Ask Larry: Will My Social Security Retirement Benefit Rate Go Down When I Stop Working?

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Today’s Social Security column addresses questions about how stopping working before filing may affect benefit rates, when it may be possible to start spousal benefits on a spouse’s record and It may be possible for a previously divorced spouse to become entitled to benefits independently before the former files. Larry Kotlikoff is a professor of economics at Boston University and the founder and president of Economic Security Planning, Inc.

See more Ask Larry’s answer here.

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Do you have your own Social Security questions that you want answered? Ask Larry about Social Security here,


Will my Social Security retirement benefit rate be reduced when I stop working?

Hi Larry, I am 68 years old and recently applied for retirement benefits but no decision has been taken by the SSA yet. Once the SSA decides my benefit amount, will it be set for the rest of my life?

Can I Withhold Payments and Go Back to Work by 70 to Earn Late Retirement Credits? Will my profit be greater for the rest of my life? Or when I stop working at 70 without any other income, will it go back to a lesser amount than before? thanks, betty

Hi Betty, Social Security retirement benefit rates could potentially be increased after any year in which a person has Social Security Covered income or earns the Delayed Retirement Credit (DRC).

Any such growth is permanent. You can’t earn additional DRCs after age 70, and your benefits won’t increase because of the extra income if you stop working at that time. So your benefit amount will remain the same once the cost of living (COLA) increases. Your profit rate will not decrease or return to the prior profit rate simply because you stop working.

By the way, Social Security retirement benefits are based on the average of an individual’s highest 35 years of Social Security Cover pay-indexed income, so earning additional years will only increase your benefit rate if the new income is higher than one or more of your current ones. 35 years currently being used for calculation of profit rate.

If your new income is not in your highest 35 income years after indexing for inflation, the new income is simply ignored and your profit rate remains the same. Best, Larryu


Can my wife file for spousal benefits from my account even if I am not old enough to claim benefits?

Hi Larry, My wife turns 62 this year and has started taking Social Security retirement benefits of about $800. I am 55 years old so I will not take benefits for at least next seven years. I’m retired, lucky, so I don’t currently have any wage income. Can She File for Spouse Benefits and Should She?

My FRA benefit is currently calculated at about $3,000, so even though it only gets the difference between 50% of my benefit and mine, that could be an additional $700 if I split spousal benefits. I understand, which is a big one. Or is she only eligible for spousal benefits when I start receiving my own retirement benefits? thanks, lucas

Hi Lucas, your wife may not qualify for spousal benefits at least until you begin receiving your benefits, and even then she will only qualify for spousal benefits If your Primary Sum Assured (PIA) is more than twice his PIA. An individual’s PIA equals their Social Security retirement benefit rate if they begin receiving their benefits at full retirement age (FRA).

Her Potential Spouse Benefit would be 50% of your PIA minutes, 100% of her PIA, not her reduced retirement benefit taken at 62. You and your wife may consider using my company’s software – max out my social security Or maxify planner – To thoroughly analyze your options so that you can make an informed decision about your best strategy to maximize your profits and avoid inadvertently leaving money on the table. Social Security calculators provided by other companies or nonprofits can give reasonable suggestions if they are designed with extreme care. Best, Larryu


Why should I wait for my ex to retire to qualify for Divorced Spouse Benefits?

Hi Larry, I recently started getting SSDI on 63. I was told by an acquaintance that I should wait for my ex, who is 65, to retire, to receive divorced spouse benefits based on his record. Is this really true? We had been married for more than 30 years. thanks, harvey

Hi Harvey, you don’t have to wait until your ex-divorced spouse begins receiving benefits to be potentially eligible for benefits, provided that your ex is at least 62 years old and your Divorce must be final for at least two years.

However, you will only qualify for divorced spouse benefits if your ex’s Primary Sum Assured (PIA) is more than double your own PIA. A person’s PIA is equal to their Social Security retirement benefit rate if they begin receiving their benefits at full retirement age (FRA), or their full unrestricted Social Security disability (SSDI) benefit rate.

And if you qualify for divorced spouse benefits and if you start drawing them before your FRA, your divorced spouse rate will decrease for age. So you may want to wait as long as your own FRA or as close to it as possible before filing for divorced spouse benefits. Best, Larryu


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