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Ask Larry: Will Having No Income Reduce My Social Security Retirement Benefit?

Today’s column addresses questions about how stopping work before claiming a Social Security retirement benefit can affect the benefit amount, divorced spousal benefits and the family maximum that can be claimed on a single record and how the Government Pension Offset (GPO) is applied. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.

See more Ask Larry answers here.

Have Social Security questions of your own you’d like answered? Ask Larry about Social Security here.

Will My Social Security Retirement Benefit Still Increase If I Stopped Working?

Hi Larry, I retired at 65 and will reach my full retirement age in eight months. If I delay taking it for another year or two would, my benefit still increase at 8% per year or does that only happen if you continue to work? Since I stopped working, will I only get COLA increases or will I still get increases for delaying?

Also, will having stopped work decrease my benefit? Thanks, Hal

Hi Hal, Yes, your benefit rate would grow by 2/3rds of 1% for each month, or 8% per year, that you defer collecting benefits from full retirement age (FRA) until 70. That’s true regardless of whether or not you continue working.


Also, no longer having income for a period of time before you file for your Social Security retirement benefit will not decrease your benefit amount. It could mean however that it won’t increase as it otherwise might have if you were projected to have a high enough income to increase your benefit before filing.

SSA assumes you’ll continue to earn at your last reported income level up to the time you file and this is reflected in their estimates.

If that income would have been high enough to increase your benefit but you don’t actually have that income, your benefit would not increase to the level SSA estimated it would. You may want to strongly consider using my company’s software — Maximize My Social Security or MaxiFi Planner — to fully analyze the options available to you in order to determine your best strategy for maximizing your benefits. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

When My Ex-Spouse Retires ,Will My Daughter’s DAC Payment Go Down?

Hi Larry, One of the unplanned consequences when I retired at 63.5 was that my daughter was switched from SSI to a disabled child benefit based on my record. Her benefit is a relatively robust $1,350 a month vs. $750 on SSI. My ex-wife is still working and will retire in a few years.

When she does, will my daughter’s benefit payment go down? Is there an upper limit to the benefits we can receive and would my ex’s benefit then decrease my daughter’s benefit? Or will her disabled child’s payment perhaps up again because of payment to her from my ex’s record? Thanks, Eli

Hi Eli, Auxiliary and survivor benefits paid to a divorced spouse do not count against the family maximum benefit (FMB) FMB that can be claimed on a worker’s record. So if your ex-wife qualifies for divorced spousal benefits on your record, it couldn’t cause your daughter’s benefit rate to go down.

The maximum Childhood Disability benefit (CDB) that can be paid to a disabled adult child on the record of a living parent is 50% of the parent’s primary insurance amount (PIA). A person’s PIA is equal to their Social Security retirement benefit rate if they start drawing their benefits at full retirement age (FRA).

If a CDB recipient potentially qualifies for benefits on the record of more than one parent, they can’t be paid on both accounts at the same time. So, the only way that your daughter’s benefit rate could increase as a result of your ex-wife filing for her benefits is if your ex-wife’s PIA is higher than your PIA. Best, Larry

Is My Husband Entitled To My Social Security?

Hi Larry, My husband is a retired postal worker and does not receive a Social Security retirement benefit. Is he entitled to any benefits on my Social Security record? Thanks, Cynthia

Hi Cynthia, The short answer is probably not. Your husband may be technically eligible for benefits on your record if he’s at least age 62 and if you’re drawing your benefits.

But assuming that your husband’s receiving a civil service pension and if he didn’t pay Social Security taxes on his earnings from the government, then any Social Security spousal or survivor benefits that he would otherwise qualify for would almost certainly be offset by 2/3rds of the amount of his civil service pension.

That’s because of the Government Pension Offset (GPO) provision.

So if your husband filed for spousal benefits, his spousal benefit rate would likely be reduced to zero assuming that his civil service pension amount is more than roughly 3/4ths as much as your full retirement age Social Security benefit rate.

For example, say that your full retirement age rate, or primary insurance amount (PIA) is $2,000. Your husband’s unreduced spousal rate would then be $1,000, or 50% of your PIA. However, if your husband’s civil service pension was more than $1,500 in this example, the spousal benefit payable to him would be zero (i.e. 2/3rds of $1,500 – $1000 = $0).

If your husband applies for spousal benefits and if he meets the requirements for those benefits, Social Security would approve his claim but wouldn’t actually pay him any cash benefits if GPO causes his spousal rate to be reduced to zero. He could still potentially qualify for premium free Part A of Medicare on your record at age 65, though, even if he’s only technically entitled as a spouse on your account. Best, Larry

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