Today’s Social Security column addresses questions about how spouses can collect benefits while delaying retirement benefits until 70, whether forming an LLC can avoid the effects of the income test and when divorced spouses benefit. may be available. Larry Kotlikoff is a professor of economics at Boston University and the founder and president of Economic Security Planning, Inc.
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Do you have your own Social Security questions that you want answered? Ask Larry about Social Security here,
Should I Suspend My Social Security Retirement Benefits to Take My Spouse’s Benefits?
Hi Larry, my husbands both were born in 1953. My husband will work till I am 70 and I will retire at 66. We haven’t filed for Social Security benefits yet because we were thinking of waiting to file until 70 to take our maximum benefits. We are looking for your advice on when should I file.
At 70, my husband’s estimated monthly benefit would be about $3,500 and mine at 70 would be about $2,250. Once my spouse files at age 70, should I file and suspend my retirement benefits and take a spousal benefit? If so, will it be 50% of my husband’s benefit rate? Then at 70 I will definitely take my increased retirement benefit. thanks, laura
Hi Laura, you will certainly want to claim spousal benefits once your spouse begins to draw on his own benefits, but you will not do so by filing and suspending your own benefits. If you file for your retirement benefits and have them suspended, you may not be paid spousal benefits, even if you qualify for them.
If you plan to wait until 70 to receive your retirement benefits, what you want to do is file a Restricted Application for Spouse Benefits from the first month you are entitled to your spouse’s benefits. To do.
Filing a restricted application means that you are limiting the scope of your application specifically to spousal benefits only. You will then need to file a separate application for your retirement benefits when you want to switch to drawing on your own account, possibly at 70.
Also, your Spouse Benefit will be 50% of his Primary Sum Assured (PIA), which is equal to his Full Retirement Age (FRA) retirement benefit amount, not 50% of his increased benefit at 70.
However, since you and your spouse were both born before 1/2/1954, this opens up a number of other potential filing options that you may want to at least consider. You and your husband may consider using my company’s software — max out my social security or maxify planner – To ensure that your family gets the highest lifetime benefit. Social Security calculators provided by other companies or nonprofits can give reasonable suggestions if they are designed with extreme care. Best, Larryu
Is it better for me to live in an LLC?
Hi Larry, I’m 62 and I’m going to start Social Security this year. I started part time delivery business to stay busy. Is it better for me to become an LLC? I would potentially earn under the amount allowed for Social Security. thanks, ricky
Hi Rick, If your income doesn’t exceed Social Security’s income test exemption amount, it won’t matter whether your income comes directly to you or through a small corporation.
Any of your earned income, which is any combination of gross pay and net income from self-employment, will be counted in the Social Security income test exemption amount. The exemption amount in 2022 is $19,560. As long as you earn less than this, your benefits will not be affected. Best, Larryu
Will my ex-spouse have to receive benefits before I can claim divorced spouse benefits?
Hi Larry, does it matter if my ex-spouse is currently collecting Social Security retirement benefits before I can file to collect spousal benefits while mine grows to 70? is allowed? He is currently 62 years old and I am 61 years old. thanks, kim
Hi Kim, You Can Potentially Claim Divorced Spouse Benefits At 62 Even If Your Ex Isn’t Collecting Retirement Benefits, But Only If Your Ex Is At Least 62 And Your Ex Divorce must be final for at least two years.
However, as long as your ex is still alive, you can’t apply for divorced spouse benefits while allowing your own benefits to increase to 70. Only those born before 1/2/1954 are allowed to do so. Best, Larryu