I'm confused about what a person who is 'grandfathered' - born before 4/30/1950 - who filed and suspended before 4/30/2016 can do in regards to receiving auxiliary benefits while their own benefits are suspended. Even though they are grandfathered, must they un-suspend their benefit in order to collect the spousal or survivor benefit, and then only receive their own benefit plus an excess benefit? Or can they remain suspended and receive only the excess while their DRCs continue to accumulate?

Hi,

Yes, a person who voluntarily suspended their benefits prior to April 30 2016 could leave their own benefits in suspense and potentially still draw an excess spousal or survivor benefit, but that may not be a winning strategy. The reason I say that is because when such a person reinstates their benefits any increase that they earned due to delayed retirement credits (DRC) would offset their spousal or survivor benefits dollar for dollar.

For example, say Jo files for and suspends her Social Security retirement benefits when she reaches FRA on April 15 2016. Jo's husband files for his benefits a year later, and Jo files for spousal benefits on her husband's account. Jo's primary insurance amount (PIA) is $800 and her husband's PIA is $2400, so Jo qualifies for an excess spousal benefit of $400 (i.e. 50% of her husband's PIA minus her own PIA, or $2400/2 - $800). When Jo turns age 70, her retirement benefits are reinstated at a rate of $1056, or 32% more than her PIA. However, at that point Jo's spousal benefits would be reduced to $144, or 50% of her husband's PIA minus her PIA augmented by DRCs (i.e. $1200 - $1056).

Therefore, in Jo's case she effectively forfeited 4 years of benefits in return for no net gain in her ongoing monthly benefit rate. If Jo had used our software (https://maximizemysocialsecurity.com/purchase) to analyze her options the software would have advised her not to voluntarily suspend her benefits, saving her tens of thousands of dollars.

Best, Jerry