When Should I File For Spousal Benefits, And Can I Continue Working?

Category: 
Dec 27 2016 - 3:45pm

My wife was recently approved for SS disability retroactive to September 1, 2016; she is 62 years old. I am 67 years old and am still working full time. I plan on retiring on June 30, 2017 and currently have a request (dated October 4, 2016) into SS for withdrawal of my suspended retirement application; I have received no SS payments as a result. I have planned to defer taking my SS retirement until age 70 to accrue deferred retirement credits.

My first on is based on the above circumstances. Should I file for spousal benefits under my wife's disability now or wait until my application for withdrawal of my suspended retirement (suspended retirement was approved by SS in April 2016) is approved and then apply for the spousal benefit?

My second question is how would my continuing to work effect my spousal benefit. I understand there is a maximum that may be paid,; how is this determined. Is there a formula based on what I earn or my or our combined income? what is the formula for calculating this or is there just a limit on what can be earned or unearned income?

Thanks,
Roger

Hi Roger,

Since you are age 67, you can elect up to 6 months of retroactivity on your spousal application, but you can't be entitled any earlier than your wife's first month of entitlement. So, the latest that you'd want to apply for spousal benefits is 6 months after your wife's first month of entitlement. There is a 5-month waiting period for disability benefit entitlement, so I don't know if you mean that September 2016 is your wife's first month of entitlement to disability, or if that's when her waiting period begins.

Social Security can't approve your application for spousal benefits until the withdrawal of your retirement application is approved. Therefore, it might be best to wait until your withdrawal request is approved and processed, as long as your spousal application is filed within 6 months of your wife's first month of entitlement. For example, if September 2016 is your wife's first month of entitlement, you'd want to apply for spousal benefits no later than March 31 2017. And, of course, you'd want to choose her first month of entitlement as your month of entitlement to start spousal benefits.

I'm not sure if I understand your second question. There is no limit on the amount that you can earn and still be eligible for spousal benefits, since you are already above full retirement age. Nor is there any limit on unearned income. The family maximum benefit payable on your wife's disability account is determined by her earnings history. Specifically, it will be calculated based on an average of her best 35 years of inflation adjusted earnings. The highest possible family maximum on a disability account is 150% of the disabled person's full benefit rate, which would permit you to receive a full spousal benefit of 50% of your wife's rate. However, if your wife has a very limited earnings history, the family maximum could be as low as 100% of her full benefit rate, which would leave you with a zero spousal benefit. If that was true in your case, it may be advantageous for your wife to apply for reduced retirement benefits, since even the minimum family maximum on a retirement account is 150% of the worker's full retirement age benefit rate. For more information on family maximum calculations, see the following: https://www.ssa.gov/policy/docs/ssb/v75n3/v75n3p1.html.

Best, Jerry