I’m Confused About Filing And Suspending My Social Security Benefit

Social Security may be one of your largest assets. What and when you collect will make a huge difference to your lifetime benefits.

Today’s column addresses questions about whether or not to file for and suspend retirement benefits before filing for spousal benefits, when married couples can file, survivor’s benefits, divorced spousal benefits and whether rental income is taxed by SSA. Larry Kotlikoff is the founder and president of Economic Security Planning, a company that markets Maximize My Social Security, a Social Security benefits calculator referred to in this post.

See more Ask Larry answers here.

Ask Larry about Social Security:

I’m Confused About Filing And Suspending My Social Security Benefit​​

Hi Larry, We plan for my wife to file now and me to apply for Spousal benefits. She says I shouldn’t but I say I need to file and suspend my own benefit before I do this. She says you write that I shouldn’t. Who’s right? However I should apply, when can I do so? Thanks, Lonnie

Hi Lonnie, You most definitely do not want to file for and suspend your own retirement benefits. You simply want to file for spousal benefits only effective the month in which you reach your full retirement age. You can file your application up to four months before then. You will subsequently need to file a separate application for your own retirement benefits when you reach age 70. Best, Larry

When Can My Wife And I File Our Applications?​​

Hi Larry, My wife will turn 67 in May Social Security retirement benefit then. I plan to take my spousal benefits at the same time. I will be 67 in June and will let my retirement benefits delayed retirement credits (DRCs) accrue until 70.. We are unsure of the timing . Do we need to file three months before her birthday and also can I file at the same time she does or does she need to be getting her checks before I can do so. Are there any deadlines we have to watch out for? Thanks, Hal

Hi Hal, You and your wife can file at the same time, and you can file your applications up to four months in advance of the month that you wish to claim benefits or as late as six months after the month that you wish to claim benefits. About the only thing you couldn’t do is file your spousal claim before your wife files for her benefits.

Before filing, though, you and your wife may want to use an expert Social Security benefits calculator as described in other answers to make sure that you choose the best possible filing strategy. Best, Larry

Should I Apply For Widower’s Benefits?​​

Hi Larry, I lost my wife in 1999. In 2016 I had to have bypass heart surgery and stop working. I’m now 60 and I’m getting a disability benefit to live on. Should I apply for my widower’s benefits? Also, how can I get the maximum amount. Thanks, Randy

Hi Randy, I’m sorry for your loss. My answer assumes that you are receiving Social Security disability benefits (SSDI) and not Supplemental Security Income (SSI), the latter of which is a needs based program. If that’s the case it sounds like you would want to file for widower’s benefits now if you are eligible. However, you will only be eligible if your widower’s rate is higher than your SSDI rate. You can essentially only receive the higher of the 2 benefit rates, not both.

If your widower’s rate is higher than your SSDI rate and you file now, you would continue to receive your SSDI plus a reduced widower’s benefit. However, the reduction for age applied to your widower’s benefit would only be temporary and would be removed after you reach your full retirement age. Best, Larry

Can I Collect On My Ex-Wife’s Record If She’s Age 62 And Not Yet Drawing Benefits?​​

Hi Larry, I am 63 1/2 and I collect Social Security disability. My ex, who I was married to for 30 years and have been divorced from for six years, has just turned 62. Can I collect a divorced spousal benefit based on her Social Security work record since her benefit would be higher? She is still working and plans to retire at 66. Do I have to wait until then to file? Thanks, Scott

Hi Scott, Yes, it sounds like you could potentially qualify for divorced spousal benefits if you’re not currently married, but only if 50% of your ex’s Primary Insurance Amount (PIA), which is equal to her full retirement age (FRA) retirement benefit amount, is higher than your own full disability benefit rate. And if you are eligible for divorced spousal benefits and choose to start drawing them prior to your full retirement age, they will be reduced for age. You’ll probably need to contact Social Security to find out if you’re eligible. Best, Larry

Can The Rental Income That We Get From Renting Our House Be Used To Earn Social Security Credits?​​

HI Larry, I am planning to wait until 70 to claim my Social Security retirement benefits. My wife worked outside the home for a time before we started our family, but has not worked for a paycheck in many years. It turns out she’s three credits short of the 40 required for her own retirement benefit. We’re planning to move and offer our current house for rent soon. Is it possible to use that business in some way for her to get her three remaining credits? Thanks, Aaron

Hi Aaron, Probably not. Rental income is almost always considered to be unearned income and is therefore not subject to Social Security taxes. Rental income is only considered as earned when a) rentals are received by real estate dealers in the course of their business, b) the landlord regularly performs services for tenants as in the case of innkeepers, or c) farmers are materially participating in their tenants farming operation. It doesn’t sound like any of these exceptions would apply in your wife’s case. Best, Larry

To learn more about your Social Security options, visit Economic Security Planning, Inc.

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