Can a wife with wage history much less than half her hubby's

[justice]

1.) retire on her wage history at age 62
2.) wait until NRA and then switch to a spousal benefit

to avoid the reduction for early retirement

[Malik Shabazz]

I'm far from expert in Social Security matters, but I don't think SS offers a beneficiary a choice between a benefit based on her/his own earnings history and one based on her/his spouse's earnings.

[Smurf]

According to the book, "Social Insurance and Economic Security" by George E. Rejda(old exam book), 1976:

"Under the law, a working wife receives a retirement benefit based on either her own earnings or those of her husband, but not both."

Don't know if this has changed since he wrote this.

[Malik Shabazz]

According to the book, "Social Insurance and Economic Security" by George E. Rejda(old exam book), 1976:

"Under the law, a working wife receives a retirement benefit based on either her own earnings or those of her husband, but not both."

Don't know if this has changed since he wrote this.
Yes, it has. Nowadays, it's a "working spouse" not a "working wife." :wink:

In essense, though, that's what I was trying to write. SSA calculates both benefits and pays the larger of the two.

[Smurf]

Yes, it has. Nowadays, it's a "working spouse" not a "working wife." :wink:




My bad! :)

[Dorothy]

There are several papers and articles concerning SS gender equity in the SOA library.

One conclusion that I remember reading is that taxes paid by working spouses provide a huge subsidy to nonworking spouses. Another really shocking fact is that some non-working spouse retirees actually collect more (particularly after the death of the primary beneficiary) than those who worked and paid taxes on their own income, even if the actual tax amounts paid per couple were the same. The worst case scenario for the two-earner couple occurs when both spouses are working, but earning about the same income, as together they can collect only 1 benefit unit while both are alive, with survivor collecting .5 benefit unit, while the one-wage-earner couple can collect 1.5 benefit units while both are alive and the surviving primary beneficiary and spouse can collect 1 and .85 benefit units, respectively, after the death of the other. So the surviving nonworker spouse can collect 70% more than the surviving worker spouse after the death of the primary beneficiary. In addition, provided that the primary beneficiary is married to each for at least 10 years, more than one non-working spouse can collect a full spousal benefit, without the primary wage earner paying any additional tax.

IMHO, if the SSA doesn't want to pay benefits based on two incomes, it shouldn't be allowed to tax two incomes.

[bdschobel]

Under Social Security law, an application for a spousal benefit is deemed to be an application for your own benefit, too. You cannot choose to take one and not the other. A different rule applies to widow(er)'s benefits. And you can get one before the other under special circumstances: For instance, if you reach 62 before your spouse does, you can apply for your own benefit before you are eligible for a spouse's benefit. If you later apply for the spouse's benefit, a carryover actuarial reduction applies.

Bruce

[bdschobel]

Almost forgot: Even if your earnings average only a third or so of your spouse's earnings, your own benefit will exceed half of your spouse's benefit because Social Security has a weighted benefit formula. The exact break-even point varies by earnings level. Basically, spousal benefits are disappearing slowly but surely because few couples have a sufficiently large income disparity. Of course, all that changes when one spouse dies. At that point, the larger benefit continues until the second death.

Bruce

[justice]

What if the spouse(wife) is 8 years older

and the worker retires at 62 [gets a 25% reduction] on his benefit

would the spouse get 50% of 100% of his PIA

or would she get 50% of 75% of his PIA?


I take it that she won't get a DRC (Delayed Retirement Credit for a Spousal Benefit)

[bdschobel]

The 50% payable to a spouse is based on the worker's unreduced primary insurance amount. The spousal benefit is then reduced dollar-for-dollar by any worker's benefit payable to him or her. Then appropriate actuarial reduction is applied separately to the worker's benefit and the (reduced) spousal benefit. Then rounding rules are applied. Then Medicare Part B is deducted (at age 65 and above). Then more rounding.

Does that answer the question?

Bruce

[bdschobel]

Almost forgot: "Living" spouses cannot get DRC, but a worker's DRC is inheritable by a widow(er).

Bruce