Hi William, thank you for your patience - I had a little tech issue this weekend. OK, so it is a typo that I can see from my end and you are not in Canada or asking about the Canada system. With regard to your post:
"My wife and I have talked with (3) different SSA agents on (3) different times and we've not yet gotten a consistent answer. I need some strict understanding with the following.
My wife is 63 and I'm 64. I plan to continue working till at least 66 and most likely beyond; BUT I am considering to collect at age 66 while I'm still willing to work. ------- OK, and I assume that you know the benefits to waiting beyond 66...
"I understand that my wife can collect now from her own benefit; ------- Yes, if she has one.
"but here's where we need to know the what's what and understand the ramifications of that.
I'm not sure what it means she can collect 1/2 of mine now if I start and suspend or wait till I reach 66.------- She can't collect a "spousal" unless you yourself file (with or without suspending). If you DO file, then she can take a spousal IF it is bigger than her own. If it is not bigger than her own, the SSA law automatically requires she take her own. A spousal if ONLY 50% of your primary insurance amount (PIA) if SHE waits until her full retirement age (FRA). Otherwise, it is reduced by a ball park 8% per year. So if she took 3 years early, she'd be at about 38% of your PIA (ball park).
"Q: if she starts collecting her benefit now at 63, when can she be eligible to collect on 1/2 of mine? ----- Never. She CAN collect her own if you do not file, thereby not triggering her right to spousal. However, if later you trigger it by filing when she is 66+, she still won't collect a full 50% because it will be made up of first HER amount (reduced), plus a spousal boost. The amount she reduced for taking her own early would come off the top of the full 50% spousal.
"Q: and what's the penalty, if any, to her or I with her collecting now? ------ If she collects now, she permanently suffers that 3 year reduction off of her amount, which will carry over if she later takes a spousal. There is no penalty to you.
"Q: if she is collecting and I die before I start collecting, does she have the option then to collect the higher benefit (mine)? ----- Yes, and her early collection will NOT carry over. She will take 100% of your benefit amount IF she starts collecting a survivor benefit at her FRA, even if she collects her own or spousal til then... but if she takes survivor early, it will be reduced.
"Q: if so, is that benefit calculated based on my age 66, or at the time of my death, whether it be under/over my age of 66? ---- It will be based on your PIA if you are age exactly FRA or less when you pass. But if you increased your benefit by gaining delayed retirement credits (8% per year increase for every year past 66, up to 70), she DOES get to benefit from that increase if she collects a survivor off of you.
"Q: what does it mean "you can start and suspend your benefit now" so she can now collect 1/2 of my benefit? ------ ONLY if she waits til her FRA, can she collect a spousal. And to collect a spousal, you have to have filed. You would suspend ONLY if you didn't want to collect now (to let yours grow). Note that the new law will only let you suspend without suspending her dependent benefit IF done before 4/30/16.
her benefit is ~$700 at age 63 and ~$850 at her reaching 66 ------ OK, her PIA is 850.
my benefit is ~$2200 at age 64 and ~$2500 at my reaching age 66 ------ Your PIA is 2500.
Q: does she then get ~$1100 instead of the ~$750 now? ------- She'd get about 38% of your PIA, not 50%, so that would be about $950/mo. If she waited til her FRA, she'd get the full $1250/mo.
Q: and my benefit for the rest of my life would be the ~$2200? ------ Your benefit does not get effected by her taking. So long as you wait til your FRA, you get 2500. If you take early, then you get the reduced amount.
Q: and the suspend benefits would be given to me in a lump sum (# ***** months * $2200) once I un-suspend? ------ No, you never get those months back. What suspending does, by not taking, is that you don't suffer that reduction once you do start taking. So if you suspend until 66, you'd get to take your full 2500/mo once you started collecting at 66. Now, if you suspended til age 70, you'd grow your PIA of 2500 by another 32%, for a monthly benefit amount of 3300/mo. It is the benefit of NOT collecting those 4 years of benefits - you get a raise. But you don't get the 4 years paid to you, that was the point, your forfeited them in exchange for a higher monthly amount later.
"Q: does my benefit recalculate to the age benefit when I do start collecting? ------- Yes, if you mean what I am saying above.
"Q: and what benefit would my spouse get if I die before that? ------ Survivor benefit depends on 1) what age she is when she chooses to apply for survivor and 2) whether you earned delayed retirement credits (DRCs) to grow your benefit amount. If you did grow it beyond your PIA of 2500, she'd get that extra as her survivor benefit and then whether it gets reduced or not depends if she waits til 66 to start it.'
Again, I'm learning and I just want to get to a substantiated knowledge point; I've not been able to do that via the SSA yet. In fact there may be more unknowns that I'm not aware of so help me where you can. --------- It is a little complicated, yes.
I hope this helps! My goal is toprovide you with excellent and accurateservice – if you feel you have gotten anything less, please reply back, Iam happy to address follow-up questions.
Kindly rate me "excellent"when you are done. I look forward to assisting you in the future, shouldyou have legal questions. Be sure tostart future posts with "To ***** Esq., ONLY" ifyou want me to specifically answer it.
Sincerely, ***** ***** Joy, Esq.
Your online SS legal resource!