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Old 04-24-2015, 07:16 AM
 
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just yours since hers would be based on your 1/2 your full if 1/2 your full is more than her full.
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Old 04-24-2015, 07:57 AM
 
Location: Mount Airy, Maryland
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Quote:
Originally Posted by mathjak107 View Post
just yours since hers would be based on your 1/2 your full if 1/2 your full is more than her full.
Awesome, thanks.

I love this place.
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Old 04-24-2015, 09:51 PM
 
Location: Cape Elizabeth
424 posts, read 387,043 times
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Quote:
Originally Posted by DaveinMtAiry View Post
Not sure I fully understand this. To maximize my wife's benefit I plan on filing at 64 1/2 but plan to work for several more years. Clearly I will be earning more than $15,700, no doubt more than your $30,720 example. What would the estimate SS check reduction be at $30,720 and say $50,000? And once I stop you are saying that reduction will somehow be calculated back into my monthly payments resulting in an increase over my origunal benefit amount should I stop working at 64? If so it will be impossible to calculate if I got it all back since life expectancy is unknown.
Look, I understand people want their checks before FRA when SSA has a more restrictive work test. But...

FYI- do you know that the work test used to go to age 70? Then they lowered it to 65, and then however, the full retirement age got increased, slowly by 2 months increments - now it is 66. but for some on this site, it is close to 67. And some, running for President, propose raising the retirement age more (like it hasn't been done already) to age 69. Good grief!

So, sorry folks, you have to deal with the hand you are dealt.

So, for DaveinMtAiry, the hand he is dealt, is that he would like his wife to get a true 1/2 of his full amount at her FRA, and because she is two years older than him, but that means, in order for her to do that, he has to begin to collect below his FRA- when he is 64 and 10 months.

But, he also doesn't want to stop working. So, we have to see if he continues to work, and make say $50000.00 a year in the 2 years before his FRA- how does his $50000.00 per year affect his check and his wife's check?

And yes, it does affect his wife's check, because he wanted her to have "a true spousal benefit" the $1132.00, not the "excess spousal of only $129.00 added to her own benefit.

In his case, it is a good thing, not a bad thing. Because the more of a check that Dave and his spouse receive, the faster they "eat up" or "use up" the amount they are over SSA limits.

Now, the big unknown in this case, is that his timeframe is 8 years away. We have no idea what is going to be going on with SSA in 8 years, and even if all these rules stay the same, we have no idea what the people under FRA will be allowed to work and earn and have it NOT affect their checks.

So, all we can use is Today's dollars. A couple like Dave and his spouse, if Dave works and earns his $50,000.00, just like he did the year before they were able to collect SS, well, I think you guys should view any benefits they get, in spite of that work, as a BONUS, not a penalty. Of course, you would love to make your $50000.00 and get all your checks, well, you can only do that at the FRA year.

In a pre-fra year like 2015, you tell SSA what your estimate is. You tell them "I plan to work and I should make $50000.00. They say, OK, we don't care about the first $15720.00 you earn, so we will subtract it.

That leaves $34280.00. Then SSA says, we don't care about $1.00 for every $2.00 you make over the $34280.00, so they divide it in half.

That leaves $16140.00 that SSA cares about from your original $50000.

The next question is: how much are your checks per month? Well, Dave's reduced check, at age 64 /10 months is $1924.00. His wife, who waited until her FRA to get that full spousal is due $1132.00. That totals $3056.00 a month, or $36672.00 a year.

SSA has to withhold $16140.00, but they can still receive $20532.00 that year.

The way SSA pays that $20532.00 is after the $16140.00 is "eaten up", month by month, beginning January at the rate of $3056.00 per month. By May, they have withheld $15280.00, and June will be withheld as well, but Dave and his wife, are due most of that check. That will get settled once the year is over and they know exactly what Dave earned the year before.

Ok, so let's recap their finances for the year: $50000.00 in wages and $20532.00 in SS. That is $70532.00.

The next year, Dave, still under FRA, also will work and earn his $50000.00. He again will get 6 full checks and most of a 7th.

The next year, Dave reaches FRA in January. He can work and make as much as he wants and Dave and his wife continue to receive all their $36672.00 (which will be higher with COLA's).

That same year, SSA will look at Dave's record and say "you know we reduced his check by 24 months, but he didn't get 24 full checks. He only got 12. SSA doesn't care that he got partial checks. They do an adjustment to his reduction factor, and from FRA on, he will permanently only be reduced by the actual number of checks he got before FRA.

So, his $1924 becomes $2052.00 ( or 6.6% more).

A few more things, if his wife was the worker, this would be great. Because the month they filed, she was FRA, so if she made the $50000.00, they could have gotten that plus the $36672.00 in SS. But, that is not the case.

Also, I wrote a long post about working and collecting in the year you reach FRA. It is titled something like "Filing in January of your FRA year yields Big bucks". I think it has very important information for people reaching FRA in months other than January. If so inclined, please find and read it.

Last edited by ilovemycat; 04-24-2015 at 10:39 PM.. Reason: hit button by mistake.
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Old 04-25-2015, 04:50 AM
 
Location: Mount Airy, Maryland
10,459 posts, read 5,922,719 times
Reputation: 16151
Quote:
Originally Posted by ilovemycat View Post
Look, I understand people want their checks before FRA when SSA has a more restrictive work test. But...

FYI- do you know that the work test used to go to age 70? Then they lowered it to 65, and then however, the full retirement age got increased, slowly by 2 months increments - now it is 66. but for some on this site, it is close to 67. And some, running for President, propose raising the retirement age more (like it hasn't been done already) to age 69. Good grief!

So, sorry folks, you have to deal with the hand you are dealt.

So, for DaveinMtAiry, the hand he is dealt, is that he would like his wife to get a true 1/2 of his full amount at her FRA, and because she is two years older than him, but that means, in order for her to do that, he has to begin to collect below his FRA- when he is 64 and 10 months.

But, he also doesn't want to stop working. So, we have to see if he continues to work, and make say $50000.00 a year in the 2 years before his FRA- how does his $50000.00 per year affect his check and his wife's check?

And yes, it does affect his wife's check, because he wanted her to have "a true spousal benefit" the $1132.00, not the "excess spousal of only $129.00 added to her own benefit.

In his case, it is a good thing, not a bad thing. Because the more of a check that Dave and his spouse receive, the faster they "eat up" or "use up" the amount they are over SSA limits.

Now, the big unknown in this case, is that his timeframe is 8 years away. We have no idea what is going to be going on with SSA in 8 years, and even if all these rules stay the same, we have no idea what the people under FRA will be allowed to work and earn and have it NOT affect their checks.

So, all we can use is Today's dollars. A couple like Dave and his spouse, if Dave works and earns his $50,000.00, just like he did the year before they were able to collect SS, well, I think you guys should view any benefits they get, in spite of that work, as a BONUS, not a penalty. Of course, you would love to make your $50000.00 and get all your checks, well, you can only do that at the FRA year.

In a pre-fra year like 2015, you tell SSA what your estimate is. You tell them "I plan to work and I should make $50000.00. They say, OK, we don't care about the first $15720.00 you earn, so we will subtract it.

That leaves $34280.00. Then SSA says, we don't care about $1.00 for every $2.00 you make over the $34280.00, so they divide it in half.

That leaves $16140.00 that SSA cares about from your original $50000.

The next question is: how much are your checks per month? Well, Dave's reduced check, at age 64 /10 months is $1924.00. His wife, who waited until her FRA to get that full spousal is due $1132.00. That totals $3056.00 a month, or $36672.00 a year.

SSA has to withhold $16140.00, but they can still receive $20532.00 that year.

The way SSA pays that $20532.00 is after the $16140.00 is "eaten up", month by month, beginning January at the rate of $3056.00 per month. By May, they have withheld $15280.00, and June will be withheld as well, but Dave and his wife, are due most of that check. That will get settled once the year is over and they know exactly what Dave earned the year before.

Ok, so let's recap their finances for the year: $50000.00 in wages and $20532.00 in SS. That is $70532.00.

The next year, Dave, still under FRA, also will work and earn his $50000.00. He again will get 6 full checks and most of a 7th.

The next year, Dave reaches FRA in January. He can work and make as much as he wants and Dave and his wife continue to receive all their $36672.00 (which will be higher with COLA's).

That same year, SSA will look at Dave's record and say "you know we reduced his check by 24 months, but he didn't get 24 full checks. He only got 12. SSA doesn't care that he got partial checks. They do an adjustment to his reduction factor, and from FRA on, he will permanently only be reduced by the actual number of checks he got before FRA.

So, his $1924 becomes $2052.00 ( or 6.6% more).

A few more things, if his wife was the worker, this would be great. Because the month they filed, she was FRA, so if she made the $50000.00, they could have gotten that plus the $36672.00 in SS. But, that is not the case.

Also, I wrote a long post about working and collecting in the year you reach FRA. It is titled something like "Filing in January of your FRA year yields Big bucks". I think it has very important information for people reaching FRA in months other than January. If so inclined, please find and read it.
Once again a great explanation. But I still don't understand how my wife's checks will be effected by my working. Am I to assume they will withold her first few checks on the following year too? And if so can I assume they compute that into her checks and increase the amount moving forward as they do mine after I reach FRA (or stop working)?
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Old 04-25-2015, 04:53 AM
 
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your wife is not effected by you working . all spousal is based on 1/2 your full not on what you get . it is only the fact she can't get spousal until you file that effects her. the longer you wait the longer she has to wait to get any benefit from you.

for every year i delay filing my wife loses a 3k spousal adder she could get added to her own early benefit. my early 63 benefit is 24,500.00 so if i wait a year my benefit jumps to 25,440. (24,500 plus 6%) but that is 3k my wife didn't get added to her benefit because i waited . it is almost a wash if i wait.

waiting a year really amounted to us seeing an extra 500 bucks. throw in the fact i have to spend that 24,500 from investments and lost the ability to compound that and the wait is a losing deal and cost us money

Last edited by mathjak107; 04-25-2015 at 05:04 AM..
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Old 04-25-2015, 06:35 AM
 
Location: Mount Airy, Maryland
10,459 posts, read 5,922,719 times
Reputation: 16151
Quote:
Originally Posted by mathjak107 View Post
your wife is not effected by you working . all spousal is based on 1/2 your full not on what you get . it is only the fact she can't get spousal until you file that effects her. the longer you wait the longer she has to wait to get any benefit from you.

for every year i delay filing my wife loses a 3k spousal adder she could get added to her own early benefit. my early 63 benefit is 24,500.00 so if i wait a year my benefit jumps to 25,440. (24,500 plus 6%) but that is 3k my wife didn't get added to her benefit because i waited . it is almost a wash if i wait.

waiting a year really amounted to us seeing an extra 500 bucks. throw in the fact i have to spend that 24,500 from investments and lost the ability to compound that and the wait is a losing deal and cost us money

I saw your answer before and liked it. But she clearly said it effected my wife's check and I need to fully understand that.
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Old 04-25-2015, 06:36 AM
 
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i don't see how , other than she gets nothing from you until you file or are old enough to file and suspend. survivor benefits yes but not on regular ss payments.

Last edited by mathjak107; 04-25-2015 at 06:50 AM..
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Old 04-25-2015, 07:34 AM
 
Location: Cape Elizabeth
424 posts, read 387,043 times
Reputation: 745
Quote:
Originally Posted by DaveinMtAiry View Post
Once again a great explanation. But I still don't understand how my wife's checks will be effected by my working. Am I to assume they will withold her first few checks on the following year too? And if so can I assume they compute that into her checks and increase the amount moving forward as they do mine after I reach FRA (or stop working)?
Good Morning, everyone!

Ok, if your wife was solely collecting her own retirement, they would not be using any of her check to offset the amount your earnings went over the SS limit.

But, in our scenario, you apply for SS before FRA and you have a dependent on your record. In your case it is a spouse. But, it could have been a child or children. Or, it could have been a young spouse if there were young children too (under 16) or a spouse caring for a disabled child.

Or, it could have been no one. You could have just decided to apply for your own retirement early, and keep working. Many people do apply for reduced retirement and receive SOME benefits every year, between 62 and FRA.

If the worker's earnings are over the pre-fra limit of $15720.00 in 2015, SSA looks at the record and asks "whose benefits can we hold back to make up the amount the worker is over the limit?"

If your wife was not on your record, well, it would only be your reduced retirement benefit of $1924.00.
If it was only you, SSA would still need to hold back $17140! **Uh,oh, last night's example I had $16140. Sorry, I made a math error, last night.**


So, $1924 x 12 = $23088. That is potential benefits for the year 2015, if Dave wasn't working, or was working and earning under $15720.00.

So, again, if it was just Dave on Dave's record, they would begin in January holding back his $1924.00 per month and it would take 8 checks and part of a 9th.

But, in his case, his wife receives benefits as his "aged spouse". (As opposed to a young spouse with "child in care".

So, we have Dave's $1924.00 and we have his wife's spousal benefit of $1132.00. A combined amount of $3056.00 per month. Even with my math error, it still takes only 5 full checks and part of a 6th to "eat up" the amount he was over the limit. As opposed to just Dave on the record, when it would take 8 full months and part of a 9th. So, having his spouse, on his record, as his spouse, I feel is beneficial.

First, more money is due Dave's family and second, the amount Dave is over the SSA work limit gets "eaten up" faster.

Now, you were reduced for age, so the ARF comes into play- Adjustment of the Reduction Factor. I am copying, from the SSA handbook the page about the ARF:

Under What Conditions Are Adjustments Of The Reduction Factor Made?

Adjustments are made under the following circumstances:

Your entitlement to retirement insurance benefits began between age 62 and full retirement age, and

A work deduction (including a partial deduction) was imposed for any month before FRA; or

You were also entitled to disability insurance benefits for any month of your entitlement to retirement insurance benefits.

Your entitlement to wife's or husband's insurance benefits began between age 62 and full retirement age, and one of the following conditions applies:

A work deduction (including a partial deduction), based on your work and/or your spouse's work, was imposed for any month before full retirement age;


A deduction was imposed because you refused vocational rehabilitation;

A benefit was not payable for a month before full retirement age because you were entitled to other benefits which terminated the benefit; or

A full benefit was payable for some months because you had in care your spouse's child (under age 16 or disabled) who was also entitled to benefits.

Your entitlement to a widow(er)'s insurance benefit began between age 50 and full retirement age and one of the following conditions applies:

A work deduction (including a partial deduction) was imposed for any month;

How Is The Benefit Amount Recomputed?

An application is not required for this adjustment. The benefit amount is recomputed by using the reduction formula that was used to compute the original reduced benefit. The appropriate month(s) in (A) through (C) above are then excluded from the benefit reduction factor.

So, only you get the adjustment. Your spouse did not begin her benefits at a reduced amount before her FRA.

Hope this helps. Off to breakfast and gardening!
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Old 04-25-2015, 11:47 AM
 
Location: Mount Airy, Maryland
10,459 posts, read 5,922,719 times
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I think my head is about to explode.
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Old 04-25-2015, 12:06 PM
 
71,511 posts, read 71,674,131 times
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i got it ! wow---- from what is being said by ilovemycat , if you are under fra and work and go over your limit anything taken back from you also effects your portion of the kicker your spouse gets . i never knew that but it makes sense.
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