after we receive the report of death.
- If you are also eligible for retirement benefits, but haven't applied yet, you have an additional option. You can apply for retirement or survivors benefits now and switch to the other (higher) benefit later.
- For those already receiving retirement benefits, you can only apply for benefits as a surviving spouse if the retirement benefit you receive is less than the benefits you would receive as a survivor."
@@ArnoldMoteWealthManagement Thank you! With that answer along with what I’ve learned from your videos, I think most my questions have been answered.
@@traceybaldwin6509 Good to hear. Thank you Tracey!
When you and your spouse are both on full retirement age. Can you claim spousal benefit now at age 67 then claim your own benefit at age 70? By initially claiming spousal benefit at age 67, Will you get the step up benefit (delayed retirement credit) for waiting to claim your own benefit until age 70?
Thanks for watching and for the question. That strategy used to be an option, but is no longer allowed. Now you can not just claim spousal benefit while delaying your own.
In order to receive spousal benefits, you must first claim on your own benefits.
Thank you for the content. I have a question with a scenario I'm a little unclear on. I'm the higher earner and want to take early SSA benefit at 62 and NOT FRA. But my wife stopped working at 35. Will it be beneficial for her to wait till FRA 67 to file for spousal benefit? Does this mean she will be claiming 50% of my FRA benefit and not just 50% of my early 62 benefit? Thank you for your help in advance.
Thank you for watching and for the comment. She will receive a higher benefit if she waits until FRA. If she waits until her FRA she will receive 50% of your FRA benefit.
Hope that helps. Thank you again for watching!
@@ArnoldMoteWealthManagement This rule does not apply to a divorced couple - the waiting till FRA? I turn 62 this year and my ex-husband is 70. Granted he took his benefit at 62 (we've been divorced for 7 years), my benefit on my ex's social security (which is higher) will be calculated on the amount at his full retirement age of 70 (at my age of claiming, 62)
@@ruthmedford5582 Thanks for watching and for the question. Ex spouse benefits have different requirements to be aware of: www.ssa.gov/benefits/retirement/planner/applying7.html
But, based on your age, if you file for spousal benefits at age 62 your benefit received will be reduced compared to what it would be if you waited to file until FRA.
Who in the hell can live off $900 a month😮
Hi Jerald, thanks for watching and for the comment. Although this was just an example, you are right that Social Security alone is not enough for a lot of retirees. While optimizing Social Security can be a big benefit, oOther savings or income will also be needed for sure.
Is it Social Security going to be gone by the time we reach there in a little over 10 -12 years? If you’re making over 90,000 a year doesn’t it put you in a higher percentage to 2- 3000 a month
Lol 😂
So if my wife starts taking benefits at age 62 of $700 a month and I wait until 65 and get $1900, we were both born in 1963, how much will she get then if she switched to spousal benefits?
Hello, thanks for watching and for the question. As a general disclaimer, these numbers can change based on wages earned between now and retirement, inflation, etc.
But for some approximate numbers, your wife would get an additional $80 per month in spousal benefits once you begin your benefits. She would receive $700 per month for a few years, and then once you begin your benefits at age 65 she will be bumped up to approximately $780.
@@ArnoldMoteWealthManagement Ok. Thank you very much
What if higher earning spouse takes benefits before 67? e.g., 65?
Hi Dave, thanks for watching and for the question. The higher earnings spouse's timing does not have an impact. What matters is the lower earnings spouses timing of beginning benefits.
In our example, as long as the lower earning spouse waits until FRA, they will receive $800 + $100 in monthly Social Security benefits. This $900/mo. is the same whether the higher earning spouse begins at 62 or 70.
Wonder why SS encourages you to wait to full retirement age. Sure they are just looking out for you. LOL
Hi John, thanks for watching and for your comment. The strategy of delaying works out well for many, but certainly isn’t right for everyone.