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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 3858
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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I was born in 1948, my FRA is 66, my earliest date to collect

Customer Question

I was born in 1948, my FRA is 66, my earliest date to collect 62. I started collecting at 62. My wife was born 1957, her FRA is 66.5. My question: Based solely on my income, at her FRA will my wife's benefits be 50% of what my benefits are at that time, i.e., based on my starting at 62, or 50% of what my benefits would have been if I had delayed until my FRA of 66?

Unfortunately I have had this question answered both ways by different SocSec agents.
Submitted: 1 year ago.
Category: Finance
Expert:  Rakhi Vasavada replied 1 year ago.
Dear Friend,

Hello and welcome. Thank you for using Just Answer.

Your collecting benefits early than your FRA would have adverse effect and reduce your wife's spousal benefits.It would be calculated at 50% of YOUR benefits THAT time and NOT on what they would have been if you had delayed until your full FRA of 66.

The spousal benefit can be as much as half of the worker's "primary insurance amount," depending on the spouse's age at retirement. If the spouse begins receiving benefits before "normal (or full) retirement age," the spouse will receive a reduced benefit. However, if a spouse is caring for a qualifying child, the spousal benefit is not reduced.

I am sure this would help.

You may please leave a positive rating if this helps as that is the only way we receive credit for assisting you. Alternatively feel absolutely free to revert with more queries if you have.

Warm Regards
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 3858
Experience: Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
Rakhi Vasavada and 2 other Finance Specialists are ready to help you
Customer: replied 1 year ago.

Thanks very much for yr answer!


 


Could you confirm if I suspend my SocSec benefits at my FRA of 66 and then start them again when I turn 70 at the higher amount (my existing benefits would increase 8% per year over the 4 years I was not collecting- which has been confirmed by SocSec) that when my wife reaches her FRA of 66.5- at which time I will be 75.5- that she will collect 50% of the new higher benefit that I am collecting at that time.


 


Thanks

Customer: replied 1 year ago.

I just got off phone with a SocSec agent who gave me answer to my original question to you which goes back to what they told me two years ago, i.e., when my wife files at her FRA under my benefits, she will receive 50% of my FRA benefits, even though I started collecting early at 62 instead of my FRA of 66. So there would be no adverse effect of reduced spousal benefits caused by me collecting before my FRA.


So I'm left wondering which one is correct.


 


Also they said spouse gets no benefit from my DRCs if I suspend for four years. The most spouse can receive is 50% of my FRA amount as a benefit at her FRA, and 100% of my FRA amount at my death even if I was collecting more than my FRA due to DRCs.

Expert:  Rakhi Vasavada replied 1 year ago.
Dear Edwin,

Hello and welcome again. Thanks for your follow up.

I understand that there is severe confusion in the replies that you are getting. I am sure the spousal benefits is "reduced". It is question of clear interpretation of what is mentioned on the SSA website. I draw your attention to the following link which clearly says that the spousal benefits are reduced in case of beginning of drawing of benefits before the FRA by the other spouse.

http://www.ssa.gov/OACT/quickcalc/spouse.html


What other thing he said is correct.

I am sure this would help.

You may please leave a positive rating if this helps as that is the only way we receive credit for assisting you. Alternatively feel absolutely free to revert with more queries if you have.

Warm Regards
Customer: replied 1 year ago.

Thanks for link to SSA.gov re spouses. I read this carefully but have reached opposite conclusion. Nowhere does the article mention anything about the effect on the spousal benefit of the worker collecting less than the Primary Insurance Amount (PIA) by collecting earlier than at his FRA.


 


 


The article states only the effect on spousal benefit if the spouse retires earlier than her FRA. The calculator displayed computes the effect on spouses early retirement as a percentage of workers PIA only with no consideration to how much worker is actually collecting whether more or less than his PIA.


Also, the last paragraph under Early Retirement Reduces Benefits clearly states that the reduction factor for spouse who retires earlier than her FRA is applied to the base spousal benefit which is defined as 50% of the workers PIA. There is no mention of any possibility that the base spousal benefit could be lower than the workers PIA, i.e., the amount the worker would have received if he had collected at his Normal Retirement Date, or FRA.


 


I think you may be inferring something that is not specifically mentioned.


 


Also for what it's worth my interpretation of this article comports with 3 out of 4 of SSA agents I spoke with on phone re this subject.


 


Please let me know if if you have other evidence to show I'm wrong about this.


Thanks,


Edwin


 

Expert:  Rakhi Vasavada replied 1 year ago.
Dear Edwin,

My interpretation would still remain same. I am sorry for the confusion this is causing but I still find it would reduce the spousal benefits.

Warm Regards
Customer: replied 1 year ago.

FYI, I found this article from Prudential that is very informative and clearly states that non-working spouse can collect 50% of working spouse's PIA once non-working spouse reaches her FRA, with no penalty even if working spouse stated collecting earlier than his FRA.


 


This article also clearly states that if working spouse suspends collecting in order to gain DRCs, that the non-working spouse will benefit from these DRCs and collect the higher amount the working spouse was collecting upon his subsequent death. The non-working spouse cannot get DRCs on her own but she can get working spouses DRCs as a death benefit. InnovativeSocialSecurityNov2012.pdf

Expert:  Rakhi Vasavada replied 1 year ago.
Dear Edwin,

Regarding benefits from DRC, you were right as you said in your original question. The non working spouse does stand to benefit.

Regarding the first part of the reducing or not reducing the spousal benefits, I would again go my interpretation and especially what is mentioned on the SSA website.

Kindly do not RATE This answer as you have already done so.

Warm Regards

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