Today’s column addresses questions about when and whether delayed retirement credits (DRCs) are applied to benefit rates, eligibility of exes to file for benefits on a person’s Social Security record and pensions based on work not taxed by Social Security. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.
See more Ask Larry answers here.
Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.
Will I Still Get Social Security Delayed Retirement Credits For 2020?
Hi Larry, I will be 70 this later December. I’m still working full-time. I will be filing for my Social Security retirement benefits soon. Will I still get the credits for not filing yet until late in 2020? My account on the Social Security site says I’m eligible for $2,900 a month but I’m trying to get it up to $3,000 or more. Is that still possible? Thanks, Rebekah
Hi Rebekah, Yes, as long as you don’t elect to start your benefits any earlier than the month you turn 70, your Social Security retirement benefit rate will include four full years of delayed retirement credits (DRC). That means your benefit rate will be 32% higher than your primary insurance amount (PIA). Your PIA is equal to the benefit rate you’d be receiving if you had started drawing your benefits at full retirement age (FRA).
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Furthermore, if your 2020 earnings are high enough to be among your highest 35 years of Social Security covered wage indexed earnings, your benefit rate can be recalculated to include those earnings effective with your benefit payment for January 2021. If you will reach 70 this December, you wouldn’t want to wait past this month to claim your Social Security retirement benefits, because doing so would not make your benefit rate any higher. Best, Larry
Will My Ex-Spouse Ever Be Entitled To My Social Security Benefits?
Hi Larry, An ex spouse collects Social Security disability under his own name. He’s collected it for years. We were married for 10.5 years before I divorced him. I have always worked and paid Social Security taxes but not him. It was a bad relationship that hung on for 10 years. If I take my Social Security retirement benefit at 62, will he ever ever in his lifetime be entitled to my Social Security benefits? Thanks, Jenn
Hi Jenn, Your ex could never claim your actual Social Security benefits, but if both of you are at least age 62 and if he’s unmarried then he could potentially qualify for divorced spousal benefits from your record. He could only qualify though if your primary insurance amount (PIA) is more than twice as much as his own PIA. A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA), or their full Social Security disability (SSDI) benefit rate.
Even if your ex is able to claim benefits from your record though, it would have absolutely no adverse effect on your benefit rate or the benefit rate(s) of anyone else who’s getting benefits based on your earnings.
If you die before your ex, then he could potentially qualify for survivor benefits from your account if your full benefit rate is higher than his own rate. Again though, that wouldn’t adversely affect any other survivors who are getting benefits from your record. Best, Larry
Can My Social Security Pension Be Reduced If I Receive Pensions From Work That I Did Before Coming To The US?
Hi Larry, I came to the US 25 years ago after marrying an American woman. I receive pensions from employment before I was either a Green Card holder or a US citizen. Can my Social security pension be reduced because of this? Thanks, Herman
Hi Herman, Yes, if you receive a pension based on your work and earnings that were exempt from US Social Security taxes, then your Social Security retirement benefit rate could be reduced because of the Windfall Elimination Provision (WEP).
My company’s software — Maximize My Social Security or MaxiFi Planner — is programmed to handle WEP computations, so you may want to consider using the software to learn about your options and help you find the best strategy for maximizing your benefits. Though it doesn’t seem to apply in your case, the software also fully accounts for the Government Pension Offset (GPO) as well. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry