New Social Security Regs (welfare, relationship, dating, generation)

[Larry Siegel]

Originally Posted by Mircea

It isn't "new" legislation. It's simply closing a loop-hole that should never have existed in the first place.

The 'loophole' was enacted during the Clinton administration to encourage people to work longer. Since that is a good idea, the 'loophole,' actually a perfectly reasonable provision, should have existed.

[mathjak107]

They ended up doing away with paying ss back at any point in time and starting over because of unintended consequences as well.

It was just coming to light that there was a huge loop hole in paying back ss .

You got to subtract all the income you paid back from current years income on your taxes.

That frequently left a retiree with negative income for the year. Since you couldn't carry it over it typically died on the vine.

Then a few smart researchers realized you could do free roth conversions utilizing that negative income.

So not only did you get the interest free money you paid back , the higher ss payment but you got a free roth conversion

[TuborgP]

Originally Posted by ilovemycat

Just a quick answer tonight on one of your points. I will deal with more tomorrow.

If, when your husband passes away, you are over your FRA, you will go to 100% of his amount. You are not penalized for starting at 62.

And that is still a claw in the soup. That distinction often gets lost in discussions in this forum. Claiming at 62 on your own benefit doesn't impact your survivor benefit if taken after FRA. Claiming on your spouses prior to 66 does. That is a big difference in lifetime benefits and was a key part for many in doing the 62/70 strategy. We did that with me claiming spousal on my wifes at FRA and will claim mine at 70. Yes it was milking the system and we were the ones the new regulations were aimed at. Unfortunately they used a shotgun to get us and there is collateral damage still in the discovery stage. The DC area is full of two higher income working spouses able and doing exactly this and I suspect since the reg's were written behind closed doors in DC with minimum impact oh well. Two woman claiming at 62 one on their own and the other on their spouses will at death be treated differently and the one claiming on their spouses will probably need the money more. One working woman will from age 62 on be treated differently and the other will receive her full benefit and her husbands at death, the other agggh. So much of it depends on how long each spouse lives and that will be hindsight at some point.

[josie13]

Originally Posted by TuborgP

And that is still a claw in the soup. That distinction often gets lost in discussions in this forum. Claiming at 62 on your own benefit doesn't impact your survivor benefit if taken after FRA. Claiming on your spouses prior to 66 does. That is a big difference in lifetime benefits and was a key part for many in doing the 62/70 strategy. We did that with me claiming spousal on my wifes at FRA and will claim mine at 70. Yes it was milking the system and we were the ones the new regulations were aimed at. Unfortunately they used a shotgun to get us and there is collateral damage still in the discovery stage. The DC area is full of two higher income working spouses able and doing exactly this and I suspect since the reg's were written behind closed doors in DC with minimum impact oh well. Two woman claiming at 62 one on their own and the other on their spouses will at death be treated differently and the one claiming on their spouses will probably need the money more. One working woman will from age 62 on be treated differently and the other will receive her full benefit and her husbands at death, the other agggh. So much of it depends on how long each spouse lives and that will be hindsight at some point.

I had no idea this discrepancy existed. So a spouse or ex-spouse who claims spousal benefits before FRA bars herself from ever receiving a survivor benefit on her (ex)-husband's record from that point on?

But if a low-earning divorced woman waits until FRA to claim spousal benefits, she is eligible to receive a survivor benefit on her ex-husband's record if he dies at any point after that?

If that's the case, then that means waiting until FRA to file is critical, even though 67 is so very far from 62.

However, what happens in the following case: Low-earning divorced woman claims before FRA on her own benefit, and her ex-spouse with much higher earning record dies before the FRA of either spouse. (We both come from short-lived lines. Chances are high that one or both of us will die before FRA, which is 67 for both of us.)

[mathjak107]

A widow at fra gets either her own ss or ,what her husband got . She can pick.

A widow pre fra gets a reduction from what her husband got for every year under fra she files.

There is a floor of her husbands full rate x.71 if she files at 60 or 61 and x.81 at 62.
She gets the higher of the rates

[josie13]

Originally Posted by mathjak107

A widow at fra gets either her own ss or ,what her husband got . She can pick.

A widow pre fra gets a reduction from what her husband got for every year under fra she files.

There is a floor of her husbands full rate x.71 if she files at 60 or 61 and x.81 at 62.
She gets the higher of the rates

What if the husband dies before FRA and he was not receiving anything?

[biscuitmom]

Originally Posted by josie13

What if the husband dies before FRA and he was not receiving anything?

Deceased did not file for benefits:

Died prior to full retirement age: maximum widow benefit equals the primary insurance amount of the deceased

Died after full retirement age: maximum widow benefit equals the deceased benefit as if deceased elected on date of death, including delayed retirement credits

source: Understanding the Social Security Widow Benefit

There are some complicating factors, they're detailed on the link.

[mathjak107]

Originally Posted by josie13

What if the husband dies before FRA and he was not receiving anything?

Still based on his full with a reduction for every year you file pre fra with a floor of either x.71 or x.81 depending if 62 when you file or under

[ilovemycat]

Originally Posted by Perryinva

So even though DRCs are figured monthly, they are only actually applied in Jan of the following year earned? So if you unsuspend in July of 2015, you start collecting on the numbrr of DRCs earned in 2014 and earlier. When Jan 2016 rolls around, your benefit increases by 6 months DRCs. Do you get an additional bonus for the missed, but earned credits not paid during the last 6 months of 2015? Something new learned every day. Thanks ILMC!

No, you don't get any additional kind of bonus. The only other things that happen effective January are recomputations to include a higher year of earnings and take out a lower year of earnings, and the COLA, if there is one, is paid in January- but actually is for the month of December.

[ilovemycat]

Originally Posted by josie13

I had no idea this discrepancy existed. So a spouse or ex-spouse who claims spousal benefits before FRA bars herself from ever receiving a survivor benefit on her (ex)-husband's record from that point on?

But if a low-earning divorced woman waits until FRA to claim spousal benefits, she is eligible to receive a survivor benefit on her ex-husband's record if he dies at any point after that?

If that's the case, then that means waiting until FRA to file is critical, even though 67 is so very far from 62.

However, what happens in the following case: Low-earning divorced woman claims before FRA on her own benefit, and her ex-spouse with much higher earning record dies before the FRA of either spouse. (We both come from short-lived lines. Chances are high that one or both of us will die before FRA, which is 67 for both of us.)

I don't know, but you guys seem to be overcomplicating the issue and are confusing me.

Now, a person with multiple marriages (could either be widowed- marriage of at least a year (9 months in some cases) or divorced - but married more than 10 years - can pick and choose which person they choose to claim benefits on.

Let's do an example: Mary marries Mr. Right at age 26 and he dies at age 33. At the time, he had a good job, worked since he was 18. They had no kids.

After a few years, she meets Mr.SoSo and marries him at age 35. They stay married until age 47 when they divorce.

Finally she meets Mr. Better and married him at age 53. He was a highly paid executive, making max, but he retired at 65, which for him was his full retirement age. They stay happily married until she is widowed again at age 76.

Mr. Better is deceased, Mr. Right is deceased and Mr. SoSo is still alive.

In the meantime, Mary worked, not at great jobs, but steadily and was receiving her own benefits starting at age 64.

When Mr. Better retired, 1/2 of his was greater than 100% of her own (say 1/2 of his was $1500.00 and her full was $900.00. She begins to receive an extra $600.00 as his wife added to her reduced retirement.

At 64, when she went to SSA for her retirement, Mr. Better was the only spouse she could possibly collect on. Because she remarried before age 60 and was still married, it precluded her from any benefits on Mr. Right or Mr. SoSo.

Now, a widow at 76, she can consider all the other marriages. And, I bet that Mr. Right's -even though he died at age 33 is the highest. That is because he died young, so his PIA (primary ins amt) is computed using many less years in the computation. And, every COLA, since he died, is factored into his PIA.

Mary, because she is over her FRA goes to 100% of Mr. Right. Mr. SoSo, being alive, is really not in the picture now. Because she is only due 1/2 of his PIA, not 100% like a widow.

Of course, if Mr. Better's benefit amount at time of death is greater than Mr. Right, she files on him.

Ten years go by and she hears that Mr. SoSo has kicked the bucket. She goes back to SSA and sees if being a divorced widow on Mr. SoSo is greater than the other two hubbies. Alas, it is less, so she stays where she is, but if it was more, she files on him.

So, people, it is very important that when you file on the internet, you do not leave out any of your marriages - especially marriages early in life that ended in death. I have had many wife's hate their ex, curse him to hell, don't want to even look into what they could get on them, but when I finally look it up and it is greater than their own, or another hubby, they change their tune.

And the same goes for the men out there. If you had a wife, early in life, who died young, but did work, if you are not married at time of filing (or married your current spouse at age 60 or later, you could claim as a widower and let your own grow to age 70. Don't let the years that have passed make you think her benefit is not worth looking into. It is very often, a fairly good option.