What Rate Determines My Wife’s Social Security Spousal Benefit?

Today’s Social Security column addresses questions about what how spousal benefits are calculated based on the worker’s benefit rate, effects on spousal benefits when the worker files early and eligibility for survivor’s benefits. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.

What Rate Determines My Wife’s Social Security Spousal Benefit?

Hi Larry, What rate is used in calculating spousal benefits? I understand the spousal benefit is the larger of the spouse’s own retirement benefit or half the primary insurance amount of the record holder.

Is it always the PIA amount at FRA, the retirement benefit amount when the record holder takes their Social Security benefit after their FRA), or the record holder’s current retirement benefit amount? Also, does PIA increases with COLA adjustment every year? Thanks, Carl

Hi Carl, The primary insurance amount (PIA) used to calculate spousal benefits is the worker’s PIA at the time the spousal claim is filed. In other words, the PIA adjusted for any applicable COLAs and recomputations. If the person filing for spousal benefits is eligible for their own retirement Social Security benefits, then their unreduced spousal rate is calculated by subtracting their own current PIA from 50% of the worker’s current PIA.

A person’s PIA is the benefit rate they would receive if they elect to begin receiving retirement benefits at their full retirement age (FRA). Once initially calculated, PIAs can be recalculated if the person has additional years of earnings that are higher than one or more of the 35 years previously used to calculate their PIA.

PIAs are also adjusted to include all cost of living (COLA) increases that occur after they reach age 62, or after they become entitled to SSDI benefits or die. Any applicable delayed retirement credits (DRC) increases are paid in addition to the person’s PIA.

How Will It Impact My Wife If I Start Collecting Benefits Before FRA?

Hi Larry, I am 64 my wife is 58. My wife worked for 12 years and paid into Social Security. If I collect my retirement benefit before FRA, how will that impact her. What would she get if i passed away. Thanks, Jack

Hi Jack, Taking your benefits early wouldn’t adversely affect your wife’s own retirement benefit rate or any potential spousal benefits that she qualifies for while you’re living, but it would limit the amount she could be paid as a widow.

If you start drawing your benefits at 64, the most that your wife could be paid in the event of your death is the higher of her own retirement benefit rate or your reduced benefit rate. If you instead waited until 70 to start drawing your benefits and subsequently die before your wife, she could get up to the higher of her own benefit rate or your full age 70 rate if she’s at least full retirement age (FRA) when she starts collecting widow’s benefits.

You and your wife may want to consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to ensure your household receives the highest lifetime benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Our software can also confirm your correct benefit amount, ensuring you aren’t being paid too little or too much, which could lead to potential clawbacks due to Social Security’s overpayment to you. Best, Larry

Am I Entitled To Collect My Husband’s Social Security Instead Of My Own?

Hi Larry, I’m not living with my husband and I’m thinking of retiring soon. Instead of collecting my Social Security, am I entitled to collect his? I’m 64 years old. Thanks, Betty

Hi Betty, No one can claim another person’s Social Security benefits, but you might be able to qualify for spousal benefits if you meet the requirements for those benefits.

If you’re not divorced from your husband, then you couldn’t qualify for spousal benefits unless and until your husband is collecting either Social Security retirement or disability benefits. And, since you were born after 1/1/1954, you can’t apply for spousal benefits without also filing for your own Social Security retirement benefits at the same time.

As a result, you could only be paid basically the higher of your own benefit rate or your spousal rate, and if you claim benefits prior to your full retirement age (FRA), your benefit rate will be reduced for age. Best, Larry