Interaction of spousal benefits and windfall reduction.Asked on 10/20/2012
My wife will soon be 67, and my birthday shortly follows. We are both working part-time, and she has a pension plus full Social Security, and is intending to file when 70. I have smaller benefits because after accumulating 40 quarters, I worked for a city which has its own pension plan. I understand my benefits, about $1300 per month, will be cut in half through the Windfall reduction, even though I am now paying into to the system again through part-time non public sector jobs.
If my wife now files for benefits and suspends, am I correct that I can obtain 50 percent of her benefit, while both of our future benefits will then increase by 8 percent per year until age 70.
One she receives her benefits at age 70, do my spousal benefits continue?
Even though my benefits are less, can I also file and suspend, allowing her to obtain half of my smaller half? One I lift the suspension at age 70, do her spousal benefits also continue, and are they at my rate for age 67 or for age 70?
- Categories: Social Security, Spousal and Ex Spouse Benefits
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This Answer was provided by Bud Hebeler.
Thank you for asking.
You will have to contact the SSA to find out the percentage reduction in Social Security from the windfall reductions..
If your wife suspends, you can file a "restricted applicaton" for a spousal benefit that will be 50% of her full-retirement-age benefit, not the amount she may be getting.
When your wife starts again at 70, her benefit will be increased by 8% (plus inflation) for each year of the suspension.
If your own benefit is higher than 50% of her full-retirement-benefit, you will get that instead if you don't file a restricted application.. When you reach 70, you can refile on your own benefit if your age 70 benefit will be higher if you filed a restricted application..
Then both of your benefits will continue for life. If she dies first, then you will immediately get 100% of her benefit if her benefit is larger or vice versa.
You can check other alternatives on the Free Strategic Social Security Planner by going to http://www.anlayzenow.com and clicking on Computer Programs.
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.