general questions about SS

Home Fairmark Forum Retirement Savings and Benefits general questions about SS

Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • #22456
    Themistocles
    Participant

    Is SS actuarially neutral with respect to the year we start taking benefits for a married couple where the spouse did not have her own earnings? Or are the spousal and survivor benefits a free lunch?

    #25923
    Bruce1950
    Participant

    Themistocles (I used to have a cat with that name)

    If the non-working spouse does not have at least 40 qualifying quarters of work subject to SS tax, than her (I’ll assume for this it is a ‘her’, although this could be a ‘he’) benefit will be a spousal benefit, which will be a max of 50% of the working spouse’s PIA (the amount he’d get had he begun benefits in the month he attained his FRA) if she begins benefits in the month of her FRA. If she begins before this, the max 50% amount will be reduced by 25/32% per month up to 36 months begun early, and then 5/12% per month for months begun earlier than that. Note, the working spouse must begin benefits before the spouse is eligible for a spousal benefit (note: this is not true in a divorce where they were married at least 10 years).

    Survivor benefits are a bit different and a bit too complicated to go into all possible situations here. Suffice to say, if the surviving spouse begins survivorship benefits prior to her FRA, they will be reduced just as they are in the above example. The one important actuarial difference is the survivorship benefits do not accrue delayed retirement credits (8%/yr) if the survivor waits to begin the survivorship benefit past her FRA.

    BruceM

    #26019
    Themistocles
    Participant

    I know all that already. You didn’t answer my question: are the benefits for a married couple actuarially neutral with respect to the choice of when to start benefit?

Viewing 3 posts - 1 through 3 (of 3 total)
  • You must be logged in to reply to this topic.